As filed with the Securities and Exchange Commission on October 13, 2000
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
COLUMBUS LIFE INSURANCE COMPANY SEPARATE ACCOUNT 1
(Exact Name of Trust)
COLUMBUS LIFE INSURANCE COMPANY
(Name of Depositor)
400 EAST FOURTH STREET
CINCINNATI, OHIO 45202
(Complete Address of Depositor's Principal Executive Offices)
Please send copies of all communications to:
DONALD J. WUEBBLING, ESQ. KEVIN L. COONEY, ESQ.
Columbus Life Insurance Company Frost & Jacobs LLP
400 East Fourth Street 2500 PNC Center
Cincinnati, Ohio 45202 201 East Fifth Street
(Name and Address of Agent for Service) Cincinnati, Ohio 45202
AN INDEFINITE AMOUNT OF INTERESTS IN
COLUMBUS LIFE INSURANCE COMPANY SEPARATE ACCOUNT 1 UNDER
VOYAGER VARIABLE UNIVERSAL LIFE INSURANCE POLICIES
(Title of Securities Being Registered)
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
(Approximate Date of Proposed Public Offering)
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
RECONCILIATION AND TIE BETWEEN ITEMS IN
FORM N-8B-2 AND THE PROSPECTUS
COLUMBUS LIFE INSURANCE COMPANY
SEPARATE ACCOUNT 1
FORM N-8B-2* CAPTION IN PROSPECTUS**
Item 1 Cover Page
Item 2 Columbus Life Insurance Company
and Separate Account 1
Item 3 Not Applicable****
Item 4 Service Providers
Item 5 Columbus Life Insurance Company
and Separate Account 1
Item 6 Columbus Life Insurance Company
and Separate Account 1
Item 7 Not Required***
Item 8 Not Required***
Item 9 Not Applicable****
Item 10 Purchasing Your Policy
Borrowing Your Money
Withdrawing Your Money
Death Benefits
Payment of Policy Proceeds
Charges
Continuation of Your Policy
Other Information About Your Policy
Premium Payments
Voting Rights
Columbus Life Insurance Company
and Separate Account 1
Information About the Investment
Options
Allocation of Net Premiums
Transferring Your Money
Riders
Tax Matters
Item 11 Information About the Investment
Options
Item 12 Service Providers
Item 13 Policy at a Glance
Borrowing Your Money
Withdrawing Your Money
Death Benefits
Charges
Riders
Information About the Investment
Options
Service Providers
Item 14 Purchasing Your Policy
Riders
Other Information About Your Policy
1
<PAGE>
FORM N-8B-2* CAPTION IN PROSPECTUS**
Item 15 Purchasing Your Policy
Premium Payments
Allocation of Net Premiums
Transferring Your Money
Other Information About Your Policy
Information About the Investment Options
Valuation of Your Investment
Item 16 Allocation of Net Premiums
Transferring Your Money
Borrowing Your Money
Withdrawing Your Money
Charges
Information About the Investment Options
Valuation of Your Investment
Item 17 Purchasing Your Policy
Borrowing Your Money
Withdrawing Your Money
Death Benefits
Payment of Policy Proceeds
Charges
Continuation of Your Policy
Other Information About Your Policy
Riders
Item 18 Valuation of Your Investment
Columbus Life Insurance Company and
Separate Account 1
Item 19 Other Information About Your Policy
Item 20 Not Applicable****
Item 21 Borrowing Your Money
Continuation of Your Policy
Item 22 Not Applicable****
Item 23 Columbus Life Insurance Company
and Separate Account 1
Item 24 Information About the Investment Options
Valuation of Your Investment
Item 25 Columbus Life Insurance Company
and Separate Account 1
Item 26 Not Applicable****
Item 27 Columbus Life Insurance Company
and Separate Account 1
Item 28 Columbus Life Insurance Company
and Separate Account 1
Item 29 Columbus Life Insurance Company
and Separate Account 1
Item 30 Not Applicable****
Item 31 Not Applicable****
Item 32 Not Applicable****
Item 33 Not Applicable****
Item 34 Not Applicable****
Item 35 Purchasing Your Policy
Service Providers
2
<PAGE>
FORM N-8B-2* CAPTION IN PROSPECTUS**
Item 36 Not Required***
Item 37 Not Applicable****
Item 38 Service Providers
Item 39 Service Providers
Item 40 Not Applicable****
Item 41 Service Providers
Item 42 Not Applicable****
Item 43 Not Applicable****
Item 44 Charges
Valuation of Your Investment
Premium Payments
Item 45 Not Applicable****
Item 46 Payments of Policy Proceeds
Charges
Valuation of Your Investment
Item 47 Information about the Investment Options
Item 48 Not Applicable****
Item 49 Not Applicable****
Item 50 Columbus Life Insurance Company
and Separate Account 1
Item 51 Columbus Life Insurance Company
and Separate Account 1
Death Benefits
Riders
Other Information About Your Policy
Payment of Policy Proceeds
Purchasing Your Policy
Premium Payments
Borrowing Your Money
Withdrawing Your Money
Continuation of Your Policy
Other Information About Your Policy
Charges
Valuation of Your Investment
Item 52 Information About the Investment Options
Item 53 Tax Matters
Item 54 Not Applicable****
Item 55 Not Applicable****
Item 56 Not Required***
Item 57 Not Required***
Item 58 Not Required***
Item 59 Not Required***
* Registrant includes this Reconciliation and Tie Statement in its
Registration Statement in compliance with Instruction 4 as to the
Prospectus as set out in Form S-6. Registrant, previously filed a
Notification of Registration as an investment company on Form N-8A and
a Form N-8B-2 Registration Statement under the Investment Company Act
of 1940
3
<PAGE>
on May 14, 1999. Pursuant to Sections 8 and 30(b)(1) of the Investment
Company Act of 1940, Rule 30a-1 under that Act, and Forms N-8B-2 and
N-SAR under that Act, Registrant will keep its Form N-8B-2 Registration
Statement current through the filing of periodic reports required by
the Securities and Exchange Commission.
** Caption in Prospectus, to the extent relevant to this Form. Certain
items are not relevant pursuant to the administrative practice of the
Commission and its staff of adapting the disclosure requirements of the
Commission's registration statement forms in recognition of the
differences between variable life insurance policies and other periodic
payment plan certificates issued by investment companies and between
separate accounts organized as management companies and unit investment
trusts.
*** Not required pursuant to Instruction 1(a) as to the Prospectus as set
out in Form S-6.
**** Omitted from the Prospectus pursuant to Instruction 3 as to the
Prospectus as set out in Form S-6.
4
<PAGE>
VOYAGER
VARIABLE UNIVERSAL LIFE
COLUMBUS LIFE INSURANCE COMPANY PROSPECTUS
SEPARATE ACCOUNT 1 _________________, 2000
This Prospectus describes the Voyager Variable Universal Life Insurance Policy
(Policy) and the investment options available to Policy owners. It contains
information you should know before purchasing a Policy and selecting your
investment options. Please read this Prospectus carefully and keep it for future
reference.
The Policy is issued by Columbus Life Insurance Company (Columbus Life). The
Policy is an investment alternative that offers you:
o Life insurance protection o Tax-deferred earnings
o Flexible premium payments o Access to your funds through
o Flexible benefits withdrawals and loans
o Optional coverages and riders o ___ investment options
The description of the Policy in this Prospectus is subject to the specific
terms of your Policy as it contains specific contractual provisions and
conditions. If the terms in your Policy differ from the description of the
Policy in the Prospectus, you should rely on the terms in your Policy.
You tell us how to invest your premium payments among the investment options.
Your investment options include the following Sub-Accounts of Separate
Account 1:
------------------------------------------ -------------------------------------
o AIM V.I. GROWTH o TOUCHSTONE SMALL CAP VALUE
o AIM V.I. GOVERNMENT SECURITIES o TOUCHSTONE EMERGING GROWTH
o ALGER AMERICAN SMALL CAPITALIZATION o TOUCHSTONE INTERNATIONAL EQUITY
o ALGER AMERICAN GROWTH o TOUCHSTONE HIGH YIELD
o DEUTSCHE VIT EQUITY 500 INDEX o TOUCHSTONE VALUE PLUS
o FIDELITY o TOUCHSTONE ENHANCED 30
o JANUS o TOUCHSTONE BALANCED
o MFS VIT EMERGING GROWTH o TOUCHSTONE BOND
o MFS VIT GROWTH WITH INCOME o TOUCHSTONE STANDBY INCOME
o PIMCO LONG-TERM U.S. GOVERNMENT
----------------------------------------- --------------------------------------
The Fixed Account is an additional investment option. It is a fixed-rate option
backed by the general assets of Columbus Life.
The Securities and Exchange Commission maintains a web site (http://www.sec.gov)
that contains certain other material that is legally part of the registration
statement for Columbus Life Insurance Company Separate Account 1 (Separate
Account 1) and other information about Separate Account 1. You can also view
these documents at the Public Reference Room
Page 1
<PAGE>
of the Securities and Exchange Commission or obtain copies, for a fee, by
writing to the Public Reference Room of the Securities and Exchange Commission,
450 Fifth Street N.W., Washington, D.C. 20549, or by e-mailing a request to:
[email protected]. You can also call the Securities and Exchange Commission at
800.SEC.0330.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the Policies or determined if the
Prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
This Policy is not a deposit or obligation of any bank. No bank has guaranteed
or endorsed the Policy. The Policy is not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board, the National Credit
Union Share Insurance Fund or any other agency.
Each Sub-Account invests in a corresponding Fund that may have a name and/or
investment objective that is very similar to the name and/or investment
objective of a publicly available mutual fund managed by the same advisor and
sub-advisor. The Funds in which the Sub-Accounts invest are not publicly
available and will not have the same performance as those publicly available
mutual funds. Different performance will result from the differences in various
factors that affect the operation of a Fund, such as implementation of the
Fund's investment policies, Fund expenses and size of the Fund. In addition,
your investment return from your Policy will be less than the investment return
of a shareholder in the publicly available mutual funds because you will pay
additional charges related to your Policy, such as premium expense charges,
state tax charges and mortality and expense risk charges.
Investments in variable life insurance policies involve investment risk,
including possible loss of principal and interest.
Benefits described in this Prospectus may not be available in every
jurisdiction. Please refer to your Policy and contact your insurance agent/
financial representative for specific benefit information.
No one is authorized to give any information or make any representation other
than those contained in the Policy (including any attached riders or
endorsements), this Prospectus or our approved sales literature. You should rely
only on the information contained in the Policy (including any attached riders
or endorsements), this Prospectus or our approved sales literature.
Page 2
<PAGE>
TABLE OF CONTENTS
POLICY AT A GLANCE.............................................................
SUMMARY........................................................................
PURCHASING YOUR POLICY.........................................................
PREMIUM PAYMENTS...............................................................
ALLOCATION OF NET PREMIUMS.....................................................
TRANSFERRING YOUR MONEY........................................................
BORROWING YOUR MONEY...........................................................
WITHDRAWING YOUR MONEY.........................................................
DEATH BENEFITS.................................................................
PAYMENT OF POLICY PROCEEDS.....................................................
CHARGES........................................................................
CONTINUATION OF YOUR POLICY....................................................
RIDERS.........................................................................
OTHER INFORMATION ABOUT YOUR POLICY............................................
INFORMATION ABOUT THE INVESTMENT OPTIONS.......................................
VALUATION OF YOUR INVESTMENT...................................................
PERFORMANCE INFORMATION........................................................
VOTING RIGHTS..................................................................
COLUMBUS LIFE INSURANCE COMPANY AND SEPARATE ACCOUNT 1.........................
SERVICE PROVIDERS..............................................................
TAX MATTERS....................................................................
OTHER GENERAL INFORMATION......................................................
SUPPLEMENT A - POLICY ILLUSTRATIONS............................................
SUPPLEMENT B - TABLE OF APPLICABLE DEATH BENEFIT FACTORS.......................
SUPPLEMENT C - TABLE OF COST OF INSURANCE CHARGES..............................
SUPPLEMENT D - TABLE OF SURRENDER TARGET AMOUNT................................
SUPPLEMENT E - CALCULATION OF SURRENDER CHARGES................................
SUPPLEMENT F - CONTINUATION PROVISIONS.........................................
SUPPLEMENT G - VALUATION PROCEDURES............................................
SEPARATE ACCOUNT 1 ANNUAL FINANCIAL STATEMENTS.................................
COLUMBUS LIFE ANNUAL FINANCIAL STATEMENTS......................................
UNAUDITED INTERIM FINANCIAL STATEMENTS - SEPARATE ACCOUNT 1....................
UNAUDITED INTERIM FINANCIAL STATEMENTS - COLUMBUS LIFE.........................
GLOSSARY.......................................................................
Page 3
<PAGE>
POLICY AT A GLANCE
The following is a snapshot of the Policy. Please refer to the Policy and the
remainder of the Prospectus for further details and other information. See
Supplement A for illustrations of how various aspects of the Policy and
investment performance can affect your Policy.
PREMIUM PAYMENTS AND WITHDRAWALS
---------------------------------
MINIMUM AMOUNTS
PREMIUMS Depends on the Insured's issue age,
gender and underwriting class, the
Specified Amount of insurance coverage
and the addition of any riders
TARGET PREMIUM Depends on the Insured's issue age,
gender and underwriting class, the
initial Specified Amount of insurance
coverage, the amount and timing of
any increases in the Specified Amount
of insurance coverage and the
addition of any riders
WITHDRAWALS $500
INSURANCE BENEFITS
------------------
DEATH BENEFITS
OPTION 1 Greater of (1) Specified Amount,
less Indebtedness or (2) the applicable
multiple of your Account Value, less
Indebtedness
OPTION 2 Greater of (1) Specified Amount, less
Indebtedness plus Account Value or
(2) the applicable multiple of your
Account Value less Indebtedness
MINIMUM ISSUE LIMIT $100,000
MINIMUM INCREASE OR DECREASE IN $25,000, subject to Minimum Issue Limit
restrictions
COVERAGE
RIDERS
INCLUDED RIDER* Accelerated Death Benefit Plus
Accelerated Death Benefit
OPTIONAL RIDERS Additional Life
Accidental Death
Insured Insurability
Disability Credit
Children's Term
Other Insured
Extended Maturity Benefit No. 2
Extended Maturity Benefit No. 3
Extended No-Lapse Guarantee
TRANSFERS
---------
NUMBER OF FREE TRANSFERS 12 times between Sub-Accounts per
Policy Year or to the Fixed Account
per Policy Year; and 1 time from the
Fixed Account per Policy Year (25%
limitation in the first 4 years)
(restrictions do not apply to transfers
made under the Dollar Cost Averaging
Program)
MINIMUM AMOUNT OF TRANSFER $250 or the total amount in the
Sub-Accounts, whichever is less
LOANS
-----
LOAN AMOUNT
MINIMUM None
MAXIMUM 90% of the Cash Surrender Value, less
any Indebtedness and less the next 2
Monthly Deductions and Monthly Expense
Charges
INTEREST RATE 4.00% (maximum of 4.00%)
* Where permitted by state law.
Page 4
<PAGE>
POLICY CHARGES AND DEDUCTIONS
-----------------------------
PERCENT OF PREMIUM CHARGES
PREMIUM EXPENSE CHARGES
UP TO TARGET PREMIUM 6.50% of premium payments up to Target
Premium (maximum of 7.50%) for a
Coverage Layer in a Coverage Year for
first 12 Coverage Years; 2.50% of
premium payments up to Target Premium
(maximum of 3.50%) for a Coverage Layer
in a Coverage Year after the first 12
Coverage Years
IN EXCESS OF TARGET PREMIUM 3.25% of premium payments in excess of
Target Premium (maximum of 4.25%) for a
Coverage Layer in a Coverage Year for
first 12 Coverage Years; 1.75% of
premium payments up to Target Premium
(maximum of 2.75%) for a Coverage Layer
in a Coverage Year after the first 12
Coverage Years
STATE TAX CHARGES Varies by state of residence
MONTHLY DEDUCTIONS FROM ACCOUNT VALUE
COST OF INSURANCE CHARGES Depends on the Insured's issue age,
gender and underwriting class, your
Account Value, Indebtedness, selected
death benefit option and Specified
Amount, the length of time your Policy
has been in effect and the division of
your Specified Amount between Base
Specified Amount and Additional Life
Rider Specified Amount
MONTHLY EXPENSE CHARGES
PER POLICY CHARGE $7.50 (maximum of $9.00)
PER $1,000 CHARGE Depends on the Insured's age and
underwriting class at time of issue and
at time of any increase of Base
Specified Amount, the Insured's gender
the Insured's underwriting class and
your Base Specified Amount
MORTALITY AND EXPENSE RISK CHARGE 0.70% effective annual rate (maximum
of 0.90%)of Account Value less
the value of the Loan Account during
the first 12 policy years; a graduated
reduction in the effective annual
rate ranging from 0.70% to 0.10%
(maximum range of 0.90% to 0.30%)
depending on Account Value less
the value of the Loan Account after the
first 12 policy years
RIDER CHARGES
ACCELERATED DEATH BENEFIT PLUS No charge until advance of funds (and
then the only charge is interest on the
advance)
ACCELERATED DEATH BENEFIT No charge until advance of funds (and
then the only charge is interest on the
advance)
ADDITIONAL LIFE Changes the cost of insurance charge
rates and alters the per $1,000 charge
and the surrender charge for the
Additional Life Rider Specified
Amount
ACCIDENTAL DEATH Depends on the Insured's Attained Age
and selected Accidental Death Benefit
Amount
INSURED INSURABILITY Depends on the Insured's Attained Age
and selected Insured Insurability
Option Amount
DISABILITY CREDIT Depends on the Insured's Attained Age
and selected Credit Amount
CHILDREN'S TERM Depends on selected Children's Term
Benefit Amounts
OTHER INSURED Depends on each Other Insured's
Attained Age, gender and underwriting
class and
selected Other Insured Benefit Amounts
EXTENDED MATURITY BENEFIT NO.2
EXTENDED MATURITY BENEFIT NO.3
EXTENDED NO-LAPSE GUARANTEE $0.01 per $1,000 of Specified Amount
and Other Insured Benefits Amount
starting in Policy Year 6
TRANSACTION CHARGES
TRANSFER CHARGES $0 for first 12 transfers among
Sub-Accounts or to the Fixed Account
each Policy Year; $10 for each
additional transfer in a Policy
Year; deducted from Account Value at
time of transfer
SURRENDER CHARGES Applies during the first 12 years since
your Policy Date or since the date of
any increase in Base Specified Amount,
if you surrender your Policy, or if it
terminates at the end of a Grace Period
because no continuation provision
applies and we did not receive
sufficient premium to keep it in
effect. The surrender charge depends on
the length of time from the Policy Date
and the date of any increase in Base
Specified Amount, the Insured's gender,
issue age and underwriting class on the
Policy Date and on the date of any
increase in Base Specified Amount, and
your Base Specified Amount
WITHDRAWAL FEES $50 withdrawal fee for your second and
each additional withdrawal in a Policy
Year
Page 5
<PAGE>
FUND EXPENSES
--------------
<TABLE>
<CAPTION>
TOTAL EXPENSES TOTAL EXPENSES
OTHER AFTER EXPENSE BEFORE EXPENSE
ADVISOR FEES EXPENSES REIMBURSEMENT REIMBURSEMENT
AIM VARIABLE INSURANCE FUNDS, INC. ------------- --------- --------------- ---------------
<S> <C> <C> <C> <C>
(Advisor--AIM Advisors, Inc.)
AIM V.I. Growth Fund* 0.63% 0.10% 0.73% 0.73%
AIM V.I. Government Securities Fund* 0.50% 0.40% 0.90% 0.90%
THE ALGER AMERICAN FUND
(Advisor--Fred Alger Management, Inc.)
Alger American Small Capitalization Portfolio* 0.85% 0.05% 0.90% 0.90%
Alger American Growth Portfolio* 0.75% 0.04% 0.79% 0.79%
DEUTSCHE ASSET MANAGEMENT VIT FUNDS
(Advisor--Bankers Trust Company)
Deutsche VIT Equity 500 Index Fund+ 0.20% 0.10% 0.30% 0.43%(a)
FIDELITY __________________
(Advisor--_____________)
New Funds
JANUS ___________________
(Advisor--____________________)
New Funds
MFS VARIABLE INSURANCE TRUST
(Advisor--Massachusetts Financial Services Company)
MFS VIT Emerging Growth Series* 0.75% 0.09% 0.84% 0.84%(b)
MFS VIT Growth with Income Series* 0.75% 0.13% 0.88% 0.88%(b)
PIMCO VARIABLE INSURANCE TRUST
(Advisor--Pacific Investment Management Company)
PIMCO Long-Term U.S. Government Portfolio* 0.40% 0.25% 0.65% 0.71%(c)
TOUCHSTONE VARIABLE SERIES TRUST
(Advisor--Touchstone Advisors, Inc.)
Touchstone Small Cap Value Fund+ 0.80% 0.20% 1.00% 2.03%(d)
Touchstone Emerging Growth Fund* 0.80% 0.35% 1.15% 1.42%(d)
Touchstone International Equity Fund* 0.95% 0.30% 1.25% 1.84%(d)
Touchstone High Yield Fund+ 0.60% 0.20% 0.80% 1.53%(d)
Touchstone Value Plus Fund* 0.75% 0.40% 1.15% 2.37%(d)
Touchstone Enhanced 30 Fund+ 0.65% 0.10% 0.75% 1.77%(d)
Touchstone Balanced Fund* 0.80% 0.10% 0.90% 1.35%(d)
Touchstone Bond Fund+ 0.55% 0.20% 0.75% 1.07%(d)
Touchstone Standby Income Fund* 0.25% 0.25% 0.50% 0.87%(d)
</TABLE>
page 6
<PAGE>
* The fee and expense figures shown for the Fund are based on amounts
incurred during the fiscal year ended December 31, 1999.
+ Since the Touchstone Bond Fund, the Touchstone Small Cap Value Fund, the
Touchstone High Yield Fund and the Touchstone Enhanced 30 Fund commenced
operations in 1999, expenses for these funds are based on estimates.
(a) Bankers Trust Company has agreed to waive its advisory fee and to
reimburse the Deutsche VIT Equity 500 Index Fund so that the Fund's
total operating expenses will not exceed 0.30%.
(b) The custodian for each of the MFS Funds has agreed to an expense offset
arrangement if expenses reach a certain level. The MFS Funds may also
have other agreements that reduce the expenses actually paid by the MFS
Funds. For example, prior to October 2, 1998, Massachusetts Financial
Services Company had agreed to waive certain fees or reimburse the MFS
Growth with Income Series so that its expenses did not exceed a
specified level.
(c) Pacific Investment Management Company has agreed to reduce its
administrative fee, subject to potential future reimbursement, to the
extent that the total expenses of the PIMCO Long-Term U.S. Government
Portfolio would exceed 0.65%.
(d) During 1999, fee waiver and expense reimbursement arrangements had the
effect of reducing expenses actually paid by each Touchstone Fund.
Touchstone Advisors, Inc. has agreed to waive certain fees or reimburse
each Touchstone Fund so that the Fund's total expenses do not exceed the
percentage set forth in the "Total Expenses After Expense Reimbursement"
column for the Fund. These agreements will remain in place until at
least December 31, 2000.
Page 7
<PAGE>
SUMMARY
This summary answers some basic questions about the Policy. Because this is a
summary, please read the Policy and the remainder of the Prospectus for more
details and other information. If the terms of your Policy differ from the
description of the Policy in this Prospectus, you should rely on the terms of
your Policy.
WHAT KIND OF LIFE INSURANCE IS THE POLICY?
The Policy is a flexible premium, variable universal life insurance policy. The
Policy is called "flexible premium" because you can change the amount and
frequency of your premium payments, within certain limits. The Policy is called
"variable" life insurance because your Cash Surrender Value and your Death
Benefit can vary because your Account Value will vary.
CAN I OBTAIN PERSONALIZED ILLUSTRATIONS DEMONSTRATING HOW THE POLICY MIGHT WORK?
Yes, we will furnish, upon request and free of charge, a personalized
illustration reflecting the proposed Insured's issue age, gender and
underwriting class. We may charge a reasonable fee for additional illustrations.
HOW DO I PURCHASE A POLICY?
You can apply for a Policy by contacting your insurance agent/financial
representative. We will not issue a Policy that insures a person who does not
meet our underwriting standards. We will also not issue a Policy that insures a
person who will be over 85 years of age on the date the Policy is issued.
Insurance coverage under your Policy begins on the effective date of
your Policy.
HOW MUCH LIFE INSURANCE CAN I PURCHASE?
The minimum amount of life insurance you must purchase is $100,000. We call this
minimum amount of insurance the "Minimum Issue Limit." We call the amount of
insurance that you request the "Specified Amount."
You may apply for an increase in your Specified Amount at any time. We will
approve a requested increase if the Insured meets our underwriting standards for
the requested increase. Generally, the minimum amount of increase we require is
$25,000.
You can request a decrease in your Specified Amount at any time after the first
Policy Year. We must approve each request. You cannot decrease your Base
Specified Amount below the Minimum Issue Limit.
WHAT INSURANCE PROTECTION DOES THE POLICY OFFER?
The Policy provides life insurance on the Insured. We will pay the Beneficiary
the Death Proceeds when the Insured dies. The Death Proceeds include the Death
Benefit under the Policy plus any insurance provided by riders to the Policy.
Page 8
<PAGE>
The Death Benefit will never be lower than your Specified Amount less any
Indebtedness. Depending on the Insured's age and your Account Value, the Death
Benefit could be higher than your Specified Amount. The amount of the Death
Benefit also depends on the death benefit option you selected. We offer 2 death
benefit options--Option 1 and Option 2.
Option 1 emphasizes the potential growth of your Account Value. If you select
Option 1, any increase in your Account Value will decrease the risk to us
relative to the death benefit we must pay when the Insured dies and will
decrease your cost of insurance.
Option 2 emphasizes the potential growth of your Death Benefit. If you select
Option 2, any increase in your Account Value will increase the amount of your
Death Benefit. Your cost of insurance will be higher under Option 2.
HOW MUCH ARE THE PREMIUM PAYMENTS?
When you purchase your Policy, you tell us how much you plan to pay and how
often you plan to pay. This is called your Planned Premium. The amount and
frequency of your Planned Premium is shown on your Policy Schedule. Generally,
you would continue to make Planned Premium payments until the Insured reaches
100 years of age or dies.
You are not required to make premium payments in set amounts or on a set
schedule. You may skip a Planned Premium payment and you may change the amount
and frequency of your Planned Premium. You must use this flexibility responsibly
to ensure that your insurance coverage continues. You may need to increase your
Planned Premium or make additional premium payments to keep your Policy in
force.
WHAT CHARGES WILL I PAY UNDER THE POLICY?
We assess charges to support the operation of your Policy and Separate Account
1, such as the premium expense charge, state tax charge, the Monthly Deduction
and the Monthly Expense Charge. In addition, we assess administrative fees for
processing withdrawals and certain transfers among the Sub-Accounts. We also
assess surrender charges if you surrender your Policy within the first 12 years
of the Policy or within 12 years following an increase in the Specified Amount.
Some charges are deducted from your premium payments and others reduce your
Account Value.
WHAT FACTORS AFFECT MY COST OF INSURANCE CHARGES?
Your cost of insurance charges, or Monthly Deduction, will depend on the
Insured's issue age, gender and underwriting class, your Account Value,
Indebtedness, selected death benefit option and Specified Amount, the length of
time your Policy has been in effect and the division of your Specified Amount
between Base Specified Amount and Additional Life Rider Specified Amount. The
underwriting class depends on the Insured's health, whether the Insured uses
tobacco and other factors that we use to determine the insurability of the
Insured. The maximum monthly cost of insurance charges will never exceed the
guaranteed monthly cost of insurance rates as shown on your Policy Schedule.
Page 9
<PAGE>
WHAT ARE MY INVESTMENT OPTIONS?
You have ___ investment options for your Net Premiums. You may allocate your Net
Premiums among the ___ available Sub-Accounts of Separate Account 1 and the
Fixed Account. Each Sub-Account invests exclusively in a corresponding Fund of
AIM Variable Insurance Funds, Inc. (AIM), The Alger American Fund (Alger),
Deutsche Asset Management VIT Funds (Deutsche), ____ (Fidelity), ____ (Janus),
MFS Variable Insurance Trust (MFS), PIMCO Variable Insurance Trust (PIMCO) or
Touchstone Variable Series Trust (Touchstone). The Sub-Accounts provide an
opportunity for a higher rate of return than the Fixed Account but also expose
you to a higher risk of losing money. The Fixed Account provides a guaranteed
minimum rate of return.
HOW DO I ALLOCATE MY NET PREMIUMS AMONG INVESTMENT OPTIONS?
You allocate your Net Premiums by specifying on your application the percentage
of your Net Premiums you would like us to allocate to each investment option.
You may change your allocation instructions at any time by notifying us either
by telephone or in writing. When we receive a premium payment from you, we
allocate the Net Premiums based on the most recent allocation instructions we
have received from you.
HOW WILL MY ACCOUNT VALUE VARY?
Your Account Value will vary on a daily basis to reflect the investment
experience of the Sub-Accounts. Your Account Value will also reflect the amount
and frequency of premium payments, any withdrawals, any Indebtedness and charges
and deductions connected with your Policy. There is no guaranteed minimum
Account Value, which means that you bear the entire investment risk that your
Account Value could fall to zero.
CAN I TRANSFER MY ACCOUNT VALUE AMONG INVESTMENT OPTIONS?
Yes, you can transfer your Account Value among the Sub-Accounts or from the
Sub-Accounts to the Fixed Account up to 12 times per Policy Year without charge.
We will charge you $10 for each additional transfer either among the
Sub-Accounts or from the Sub-Accounts to the Fixed Account. You are also
permitted to make 1 transfer from the Fixed Account per Policy Year without
charge. In the first 4 Policy Years, you cannot transfer more than 25% of your
money from the Fixed Account in a Policy Year.
HOW DO I ACCESS MY ACCOUNT VALUE?
Generally, you can withdraw from your Policy part of your Cash Surrender Value,
less any applicable withdrawal fees, and less any Indebtedness. Withdrawals and
related fees will reduce your Account Value. Depending upon your Account Value
and death benefit option, a withdrawal may also reduce your Specified Amount. A
withdrawal may have tax consequences.
You may also surrender your Policy and withdraw all of your Account Value, less
any surrender charges, and less any Indebtedness. We generally assess a
surrender charge for a full surrender of
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your Policy. A full surrender will terminate your Policy. A withdrawal or full
surrender of your Policy may have tax consequences.
CAN I BORROW AGAINST MY POLICY?
Yes, you can borrow money from us by using your Policy as the sole collateral
for the loan. The most you can borrow against your Policy is 90% of your Cash
Surrender Value, less any Indebtedness and less an amount sufficient to cover
the next 2 Monthly Deductions and Monthly Expense Charges. The maximum interest
rate we charge on loans is 4.00%. A loan, whether repaid or not, will have a
permanent negative effect on the Death Benefit and Account Value of your Policy.
WHAT OPTIONAL INSURANCE BENEFITS MAY I PURCHASE?
There are a number of optional insurance benefits that may be available to you.
Among them are:
o Additional Life Rider -- designed to provide additional, low cost,
permanent insurance coverage on the life of the Insured
o Accidental Death Rider -- designed to provide additional insurance
coverage if the Insured's death occurs accidentally rather than by
natural means
o Insured Insurability Rider -- designed to provide the option to
purchase additional insurance coverage without evidence of
insurability at certain ages and under certain circumstances
o Disability Credit Rider -- designed to credit a selected premium to
the Policy in the event you become disabled
o Extended Maturity Benefit Rider No. 2 and No. 3 -- designed to keep
your Policy in force if you live past age 100
o Extended No-Lapse Guarantee Rider -- designed to keep your Policy in
force regardless of the performance of your selected investment
options
Each rider provides a valuable benefit, but each rider has a cost and/or trade-
off in terms of the availability of other riders. Each rider should be
considered in light of its potential benefits and potential costs.
WHAT WILL CAUSE THE POLICY TO LAPSE WITHOUT VALUE?
Your Policy will lapse if your Net Cash Surrender Value is insufficient to pay
the Monthly Deduction and Monthly Expense Charge, the continuation provision
does not apply and we do not receive sufficient premium payments from you during
the Grace Period. If the Policy lapses, you will not receive any money from us
because the Net Cash Surrender Value will have been reduced to zero.
WILL MY DEATH BENEFIT AND ACCOUNT VALUE BE TAXED?
The Policy is intended to meet the definition of a "life insurance contract"
under federal tax law. Therefore, the Death Proceeds should be fully excludable
from the Beneficiary's gross income. In addition, any earnings on your
investment in the Sub-Accounts should not be taxable to you while the Policy is
in effect unless you withdraw some of your Account Value or surrender your
Policy. Under certain circumstances, a loan may be treated as taxable income. We
do not intend for this discussion to be tax advice. You should consult with your
own tax advisor before purchasing a Policy.
DO I HAVE A "FREE LOOK" RIGHT TO EXAMINE THE POLICY?
Yes, you may cancel the Policy within 10 days after receiving it, or such longer
period as state law may require. If you cancel your Policy during the free look
period, we generally will refund to you (1) the amount of your premiums
allocated to the Fixed Account, plus (2) the value of your investments in the
Sub-Accounts as calculated on the date your notice of cancellation is received
by us or your insurance agent/financial representative, plus (3) any charges
attributable to your Net Premiums allocated to the Sub-Accounts.
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PURCHASING YOUR POLICY
To obtain an application to purchase a Policy, please contact your insurance
agent/financial representative.
ELIGIBLE PURCHASERS
You can apply for a Policy if:
o You live in a state where we can issue a Policy.
o You are of legal age.
Your application will be processed through our underwriting process, which may
require the proposed Insured to have a medical exam. Any premium payment
received by us from you before we have completed the underwriting process will
be held by us in escrow. After we complete the underwriting process, we will
notify you of our decision regarding your application. If we approve your
application, the insurance coverage provided by your Policy will begin on the
effective date of your Policy. The effective date of your Policy will be the
later of
o The date we complete the underwriting process and approve your application; or
o The date we receive the required minimum initial premium payment.
We will allocate your initial Net Premiums to your selected investment options
on the effective date of your Policy. We will send you a confirmation statement
indicating that your initial Net Premiums have been allocated and your Policy is
effective.
Even if you live in a state where we can issue a Policy, we will not issue a
Policy that insures a person who will be over 85 years of age on the date the
Policy is issued. We will also not issue a Policy that insures a person who does
not meet our underwriting standards. If we do not issue a Policy to you, we will
return any premium payments made by you and received by us.
SPECIFIED AMOUNT AND MINIMUM ISSUE LIMIT
If you meet our underwriting standards, you may purchase a Policy with a Base
Specified Amount as low as the Minimum Issue Limit. The Minimum Issue Limit for
a Policy is $100,000. If you purchase a Policy with a Base Specified Amount
equal to or near the Minimum Issue Limit, you might not be able to
o Make withdrawals
o Reduce your Specified Amount
o Change your death benefit option
You should consider these limitations before you purchase a Policy with a Base
Specified Amount at or near the Minimum Issue Limit. You should discuss the
Specified Amount for your Policy with your insurance agent/financial
representative before purchasing a Policy.
If you do not purchase the Additional Life Rider, your Base Specified Amount and
your Specified Amount will be the same. However, if you do purchase the
Additional Life Rider, your total Specified Amount will be divided between the
Base Specified Amount of the Policy and the Additional Life Rider Specified
Amount for the Additional Life Rider. The minimum initial Additional Life Rider
Specified Amount you may purchase is $25,000. As a result, if you also purchase
the Additional Life Rider, your initial Specified Amount must be at least
$125,000 (i.e., $100,000 + $25,000).
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10-DAY REVIEW PERIOD
You have 10 days to review your Policy after you receive it. This 10-day review
period is called the free look period. The state where you live may require us
to give you a longer free look period.
If you are not satisfied with the Policy, you can cancel it during the free look
period. To cancel your Policy, you must return it either to us at Columbus Life
Variable Service Center, P.O. Box 2850, Cincinnati, Ohio 45201-2850, or to the
insurance agent/financial representative, who sold you the Policy within 10 days
after you receive it. If you cancel the Policy during the free look period, we
will refund to you:
o The amount of your premiums allocated to the Fixed Account, plus
o The value of your investments in the Sub-Accounts as calculated on
the date your notice of cancellation is received by us or your
insurance agent/financial representative, plus
o Any charges attributable to your Net Premium allocated to the Sub-Accounts.
However, some state laws may require us to refund your total premium payments.
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PREMIUM PAYMENTS
Premium payments are payments that you make to purchase and maintain your
Policy. You can vary the amount and frequency of your premium payments. The
amount and frequency of your premium payments will affect your Account Value and
the duration of insurance coverage under your Policy. We reserve the right to
reject any premium payment if, in our opinion, accepting the payment would mean
the Policy would not qualify as life insurance under federal tax laws.
Your initial premium payment must equal at least 1/12th of the minimum annual
premium for the Five-Year No-Lapse Guarantee. Your initial premium payment may
be given to your insurance agent/financial representative. You should send your
subsequent premium payments to the Columbus Life Variable Service Center, P.O.
Box 2850, Cincinnati, Ohio 45201-2850.
Generally, each premium payment must be at least $50.
You can make premium payments through automatic or scheduled installment
payments, such as pre-authorized checking account deductions. If you use one of
these methods to make premium payments, we will accept premium payments in
amounts less than $50.
Federal tax law may limit your ability to make certain large premium payments.
We will monitor your premium payments to be sure that you do not exceed the
permitted amounts or inadvertently incur any tax penalties due to excess premium
payments.
PLANNED PREMIUMS
When you purchase your Policy, you tell us how much you plan to pay and how
often you plan to pay. This is called your Planned Premium. The amount and
frequency of your Planned Premium is shown on your Policy Schedule. Generally,
you would continue to make Planned Premium payments until the Policy Anniversary
after the Insured reaches 100 years of age or dies. You are not required to make
a Planned Premium payment, but making Planned Premium payments increases the
likelihood that your insurance coverage under the Policy will continue.
You are not required to make premium payments in set amounts or on a set
schedule. You may find this flexibility attractive, but you are responsible for
making sufficient premium payments to ensure that your Policy continues.
Generally, your Policy continues so long as your Net Cash Surrender Value is
equal to or more than the Monthly Deduction plus the Monthly Expense Charge.
Your Net Cash Surrender Value will fluctuate depending on various factors
including the amount of your premium payments. Making Planned Premium payments
increases the likelihood that your Net Cash Surrender Value will be sufficient
to continue your Policy. If you skip a Planned Premium payment or you stop
making Planned Premium payments, it is more likely that your Net Cash Surrender
Value will be insufficient to continue your Policy.
Making Planned Premium payments does not guarantee that your Policy will
continue. Because your Net Cash Surrender Value is affected by other factors,
such as the investment return of your
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Policy, the charges related to your Policy, and the amount of loans and
withdrawals you have made, your Planned Premium payments may not be enough to
keep your Policy in force. You may need to increase your Planned Premium or make
additional premium payments to keep your Policy in force. We will monitor your
Policy and notify you if your Net Cash Surrender Value is no longer sufficient
to maintain your Policy. Also, each year we will send you a report that includes
a projection, which is based upon certain assumptions, that will indicate
whether or not your Planned Premium is likely to be sufficient to keep your
Policy in force for the upcoming year.
An illustration is a useful tool for estimating, by assuming one or more
hypothetical investment returns, whether a given Planned Premium is likely to
achieve the goals you have set for your Policy. An illustration is available
upon request and free of charge.
More information about the continuation of your Policy, including a provision of
your Policy that guarantees continued coverage for the five-year period
beginning on the Policy Date, is located on page ___ of this Prospectus. You
may be able to purchase a rider that will extend this guarantee of continued
coverage for longer periods of time.
CHANGING YOUR PLANNED PREMIUM
Planned Premium Changes by Phone. You can change the amount or frequency of your
Planned Premium over the phone by following these steps:
STEP 1: Fill out either the telephone authorization part of the application or a
Telephone Access Authorization Form. You can get a copy of this form by
contacting the Columbus Life Variable Service Center, P.O. Box 2850, Cincinnati,
Ohio 45201-2850. You must complete and return one of these authorizations before
you can call to change your Planned Premium.
STEP 2: Call the Columbus Life Variable Service Center at 800.677.9595 between
8:00 a.m. and 4:00 p.m. Eastern Time.
Give the representative the following information:
o Your Social Security number
o Your Policy number or other precise information that identifies
your Policy
o Your new Planned Premium information
Planned Premium Changes in Writing. You can also change the amount or frequency
of your Planned Premium by writing to the Columbus Life Variable Service Center,
P.O. Box 2850, Cincinnati, Ohio 45201-2850. Your written instructions must
include the following information:
o Your Policy number or other precise information that identifies your
Policy
o Your new Planned Premium information
o Your signature
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SKIPPING PLANNED PREMIUM PAYMENTS
You can skip Planned Premium payments and your Policy will continue to be
effective if the Net Cash Surrender Value of your Policy is sufficient to pay
the Monthly Deduction and the Monthly Expense Charge on the next Monthly
Anniversary Day or the continuation provision described on page ___ is
applicable. If not, your Policy may terminate.
INVESTOR ALERT
o Your Net Cash Surrender Value is affected by various factors,
including the investment performance of the investment options you
select. Therefore, it is possible that, due to poor investment
performance, your Net Cash Surrender Value will not be sufficient
to continue coverage under your Policy even if you have paid your
Planned Premiums.
o Skipped premium payments, withdrawals and loans will reduce your
Net Cash Surrender Value and may prevent you from meeting the
conditions required to continue coverage under your Policy.
o Because of the relative size of the minimum annual premium for the
Five-Year No-Lapse Guarantee and the surrender charges, your Net
Cash Surrender Value may be zero for up to 5 years if you pay only that
minimum annual premium. In addition, you may have to make an additional
premium payment at the end of the first 5 years in order to continue
coverage under your Policy. If you can only make the minimum annual
premium payments, this type of policy may not be appropriate for you.
TARGET PREMIUMS
Each Coverage Layer of your Policy is assigned a Target Premium for each
Coverage Year. The Target Premium for each Coverage Layer is shown on your
Policy Schedule. We use the Target Premium to determine the rate of the premium
expense charge. We also use the Target Premium to determine the portion of a
premium payment on which we assess the premium expense charge at the base rate
and the portion that assess the premium expense charge at the excess rate, which
is lower.
INVESTOR ALERT
o Attempting to structure the time and amount of premium payments to
reduce the potential premium expense charge may increase your risk
that your Policy will lapse.
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ALLOCATION OF NET PREMIUMS
INVESTMENT OPTIONS
You decide how to allocate your Net Premiums by selecting from the following
investment options:
SUB-ACCOUNTS
o AIM V.I. Growth
o AIM V.I. Government Securities
o Alger American Small Capitalization
o Alger American Growth
o Deutsche VIT Equity 500 Index
o FIDELITY
o JANUS
o MFS VIT Emerging Growth
o MFS VIT Growth with Income
o PIMCO Long-Term U.S. Government
o Touchstone Small Cap Value
o Touchstone Emerging Growth
o Touchstone International Equity
o Touchstone High Yield
o Touchstone Value Plus
o Touchstone Enhanced 30
o Touchstone Balanced
o Touchstone Bond
o Touchstone Standby Income
FIXED ACCOUNT
--------------------------------------------------------------------------------
You should review your selected investment options and allocations periodically
to determine if they are appropriate considering market conditions and your
financial objectives.
--------------------------------------------------------------------------------
ALLOCATION OF NET PREMIUMS
Your initial allocation instructions are included in your application and are
shown on your Policy Schedule. You can change your allocation instructions by
contacting us either by phone or in writing. If we receive a premium payment
from you, we allocate your Net Premiums based on the most recent allocation
instructions we have received from you.
The following guidelines apply to the allocation of your Net Premiums:
o Allocate at least 1% of your Net Premiums to each investment option you
choose.
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o Use whole percentages. For example, you can allocate 33% or 34% to an
investment option, not 33 1/3%.
o Make sure your percentages total 100%.
Allocation Changes by Phone. You can change the allocation of your future Net
Premiums over the phone by following these steps:
STEP 1: Fill out either the telephone authorization part of the application or a
Telephone Access Authorization Form. You can get a copy of this form by
contacting the Columbus Life Variable Service Center, P.O. Box 2850, Cincinnati,
Ohio 45201-2850. You must complete and return one of these authorizations before
you can call to change your allocations over the phone.
STEP 2: Call the Columbus Life Variable Service Center at 800.677.9595 between
8:00 a.m. and 4:00 p.m. Eastern Time.
Give the representative the following information:
o Your Social Security number
o Your Policy number or other precise information that identifies your
Policy
o Your allocation instructions
Allocation Changes in Writing. You can also change the allocation of your future
Net Premiums by writing to the Columbus Life Variable Service Center, P.O. Box
2850, Cincinnati, Ohio 45201-2850. Your written instructions must include the
following information:
o Your Policy number or other precise information that identifies your
Policy
o Your allocation instructions
o Your signature
Third Party Authorizations. You can authorize a third party to allocate your Net
Premiums. To do so, you must complete the appropriate authorization forms.
Contact the Columbus Life Variable Service Center, P.O. Box 2850, Cincinnati,
Ohio 45201-2850 at 800-677-9595 for additional information.
INVESTOR ALERT
o There is no guaranteed minimum value for amounts allocated to the
Sub-Accounts. This means that you bear the entire investment risk
that your investment in a Sub-Account could fall to zero.
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TRANSFERRING YOUR MONEY
After your free look period, you can transfer money from one investment option
to another. You can make transfers by phone or in writing.
The following guidelines apply to transfers other than dollar cost averaging
transfers:
o Each transfer must be at least $250 or the total value of the
Sub-Accounts, if less than $250.
o The allocation to each investment option must be at least 1% of the
total transfer amount.
o You can transfer money among the Sub-Accounts or from the Sub-Accounts
TO the Fixed Account up to 12 times in a Policy Year
without charge. You will be charged $10 per transfer for each
additional transfer in a Policy Year.
o You can transfer FROM the Fixed Account to the Sub-Accounts only
once each Policy Year. During the first 4 Policy Years, you can
transfer up to 25% of your money from the Fixed Account in a
Policy Year. After your 4th Policy Year, you can transfer all of
your money from the Fixed Account at any time.
All transfers requested on the same day will be considered a single transfer for
purposes of these guidelines and charges.
Transfers by Phone. You can transfer your money by calling us and following
these steps:
STEP 1: Fill out either the telephone authorization part of the application or a
Telephone Access Authorization Form. You can get a copy of this form by
contacting the Columbus Life Variable Service Center, P.O. Box 2850, Cincinnati,
Ohio 45201-2850. You must complete and return one of these authorizations before
you can call to transfer your money.
STEP 2: Call the Columbus Life Variable Service Center at 800.677.9595 between
8:00 a.m. and 4:00 p.m. Eastern Time.
Give the representative the following information:
o Your Social Security number
o Your Policy number or other precise information that identifies your
Policy
o Your transfer instructions
Transfers in Writing. You can also transfer your money by writing to the
Columbus Life Variable Service Center, P.O. Box 2850, Cincinnati, Ohio
45201-2850. Your written instructions must include the following information:
o Your Policy number or other precise information that identifies your
Policy
o Your transfer instructions
o Your signature
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Third Party Authorizations. You can authorize a third party to transfer your
money for you. To do so, you must complete the appropriate authorization forms.
Contact the Columbus Life Variable Service Center, P.O. Box 2850, Cincinnati,
Ohio 45201-2850 at 800-677-9595 for additional information.
DOLLAR COST AVERAGING PROGRAM
Dollar cost averaging is a method of investing equal amounts of money at regular
intervals. Dollar cost averaging allows you to purchase more when prices are low
and less when prices are high. For dollar cost averaging to be effective, you
should continue to invest during both market ups and downs. You should also
consider your financial ability to maintain a consistent level of investment
over time.
The Dollar Cost Averaging Program allows you to transfer amounts at regular
intervals from a Sub-Account we designate for this purpose or the Fixed Account
to the other Sub-Accounts. You can make the following transfers:
o A specific dollar amount
o A specific percentage of your money in the Sub-Account we designate for
this purpose or the Fixed Account o Earnings in the Sub-Account we
designate for this purpose or the Fixed Account
You select the number and frequency of your transfers in the Dollar Cost
Averaging Program. We will transfer the money on your Monthly Anniversary Day.
The following guidelines apply to dollar cost averaging transfers:
o Dollar cost averaging transfers must continue for at least 12 months.
o Each transfer must be at least $100.
o The allocation to each Sub-Account must be at least 1% of the transfer
amount.
To set up dollar cost averaging transfers, contact the Columbus Life Variable
Service Center, P.O. Box 2850, Cincinnati, Ohio 45201-2850 at 800.677.9595. We
currently do not charge a fee for this service. However, we may charge a fee in
the future for your transfers in the Dollar Cost Averaging Program.
Dollar cost averaging transfers will stop if we complete the number of transfers
you requested, you ask us to stop after using the program for 12 months, you do
not have enough money in your accounts to complete the transfer, or we
discontinue the program. If we discontinue the program, you will be allowed to
complete the number of transfers you previously requested.
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BORROWING YOUR MONEY
Your Policy is designed to provide insurance coverage and to help you achieve
your long-term financial goals. However, there may be times when you need to
borrow money against your Policy.
LOANS
You can borrow money against your Policy. We calculate the maximum loan amount
using the following procedure:
o We determine 90% of your Cash Surrender Value.
o We subtract any outstanding Indebtedness.
o We determine and subtract the next 2 Monthly Deductions and Monthly
Expense Charges.
COLLATERAL FOR LOANS
If you borrow money against your Policy, generally we will transfer the same
amount of money to your Loan Account. The money in your Loan Account is
collateral for your loan. We transfer money on a pro-rata basis from each of
your investment options. For example, if you have 25% of your money in the
Touchstone High Yield Sub-Account and 75% of your money in the Touchstone
Enhanced 30 Sub-Account and you borrow $2,000, we will transfer $500 from the
Touchstone High Yield Sub-Account (25% of $2,000) and $1,500 from the Touchstone
Enhanced 30 Sub-Account (75% of $2,000) to your Loan Account.
We pay interest on your Loan Account. The minimum interest we pay is 3.00%
annually.
INTEREST ON BORROWED AMOUNTS
We charge interest on the amounts you borrow at the current rate. We may change
the interest rate at any time, but the interest rate will never be greater than
the maximum interest rate that is listed on your Policy Schedule.
Interest is due on each Policy Anniversary and on the date the loan is repaid.
If you do not pay the interest when it is due, we will treat it as an additional
loan.
INVESTOR ALERT
Any loan, even if you repay the loan, will generally have a permanent negative
effect on the Death Benefit and Account Value because:
o Loan amounts will not be available for investment in the Sub-Accounts
or Fixed Account.
o Interest charged on borrowed amounts may be treated as an additional
loan.
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o Outstanding Indebtedness is subtracted to determine your Death Benefit.
LOAN REPAYMENTS
You can repay all or part of your loan at any time while the Insured is living.
When you make a payment towards the principal amount of your loan, we transfer
the amount of the loan payment from your Loan Account back to your investment
options on a pro-rata basis according to your allocation instructions at that
time.
If you do not repay the loan before the Insured dies, we will deduct the
Indebtedness when determining your Death Benefit. If you do not repay the loan
before you surrender your Policy, we will deduct the Indebtedness to determine
the Net Cash Surrender Value proceeds.
INVESTOR ALERT
o You must specifically designate a payment as a loan repayment or we
will treat it as an additional premium payment instead.
CANCELLATION BASED ON INDEBTEDNESS
If the Indebtedness exceeds the Cash Surrender Value less the Monthly Deduction
and Monthly Expense Charge for the current month, we can terminate your Policy.
We will tell you that we intend to terminate your Policy by mailing a notice to
you at least 31 days before we terminate your Policy. The notice will tell you
the minimum amount that you must pay to keep your Policy in effect. We will mail
the notice to your address as shown on our records. If our records indicate that
someone holds your Policy as collateral, we will also mail a copy of the notice
to that person's address as shown on our records.
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WITHDRAWING YOUR MONEY
There may be times when you need to withdraw money from or cancel your Policy.
If you cancel your Policy, you may have to pay a surrender charge. Surrender
charges are explained on page ___.
WITHDRAWALS
After you have owned your Policy for one year, you may withdraw a portion of
your money from your Policy by sending written instructions to the Columbus Life
Variable Service Center, P.O. Box 2850, Cincinnati, Ohio 45201-2850. For help
with a withdrawal, please call the Columbus Life Variable Service Center at
800.677.9595.
The following guidelines apply to withdrawals:
o You must include your Policy number or other information that
identifies your Policy and the amount to be withdrawn on your
instructions.
o Each withdrawal must be at least $500.
o No withdrawal may be made that would reduce your Net Cash Surrender Value
below $250.
o You can make one withdrawal in a Policy Year without paying a withdrawal
fee. You will be charged a fee of $50 per withdrawal for each additional
withdrawal in that Policy Year.
o If you have death benefit option 1, we will reduce the Specified Amount by
the amount necessary to keep your Death Benefit less your Account Value
the same both before and after the withdrawal. (If you have also purchased
the Additional Life Rider, for any reduction in your Specified Amount, you
will keep the same proportion of Base Specified Amount and Additional Life
Rider Specified Amount.)
o The amount of your withdrawal if you have death benefit Option 1 may be
limited because your Base Specified Amount cannot be reduced to less than
the Minimum Issue Limit by a withdrawal. As a result, if your Base
Specified Amount is equal to the Minimum Issue Limit for your Policy, you
will not be able to make withdrawals.
PROCESSING WITHDRAWALS
When we process your withdrawal, we will deduct the amount withdrawn plus any
withdrawal fees from your Account Value. We withdraw money from each of your
investment options on a pro-rata basis.
PAYMENT ON WITHDRAWALS
We will generally send payments to you within 7 days of the date we process your
request. We may delay calculating the amount of payment from a Sub-Account or
sending a payment from a Sub-Account for any of the following reasons:
o You have made a premium payment by check that has not cleared the banking
system.
o The New York Stock Exchange is closed on a day that it normally would
be open.
o Trading on the New York Stock Exchange is restricted.
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o Because of an emergency, it is not reasonably practicable for the
Sub-Accounts to sell securities or to fairly determine the value
of their investments.
o The Securities and Exchange Commission permits us to postpone payments from
the Sub-Accounts for your protection.
As required by most states, we reserve the right to delay payments from the
Fixed Account for up to 6 months. We do not expect to delay payments from the
Fixed Account and we will notify you if there will be a delay.
CANCELING YOUR POLICY
You can cancel your Policy at any time. When you cancel your Policy, we pay you
the Net Cash Surrender Value. This payment terminates your Policy and our
obligations under the Policy.
The Net Cash Surrender Value will equal your Account Value, less any
Indebtedness and any applicable surrender charge. Because investment
performance, Monthly Deductions and Monthly Expense Charges affect your Account
Value, loan activity affects your Indebtedness and a surrender charge may apply,
the Net Cash Surrender Value may be much less than the total of your premium
payments.
To cancel your Policy, send written instructions to the Columbus Life Variable
Service Center, P.O. Box 2850, Cincinnati, Ohio 45201-2850. Include your Policy
number or other information that identifies your Policy and your signature in
your instructions. For assistance, please call the Columbus Life Variable
Service Center at 800.677.9595.
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DEATH BENEFITS
DEATH BENEFIT OPTIONS
Your Death Benefit depends on the death benefit option you select. When you
complete your application, you select one of 2 death benefit options (Option 1
or Option 2).
OPTION 1
WHAT YOUR BENEFICIARY RECEIVES
The Death Benefit will equal the greater of the following amounts:
o The Specified Amount, less any Indebtedness
o The Account Value multiplied by the Applicable Death Benefit Factor
(see Supplement B), less any Indebtedness
We calculate these amounts as of the date of the Insured's death.
WHY SELECT THIS OPTION
Option 1 emphasizes the potential growth of your Account Value. Under
Option 1, any increase in your Account Value will decrease the risk to
us relative to the Death Benefit we must pay when the Insured dies. As
a result, all other things being equal, you will pay less in cost of
insurance charges under Option 1 for the same Specified Amount than you
would under Option 2. These lower charges may allow your Account Value
to grow faster.
EXAMPLE
Facts:
o The Insured is less than 40 years old (Applicable Death Benefit
Factor =2.50).
o Your Policy's Specified Amount is $100,000.
o You have never borrowed money from your Policy.
o Your Account Value is $25,000.
Under Option 1, your Death Benefit would be the greater of $100,000 and
$62,500 ($25,000 multiplied by 2.50). Therefore, your Death Benefit
would be $100,000.
OPTION 2
WHAT YOUR BENEFICIARY RECEIVES
The Death Benefit will equal the greater of the following amounts:
o The Specified Amount plus the Account Value, less any Indebtedness
Page 25
<PAGE>
o The Account Value multiplied by the Applicable Death Benefit Factor
(see Supplement B), less any Indebtedness
We calculate these amounts as of the date of the Insured's death.
WHY SELECT THIS OPTION
Option 2 emphasizes the potential growth of your Death Benefit. Under
Option 2, any increase in your Account Value will increase the amount
of your Death Benefit. As a result, all other things being equal, your
Death Benefit under Option 2 will generally be greater than under
Option 1 for the same Specified Amount. However, you will pay more in
cost of insurance charges under Option 2 for the same Specified Amount
than you would under Option 1.
EXAMPLE
Facts:
o The Insured is less than 40 years old (Applicable Death Benefit
Factor =2.50).
o Your Policy's Specified Amount is $100,000.
o You have never borrowed money from your Policy.
o Your Account Value is $25,000.
Under Option 2, your Death Benefit would be the greater of $125,000
($100,000 plus $25,000) and $62,500 ($25,000 multiplied by 2.50).
Therefore, your Death Benefit would be $125,000.
CHANGING YOUR DEATH BENEFIT OPTION
After you have owned your Policy for one year, you may change your death benefit
option by sending written notice to the Columbus Life Variable Service Center,
P.O. Box 2850, Cincinnati, Ohio 45201-2850. If you change your death benefit
option, your Specified Amount will also change unless you elect to keep the same
Specified Amount. (If you have also purchased the Additional Life Rider, for any
change in your Specified Amount, you will keep the same proportion of Base
Specified Amount and Additional Life Rider Specified Amount.) The change in
Specified Amount insures that your Death Benefit will be the same both before
and after the change. Also, a change in death benefit option will generally
affect your cost of insurance charges. If you change your death benefit option,
we will automatically make any other changes necessary to preserve the status of
the Policy as life insurance under the federal tax laws. We must approve any
changes in your death benefit option. Changes in your death benefit option are
effective on the first Monthly Anniversary Day after we approve your request. We
will send you an amended Policy Schedule.
CHANGING FROM OPTION 1 TO OPTION 2
If you change from Option 1 to Option 2, your previous Specified Amount
will be reduced by the amount, if any, needed to keep the Death Benefit
the same both before and after the change. We will not allow this
change if it causes the new Specified Amount to fall below the Minimum
Issue Limit shown on your Policy Schedule.
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<PAGE>
If you elect to keep the same Specified Amount as before, you must
provide us with proof of insurability satisfactory to us.
CHANGING FROM OPTION 2 TO OPTION 1
If you change from Option 2 to Option 1, your previous Specified Amount
will be increased by the amount, if any, needed to keep the Death
Benefit the same both before and after the change.
CHANGING YOUR SPECIFIED AMOUNT
You may ask to change your Specified Amount by sending a written request to
the Columbus Life Variable Service Center, P.O. Box 2850, Cincinnati, Ohio
45201-2850. You may change the Specified Amount of your Policy without changing
your death benefit option. The Specified Amount must be increased or decreased
by at least $25,000. (If you have also purchased the Additional Life Rider, for
any change in your Specified Amount, you will keep the same proportion of Base
Specified Amount and Additional Life Rider Specified Amount.)
INCREASING THE SPECIFIED AMOUNT
You may apply for an increase in your Specified Amount on a
supplemental application. Before the increase is effective, we will
require proof of insurability satisfactory to us. Any approved increase
will be effective as of the date shown on the amended Policy Schedule.
DECREASING THE SPECIFIED AMOUNT
You may request a decrease in your Specified Amount at any time after
you have owned the Policy for one year. Only your written request is
needed to decrease your Specified Amount. However, you may not decrease
your Base Specified Amount below the Minimum Issue Limit shown on your
Policy Schedule. We may also limit the amount of the decrease in order
to preserve the tax status of your Policy as life insurance.
A decrease in your Specified Amount will be applied in the following
order:
(1) We will reduce the most recent increase in your Specified Amount,
if any.
(2) We will then reduce the next most recent increase in your
Specified Amount, if any.
(3) We will continue reducing any increase in your Specified Amount
until it has been reduced to your initial Specified Amount.
(4) Finally, any remaining decreases will reduce your initial
Specified Amount.
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<PAGE>
PAYMENT OF POLICY PROCEEDS
POLICY PROCEEDS
We will pay the proceeds of this Policy in an lump sum or under one of the
Income Plans. We will generally pay one of 2 types of proceeds--Death Proceeds
or Net Cash Surrender Value proceeds. Proceeds applied under one of the Income
Plans no longer vary with the investment experience of the Sub-Accounts.
<TABLE>
<CAPTION>
Proceeds Death Proceeds Net Cash Surrender Value
-------------- ------------------------
<S> <C> <C>
When Paid? o Upon the death of the Insured. o Upon any cancellation of the Policy
during the lifetime of the Insured.
Who Receives Payments o The Beneficiaries receive the o You receive the payments.
or Who are the Payees? payments.
o If there are no surviving Beneficiaries, the
Contingent Beneficiaries who are still alive
receive the payments.
o If there are no surviving Beneficiaries or
Contingent Beneficiaries, you or your estate
receive the payments.
Amount of Proceeds? o The proceeds equal your Death o The proceeds equal your Account
Benefit plus any insurance on the life Value less any applicable Surrender
of the Insured provided by riders, other Charges and less any Indebtedness on
than the Additional Life Rider the date of cancellation.
o We will also pay you interest on o We will also pay you interest on
the proceeds at not less than the rate the proceeds at not less that the rate
required by law for the time between required by law for the time between
the date of the Insured's death to the the date the Policy is cancelled to the
date of the lump-sum payment or the date of the lump-sum payment or the
date on which we apply the proceeds to date on which we apply the proceeds to
the selected Income Plan. the selected Income Plan.
o If the Insured dies during a Grace
Period, we will reduce the proceeds
by the amount of any unpaid charges,
but not by more than 3 times the sum of
the Monthly Deduction and the Monthly
Expense Charge.
How to Claim Proceeds? o The Beneficiary must contact us for o You must write to us and tell us
instructions and provide proof of the that you want to cancel your Policy.
Insured's death. o We may request other information
o We may request other information before we pay the proceeds.
before we pay the proceeds.
</TABLE>
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<PAGE>
SELECTING AN INCOME PLAN
While the Insured is alive, you may select an Income Plan under which we will
pay the proceeds of your Policy. If the Insured dies and you have not selected
an Income Plan, the Beneficiary may select an Income Plan. If you have selected
an Income Plan before the Insured's death, the Beneficiary may not change the
Income Plan after the Insured's death.
We will send you a separate written agreement putting the selected Income Plan
into effect. One of the following Income Plans may be selected:
<TABLE>
<CAPTION>
<S> <C>
INCOME PLAN 1 o Payments for Fixed Period - we make monthly payments for a fixed
number of years.
INCOME PLAN 2 o Payments for Life--Guaranteed Period - we make monthly payments for
a guaranteed period or the life of the Insured, whichever is longer.
INCOME PLAN 3 o Payments of a Fixed Amount - we make monthly payments of a fixed
amount until an amount equal to the proceeds plus accrued interest has
been paid.
INCOME PLAN 4 o Life Annuity--No Guaranteed Period - we make monthly payments for
the life of the Payee.
INCOME PLAN 5 o Joint and Survivor - we make monthly payments as long as one of
the two designated Payees is alive.
</TABLE>
In addition to these Income Plans, other Income Plans may be available in the
future or upon request.
If you or the Beneficiary do not select an Income Plan, we will make a lump-sum
payment of the proceeds. We generally make this lump-sum payment to a special
account retained by us. We provide the Beneficiary with a checkbook to access
these funds from that special account.
The Income Plan selected and the time when the Income Plan is selected can
affect the tax consequences to you or the Beneficiary. You should consult your
tax advisor before selecting an Income Plan.
SUMMARY OF INCOME PLANS
In the following summaries of the Income Plans, we use Payee to mean the person
who actually receives the payment of proceeds from us. Depending upon the
circumstances, the Payee might mean you, the Beneficiary, the Contingent
Beneficiary, your estate or another designated person. The total amount to be
applied under an Income Plan includes both the proceeds and any interest we have
paid on the proceeds.
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<PAGE>
INCOME PLAN 1
(PAYMENTS FOR FIXED PERIOD)
We will pay the proceeds in equal monthly installments for a fixed
period of time, up to a maximum of 30 years. The installment payments
will remain the same throughout the period of years selected.
The amount of the monthly installment payment will depend on the
following:
o The total amount to be applied under this Income Plan
o The number of years selected for installment payments
INCOME PLAN 2
(PAYMENTS FOR LIFE--GUARANTEED PERIOD)
You select a guaranteed payment period of 10 or 20 years. We will make
equal monthly payments for the selected guaranteed period or the life
of the Payee, whichever is longer. Before we make a payment, we may
require proof that the Payee is alive at the time a payment is due.
The amount of the monthly installment payment will depend on the
following:
o The total amount to be applied under this Income Plan
o The gender of the Payee
o The age of the Payee on the effective date of this Income Plan
o The selected guaranteed period
INCOME PLAN 3
(PAYMENTS OF A FIXED AMOUNT)
We will pay the proceeds in equal monthly installment payments. You
select the amount of the monthly installment payment, which must be at
least $5 for every $1,000 of proceeds. For example, if the proceeds are
$60,000, the minimum monthly installment payment is $300 ($5 x 60). The
monthly installment payment will remain the same until the total amount
to be applied under this Income Plan is paid. The last payment will be
for the balance only. All monthly installment payments must be made in
30 years or less.
INCOME PLAN 4
(LIFE ANNUITY--NO GUARANTEED PERIOD)
We will make equal monthly payments as long as the Payee is alive. WHEN
THE PAYEE DIES, WE WILL STOP MAKING PAYMENTS, EVEN IF WE HAVE ONLY MADE
ONE PAYMENT. Before we make a payment, we may require proof that the
Payee is alive at the time a payment is due.
The amount of the monthly installment payment will depend on the
following:
o The total amount to be applied under this Income Plan
o The gender of the Payee
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<PAGE>
o The age of the Payee on the effective date of this Income Plan
INCOME PLAN 5
(JOINT AND SURVIVOR)
You can select this Income Plan only if 2 persons are named as Payees.
We will make monthly payments to the Payee or Payees as long as at
least one Payee is alive. Before we make a payment, we may require
proof that at least one of the Payees is alive at the time the payment
is due.
The amount of the monthly installment payment will depend on the
following:
o The total amount to be applied under this Income Plan
o The gender of each of the Payees
o The age of each of the Payees on the effective date of this
Income Plan
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<PAGE>
CHARGES
PREMIUM EXPENSE CHARGE
The premium expense charge partially covers our distribution expenses and
federal DAC taxes associated with the Policy. We deduct the premium expense
charge from each premium payment that we receive from you before we allocate the
Net Premiums to your investment options.
The premium expense charge that you pay to us depends on the Coverage Year for
each Coverage Layer. We allocate premium payments to each Coverage Layer in the
same proportion that the Target Premium for a Coverage Layer bears to the total
Target Premium for a Coverage Layer bears to the total Target Premiums for all
Coverage Layers. The premium expense charge rate that you pay for each Coverage
Layer depends on the following:
o The total amount of premium payments allocated to that Coverage Layer in
each Coverage Year and
o Whether the total amount of premium payments allocated to that
Coverage Layer in that Coverage Year is more than or less than the
Target Premium for that Coverage Layer.
If the premium payments allocated to a Coverage Layer in a Coverage Year are
more than the Target Premium for that Coverage Layer, we assess a lower premium
expense charge rate on the excess premium payments. The total premium expense
charge that you pay on a specific premium payment is the sum of the premium
expense charges that we calculate for each Coverage Layer. The maximum premium
expense charge for a Coverage Layer is 7.50% of the part of the premium payment
allocated to that Coverage Layer. The table below describes the current and
maximum premium expense charge rate that we charge
<TABLE>
<CAPTION>
--------------------------------------------------------- ---------------------------------------------------------
CURRENT PREMIUM EXPENSE CHARGE RATES MAXIMUM PREMIUM EXPENSE CHARGE RATES
--------------------------------------------------------- ---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COVERAGE UP TO IN EXCESS OF COVERAGE UP TO IN EXCESS OF
YEAR TARGET PREMIUM TARGET PREMIUM YEAR TARGET PREMIUM TARGET PREMIUM
----- ------------- -------------- ----- -------------- ---------------
1-12 6.50% 3.25% 1-12 7.50% 4.25%
13+ 2.50% 1.75% 13+ 3.50% 2.75%
--------------- -------------------- -------------------- ------------ --------------------- ----------------------
</TABLE>
At our option, we may charge an amount different than the current rates shown
above. However, the premium expense charge rate is guaranteed to be no more than
the maximum shown above.
STATE TAX CHARGE
The state tax charge covers state taxes on insurance premiums. We will deduct
the state tax charge from each premium payment that we receive from you before
we allocate the Net Premiums to your investment options.
MONTHLY DEDUCTION AND MONTHLY EXPENSE CHARGE
The Monthly Deduction includes the cost of insurance charge described below plus
the cost of any additional benefits provided under your Policy by rider.
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<PAGE>
The Monthly Expense Charge partially covers our expenses for distributing,
issuing and administering the Policy and for assuming the mortality risks and
the expense risks associated with the Policy. The Monthly Expense Charge
consists of 3 components:
o a per policy charge
o a per $1,000 charge
o a mortality and expense risk charge
We deduct the Monthly Deduction and the Monthly Expense Charge on each Monthly
Anniversary Day, including the Policy Date. We normally deduct these charges
from each of your investment options on a pro-rata basis. You may elect to have
all of these charges deducted entirely from the Fixed Account or from a single
Sub-Account that you select. Please contact the Columbus Life Variable Service
Center, P.O. Box 2850, Cincinnati, Ohio 45201-2850, or call us at 800.677.9595
for assistance in making this election.
COST OF INSURANCE CHARGE
You pay us a monthly cost of insurance charge for providing you with life
insurance protection.
The cost of insurance charge that you pay to us depends on the Insured's issue
age, gender and underwriting class, your Specified Amount and the length of time
your Policy has been in effect.
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<PAGE>
The table in Supplement C shows the maximum cost of insurance charge if the
Insured under a Policy is in either a standard or a preferred underwriting
class. Various risk factors determine the underwriting class of the Insured. The
cost of insurance charge rate is generally higher for an Insured who uses
tobacco, but the cost of insurance charge rate is generally lower for an Insured
who is in the preferred underwriting class. The monthly cost of insurance
charge may be higher than the amount shown in Supplement C if the Insured under
a Policy is in a special or substandard underwriting class.
The maximum monthly cost of insurance charge rates under your Policy are shown
on your Policy Schedule. At our option, we may charge less than the maximums
shown on your Policy Schedule. For early Coverage Years of a Coverage Layer, we
also generally charge a lower cost of insurance charge rate for a Specified
Amount above $250,000. Also, for early Coverage Years of a Coverage Layer, this
charge may be even lower for the cost of insurance charge rate attributable to
the Additional Life Rider Specified Amount.
PER POLICY CHARGE
The per policy charge is a component of the Monthly Expense Charge that
partially compensates us for administering the Policy. The maximum per policy
charge is $9.00. The current per policy charge is $7.50. At our option, we may
change the current per policy charge but we will not charge more than the
maximum per policy charge.
PER $1,000 CHARGE
The per $1,000 charge is a component of the Monthly Expense Charge that
partially compensates us for issuing and distributing the Policy. A per $1,000
charge applies to your initial Base Specified Amount and to any requested
increase in Base Specified Amount. We will charge the per $1,000 charge on your
initial Base Specified Amount for the first 12 years after your Policy Date. We
will also charge a per $1,000 charge on any increase in Base Specified Amount
for the first 12 years after that increase. However, we will not change your per
$1,000 charge for a Coverage Layer if you reduce your Specified Amount.
The per $1,000 charge that you pay to us depends on Insured's age on the Policy
Date and on the date of any increase in Base Specified Amount and the
underwriting class of the Insured. Various risk factors determine the
underwriting class of the Insured. The maximum per $1,000 charge under your
Policy is shown on your Policy Schedule. At our option, we may charge less than
the maximum shown on your Policy Schedule.
MORTALITY AND EXPENSE RISK CHARGE
The mortality and expense risk charge is a component of the Monthly Expense
Charge that partially compensates us for assuming the mortality risk and the
expense risk associated with the Policy. We take a mortality risk that the
Insured will not live as long as we expect and therefore the amount of the death
benefits we pay under the Policy will be greater than we expect. We take an
expense risk that the costs of issuing and administering the Policy will be
greater than we expect. You pay us to assume these risks by paying the mortality
and expense risk charge. The maximum mortality and expense risk charge is 0.90%
annually. The current annual rate of these charges is 0.70% for the first 12
Policy Years. Beginning in Policy Year 13, we charge a different rate on
different portions of your Account Value. The table below describes the current
and maximum mortality and expense risk charge rate we charge.
<TABLE>
<CAPTION>
Current Annual Maximum Annual
Policy Account Value Mortality and Expense Mortality and Expense
Year Less Value of Loan Account Risk Charge Rate Risk Charge Rate
------ -------------------------- --------------------- ---------------------
<S> <C> <C> <C>
1-12 All Amounts 0.70% 0.90%
13+ 0-$25,000 0.70% 0.90%
$25,001-$50,000 0.45% 0.65%
$50,001-$250,000 0.20% 0.40%
$250,001+ 0.10% 0.30%
</TABLE>
Page 34
<PAGE>
SURRENDER CHARGES
A surrender charge will generally apply if your Policy is cancelled or
terminated for any reason during the first 12 years after the issuance of your
Policy or the first 12 years after an increase in the Specified Amount. A
separate 12-year period applies to each Coverage Layer.
The maximum surrender charge under your Policy depends upon your Surrender
target amount, for each Coverage Layer and the Coverage Year of each Coverage
Layer on the date of termination or cancellation. The maximum surrender target
amounts shown on Supplement D depends upon the Insured's issue age, gender and
underwriting class at the time each Coverage Layer begins, the Base Specified
Amount associated with each Coverage Layer. (Because there is no surrender
charge associated with the Additional Life Rider Specified Amount, we only
determine the surrender target amount for the Base Specified Amount.) The
formula for determining your surrender charge from your surrender target amount
is shown on Supplement E.
The following example should help you understand the surrender charges.
o You purchase a Policy with an initial Base Specified Amount of $200,000 on
October 1, 2000. This is Coverage Layer 1. The Surrender target amount for
Coverage Layer 1 is set at $____ .
o You increase the Base Specified Amount by $100,000 on January 1, 2007. This is
Coverage Layer 2. The Surrender target amount for Coverage Layer 2 is set
at $600.
o Your total Base Specified Amount would then be $300,000.
o You increase the Base Specified Amount by $50,000 on April 1, 2012.
This is Coverage Layer 3. The Surrender target amount for Coverage
Layer 3 is $____ .
o Your total Base Specified Amount would then be $350,000.
o On July 1, 2015, you surrender your Policy. On the date of surrender.
o Coverage Layer 1 is in its 14th Coverage Year (177 months in effect),
o Coverage Layer 2 is in its 9th Coverage Year (103 months in effect),
and
o Coverage Layer 3 is in its 4th Coverage Year (40 months in effect).
o We would charge you a surrender charge determined as described in the
steps:
STEP 1: The surrender charge attributed to Coverage Layer 1 is $0.
Coverage Layer 1 has been in effect for more than 12
Coverage Years.
STEP 2: The surrender charge attributed to Coverage Layer 2 is $____ .
The calculation for this portion of the surrender
charge is [90% - (103-60)%] x $____ .
STEP 3: The surrender charge attributed to Coverage Layer 3 is $____ .
The calculation for this portion of the surrender
charge is 90% x $____ .
STEP 4: The total surrender charge is ($0 + $____ + $____) or $____ .
TRANSFER CHARGES
We do not charge you for the first 12 transfers among Sub-Accounts or from the
Sub-Accounts to the Fixed Account in a Policy Year. If you make more than 12
transfers among Sub-Accounts or from the Sub-Accounts to the Fixed Account in a
Policy Year, we will charge you $10 per transfer for each additional transfer.
We do not charge you for transfers made in connection with the Dollar Cost
Averaging Program and we do not count these transfers when we determine the
Page 35
<PAGE>
number of transfers you have made in a Policy Year. We deduct the $10 transfer
charge from your Account Value.
All transfers requested on the same day will be considered a single transfer for
purposes of determining transfer charges.
WITHDRAWAL FEES
We do not charge you for the first withdrawal in a Policy Year. If you make more
than one withdrawal in a Policy Year, we will charge you $50 per withdrawal for
each withdrawal. We deduct the $50 withdrawal fee from your Account Value.
Page 36
<PAGE>
SUMMARY OF CHARGES
<TABLE>
<CAPTION>
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
PREMIUM EXPENSE STATE TAX CHARGE MONTHLY DEDUCTION MONTHLY EXPENSE
CHARGE CHARGE
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
When Charged? When you make a When you make a On each Monthly On each Monthly
premium payment. premium payment. Anniversary Day, Anniversary Day,
including the Policy including the Policy
Date. Date.
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
How Much Charged? The maximum premium The state tax charge This charge is This charge consists
expense charge is that you pay will generally based on of three components:
7.50% of each reflect the actual the cost of the per policy
premium payment. The state premium tax insurance and the charge, the per
premium expense charges in the state cost of benefits $1,000 charge and
charge that you pay in which you reside. provided by riders. the mortality and
depends on the See your Policy expense risk charge.
current rates, the Schedule for the
number of Coverage maximum cost of The maximum per
Layers and their insurance charge policy charge is
Coverage Years, and applicable to your $9.00 each month
the total amount of Policy and the (current = $7.50).
premium payments maximum cost of
allocated to each benefits to be The per $1,000
Coverage Layer in a provided by rider. charge depends on
Coverage Year. your Base Specified
Amount, and the Insured's
issue age and underwriting
class and the length of time
the Policy has been in effect.
The maximum mortality
and expense risk charge
is 0.90% annually
for the first 12
years (current = 0.70%).
Beginning in year 13, the rate
charged depends on your
Account Value and the value
of your Loan Account.
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
How Charged? We deduct this We deduct this charge We reduce your We reduce your
charge from each from each premium Account Value. Account Value.
premium payment payment before we
before we allocate allocate the Net
the Net Premiums to Premiums to your
your investment investment options.
options.
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
</TABLE>
Page 37
<PAGE>
<TABLE>
<CAPTION>
------------------------- ---------------------- ---------------------- -----------------------
SURRENDER CHARGE TRANSFER CHARGES WITHDRAWAL FEES
------------------------- ---------------------- ---------------------- -----------------------
<S> <C> <C> <C>
When Charged? When the Policy is On transfers among On withdrawals after
surrendered or Sub-Accounts or from the first withdrawal
otherwise terminates. Sub-Accounts to the in the Policy Year.
Fixed Account after
the first 12
transfers in a Policy
Year.
------------------------- ---------------------- ---------------------- -----------------------
How Much Charged? This charge is based $10 per transfer $50 per withdrawal
on the surrender
target amounts
associated with your
Base Specified Amount
and the Coverage Year
of each Coverage
Layer. The maximum
surrender charge is
0.90% of the
surrender target
amounts for your
Policy.
------------------------- ---------------------- ---------------------- -----------------------
How Charged? We reduce your We reduce your We reduce your
Account Value. Account Value. Account Value.
------------------------- ---------------------- ---------------------- -----------------------
</TABLE>
Page 38
<PAGE>
CONTINUATION OF YOUR POLICY
CONTINUATION OF INSURANCE COVERAGE
On each Monthly Anniversary Day, we determine whether your insurance coverage
will continue. If your Net Cash Surrender Value is equal to or more than the
monthly charges to be charged on the Monthly Anniversary Day, your Policy will
continue.
If your Net Cash Surrender Value is less than the monthly charges, then a Grace
Period related to the continuation of your Policy will start unless the
Five-Year No-Lapse Guarantee described below applies. If the Five-Year No-Lapse
Guarantee does not apply, and you do not make the required additional premium
payment during the Grace Period, your Policy will lapse without value.
o Monthly charges include the Monthly Deduction and the Monthly
Expense Charge. The Monthly Deduction includes the amount deducted
for the cost of insurance plus the cost of any additional benefits
provided under your Policy by rider.
o Supplement E to this Prospectus contains a description of the
procedures we use to determine if your Policy meets the conditions
for the Five-Year No-Lapse Guarantee.
o Grace Periods, which are designed to give you time to make an additional
premium payment, are explained below.
CONTINUATION UNDER THE FIVE-YEAR NO-LAPSE GUARANTEE
Even if your Net Cash Surrender Value on a Monthly Anniversary Day is not
sufficient to continue your Policy, your Policy may continue under the Five-Year
No-Lapse Guarantee. During the first 5 years after the Policy Date, we guarantee
that we will not terminate your Policy or start a Grace Period related to
continuation of your Policy.
On each Monthly Anniversary Day, we determine if your Policy meets the
conditions for the Five-Year No-Lapse Guarantee as described in Supplement F. If
your Policy does not meet these conditions, then a Grace Period will start. If
you do not make the required additional premium payment during this Grace
Period, you will lose the Five-Year No-Lapse Guarantee. It cannot be reinstated.
MINIMUM ANNUAL PREMIUM
Your minimum annual premium for the Five-Year No-Lapse Guarantee is shown on
your Policy Schedule. We use the minimum annual premium to determine if you have
met the conditions for continuing your insurance coverage under this provision.
If you make any changes in your Policy that result in an increase in the
Specified Amount or you add any riders, we will determine a new minimum annual
premium. We will send you a new Policy Schedule showing the new minimum annual
premium.
However, we will not change your minimum annual premium if you make any changes
to your Policy that result in a decrease in the Specified Amount or if you
cancel any riders.
Page 39
<PAGE>
GRACE PERIODS
A Grace Period is a 61-day period that starts on the day after we mail you the
applicable notice. Under certain circumstances, the Grace Periods related to the
continuation of your Policy and the continuation of the Five-Year No-Lapse
Guarantee may overlap or start at the same time. The chart below shows how a
Grace Period works.
<TABLE>
<CAPTION>
---------------------------------------------------- -----------------------------------------------
CONTINUATION OF YOUR POLICY MAINTENANCE OF FIVE-YEAR
NO-LAPSE GUARANTEE
---------------------------------------------------- -----------------------------------------------
<S> <C>
o A Grace Period related to the o A Grace Period related to the
continuation of your Policy will start if: Five-Year No-Lapse Guarantee will start
if your Policy does not meet the
o Your Net Cash Surrender Value is not conditions for this guarantee.
sufficient on a Monthly Anniversary Day. o The notice will tell you the amount
o The Five-Year No-Lapse Guarantee does not of the minimum additional premium you
apply. must pay to maintain the Five-Year
No-Lapse Guarantee.
o The notice will tell you the amount of o If you make the required additional
the minimum additional premium you must pay premium payment during the Grace Period,
to keep your Policy in effect. the Five-Year No-Lapse Guarantee will
o If you make the required additional continue to be effective.
premium payment during the Grace Period, your o If you do not make the required
Policy will continue to be effective. additional premium payment during the
o If you do not make the required Grace Period, you will lose the
additional premium payment during the Grace Five-Year No-Lapse Guarantee.
Period, your Policy will terminate at the end o The Five-Year No-Lapse Guarantee
of the Grace Period without value. cannot be reinstated.
o If the Insured dies during the Grace Period,
we will reduce the Death Proceeds by the
amount of any unpaid charges up to 3 times
the sum of the Monthly Deduction and the
Monthly Expense Charge.
---------------------------------------------------- -----------------------------------------------
</TABLE>
POLICY LAPSE
If a Grace Period related to the continuation of your Policy ends, you have not
paid the minimum additional premium needed to continue your Policy and the
Five-Year No-Lapse Guarantee does not apply, your Policy will lapse and you will
not receive any money from us because the Net Cash Surrender Value of your
Policy will have been reduced to zero.
REINSTATEMENT
If your Policy was terminated but the Insured is still living, you can ask us to
reinstate your Policy at any time during the 5-year period after the Grace
Period ends. We will reinstate your Policy if:
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o We receive satisfactory evidence of insurability.
o You pay a premium that increases your Net Cash Surrender Value to an amount
equal to or greater than:
o All costs and charges that we would have deducted from your Account
Value on each Monthly Anniversary Day from the date of termination to
the date of reinstatement and
o The Monthly Deduction and Monthly Expense Charge for the next 3 months
o You pay or reinstate any Indebtedness that was outstanding on the date of
termination.
If you do not maintain the Five-Year No-Lapse Guarantee, we will not reinstate
it.
Investor Alert
o You may be able to purchase a rider that will extend this guarantee
of continued coverage for longer periods of time.
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<PAGE>
RIDERS
Each rider's description in this Prospectus is subject to the specific terms of
the rider as each contains definitions, contractual limitations and conditions.
You should review any rider before purchasing it.
INCLUDED RIDER
The Accelerated Death Benefit Plus Rider summarized below is automatically
included with every Policy issued in a state where such an insurance benefit is
permitted and if the Insured meets certain underwriting conditions. If the
Accelerated Death Benefit Plus Rider is not available, the Accelerated Death
Benefit Rider summarized below will be automatically included with every Policy
issued in a state where the insurance benefit is permitted. When the Accelerated
Death Benefit Plus Rider becomes available in your state and the insured meets
the underwriting conditions, we will amend your previously issued Policy by
substituting the Accelerated Death Benefit Plus Rider for the Accelerated Death
Benefit Rider. You should ask your insurance agent/financial representative if
these insurance benefits are available in your state and whether the Insured
meets these underwriting conditions.
ACCELERATED DEATH BENEFIT PLUS RIDER
Benefit Summary:
Benefit Description:
Excluded Coverage:
Cost of Benefits:
Termination of Benefits:
ACCELERATED DEATH BENEFIT RIDER
Benefit Summary: Enables you to obtain an advance against the Death Benefit
upon diagnosis of fatal illness
Benefit Description: When the Insured is diagnosed with a fatal illness, we
will make you special loans secured by your Death
Benefits payable under the Policy.
o $250,000
o 60% of the difference between your Death
Benefit and the maximum amount you are
able to borrow from your Policy
Multiple special loan advances are permitted
during the 12-month period from the date of the
first advance until you reach the maximum
amount. The minimum special loan is $5,000. We
charge you interest at an annual rate of 8% on
all special loans we make to you.
Some or all of the special loan advances may be
considered taxable by the Internal Revenue
Service. You should consult your tax adviser
before requesting an advance under this rider.
The Death Benefits will be reduced by the amount
of all special loan advances, including
interest, upon the death of the Insured.
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Excluded Coverage: This advance must be voluntarily elected. It is not
available if:
o You are required to elect this benefit by law to
meet the claims of creditors
o You are required to elect this benefit by a
government agency in order to apply, keep or
maintain a government benefit
Cost of Benefits: No charge until elected (and then the only charge is
interest on the advance)
Termination of
Benefits: The benefits terminate on the earlier of
o When your Policy ends
o When the cumulative maximum amount has been
advanced
OPTIONAL RIDERS
Subject to certain underwriting conditions and other requirements, you may add
one or more of the following optional insurance benefits to your Policy by
rider. We will deduct the cost of any rider as a part of the Monthly Deduction.
Each available optional insurance benefit (or rider) is summarized below. You
should ask your insurance agent/financial representative if these insurance
benefits are available in your state and whether these underwriting conditions
and other conditions are met.
ACCIDENTAL DEATH RIDER
Benefit Summary: Pays an additional death benefit if the
Insured's death is caused by accidental
bodily injury
Benefit Description: You select the Accidental Death Benefit Amount.
The Accidental Death Benefit Amount will be
added to the Death Proceeds and paid under the
same Income Plan. Under certain circumstances,
we will pay 2 times your Accidental Death
Benefit Amount.
Excluded Coverage: We will not pay an Accidental Death
Benefit if the Insured's injury or death
resulted from certain risks, such as suicide,
certain travel in aircraft, certain use of drugs
and participation in an activity while
intoxicated.
Cost of Benefits: Depends on the Insured's Attained Age and
selected Accidental Death Benefit Amount
Termination of Benefits: The benefits terminate at the earliest of
o When your Policy ends
o Upon cancellation of the rider
o The day before the Policy Anniversary
on which the Insured is 70 years old
ADDITIONAL LIFE RIDER
Benefit Summary: Provides an additional amount of insurance
coverage on the life of the Insured. (Available
only at time of issuance of Policy)
Benefit Description: o min = $25,000
o max = 10 times Base Specified Amount
Excluded Coverage: o May not be available if Extended No-Lapse
Guarantee Rider is purchased.
Cost of Benefits:
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Termination of Benefits:
CHILDREN'S TERM RIDER
Benefit Summary: Pays a death benefit if an Insured Child dies
Benefit Description: For each Insured Child that you name in your
application, you select the Children's Term
Benefit Amount that will be applicable to each
Insured Child. The Children's Term Benefit
Amount will be paid upon the death of an Insured
Child and can be paid under an Income Plan.
Under most circumstances, if the Insured dies,
the insurance on each Insured Child provided by
this rider will become fully paid-up
nonparticipating term insurance and will
continue until each Insured Child's 23rd
birthday. After an Insured Child is age 18, that
Insured Child may convert the term insurance
policy to a whole life plan.
Excluded Coverage: This rider provides coverage only for Insured
Children of the Insured. An Insured Child
includes any child of the Insured who was at
least 15 days old and less than 18 years old
when named in the application. An Insured Child
also includes any child at least 15 days old,
who after the date of application for this
rider, was born of any marriage of the Insured
or was adopted by the Insured when less than
18 years of age.
Cost of Benefits: Depends only on selected Children's Term
Benefit Amounts
Termination of Benefits: The benefits terminate on the earliest of
o When your Policy ends
o When you cancel the rider
o The day before the Policy Anniversary on which
the Insured is 65 years old
o On an Insured Child's 23rd birthday, for that
Insured Child
o The day an Insured Child exercises the
conversion option, for that Insured Child
DISABILITY CREDIT RIDER
Benefit Summary: Makes premium payments equal to the "Credit
Amount" while you are disabled, as "disabled"
is defined in the rider (Available only at time
of issuance of Policy)
Benefit Description: You select the Credit Amount. The Credit Amount
is the annual amount of premium payments we
will pay under this optional policy benefit.
The Credit Amount must always be greater than
or equal to your minimum annual premium for the
Five-Year No-Lapse Guarantee
Your Credit Amount may be adjusted if the
minimum annual premium changes.
We make a premium payment of 1/12 of the Credit
Amount for each month you are disabled. This
amount may or may not be sufficient to keep your
Policy in effect.
Excluded Coverage: Disabilities that result from the following are
not covered:
o Self-inflicted injuries
o A declared or undeclared war
o Injuries or diseases that first manifest
while this optional insurance benefit is
not in force
Cost of Benefits: Depends on the Insured's Attained Age and
selected Credit Amount
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Termination of Benefits: The benefits terminate on the earliest of
o When your Policy ends
o Upon cancellation of the rider
o The day before the Policy
Anniversary on which the Insured
is 60 years old, unless such
benefits are being paid at that time
EXTENDED MATURITY BENEFIT NO. 2 RIDER
Benefit Summary:
Benefit Description:
Excluded Coverage:
Cost of Benefits:
Termination of Benefits:
EXTENDED MATURITY BENEFIT NO. 3 RIDER
Benefit Summary:
Benefit Description:
Excluded Coverage:
Cost of Benefits:
Termination of Benefits:
INSURED INSURABILITY RIDER
Benefit Summary: Provides an option to purchase additional
insurance on the life of the Insured
without evidence of insurability
Benefit Description: We provide you an option to purchase additional
insurance on the life of the Insured without
evidence of insurability. The Insured
Insurability Option Amount you select is the
amount of additional insurance you have the
option to purchase.
Under most circumstances, the options may be
exercised on each regular option date. The
regular option dates are the Policy
Anniversaries that occur after the Insured is
ages 25, 28, 31, 34, 37 and 40.
The options may also be exercised on alternate
option dates. An alternate option date occurs
on the 90th day following each of the following:
o Insured's marriage
o Birth of a living child of Insured
o Adoption of a child by Insured
The exercise of an option on an alternate option
date cancels the next regular option date still
available.
Excluded Coverage: N/A
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<PAGE>
Cost of Benefits: Depends on the Insured's Attained Age and
selected Insured Insurability Option Amount
Termination of Benefits: The benefits terminate on the earliest of
o When your Policy ends
o Upon cancellation of the rider
o The Policy Anniversary on which the Insured
is 40 years old
EXTENDED NO-LAPSE GUARANTEE RIDER
Benefit Summary: (Available only at time of issuance of Policy)
Benefit Description:
Excluded Coverage:
Cost of Benefits:
Termination of Benefits:
OTHER INSURED RIDER
Benefit Summary: Pays for a death benefit if an Other Insured
dies
Benefit Description: For each Other Insured that you name in your
application, you select an Other Insured Benefit
Amount. The Other Insured Benefit Amount will be
paid to the designated beneficiary upon the
death of an Other Insured and can be paid under
an Income Plan.
Under most circumstances, if the Insured dies,
each Other Insured has the right to convert the
coverage to a new life insurance policy.
Until the Policy Anniversary on which an Other
Insured is age 85, that Other Insured may
convert the coverage to any life insurance
policy (other than term insurance) that we
regularly issue.
Excluded Coverage: N/A
Cost of Benefits: Depends on each Other Insured's Attained Age,
gender and underwriting class and selected
Other Insured Benefit Amounts
Termination of Benefits: The benefits terminate on the earliest of
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o When your Policy ends
o When you cancel the rider
o The day before the Policy Anniversary on which
the Insured is 100 years old
o The day before
the Policy Anniversary on which the Other
Insured is 95 years old, for that Other
Insured
o The day an Other Insured exercises the
conversion options, for that Other Insured
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<PAGE>
OTHER INFORMATION ABOUT YOUR POLICY
POLICY IS A CONTRACT
The Policy is a legal contract between you and us to insure the life of the
person named in the application as the Insured. We provide the insurance
coverage and other benefits described in the Policy in exchange for your
completed application and your premium payments.
When we refer to the Policy, we mean the entire contract, which consists of:
o The basic policy
o The application
o Any supplemental applications
o Any optional policy benefits, riders, endorsements or amendments that
add provisions or change the terms of the basic policy
The description of the Policy in this Prospectus is subject to the specific
terms of your Policy as it contains specific contractual provisions and
conditions. If the terms of your Policy differ from the description of the
Policy in the Prospectus, you should rely on the terms in your Policy.
The Policy is subject to the laws in the state in which it is issued. To the
extent that the Policy may not comply with the applicable state law, we will
interpret it so that it complies.
MODIFICATION OF POLICY
Upon notice to you, we may modify your Policy:
o If such modification is necessary to make the Policy comply with
any law or regulation issued by a governmental agency applicable
to the Policy
o If such modification is necessary to assure continued
qualification of the Policy under the Internal Revenue Code or
other federal or state laws as a life insurance policy
o If such modification is necessary to reflect a change in the operation of the
Company, Separate Account 1 or the Sub-Accounts
o If such modification adds, deletes or otherwise changes Sub-Account options
We also reserve the right to modify certain provisions of the Policy as stated
in those provisions. In the event of a modification, we may make appropriate
endorsement to the Policy to reflect the modification.
Your insurance agent/financial representative cannot change any of the terms of
our Policy, extend the time for making premium payments or make any other
agreement that would be binding on us.
EXTENDED MATURITY BENEFIT
On the Policy Anniversary after the Insured turns age 100, the total of the then
current value of your Sub-Accounts will be automatically transferred to the
Fixed Account, where it will begin earning interest at the Fixed Account's then
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current rate. Also, the interest rate credited to your Loan Account will be
increased to equal the interest rate charged against any policy loans. After
that time, we will not accept any further premium payments, we will not deduct
any further charges, we will not permit you to transfer your money from the
Fixed Account, we will not permit any additional loans and your Death Benefit
will be revised to equal the Net Cash Surrender Value of your Policy. Your
Policy will continue in effect until the Insured's death or until the Policy is
surrendered for its Net Cash Surrender Value.
CONVERSION TO A FIXED POLICY
You may elect to convert your Policy to a fixed policy at any time:
o Within 24 months of your Policy Date or
o Within 60 days of the later of
o a notification of a change in the investment policy of Separate Account 1,
or
o the effective date of the change
If you elect to convert your Policy, we will transfer the entire value of your
investment in the Sub-Accounts to the Fixed Account. We will not charge you for
this transfer. After the date of your election to convert your Policy, Net
Premiums may not be allocated and transfers may not be made to any of the
Sub-Accounts. All other terms and charges of your Policy will continue to apply.
CONFIRMATIONS AND STATEMENTS
We will send you a confirmation of each premium payment, loan, transfer or
withdrawal. We will also send you periodic statements showing the value of your
investment in the Sub-Accounts and the Fixed Account and listing all financial
transactions made with respect to your Policy during that period.
If you have invested money in a Sub-Account, you will also receive semi-annual
reports for the Fund in which the Sub-Account invests. These semi-annual reports
will include a list of portfolio securities held by the underlying Fund.
PROCESSING GUIDELINES
We use certain guidelines to determine when we will process your Policy
application and other instructions. These processing guidelines determine your
Policy Date and the effective date of instructions that you send to us. The
effective date depends upon
o Whether we receive your application or instructions before or after the
close of regular trading on the New York Stock Exchange
(typically 4:00 p.m. Eastern Time),
o Whether the New York Stock Exchange is open at that time, and
o Whether your application and instructions are in good order.
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If you are the sole owner of the Policy, you must sign the Policy application
and other instructions. If you and another person are joint owners of your
Policy, you and your joint owner must both sign your Policy application and
instructions.
REQUIRED NOTE ON COMPUTATIONS
Calculations are based on the mortality table shown on your Policy Schedule.
We have filed a detailed statement of our computations with the applicable state
insurance departments. The values under this Policy are not less than those
required by the law of your state. Any benefit provided by an attached rider
will not increase these values unless stated in the rider.
The method used in calculating Policy values will be based on the actuarial
procedures that recognize the variable nature of this Policy.
PROJECTION OF BENEFITS AND VALUES
In addition to any examples and illustrations provided to you by your insurance
agent/financial representative, you may request that we send you a hypothetical
illustration of Policy benefits and values. We may charge a reasonable fee to
provide this information to you.
INCONTESTABILITY
We issue the Policy in reliance on the answers you provided in the application
and any supplemental applications. These answers are considered representations,
and not warranties. We have assumed that all these answers are true and
complete. If they are not, we may have the right to contest and void the Policy
as if it had not been issued. Except for cases involving termination of the
Policy for fraud, we will not contest:
o The Policy after the Policy has been in effect for 2 years during the
Insured's lifetime
o Any increase in Specified Amount after the increase has been in effect for 2
years during the Insured's lifetime
o Any rider attached to the Policy after the rider has been in effect
for 2 years
During these 2-year periods, we may contest the validity of your Policy, any
increase in Specified Amount or the validity of any riders based on material
misstatements made in the application or any supplemental application. No
statement will be used in contesting a claim unless it is in an application or
supplemental application and a copy of the application is attached to the
Policy.
If your Policy is reinstated after termination, the 2-year period of
contestability begins on the reinstatement date. If the Policy has been in
effect for 2 years during the lifetime of the Insured, it will be contestable
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only as to statements made in the reinstatement application. If the Policy has
been in force for less than 2 years, it will be contestable as to statements
made in the reinstatement application as well as the initial application and any
supplemental applications.
DEFENDING AGAINST CLAIMS
We will not use any statement you made to defend against a claim under your
Policy unless it is in an application or supplemental application and a copy of
the application is attached to the Policy.
SUICIDE EXCLUSION
Your Policy does not cover suicide by the Insured, whether sane or insane,
during the 2-year period beginning with the Policy Date. If the Policy is in
effect and the Insured commits suicide during this 2-year period, we will pay
you the greater of the following amounts:
o Your premium payments, less any Indebtedness, less any previous
withdrawals, and less all monthly costs of insurance on all
persons other than the Insured ever covered by rider
o The Net Cash Surrender Value
We will not pay any Death Benefit in these circumstances.
With respect to any increase in Specified Amount, we will not pay death benefits
if the Insured, whether sane or insane, commits suicide within 2 years from the
effective date of the increase. If the Policy has been in effect for more than 2
years after the Policy Date but less than 2 years from an increase in Specified
Amount, we will return the monthly costs of insurance charged for the increase
and pay death benefits based on the previous Specified Amount (on which the
2-year suicide exclusion has expired).
This provision also applies to any rider attached to the Policy. The 2-year
period begins on the rider's date of issue.
If your Policy terminates and is later reinstated, we will measure the 2-year
period from the effective date of reinstatement. Any premium payment refund will
be limited to premiums paid on or after the effective date of reinstatement.
TERMINATION OF YOUR POLICY
Your Policy will terminate and all insurance coverage under the Policy will stop
in the following instances:
o As of the date on which we receive notice from you requesting that the Policy
be cancelled
o As of the date the Insured dies (although some riders may provide benefits for
other covered persons beyond the Insured's death)
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o As of the date a Grace Period related to the continuation of your Policy
expires
o As of 31 days after we mail you a notice that your Indebtedness exceeds
your Cash Surrender Value less the Monthly Deduction and the Monthly Expense
Charge for the current month unless you make the necessary premium payment
to continue the Policy
NO DIVIDENDS
The Policies are "non-participating," which means that they do not pay
dividends.
MISSTATEMENT OF AGE OR GENDER
If the age or gender of the Insured is misstated in information sent to us, we
will change any benefits under the Policy to those benefits that your cost of
insurance charge for the month of death would provide if the correct age and
gender had been stated. If we do not discover the misstatement until after the
payment of the Policy proceeds under one of the Income Plans has started, we
will deduct any overpayments, plus compound interest, from subsequent payments
and we will pay any underpayments, plus compound interest, in a lump sum.
TELEPHONE SECURITY PROCEDURES
We have established security procedures for telephone transactions, such as
recording telephone calls. We may also require a personal identification number
(PIN) or other identifying information. We will not be liable for losses due to
unauthorized or fraudulent telephone instructions if we follow reasonable
security procedures and reasonably believe the instructions are genuine.
ASSIGNMENT
Generally, you may assign your Policy. We will not be bound by an assignment
until we receive and record written notice of the assignment at the Columbus
Life Variable Service Center, P.O. Box 2850, Cincinnati, Ohio 45201-2850. Your
rights and the rights of your Beneficiary will be affected by an assignment. We
are not responsible for the validity or any tax consequences of any assignment.
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INFORMATION ABOUT THE INVESTMENT OPTIONS
THE SUB-ACCOUNTS AND THE FUNDS
You can allocate your Net Premiums to one or more Sub-Accounts. You may also
transfer amounts among the Fixed Account and the Sub-Accounts. Each Sub-Account
invests in a corresponding Fund of AIM Variable Insurance Funds, Inc. (AIM), The
Alger American Fund (Alger), Deutsche Asset Management VIT Funds (Deutsche),
_______ (Fidelity), _______ (Janus), MFS Variable Insurance Trust (MFS), PIMCO
Variable Insurance Trust (PIMCO) or Touchstone Variable Series Trust
(Touchstone).
Each Sub-Account buys shares of the corresponding Fund at net asset value
without a sales charge. Dividends and capital gains distributions from a Fund
are reinvested at net asset value without a sales charge and held by the
Sub-Account as an asset. Each Sub-Account redeems Fund shares at net asset value
to the extent necessary to make payment of Death Proceeds or other payments
under the Policy.
The following table contains general information about the investment advisor,
investment objective and principal investment strategies of each Fund in which a
corresponding Sub-Account invests. The fund advisors and sub-advisors cannot
guarantee that the Funds will meet their investment objectives nor is there any
guarantee that your Account Value will equal or exceed the total of your Net
Premiums. More complete information about each Fund, including information about
its risks, performance and other investment strategies, is included in the
prospectus of each Fund. Please read each prospectus carefully before you
purchase a Policy or make other decisions about your investment options.
A Fund may have a name and/or investment objective that is very similar to the
name of a publicly available mutual fund managed by the same advisor or
sub-advisor. The Funds in which the Sub-Accounts invest are not publicly
available and will not have the same performance as those publicly available
mutual funds. Different performance will result from differences in various
factors that affect the operation of a Fund, such as implementation of
investment policies, Fund expenses and the size of the Fund. In addition, your
investment return from your Policy will be less than the investment return of a
shareholder in the publicly available funds because you will pay additional
charges related to your Policy, such as the Monthly Expense Charge.
AIM V.I. GROWTH FUND
(AIM V.I. GROWTH SUB-ACCOUNT)
<TABLE>
<CAPTION>
Fund Family: AIM Variable Insurance Funds, Inc.
Fund Advisor: AIM Advisors, Inc.
Investment Objective: The Fund seeks to achieve growth of capital
principally through investment in common stocks
of seasoned and better capitalized companies
considered to have strong earnings momentum. The
Fund may invest up to 25% of its assets in
foreign securities.
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<S> <C>
Principal Investment The portfolio manager focuses on companies that
Strategies: have experienced above-average growth earnings
and have excellent prospects for future growth.
The Fund may engage in active and frequent
trading.
AIM V.I. GOVERNMENT SECURITIES FUND
(AIM V.I. GOVERNMENT SECURITIES SUB-ACCOUNT)
Fund Family: AIM Variable Insurance Funds, Inc.
Fund Advisor: AIM Advisors, Inc.
Investment Objective: The Fund seeks to achieve a high level of
current income consistent with reasonable
concern for safety of principal by investing in
debt securities issued, guaranteed or otherwise
backed by the U.S. Government. The Fund intends
to maintain a dollar-weighted average portfolio
maturity between 3 and 10 years.
Principal Investment The Fund invests primarily in U.S. Treasury
Strategies: obligations and obligations issued or
guaranteed by U.S. Government agencies and
instrumentalities.
ALGER AMERICAN SMALL CAPITALIZATION FUND
(ALGER AMERICAN SMALL CAPITALIZATION SUB-ACCOUNT)
Fund Family: The Alger American Fund
Fund Advisor: Fred Alger Management, Inc.
Investment Objective: The Fund seeks long-term capital appreciation.
Principal Investment The Fund invests primarily in equity securities.
Strategies: The Fund invests primarily in "growth" stocks.
It focuses on small, fast-growing companies that
offer innovative products, services or
technologies to a rapidly expanding market
place. Under normal circumstances, the Fund
invests primarily in small capitalization
companies, companies that have a market
capitalization within the range of
companies included in the Russell 2000 Growth
Index or the S&P SmallCap 600 Index.
ALGER AMERICAN GROWTH FUND
(ALGER AMERICAN GROWTH SUB-ACCOUNT)
Fund Family: The Alger American Fund
Fund Advisor: Fred Alger Management, Inc.
Investment Objective: The Fund seeks long-term capital appreciation.
Principal Investment The Fund invests primarily in equity securities.
Strategies: The Fund invests primarily in "growth" stocks.
It focuses on growing companies that generally
have broad product lines, markets, financial
resources and depth of management. Under normal
circumstances, the Fund invests primarily in
the equity securities of large companies,
companies that have a market capitalization of
$1 billion or greater.
DEUTSCHE VIT EQUITY 500 INDEX FUND
(DEUTSCHE VIT EQUITY 500 INDEX SUB-ACCOUNT)
Fund Family: Deutsche Asset Management VIT Funds
Fund Advisor: Bankers Trust Company
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Investment Objective: The Fund seeks to match the performance of the
S&P 500.
Principal Investment Under normal circumstances, the Fund will
Strategies: invest at least 80% of its assets in stocks
of companies included in the S&P 500 Index and
in derivative instruments, such as future
contracts and options, that provide exposure to
the stocks of companies in the S&P 500 Index.
The Fund's securities are weighted to attempt
to make the Fund's total investment
characteristics similar to those of the S&P 500
Index as a whole.
FIDELITY ____________________
(FIDELITY _________________ SUB-ACCOUNT)
Fund Family:
Fund Advisor:
Investment Objective:
Principal Investment
Strategies:
JANUS __________________ FUND
(JANUS __________________ SUB-ACCOUNT)
Fund Family:
Fund Advisor:
Investment Objective:
Principal Investment
Strategies:
MFS VIT EMERGING GROWTH FUND
(MFS VIT EMERGING GROWTH SUB-ACCOUNT)
Fund Family: MFS Variable Insurance Trust
Fund Advisor: Massachusetts Financial Services Company
Investment Objective: The Fund seeks to provide long-term growth of
capital.
Principal Investment The Fund invests primarily (at least 65% of
Strategies: total assets) in the common stocks of companies
believed to be early in their life cycle but
have the potential to become major enterprises
(emerging growth companies) or major enterprises
whose rates of earnings growth are expected to
accelerate. The portfolio manager selects
securities based upon fundamental analysis.
The Fund may invest in foreign securities
through which it may have exposure to foreign
currencies. It has and may engage in active and
frequent trading.
MFS VIT GROWTH WITH INCOME FUND
(MFS VIT GROWTH WITH INCOME SUB-ACCOUNT)
Fund Family: MFS Variable Insurance Trust
Fund Advisor: Massachusetts Financial Services Company
Investment Objective: The Fund seeks to provide reasonable current
income and long-term growth of capital
and income.
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Principal Investment The Fund invests primarily (at least 65% of
Strategies: total assets) in equity securities. The Fund
generally focuses on companies with larger
market capitalizations that the portfolio
manager believes have sustainable growth
prospects and attractive valuation based
on current and expected earnings or cash flow.
The Fund also seeks to generate gross income
equal to approximately 90% of the dividend yield
on the Standard & Poor's 500 Composite Index.
The Fund may invest in foreign securities
through which it may have exposure to foreign
currencies. It has and may engage in active and
frequent trading.
PIMCO LONG-TERM U.S. GOVERNMENT FUND
(PIMCO LONG-TERM U.S. GOVERNMENT SUB-ACCOUNT)
Fund Family: PIMCO Variable Insurance Trust
Fund Advisor: Pacific Investment Management Company
Investment Objective: The Fund seeks to maximize total return,
consistent with the preservation of capital
and prudent investment management.
Principal Investment The Fund invests primarily (up to 65% of assets)
Strategies: in U.S. Government securities. The U.S.
Government securities may be represented by
options and futures contracts. The Fund may
invest in other fixed income instruments and
may invest all of its assets in derivative
instruments or in mortgage-backed securities.
TOUCHSTONE SMALL CAP VALUE FUND
(TOUCHSTONE SMALL CAP VALUE SUB-ACCOUNT)
Fund Family: Touchstone Variable Series Trust
Fund Advisor: Touchstone Advisors, Inc.
Fund Sub-Advisor: Todd Investment Advisors, Inc.
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investment The Fund invests primarily (at least 75% of
Strategies: total assets) in the common stocks of small to
medium capitalization companies that the
portfolio manager believes are undervalued.
The portfolio manager looks for stocks that are
priced lower than they should be, and also
contain a catalyst for growth. The Fund may
also invest up to 5% of its assets (at
the time of purchase) in any one company. The
Fund will limit its investments so that the
percentage of the Fund's assets invested in a
particular industry will not be more than double
the percentage of the industry in the Russell
2000 Index.
TOUCHSTONE EMERGING GROWTH FUND
(TOUCHSTONE EMERGING GROWTH SUB-ACCOUNT)
Fund Family: Touchstone Variable Series Trust
Fund Advisor: Touchstone Advisors, Inc.
Fund Sub-Advisor: David L. Babson & Company, Inc.
Westfield Capital Management Company, Inc.
Investment Objective: The Fund seeks to increase the value of its
shares as a primary goal and to earn
Page 56
<PAGE>
income as a secondary goal.
Principal Investment The Fund invests primarily (at least 65% of
Strategies: total assets) in the common stocks of smaller,
rapidly growing (emerging growth) companies.
In selecting its investments, the portfolio
managers focus on those companies they believe
will grow faster than the U.S. economy in
general. They also choose companies they
believe are priced lower in the market than
their true value.
TOUCHSTONE INTERNATIONAL EQUITY FUND
(TOUCHSTONE INTERNATIONAL EQUITY SUB-ACCOUNT)
Fund Family: Touchstone Variable Series Trust
Fund Advisor: Touchstone Advisors, Inc.
Fund Sub-Advisor: Credit Suisse Asset Management
Investment Objective: The Fund seeks to increase the value of its
shares over the long-term.
Principal Investment The Fund invests primarily (at least 80% of
Strategies: total assets) in equity securities of foreign
companies and will invest in at least 3
countries outside the United States.
A large portion of those non-U.S. equity
securities may be issued by companies active in
emerging market countries (up to 40% of total
assets).
TOUCHSTONE HIGH YIELD FUND
(TOUCHSTONE HIGH YIELD SUB-ACCOUNT)
Fund Family: Touchstone Variable Series Trust
Fund Advisor: Touchstone Advisors, Inc.
Fund Sub-Advisor: Fort Washington Investment Advisors, Inc.
Investment Objective: The Fund seeks to achieve a high level of
current income as its main goal. Capital
appreciation is a secondary consideration in
achieving its goal.
Principal Investment The Fund invests primarily (at lest 65% of
Strategies: total assets) in non-investment grade debt
securities of domestic corporations.
Non-investment grade debt securities are
often referred to as "junk bonds" and are
considered speculative. The Fund expects to have
an average maturity between 6 and 10 years, but
may vary between 4 and 12 years.
TOUCHSTONE VALUE PLUS FUND
(TOUCHSTONE VALUE PLUS SUB-ACCOUNT)
Fund Family: Touchstone Variable Series Trust
Fund Advisor: Touchstone Advisors, Inc.
Fund Sub-Advisor: Fort Washington Investment Advisors, Inc.
Investment Objective: The Fund seeks to increase the value of its
shares over the long-term.
Principal Investment The Fund invests primarily (at least 65% of
Strategies: total assets) in common stock of larger
companies that the portfolio manager believes
are undervalued. In choosing undervalued stocks,
the portfolio manager looks for companies that
have proven management and unique features or
advantages and are believed to be priced lower
than their true value. These companies may not
pay dividends. The Fund may also invest in
common stocks of rapidly growing companies to
enhance the Fund's return and vary its
investments to avoid having too much of the
Fund's assets subject to risks specific to
undervalued stocks. Also, up to 70% of total
assets may be invested in large cap companies
and up to 30% may be invested in mid cap
companies.
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<PAGE>
TOUCHSTONE ENHANCED 30 FUND
(TOUCHSTONE ENHANCED 30 SUB-ACCOUNT)
Fund Family: Touchstone Variable Series Trust
Fund Advisor: Touchstone Advisors, Inc.
Fund Sub-Advisor: Todd Investment Advisors, Inc.
Investment Objective: The Fund seeks to achieve a total return which
is higher than the total return of the Dow
Jones Industrial Average (DJIA).
Principal Investment The Fund's portfolio is based on the 30 stocks
Strategies: which comprise the DJIA. The portfolio manager
seeks to surpass the total return of the DJIA
by substituting stocks that offer above average
growth potential for those stocks in the DJIA
that appear to have less growth potential. The
portfolio manager uses a database of 4,000
stocks from which to choose the companies that
will be substituted in the enhanced portion of
the portfolio.
TOUCHSTONE BALANCED FUND
(TOUCHSTONE BALANCED SUB-ACCOUNT)
Fund Family: Touchstone Variable Series Trust
Fund Advisor: Touchstone Advisors, Inc.
Fund Sub-Advisor: OpCap Advisors, Inc.
Investment Objective: The Fund seeks to achieve an increase in value
and current income.
Principal Investment The Fund invests in both equity securities
Strategies: (generally about 60% of total assets) and debt
securities (generally about 40%, but at least
25%). The debt securities will be rated
investment grade or at the highest levels of
non-investment grade.
TOUCHSTONE BOND FUND
(TOUCHSTONE BOND SUB-ACCOUNT)
Fund Family: Touchstone Variable Series Trust
Fund Advisor: Touchstone Advisors, Inc.
Fund Sub-Advisor: Fort Washington Investment Advisors, Inc.
Investment Objective: The fund seeks to provide a high level of
dividends and distributions.
Principal Investment The Fund invests primarily in higher quality
Strategies: investment grade debt securities (at least 65%
of total assets). The Fund's investment in debt
securities may be determined by the direction
in which interest rates are expected to move
because the value of these securities generally
moves in the opposite direction from interest
rates. The Fund expects to have an average
maturity between 5 and 15 years.
TOUCHSTONE STANDBY INCOME FUND
(TOUCHSTONE STANDBY INCOME SUB-ACCOUNT)
Fund Family: Touchstone Variable Series Trust
Fund Advisor: Touchstone Advisors, Inc.
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<PAGE>
Fund Sub-Advisor: Fort Washington Investment Advisors, Inc.
Investment Objective: The Fund seeks to provide a higher level of
current income than a money market fund, while
also seeking to prevent large fluctuations in
the value of the Sub-Account's initial
investment. The Fund does not try to keep a
constant $1.00 per share net asset value.
Principal Investment The Fund invests mostly in various types of
Strategies: money market instruments. All investments will
be rated at least investment grade. On average,
the securities held by the Fund will mature in
less than one year.
Neither AIM Advisors, Inc., Fred Alger Management, Inc., Bankers Trust Company,
_______, _______, Massachusetts Financial Services Company nor Pacific
Investment Management Company is an affiliate of Columbus Life.
</TABLE>
SPECIAL CONSIDERATIONS
AIM, Alger, Deutsche, Fidelity, Janus, MFS and PIMCO offer shares to Separate
Account 1 and other separate accounts of unaffiliated life insurance companies
to fund benefits under variable annuity contracts and variable life insurance
policies. Touchstone offers its shares to the separate accounts of Columbus Life
and Western-Southern Life Assurance Company to fund benefits under the Policies,
other variable life insurance policies and variable annuity contracts. We do not
foresee any disadvantage to you arising out of these arrangements. Nevertheless,
differences in treatment under tax and other laws, as well as other
considerations, could cause the interests of various purchasers of contracts and
policies to conflict. For example, violation of the federal tax laws by one
separate account investing in a Fund could cause the contracts or policies
funded through another separate account to lose their tax-deferred status,
unless remedial action were taken.
If a material irreconcilable conflict arises between separate accounts, a
separate account may be required to withdraw its investment in a Fund. If it
becomes necessary for a separate account to replace its shares of a Fund with
another investment, the Fund may have to liquidate portfolio securities on a
disadvantageous basis. At the same time, AIM, Alger, Deutsche, Fidelity, Janus,
MFS, PIMCO and Columbus Life are subject to conditions imposed by the Securities
and Exchange Commission that are designed to prevent or remedy any conflict of
interest. Touchstone, which is not subject to such conditions, has adopted
certain procedures that substantially reflect and implement the substance of
these conditions. These conditions and procedures require the Board of Trustees
of each Fund to monitor events in order to identify any material irreconcilable
conflict that may possibly arise and to determine what action, if any, should be
taken to remedy or eliminate the conflict.
CHANGES IN THE SUB-ACCOUNTS AND THE FUNDS
We may add, delete or combine Sub-Accounts. New Sub-Accounts will invest in
Funds we consider suitable. We may also substitute a new Fund or similar
investment option for the Fund in which a Sub-Account invests. We would make a
substitution to ensure the underlying Fund continues to be a suitable
investment. A substitution may be triggered by unsatisfactory investment
Page 59
<PAGE>
performance, a change in laws or regulations, a change in the Fund's investment
strategies or restrictions, a change in the availability of the Fund for
investment, or any other reason. Before any substitution, we will obtain any
required approvals, including approval from the SEC or from Policy holders.
FIXED ACCOUNT
The Net Premiums that you allocate to the Fixed Account will earn interest. We
guarantee that this interest rate will never be less than an effective annual
rate of at least 3%. We may, but are not required to, credit interest in excess
of this rate. Different interest rates may apply to Net Premiums allocated, or
amounts transferred, to the Fixed Account on different dates.
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<PAGE>
VALUATION OF YOUR INVESTMENT
SUB-ACCOUNTS
------------------------------------- ------------------------------------
ACCUMULATION UNIT A unit of measure used to
calculate a Policy owner's share of a
Sub-Account. Although it is not the
same as a mutual fund share, it is
similar.
ACCUMULATION UNIT VALUE The dollar value of an Accumulation
Unit in a Sub-Account.
------------------------------------- -------------------------------------
The value of your interest in a Sub-Account is measured in Accumulation Units.
An Accumulation Unit is an accounting unit of measure. It is similar to a share
of a mutual fund. The value of an Accumulation Unit varies from day to day
depending on the investment performance of the Fund in which the Sub-Account is
invested and the expenses of the Sub-Account.
The Accumulation Unit Value of each Sub-Account is calculated on each day that
the New York Stock Exchange is open for business (Valuation Date). The
Accumulation Unit Value of a Sub-Account on any Valuation Date is calculated by
dividing the value of the Sub-Account's net assets by the number of Accumulation
Units credited to the Sub-Account on the Valuation Date.
When you allocate Net Premiums or transfer amounts to a Sub-Account, your
Account Value is credited with Accumulation Units. Other transactions, such as
withdrawals and payments of the Monthly Deduction and Monthly Expense Charge,
will decrease the number of Accumulation Units. The number of Accumulation Units
added to or subtracted from your Account Value is calculated by dividing the
dollar amount of the transaction by the Accumulation Unit Value for the
Sub-Account at the close of trading on the Valuation Date when we process the
transaction. We use the following guidelines to determine the Valuation Date
when we process the transaction:
o If we receive your premium payment or transfer instructions in
good order on a Valuation Date before the close of regular trading
on the New York Stock Exchange (typically 4:00 p.m. Eastern Time),
we will process the transaction on that Valuation Date.
o If not, we will process the transaction on the next Valuation Date.
To calculate the Accumulation Unit Value of a Sub-Account on any Valuation Date,
we start with the Accumulation Unit Value from the preceding Valuation Date and
adjust it to reflect the following items:
o The investment performance of the Sub-Account, which is based on the
investment performance of the corresponding Fund
o Any dividend or distributions paid by the corresponding Fund
o Any charges or credits for taxes that we determined were the result of the
investment operations of the Sub-Account
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<PAGE>
Supplement G to this Prospectus contains a description of the procedures we use
to calculate the Accumulation Unit Value of a Sub-Account.
FIXED ACCOUNT
The value of the Fixed Account is calculated daily and reflects the following
transactions:
o Net Premiums allocated to the Fixed Account
o Withdrawals from the Fixed Account
o Transfers to and from the Fixed Account
o Interest credited to the Fixed Account
o Charges assessed against the Fixed Account, such as the
Monthly Deduction and Monthly Expense Charge
Supplement G to this Prospectus contains a description of the procedures we use
to calculate the value in the Fixed Account.
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<PAGE>
PERFORMANCE INFORMATION
We may include performance information in advertisements, sales literature and
reports to Policy owners or prospective owners.
We may report performance information in any manner permitted under applicable
law. For example, we may report total returns and average annual total returns
for the Funds and the Sub-Accounts or present performance information as a
change in a hypothetical Policy owner's Account Value or Death Benefit. The
performance information may cover various periods of time, including periods
beginning with the start of operations of a Sub-Account or the Fund in which it
invests. Performance information may not reflect the deduction of all charges
applicable to a particular Policy. For example, performance information may not
reflect the deduction of the cost of insurance charge because of the individual
nature of this charge. If all charges applicable to a particular Policy were
included, performance would be reduced.
You can request a personalized illustration that shows the performance of a
hypothetical Policy. The illustration will be based on the hypothetical
investment return that you request. The Net Cash Surrender Value provided in the
illustration will assume all Fund charges and expenses, all Separate Account 1
charges and all Policy charges are deducted. The Account Value provided in the
illustration will assume all charges except the surrender charge are deducted.
Your Policy's actual investment performance may not be the same as the
performance of the hypothetical Policy shown in the illustration. You should not
consider any performance information to be an estimate or guarantee of future
performance.
We may also compare the performance of a Sub-Account to the performance of other
separate accounts or investments as listed in rankings prepared by independent
organizations that monitor the performance of separate accounts and other
investments. We may also include evaluations of the Sub-Accounts published by
nationally recognized ranking services or nationally recognized financial
publications.
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<PAGE>
VOTING RIGHTS
Because each Sub-Account invests in a corresponding Fund, Columbus Life is
entitled to vote at any meeting of the Fund's shareholders. Columbus Life, on
behalf of Separate Account 1, votes the shares of a Fund that are held by a
Sub-Account according to the instructions of the holders of the Policies who
have invested in that Sub-Account.
If you have money in a Sub-Account on the record date for a meeting of the
shareholders of the corresponding Fund, we will ask you for voting instructions.
Your voting instructions will apply to a specific number of Fund shares. We will
calculate this number by determining the percentage of the Sub-Account that you
own and applying this percentage to the total number of Fund shares that the
Sub-Account owns.
We will mail materials to you at least 14 days before the shareholder meeting so
you can provide your voting instructions to us. If we do not receive voting
instructions from you, we will still vote the shares for which you are entitled
to provide instructions. We will vote these shares in the same proportion as the
voting instructions received from Policy holders who provide instructions. If
Columbus Life itself is entitled to vote at the shareholders meeting, it will
vote its shares in the same manner.
We may not ask the Policy holders for voting instructions if the applicable
rules and regulations change and permit us to vote the shares of the Fund. We
may also change the manner in which we calculate the number of shares for which
you can provide voting instructions if the applicable rules and regulations
change.
We may disregard the voting instructions of Policy holders under certain
circumstances and state insurance regulators may require us to disregard these
instructions under certain circumstances. If we disregard the voting
instructions we receive, we will include a summary of our actions in our next
report to you.
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<PAGE>
COLUMBUS LIFE INSURANCE COMPANY & SEPARATE ACCOUNT 1
COLUMBUS LIFE INSURANCE COMPANY
Columbus Life Insurance Company (Columbus Life) is a stock life insurance
company organized under the laws of the State of Ohio on September 8, 1986. It
is a wholly-owned subsidiary of The Western and Southern Life Insurance Company
(WSLIC), a mutual life insurance company organized under the laws of the State
of Ohio on February 23, 1888. Columbus Life issues insurance and annuity
contracts and is located at 400 East Fourth Street, Cincinnati, Ohio 45202.
Columbus Life is subject to supervision by the department of insurance of the
various states in which it is licensed to transact business.
Investments allocated to the Fixed Account are held in Columbus Life's general
account along with Columbus Life's other assets. The interests of the Fixed
Account have not been registered under the Securities Act of 1933 and Columbus
Life's general account has not been registered as an investment company under
the Investment Company Act of 1940. As a result, the staff of the Securities and
Exchange Commission has not reviewed the information in this Prospectus about
the Fixed Account. Disclosures regarding the Fixed Account may, however, be
subject to certain general provisions of the federal securities laws relating to
the accuracy and completeness of statements made in a prospectus.
Because of state insurance law requirements, Columbus Life maintains reserves to
cover its obligations under the Policies. The assets of Separate Account 1
attributable to the Policies make up a part of these reserves. Although these
reserves support the Policies, Policy owners have no ownership interest in these
reserves and any excess reserves will be for the benefit of Columbus Life and
not the Policy owners. The general account of Columbus Life is available to
satisfy Columbus Life's obligations under the Policies.
<PAGE>
Directors of Columbus Life. Columbus Life is managed by its Board of Directors,
4 of whom are also officers of Columbus Life or WSLIC. Each Director's principal
business address is 400 East Fourth Street, Cincinnati, Ohio 45202, unless
otherwise noted. The following persons serve as directors of Columbus Life:
Name Principal Occupation (Past 5 years)
William J. Williams Chairman of the Board of Columbus Life
since 1989; Chairman of the Board of WSLIC
and Western-Southern Life Assurance
Company (WSLAC) since 1989; Chief
Executive Officer of WSLIC and WSLAC
1989-1994.
John F. Barrett Vice-Chairman of the Board of
Columbus Life since 1987; Chief Executive
Officer of WSLIC and WSLAC since 1994;
President of WSLIC and WSLAC since 1989;
Chief Operating Officer of WSLIC and WSLAC
1989-1994.
Lawrence L. Grypp President and Chief Executive Officer of
Columbus Life since 1999; President
and Chief Executive Officer of Summit
Financial Resources, Inc. 1998-1999;
Executive Vice President of Massachusetts
Mutual Life Insurance Company 1976-1996.
James N. Clark Executive Vice President and
Secretary of WSLIC and WSLAC since 1997;
Executive Vice President, Secretary and
Treasurer of WSLIC and WSLAC 1996-1997;
Executive Vice President and Treasurer of
WSLIC and WSLAC 1994-1996.
Paul H. Amato Retired President and Chief Executive
Officer of Columbus Life. 6216 Whileaway
Drive, Loveland, Ohio 45140.
Robert C. Savage General Agent, Savage and Associates, 4427
Talmadge Road, Building 2, Toledo,
Ohio 43623.
Ralph E. Waldo Retired President and Chief Executive
Officer of Columbus Life. 3974 Patricia
Drive, Columbus, Ohio 43220.
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<PAGE>
Officers of Columbus Life (other than directors). The senior officers of
Columbus Life, other than the directors named above, and the officers
responsible for the variable life operations are described below. Each officer's
principal business address is 400 East Fourth Street, Cincinnati, Ohio 45202,
unless otherwise noted.
Name Principal Occupation (Past 5 years)
Clint D. Gibler Senior Vice President and Chief Information
Officer of Columbus Life, WSLIC and WSLAC
since 2000; Vice President of Technology
of Columbus Life, WSLIC and WSLAC
1996-2000; R&D Director of ATT Bell
Laboratories 1981-1996.
Nora E. Moushey Senior Vice President and Chief
Actuary of Columbus Life, WSLIC and WSLAC
since 1999; Senior Vice President of
Products and Financial Management of
Columbus Life 1993-1998.
James M. Teeters Senior Vice President of Insurance
Operations of Columbus Life,
WSLIC and WSLAC since 1999; Senior Vice
President of Administration of Columbus
Life 1991-1999; Senior Vice President of
Administration of WSLIC and WSLAC
1998-1999.
Robert L. Walker Senior Vice President and Chief
Financial Officer of Columbus Life, WSLIC
and WSLAC since 1998; Chief Financial
Officer of National Data Corporation
1997-1998; Senior Vice President and Chief
Financial Officer of Providian Corporation
1993-1997.
Mark A. Wilkerson Senior Vice President and Chief Marketing
Officer of Columbus Life since 1990.
William F. Ledwin Vice President of Chief Investment
Officer of Columbus Life since
1987; Senior Vice President and Chief
Investment Officer of WSLIC and WSLAC since
1989; President of Fort Washington
Investment Advisors, Inc. since 1990.
Thomas D. Holdridge Vice President of Underwriting of Columbus
Life since 1980.
Donald J. Wuebbling Vice President and Secretary
of Columbus Life since 1987; Senior Vice
President and General Counsel of WSLIC and
WSLAC since 1999; Vice President and
General Counsel of WSLIC and WSLAC
1988-1999.
Edward S. Heenan Vice President and Comptroller of Columbus
Life, WSLIC and WSLAC since 1987.
James J. Vance Vice President and Treasurer of
Columbus Life, WSLIC and WSLAC since 1999;
Treasurer of Columbus Life, WSLIC and WSLAC
1997-1999; Assistant Treasurer of WSLIC and
WSLAC 1995-1997; Director of Financial
Research of WSLIC and WSLAC 1994-1995.
Charles W. Wood, Jr. Vice President of Sales and
Marketing of Columbus Life since 1999; Vice
President of Marketing Support of Columbus
Life 1998-1999; Regional Vice President of
Sales of Ameritas Life Insurance Company
1996-1998; Senior Vice President and Chief
Marketing Officer of Covenant Life
Insurance Company 1988-1995.
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<PAGE>
Mario J. San Marco Vice President of Columbus Life since 1992;
Vice President of WSLIC and WSLAC
since 1988.
The directors, officers and employees of Columbus Life and Touchstone Securities
are bonded in the amount of $12,500,000 by a Financial Institutions Blanket
Bond, for dishonest, fraudulent, or criminal acts, wherever committed, and
whether committed alone or in collusion with others.
SEPARATE ACCOUNT 1
Columbus Life established Columbus Life Separate Account 1 (Separate Account 1)
under Ohio law on September 10, 1998. Separate Account 1 is registered with the
SEC as a unit investment trust. We may operate Separate Account 1 as a
management investment company or any other form permitted by law. We may also
deregister Separate Account 1 if registration with the SEC is no longer
required.
Separate Account 1 currently offers ___ Sub-Account options to purchasers of the
Policies. Separate Account 1 holds the investments allocated to the Sub-Accounts
by the owners of the Policies. It may also hold assets for the benefit of owners
of certain other variable universal life insurance policies that it issues.
Separate Account 1 invests the assets of each Sub-Account in an underlying Fund.
The investment objective of a Sub-Account and the underlying Fund in which it
invests are identical.
We own Separate Account 1's assets but we separate Separate Account 1's assets
from our general account assets and the assets of our other separate accounts.
Liabilities from other businesses we conduct will not be charged to Separate
Account 1's assets. We hold Separate Account 1's assets exclusively for the
benefit of owners and beneficiaries of the Policies and any other variable life
insurance policies supported by Separate Account 1. We are obligated to pay all
benefits provided under the Policies.
The income, capital gains and capital losses of each Sub-Account are credited to
or charged against the assets of the Sub-Account without regard to the income,
capital gains and capital losses of any other Sub-Account or Columbus Life.
Page 68
<PAGE>
SERVICE PROVIDERS
DISTRIBUTION OF THE POLICIES
Touchstone Securities, Inc. is the sole distributor of the Policy. Touchstone
Securities is a wholly-owned subsidiary of IFS Financial Services, a
wholly-owned subsidiary of WSLAC, a wholly-owned subsidiary of WSLIC. Touchstone
Securities is a broker-dealer registered under the Securities Exchange Act of
1934 and is a member of the National Association of Securities Dealers, Inc.
(NASD) and Securities Investor Protection Corporation (SIPC). The Policy will be
sold by agents who have entered into distribution agreements with Touchstone
Securities. The agents will be licensed insurance agents in those states where
the Policy may be lawfully sold. The agents will also be registered
representatives of broker-dealers registered under the Securities Exchange Act
of 1934 who are members of NASD.
Columbus Life pays Touchstone Securities, or agents of Touchstone Securities, a
commission of up to ___% of the initial target annual premium (annualized) of
the Policy until that level of premiums has been paid. If more than the initial
target annual premium is paid in the first year, Columbus Life pays an
additional commission of up to 3% of all premiums in excess of the initial
target annual premium. The amount of the initial target annual premium generally
depends on the Base Specified Amount of a Policy. Each year thereafter, Columbus
Life pays a commission of 4.5% or less on all premiums paid on a Policy. Each
year Columbus Life also pays a service fee of 0.25% or less of the Account
Value, less any Indebtedness. Touchstone Securities is generally responsible for
paying its agents and representatives for distribution of the Policies.
SERVICE PROVIDERS TO THE FUNDS
The key service providers to each family of Funds in which the Sub-Accounts
invest are indicated below:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
AIM VARIABLE INSURANCE FUNDS, INC. (AIM)
Advisor Custodian Distributor
------- --------- -----------
<S> <C> <C>
AIM Advisors, Inc. State Street Bank and Trust Company AIM Distributors, Inc.
11 Greenway Plaza, Suite 100 225 Franklin Street 11 Greenway Plaza, Suite 100
Houston, TX 77046 Boston, MA 02110 Houston, TX 77046
---------------------------------------- -------------------------------------- --------------------------------------
----------------------------------------------------------------------------------------------------------------------
THE ALGER AMERICAN FUND (ALGER)
Advisor Custodian Distributor
------- --------- -----------
Fred Alger Management, Inc. Custodial Trust Company Alger Inc.
75 Maiden Lane 101 Carnegie Center 30 Montgomery Street
New York, NY 10038 Princeton, NJ 08540 Jersey City, NJ 07302
---------------------------------------- -------------------------------------- --------------------------------------
----------------------------------------------------------------------------------------------------------------------
DEUTSCHE ASSET MANAGEMENT VIT FUNDS (DEUTSCHE)
Advisor Custodian Distributor
------- --------- -----------
Bankers Trust Company Bankers Trust Company Provident Distributors, Inc.
130 Liberty Street 130 Liberty Street Four Falls Corporate Center
New York, NY 10006 New York, NY 10006 West Conshohocken, PA 19428
---------------------------------------- -------------------------------------- --------------------------------------
Page 69
<PAGE>
----------------------------------------------------------------------------------------------------------------------
FIDELITY (Fidelity)
Advisor Custodian Distributor
---------------------------------------- -------------------------------------- --------------------------------------
----------------------------------------------------------------------------------------------------------------------
JANUS (Janus)
Advisor Custodian Distributor
---------------------------------------- -------------------------------------- --------------------------------------
----------------------------------------------------------------------------------------------------------------------
MFS VARIABLE INSURANCE TRUST (MFS)
Advisor Custodian Distributor
------- --------- -----------
Massachusetts Financial Services State Street Bank and Trust Company MFS Fund Distributors, Inc.
Company 225 Franklin Street 500 Boyleston Street
500 Boyleston Street Boston, MA 02110 Boston, MA 02116
Boston, MA 02116
---------------------------------------- -------------------------------------- --------------------------------------
----------------------------------------------------------------------------------------------------------------------
PIMCO VARIABLE INSURANCE TRUST (PIMCO)
Advisor Custodian Distributor
------- --------- -----------
Pacific Investment Management Company Investors Fiduciary Trust Company PIMCO Funds Distributors, Inc.
840 Newport Center Drive 801 Pennsylvania 2187 Atlantic Street
Newport Beach, CA 92660 Kansas City, MO 64105 Stamford, CT 06902
---------------------------------------- -------------------------------------- --------------------------------------
----------------------------------------------------------------------------------------------------------------------
TOUCHSTONE VARIABLE INSURANCE TRUST (TOUCHSTONE)
Advisor Custodian Distributor
------- --------- -----------
Touchstone Advisors, Inc. Investors Bank & Trust Company Touchstone Securities, Inc.
311 Pike Street 200 Clarendon Street 311 Pike Street
Cincinnati, OH 45202 Boston, MA 02116 Cincinnati, OH 45202
---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
Page 70
<PAGE>
TAX MATTERS
The following is a summary discussion of certain federal income tax matters that
apply to your Policy. The following discussion does not purport to be complete
or to cover all situations. The discussion is general in nature, and it should
not be considered tax advice. You should consult your own tax advisor for more
complete information.
The individual situation of each Policy owner or beneficiary will determine how
ownership or receipt of the Policy's proceeds will be treated for purposes of
federal estate tax, state inheritance tax and other taxes. Other than the very
general overview of the effect of federal estate taxes on the Policy that is
contained in the following discussion, the effect of federal estate tax, state
inheritance tax and other taxes is generally not discussed herein.
The following discussion is also based on federal income tax law and
interpretations in effect as of the date of this Prospectus and is subject to
later changes in such tax law or interpretations. Except as is otherwise
expressly noted below, this discussion assumes that you are the Policy owner and
that you are a natural person who is a U.S. citizen and resident. The tax
effects on an owner who is not a natural person, U.S. citizen or U.S. resident
may be different than the effects discussed herein.
GENERAL
Your Policy will be treated as "life insurance" for federal income tax purposes
(a) if it meets the definition of life insurance under Section 7702 of the
Internal Revenue Code of 1986, as amended (the "Code"), and (b) for as long as
the investments made by the mutual funds available for investment under the
Policy satisfy certain investment diversification requirements under Section
817(h) of the Code. We believe that the Policy will meet these requirements.
Accordingly, provided that your Policy meets such requirements, the following
federal income tax consequences should apply:
o The death benefit received by the beneficiary under the Policy will not
be subject to federal income tax; and
o Increases in the Policy's cash value as a result of investment experience
will not be subject to federal income tax unless and until there is a
distribution from the Policy, such as a surrender or a withdrawal.
PAYMENT OF DEATH BENEFIT
In general, as long as your Policy is considered "life insurance," the death
benefit payable under the Policy will not be included in the income of the
beneficiary receiving such benefit for federal income tax purposes.
However, if such death benefit is paid in the form of an Income Plan (over a
period of years) and not in a lump sum, then, in general, a portion of each
payment will be tax-free but the remaining portion of each payment will be
treated as interest on the death benefit and will be included in
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the beneficiary's income for federal income tax purposes. The portion of each
such payment that will be treated as tax-free and the portion that will be
treated as interest are determined under the provisions of Section 101 of the
Code and U.S. Treasury Department regulations issued thereunder. The tax-free
portion generally will be determined by spreading on a pro rata basis the single
sum death benefit under the Policy over the anticipated number of payments under
the applicable Income Plan.
PRE-DEATH DISTRIBUTIONS - TESTING FOR MODIFIED ENDOWMENT CONTRACT STATUS
The federal income tax consequences of a distribution from your Policy that does
not reflect the payment of a death benefit under the Policy can be affected by
whether the Policy is determined to be a "modified endowment contract." In all
cases, however, the character of the income that is described in this and the
following parts of this tax discussion as taxable to the recipient will be
ordinary income (as opposed to capital gain).
Your Policy will generally be considered under the Code to be a "modified
endowment contract" if, at any time during the first 7 Policy Years of the
Policy, you have paid a cumulative amount of premiums that exceeds the premiums
that would have been paid by that time under a fixed-benefit insurance policy
that provided a death benefit equal to the Policy's first-year death benefit and
that was designed (based on certain assumptions mandated under the Code) to
provide for paid-up future benefits after the payment of 7 level annual
premiums. This determination is called the "7-pay test."
Further, whenever there is a "material change" in your Policy, it will generally
be (a) treated as a new contract for purposes of determining whether the Policy
is a modified endowment contract and (b) thereby subjected to a new 7-pay test
over a new 7-year period. The new 7-pay test will be adjusted to take into
account, under a prescribed formula, the accumulated cash value of the Policy at
the time of the material change. Thus, a materially changed Policy will be
considered a modified endowment contract if it fails to satisfy the new 7-pay
test.
A material change in your Policy for these purposes could occur as a result of a
change in the Policy's death benefit option, the selection of additional rider
benefits under the Policy, an increase in the Policy's Specified Amount of
coverage, or certain other changes.
If your Policy's benefits are reduced during the first 7 Policy Years of the
Policy (or within 7 years after a material change in the Policy), the initial
7-pay test that applied to the Policy at the time of its issue (or, if
applicable, at the time of the material change in the Policy) will be
recalculated based on the reduced level of benefits and applied retroactively
for purposes of such 7-pay test. (Such a reduction in benefits could include,
for example, a decrease in the Policy's Specified Amount that you request or, in
some cases, a withdrawal or termination of additional benefits under a rider to
the Policy.) If the premiums previously paid are greater than the recalculated
7-pay test limit, the Policy will become a modified endowment contract. If your
Policy is received in exchange for a modified endowment contract, it will also
be considered a modified endowment contract.
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Changes made in your Policy (for example, a decrease in the Policy's benefits or
a lapse or reinstatement of the Policy) may also impact the maximum amount of
premiums that can be paid under the Policy as well as the maximum amount of cash
value that may be maintained under the Policy.
TAXATION OF PRE-DEATH DISTRIBUTIONS IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT
CONTRACT
This part of the tax discussion summarizes the federal income tax purposes of a
distribution to you from your Policy (that does not reflect the payment of a
death benefit under the Policy) when the Policy is not considered a modified
endowment contract.
Loans. As long as your Policy remains in force during the Insured's lifetime
(and is not a modified endowment contract), no part of the proceeds of a loan
from the Policy will be subject to current federal income tax. Interest on the
loan generally will not be tax deductible.
If a loan is still outstanding when the Policy is surrendered or lapses,
however, the then outstanding loan amount will be included in your income for
federal income tax purposes at that time to the extent the cash value of the
Policy exceeds your "basis" in the Policy. Generally your "basis" in the Policy
will equal the premiums you have paid on the Policy less the amount of any
previous distributions from the Policy that were taxable.
Withdrawals. After the first 15 Policy Years of your Policy, the proceeds from a
withdrawal will be subject to federal income tax to the extent such proceeds
exceed your "basis" in the Policy. Your "basis" in the Policy generally will
equal the premiums you have paid on the Policy, less the amount of any previous
distributions from the Policy that were not taxable.
During the first 15 Policy Years of your Policy, the proceeds from a withdrawal
or a reduction in insurance coverage generally will be subject to federal income
tax to the extent that the then cash surrender value under the Policy exceeds
your "basis" in the Policy, up to certain limits that are set forth in Section
7702 of the Code.
These limits generally are based on the amount by which your premiums on the
Policy or the Policy's cash surrender value immediately before the withdrawal or
reductions in coverage exceeds the amount of premiums or cash surrender value
that was needed for the Policy to be considered a life insurance policy under
the Code immediately before the withdrawal or reduction in coverage. These
limits also depend in part on whether the withdrawal or reduction in coverage
occurs in the first 5 Policy Years of the Policy.
Surrender or Termination. Upon full surrender of your Policy, any excess in the
amount of the proceeds we pay (including for this purpose amounts we use to
discharge any Policy loan) over your "basis" in the Policy will be subject to
federal income tax. You will generally not be taxed on the portion of the
proceeds that does not exceed your "basis" in the Policy. Your "basis" in the
Policy generally will equal the premiums you have paid on the Policy less the
amount of any previous distributions from the Policy that were taxable.
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In addition, if your Policy terminates while there is a Policy loan outstanding,
the cancellation of the loan and accrued loan interest will be treated as a
distribution and could be subject to tax under the above rules.
Assignment. Finally, if you make an assignment of rights or benefits under your
Policy, you may be deemed to have received a distribution from the Policy, all
or part of which may be taxable.
TAXATION OF PRE-DEATH DISTRIBUTIONS IF YOUR POLICY IS A MODIFIED ENDOWMENT
CONTRACT
This part of the tax discussion summarizes the federal income tax purposes of a
distribution to you from your Policy (that does not reflect the payment of a
death benefit under the Policy) when the Policy is considered a modified
endowment contract.
If your Policy is considered a modified endowment contract, any distribution
from the Policy during the Insured's lifetime will generally be taxed on an
"income-first" basis and hence will be included in your income for federal
income tax purposes to the extent the then cash surrender value of the Policy
exceeds your then "basis" in the Policy. For modified endowment contracts, your
"basis" in the Policy is similar to the basis described above that would apply
if the Policy were not a modified endowment contract, except that your "basis"
would be increased by the amount of any prior loan under the Policy that was
considered taxable income to you.
Distributions for this purpose generally include a loan received under the
Policy (including any increase in the loan amount to pay interest on an existing
loan or an assignment or a pledge to secure a loan) or a withdrawal from the
Policy. Thus, any such distributions will be considered taxable income to you to
the extent the cash surrender value exceeds your "basis" in the Policy.
For purposes of determining the taxable portion of any distribution, all
modified endowment contracts issued by the same insurer (or its affiliate) to
the same owner (excluding certain tax-qualified plans) during any calendar year
are aggregated and treated as if they were a single modified endowment contract.
Thus, if your Policy is considered a modified endowment contract and other
modified endowment contracts issued by us (or an affiliate of ours) were issued
to you in addition to the Policy during any calendar year, the Policy and such
other contracts are considered one contract in determining the tax on any
distribution under the Policy or one of such other contracts.
The U.S. Treasury Department has authority to prescribe additional rules to
prevent avoidance of "income-first" taxation on distributions from modified
endowment contracts.
Further, a 10% penalty tax will also generally apply under the federal income
tax provisions of the Code to the taxable portion of a distribution to you from
your Policy if it is a modified endowment contract. The penalty tax will not,
however, apply to a distribution that is made:
o To you after you have attained age 59 1/2
o In the case of your disability (as defined in the Code and generally
limited to a disability that is expected to result in your death or
be of indefinite duration and that prevents you from working in any
job) or
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o Received as part of a series of substantially equal periodic payments
for your life (or life expectancy) or the joint lives (or joint life
expectances) of you and a beneficiary under the Policy.
Surrender or Termination. In addition, upon a full surrender of the Policy, any
excess of the proceeds we pay (including any amounts we use to discharge any
loan) over your "basis" in the Policy will be subject to federal income tax and,
unless an exception applies, the 10% penalty tax.
If your Policy terminates after a Grace Period while there is a Policy loan
outstanding, the cancellation of the loan will be treated as a distribution (to
the extent not previously treated as a distribution) and could be subject to
federal income tax, including the 10% penalty tax, as described above.
Applicable Time Periods. Distributions that occur during a Policy Year in which
your Policy becomes a modified endowment contract, and during any subsequent
Policy Years, will be taxed as described in this part of the discussion as
distributions from a modified endowment contract. In addition, distributions
from your Policy within two years before it becomes a modified endowment
contract also will be subject to federal income tax in this manner. This means
that a distribution made from the Policy when it was not a modified endowment
contract could later become taxable as a distribution from a modified endowment
contract if the Policy, subsequently, becomes a modified endowment contract (by
reason of later failing the 7-pay test).
The U.S. Treasury Department has been authorized to prescribe rules that would
treat other distributions from the Policy made in anticipation of the Policy
becoming a modified endowment contract in a similar fashion.
POLICY LAPSES AND REINSTATEMENTS
The lapse of your Policy may have the tax consequences described above for
surrenders and terminations, even if you may be able to reinstate the Policy.
For federal income tax purposes, some reinstatements may be treated as the
purchase of a new insurance contract.
DIVERSIFICATION
As has been noted before, your Policy will be treated as "life insurance" for
federal income tax purposes only if, among other things, the investments made by
the mutual funds available for investment under the Policy satisfy certain
investment diversification requirements under Section 817(h) of the Code.
The U.S. Treasury Department has issued regulations that implement the
investment diversification requirements of Code Section 817(h). If we fail to
comply with these regulations, your Policy will be disqualified as a life
insurance policy under Section 7702 of the Code and you will be subject to
federal income tax on the income under the Policy for the period of the
disqualification and for subsequent periods. Separate Account 1, through the
Funds, therefore intends to comply with these requirements.
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In connection with the issuance of then temporary diversification regulations,
the U.S. Treasury Department stated that it anticipated the issuance of
guidelines that could describe certain circumstances in which your ability as
the owner of your Policy to direct your investments under the Policy to
particular sub-accounts within Separate Account 1 would cause you, rather than
Columbus Life, to be treated as the owner of the assets of Separate Account 1.
If you were considered the owner of the assets of Separate Account 1, income and
gains from Separate Account 1 would be included in your income for federal
income tax purposes. Columbus Life thus reserves the right to amend the Policy
in any way necessary to avoid any such result.
As of the date of this Prospectus, however, no such guidelines have been issued,
although the U.S. Treasury Department has informally indicated that any such
guidelines could limit the number of investment funds or the frequency of
transfers among such funds. If issued, these guidelines may be applied by us
retroactively.
ESTATE AND GENERATION SKIPPING TAXES
As noted before, this tax discussion generally addresses only federal income tax
matters. We do, however, want to note as a general matter that, if you are the
Insured under your Policy, the death benefit under the Policy will generally be
includable in your estate for purposes of federal estate tax. If you are not the
Insured, then, under certain conditions, only the replacement value, an amount
approximately equal to the cash surrender value of the Policy, will be
includable in your estate for purposes of federal estate tax.
Federal estate tax is integrated with federal gift tax under a unified rate
schedule. In general, under the law in effect as of the date of this Prospectus,
estates of less than $650,000 (with such amount increasing incrementally to $1
million by 2006) will not incur a federal estate tax liability. In addition, an
unlimited marital deduction may be available for federal estate tax purposes to
the extent your estate is to be distributed to your surviving spouse.
If you are not the Insured under the Policy, and you die before the Insured, the
value of your Policy, as determined under U.S. Treasury Department regulations,
is includable in your estate for federal estate tax purposes. Whether a federal
estate tax is payable depends on a variety of factors, including those listed in
the preceding paragraph.
As a general rule, if a "transfer" under the Policy is made to a person who is
two or more generations younger than you, a generation skipping transfer tax may
be payable at rates similar to the maximum estate tax rate in effect at the
time. The generation skipping transfer tax provisions generally apply to
"transfers" that would be subject to the gift and estate tax rules. As of the
date of this Prospectus, individuals are allowed an aggregate generation
skipping transfer tax exemption of $1,030,000. This amount is indexed for
inflation annually.
Because these rules are complex, you should consult with a qualified tax advisor
for specific information, especially when benefits under the Policy are passing
to younger generations.
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The particular situation of the Policy's owner, Insured and/or beneficiary will
determine how ownership or receipt of the Policy's proceeds will be treated for
purposes of federal estate and generation skipping taxes, as well as state and
local estate, inheritance and other taxes.
PENSION AND PROFIT-SHARING PLANS
If the Policy is purchased by a trust or other entity that forms part of a
pension or profit-sharing plan that is qualified as a tax-favored plan under
Section 401(a) of the Code for the benefit of a participant covered under the
plan, the federal income tax treatment of the Policy will be somewhat different
from that described in the foregoing parts of this tax discussion.
If the Policy is purchased as part of a pension or profit-sharing plan for the
benefit of a plan participant, the reasonable net premium cost for the amount of
insurance under the Policy is generally required to be included annually in the
applicable plan participant's income for federal income tax purposes. This cost
is generally determined by tables issued by the Internal Revenue Service or, if
less, the insurance company's rates as to the cost of individual one-year term
insurance for standard risks. This cost (generally referred to as the "P.S.-58"
cost) is reported to the participant annually.
If the plan participant dies while covered by the plan and the Policy proceeds
are paid to the participant's beneficiary, then the excess of the Policy's death
benefit over the Policy's cash surrender value generally will not be subject to
federal income tax. However, the Policy's cash surrender value will generally
still be taxable in this situation to the extent it exceeds the participant's
cost basis in the Policy. The participant's cost basis will generally include
the costs of insurance previously reported as income to the participant.
Special rules may apply if the participant borrowed from the Policy or was
considered an owner-employee under the plan (such as the sole proprietor, a 10%
partner, or 5% Subchapter S corporation owner of the employer of the plan).
There are limits on the amounts of life insurance that may be purchased on
behalf of a participant in a pension or profit-sharing plan. Complex rules, in
addition to those discussed above, apply whenever life insurance is purchased by
a tax-qualified plan. You should consult with the plan administrator and a
qualified tax advisor in such situation.
OTHER EMPLOYEE BENEFIT PROGRAMS
Complex rules may also apply when the Policy is held by an employee or a trust,
or acquired by an employee, in connection with the provision of other employee
benefits. In particular, such a Policy owner must consider whether the Policy
was applied for by (or issued to) a person having an insurable interest under
applicable state law and with the insured person's consent. The lack of an
insurable interest or consent may, among other things, affect the qualification
of the Policy as life insurance for federal income tax purposes and the right of
the named beneficiary under the Policy to receive a death benefit.
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ERISA
Employers and employer-created trusts may be subject to reporting, disclosure
and fiduciary obligations under the Employee Retirement Income Security Act of
1974, as amended (ERISA). An employer or trust should consult a qualified legal
advisor as to the effect of ERISA in any case when the Policy is purchased in
connection with an employee benefit plan.
WITHHOLDING
Payments received by you from your Policy (other than the payment of a tax-free
death benefit under the Policy) are generally subject to federal income tax
withholding to the extent it is reasonable to believe that they will be
includable in income for federal income tax purposes, except that you generally
are permitted to elect not to have federal income taxes withheld from such
payments if you notify us on a timely basis that you are making this election
(and meet certain reporting requirements as to such election).
If federal income tax withholding applies to the payment, the withholding is
generally taken at the same rate as is taken on wages; except that, if the
payments are not payable over a period of more than a year, the withholding is
generally taken at a 10% rate. In some cases, when generation skipping taxes may
apply, we may also be required to withhold for such taxes unless we receive
satisfactory written notification that no such taxes are due.
CHANGES IN TAX LAWS
Your Policy may be affected by changes that occur in the federal income tax laws
and by other tax laws, such as state or local income tax laws, federal estate
and gift tax laws and local estate and other similar laws (which other laws are
generally not discussed in this Prospectus). We have also not discussed the
effect of possible tax law changes on the Policy in this tax discussion. We
suggest that you consult a tax advisor if you have questions about the effects
of such other tax laws or of possible changes in the tax laws.
TAXATION OF COLUMBUS LIFE
Columbus Life is taxed as a life insurance company under federal income tax
laws. Columbus Life does not initially expect to incur any income tax on the
earnings or the realized capital gains attributable to Separate Account 1. If,
in the future, Columbus Life determines that Separate Account 1 may incur
federal income taxes, then it may assess a charge against the Sub-Accounts for
those taxes. Any charge will reduce your Policy's Account Value.
We may have to pay state, local or other taxes in addition to premium taxes. At
present, these taxes are not substantial. If they increase, charges may be made
for such taxes when they are attributable to Separate Account 1 or allocable to
your Policy.
Finally, certain Funds in which the Sub-Accounts are invested may elect to pass
through to Columbus Life taxes withheld by foreign taxing jurisdictions of
foreign source income. Such an election may result in additional taxable income
and income tax to Columbus Life, which could
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result in charges being made for such taxes. The amount of the additional income
tax, however, may be more than offset by credits for the foreign taxes withheld
that are also passed through. These credits may provide a benefit to Columbus
Life.
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OTHER GENERAL INFORMATION
LEGAL MATTERS
Frost & Jacobs LLP has advised Columbus Life on certain federal securities law
matters. All matters of Ohio law pertaining to the Policy, including the
validity of the Policy and Columbus Life's right to issue the Policy under Ohio
insurance law, have been passed upon by Donald J. Wuebbling, Esq., Senior Vice
President and General Counsel of WSLIC.
EXPERTS
____________________, independent auditors, have audited the financial
statements of Columbus Life Insurance Company Separate Account 1 and Columbus
Life Insurance Company at December 31, 1999 and for the periods then ended, as
set forth in their reports. We have included our financial statements in this
Prospectus and elsewhere in the registration statement in reliance on
________________'s reports, given on their authority as experts in accounting
and auditing.
We have also included in this Prospectus the unaudited interim financial
statements of Separate Account 1 and Columbus Life for the quarter ended
September 30, 2000.
Actuarial matters in the Prospectus have been examined by ___________ as stated
in his opinion filed as an exhibit to the registration statement.
FINANCIAL STATEMENTS
This Prospectus contains financial statements for Separate Account 1 and
consolidated financial statements of Columbus Life. The financial statements of
Columbus Life included in this Prospectus are relevant only for the purpose of
showing the ability of Columbus Life to meet its contractual obligations under
the Policies. The financial statements of Columbus Life do not show or contain
any information about the investment performance of Separate Account 1.
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SUPPLEMENT A
POLICY ILLUSTRATIONS
The following tables illustrate how the Death Benefits, Account Values and Net
Cash Surrender Values of a Policy may vary over an extended period of time at
certain ages, assuming hypothetical gross rates of investment return for the
investment options equivalent to constant gross annual rates of 0% and 10%.
The hypothetical rates of investment return are for purposes of illustration
only and should not be deemed a representation of past or future rates of
investment return. Actual rates of return for a particular Policy may be more or
less than the hypothetical investment rates of return and will depend on a
number of factors including the investment allocations made by a Policy owner.
Also, values would be different from those shown if the gross annual investment
returns averaged 0% and 10% over a period of years but fluctuated above and
below those averages for individual Policy Years.
The tables assume that the Sub-Accounts are subject to a daily charge for Fund
advisory fees and operating expenses equivalent to an annual rate of ____% of
the average daily net assets. This annual expense ratio is based on the average
of the expense ratios of each available Fund underlying the Sub-Accounts for
the last fiscal year (estimated for Funds beginning operations in 1999 or later)
and takes into account current expense caps or expense reimbursement
arrangements. The fees and expenses of each underlying Fund vary, and the total
fees and expenses used in the above calculation ranged from an annual rate of
___% to an annual rate of ____% of average daily net assets. For more
information on the investment option expenses, see the "Policy at a Glance" at
the beginning of the Prospectus.
The hypothetical gross annual rates of investment return of 0% and 10%, when
adjusted for the above daily charges, result in the following net effective
annual rates of return: ___% and ___%, respectively.
The tables reflect the deduction of all applicable Policy charges and deductions
described in the Prospectus for the hypothetical Insured. The Net Cash Surrender
Values illustrated in the tables also reflect the deduction of applicable
surrender charges. The current Policy charges and deductions and the higher
guaranteed maximum Policy charges and deductions Columbus Life may charge are
reflected in separate tables on each of the following pages. The amounts shown
are at the end of each Policy Year.
The hypothetical values shown in the tables do not reflect any charges for
federal income taxes against Separate Account 1 since Columbus Life is not
currently making such charges. However, such charges may be made in the future
and, in that event, the gross annual investment rate of return would have to
exceed 0% or 10% by an amount sufficient to cover tax charges in order to
produce the Death Benefits, Account Values and Net Cash Surrender Values
illustrated.
The tables illustrate the Policy values that would result based upon the
hypothetical investment rates of return if premiums are paid as indicated, if
all Net Premiums are allocated to the Sub-Accounts, if no Policy loans have been
made and if death benefit Option 1 has been selected.
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The tables are also based on the assumptions that the Policy owner has not
requested an increase or a decrease in Specified Amount, that no withdrawals or
transfers have been made and that the Policy owner did not purchase the
Additional Life Rider.
Upon request, Columbus Life will provide you with a comparable illustration
based upon the proposed Insured's age, gender and premium class, the Specified
Amount or premium requested, and the proposed frequency of premium payments.
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COLUMBUS LIFE INSURANCE COMPANY--ILLUSTRATION #1
-------------------------------------------------------------------------------
Designed for John J. Doe, M.D. $100,000.00 Specified Amount
Male Issue Age 35 Death Benefit Option 1
-------------------------------------------------------------------------------
Preferred - TNU $xx.xx Annual Premium
-------------------------------------------------------------------------------
.
FLEXIBLE PREMIUM The Policy is a flexible premium product because
VARIABLE UNIVERSAL you can change the amount and frequency of your
LIFE INSURANCE premium payments within limits. It is variable
life insurance because your policy values may
vary with the performance of the policy's
Sub-Accounts.
UNDERWRITING CLASS: The cost of insurance for this illustration is
MALE PREFERRED TOBACCO based on the assumption the policy is issued with
NON-USER the underwriting class listed at the left. Actual
costof insurance will depend on the outcome of
the underwriting process and may vary from what
is shown on the illustration.
DEATH BENEFIT OPTION You may select from two options. Option 1
provides an initial Death Benefit equal
to the Specified Amount. Option 2 provides an
initial Death Benefit equal to the Specified
Amount plus the Account Value.
INITIAL SPECIFIED AMOUNT The Specified Amount assumed at issue is shown
$100,000 on the left. The actual amount payable at death
will depend on the death benefit option and may
be decreased by loans or withdrawals, or
increased by additional insurance benefits. The
insurance contract will specify how to determine
the death benefit. The Death Benefits are
illustrated as of the end of each policy year.
INITIAL PLANNED PREMIUM The planned premiums, including lump-sum
OUTLAY $XX.XX ANNUAL premiums, are shown in the yearly detail of this
illustration. Values will be different if
premiums are paid with a different frequency or
in different amounts. This illustration assumes
that 100% of the premiums are allocated to the
Sub-Accounts.
MINIMUM ANNUAL PREMIUM FOR Paying the Five-Year No-Lapse Guarantee premium,
FIVE-YEAR NO-LAPSE GUARANTEE will keep the policy in force for five years
$XX.XX even if the Net Cash Surrender Value of the
Policy is less than the next Monthly
Deduction and Monthly Expense Charge, and
regardless of investment performance. At least
1/12 of this minimum premium must be paid in
order to place the Policy in force.
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COLUMBUS LIFE INSURANCE COMPANY--ILLUSTRATION #1
-------------------------------------------------------------------------------
Designed for John J. Doe, M.D. $100,000.00 Specified Amount
Male Issue Age 35 Death Benefit Option 1
-------------------------------------------------------------------------------
Preferred - TNU $xx.xx Annual Premium
-------------------------------------------------------------------------------
NON-GUARANTEED ELEMENTS OF The cost of insurance and the Policy charges are
THE POLICY guaranteed to be no higher than the maximums
stated in the Policy and Prospectus. The current
cost of insurance and current Policy charges are
not guaranteed. The Account Value will depend on
the allocation to and performance of the various
Sub-Accounts as well as the non-guaranteed
elements of the Policy. No minimum Account Value
is guaranteed for amounts allocated to the
Sub-Accounts.
EXTENDED MATURITY If the policy is still in force on the Policy
Anniversary after the Insured's 100th birthday,
the Death Benefit will continue. All accounts
will be transferred to the Fixed Account
will begin earning interest at the Fixed
Account's then current rate. Also, the interest
rate credited to your Loan Account will be
increased to equal the interest rate charged
against any Policy loans. After that time,
reduced by the amount of any Indebtedness. No
further premiums may be paid, no costs or charges
will be deducted, and no further loans will be
permitted, no further transfers will be permitted
and your Death Benefit will be revised to equal
your Net Cash Surrender Value.
NON-GUARANTEED ELEMENTS The current cost of insurance rates and charges
are subject to change. Account Values will vary
from those illustrated if actual rates differ
from those assumed. The hypothetical gross rates
of return are illustrative only and do not
represent past or future investment results.
Actual investment results may be more or less
than those shown and will depend on investment
allocations and the investment experience of the
Sub-Accounts. No representation is being made
that these hypothetical returns can be achieved
over any time period. No minimum Account Value is
guaranteed for amounts allocated to the
Sub-Accounts. If actual earnings in the
Sub-Accounts over an extended period average out
to one of the hypothetical gross investment
returns shown here, and if all other assumptions
continue unchanged, it does not mean the policy
will perform exactly as illustrated. Fluctuations
in actual earnings will not give the same
accumulated result as a constant earnings rate.
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COLUMBUS LIFE INSURANCE COMPANY--ILLUSTRATION #1
-------------------------------------------------------------------------------
Designed for John J. Doe, M.D. $100,000.00 Specified Amount
Male Issue Age 35 Death Benefit Option 1
-------------------------------------------------------------------------------
Preferred - TNU $xx.xx Annual Premium
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Charges
10.00% Gross (8.12 % Net) 0.00% Gross (-1.71 % Net)
---------------------------------- -----------------------------------
Hypothetical Rate of Return Hypothetical Rate of Return
---------------------------------- -----------------------------------
End Net Cash Net Cash
of Premium Account Surrender Death Account Surrender Death
Age Yr Outlay Mode Value Value Benefit Value Value Benefit
--------- ------- ----------- -------- ---------- ------------ ---------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
36 1 A
37 2 A
38 3 A
39 4 A
40 5 A
41 6 A
42 7 A
43 8 A
44 9 A
45 10 A
46 11 A
47 12 A
48 13 A
49 14 A
50 15 A
51 16 A
52 17 A
53 18 A
54 19 A
55 20 A
</TABLE>
Net investment return percentages shown at the top of the page are calculated as
the hypothetical gross investment return less all asset-based charges shown in
the Prospectus. The amounts shown in the columns labeled under Account Value,
Net Cash Surrender Value and Death Benefit reflect these net investment returns
as well as all other applicable types of insurance costs, deductions and charges
shown in the Prospectus. This illustration does not project performance of any
Fund selected.
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COLUMBUS LIFE INSURANCE COMPANY--ILLUSTRATION #1
-------------------------------------------------------------------------------
Designed for John J. Doe, M.D. $100,000.00 Specified Amount
Male Issue Age 35 Death Benefit Option 1
-------------------------------------------------------------------------------
Preferred - TNU $xx.xx Annual Premium
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Maximum Charges
10.00% Gross (8.01% Net) 0.00% Gross (-1.81% Net)
----------------------------------- ----------------------------------
Hypothetical Rate of Return Hypothetical Rate of Return
----------------------------------- ----------------------------------
End Net Cash Net Cash
of Premium Account Surrender Death Account Surrender Death
Age Yr Outlay Mode Value Value Benefit Value Value Benefit
--------- ------- ----------- -------- ---------- ------------ ----------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
36 1 A
37 2 A
38 3 A
39 4 A
40 5 A
41 6 A
42 7 A
43 8 A
44 9 A
45 10 A
46 11 A
47 12 A
48 13 A
49 14 A
50 15 A
51 16 A
52 17 A
53 18 A
54 19 A
55 20 A
</TABLE>
Net investment return percentages shown at the top of the page are calculated as
the hypothetical gross investment return less all asset-based charges shown in
the Prospectus. The amounts shown in the columns labeled under Account Value,
Net Cash Surrender Value and Death Benefit reflect these net investment returns
as well as all other applicable types of insurance costs, deductions and charges
shown in the Prospectus. This illustration does not project performance of any
Fund selected.
Page 6
<PAGE>
COLUMBUS LIFE INSURANCE COMPANY--ILLUSTRATION #2
------------------------------------------------------------------------------
Designed for John J. Doe, M.D. $100,000.00 Specified Amount
Male Issue Age ___ Death Benefit Option 1
------------------------------------------------------------------------------
Preferred - TNU $xx.xx Annual Premium
------------------------------------------------------------------------------
.
FLEXIBLE PREMIUM VARIABLE The Policy is a flexible premium product because
UNIVERSAL LIFE INSURANCE you can change the amount and frequency of your
premium payments within limits. It is variable
life insurance because your policy values may
vary with the performance of the policy's
Sub-Accounts.
UNDERWRITING CLASS: The cost of insurance for this illustration is
MALE PREFERRED TOBACCO based on the assumption the policy is issued with
NON-USER the underwriting class listed at the left. Actual
cost of insurance will depend on the outcome of
the underwriting process and may vary from what
is shown on the illustration.
DEATH BENEFIT OPTION You may select from two options. Option 1
provides an initial Death Benefit equal to the
Specified Amount. Option 2 provides an initial
Death Benefit equal to the Specified Amount plus
the Account Value.
INITIAL SPECIFIED AMOUNT The Specified Amount assumed at issue is shown on
$100,000 the left. The actual amount payable at death will
depend on the death benefit option and may be
decreased by loans or withdrawals, or increased
by additional insurance benefits. The insurance
contract will specify how to determine the death
benefit. The Death Benefits are illustrated as of
the end of each policy year.
INITIAL PLANNED PREMIUM The planned premiums, including lump-sum
OUTLAY $XX.XX ANNUAL premiums, are shown in the yearly detail of this
illustration. Values will be different if
premiums are paid with a different frequency or
in different amounts. This illustration assumes
that 100% of the premiums are allocated to the
Sub-Accounts.
MINIMUM ANNUAL PREMIUM FOR Paying the Five-Year No-Lapse Guarantee premium,
FIVE-YEAR NO-LAPSE GUARANTEE will keep the policy in force for five years
$XX.XX even if the Net Cash Surrender Value of the
Policy is less than the next Monthly
Deduction and Monthly Expense Charge, and
regardless of investment performance. At least
1/12 of this minimum premium must be paid in
order to place the Policy in force.
Page 7
<PAGE>
COLUMBUS LIFE INSURANCE COMPANY--ILLUSTRATION #2
-------------------------------------------------------------------------------
Designed for John J. Doe, M.D. $100,000.00 Specified Amount
Male Issue Age ___ Death Benefit Option 1
-------------------------------------------------------------------------------
Preferred - TNU $xx.xx Annual Premium
-------------------------------------------------------------------------------
NON-GUARANTEED ELEMENTS OF The cost of insurance and the Policy charges are
THE POLICY guaranteed to be no higher than the maximums
stated in the Policy and Prospectus. The current
cost of insurance and current Policy charges are
not guaranteed. The Account Value will depend on
the allocation to and performance of the various
Sub-Accounts as well as the non-guaranteed
elements of the Policy. No minimum Account Value
is guaranteed for amounts allocated to the
Sub-Accounts.
EXTENDED MATURITY If the policy is still in force on the Policy
Anniversary after the Insured's 100th birthday,
the Death Benefit will continue. All accounts
will be transferred to the Fixed Account
will begin earning interest at the Fixed
Account's then current rate. Also, the interest
rate credited to your Loan Account will be
increased to equal the interest rate charged
against any Policy loans. After that time,
reduced by the amount of any Indebtedness. No
further premiums may be paid, no costs or charges
will be deducted, and no further loans will be
permitted, no further transfers will be permitted
and your Death Benefit will be revised to equal
your Net Cash Surrender Value.
NON-GUARANTEED ELEMENTS The current cost of insurance rates and charges
are subject to change. Account Values will vary
from those illustrated if actual rates differ
from those assumed. The hypothetical gross rates
of return are illustrative only and do not
represent past or future investment results.
Actual investment results may be more or less
than those shown and will depend on investment
allocations and the investment experience of the
Sub-Accounts. No representation is being made
that these hypothetical returns can be achieved
over any time period. No minimum Account Value
is guaranteed for amounts allocated to the
Sub-Accounts. If actual earnings in the
Sub-Accounts over an extended period average out
to one of the hypothetical gross investment
returns shown here, and if all other assumptions
continue unchanged, it does not mean the policy
will perform exactly as illustrated. Fluctuations
in actual earnings will not give the same
accumulated result as a constant earnings rate.
Page 8
<PAGE>
COLUMBUS LIFE INSURANCE COMPANY--ILLUSTRATION #2
------------------------------------------------------------------------------
Designed for John J. Doe, M.D. $100,000.00 Specified Amount
Male Issue Age ___ Death Benefit Option 1
------------------------------------------------------------------------------
Preferred - TNU $xx.xx Annual Premium
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Charges
10.00% Gross (8.12 % Net) 0.00% Gross (-1.71 % Net)
---------------------------------- -----------------------------------
Hypothetical Rate of Return Hypothetical Rate of Return
---------------------------------- -----------------------------------
End Net Cash Net Cash
of Premium Account Surrender Death Account Surrender Death
Age Yr Outlay Mode Value Value Benefit Value Value Benefit
--------- ------- ----------- -------- ---------- ------------ ---------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
36 1 A
37 2 A
38 3 A
39 4 A
40 5 A
41 6 A
42 7 A
43 8 A
44 9 A
45 10 A
46 11 A
47 12 A
48 13 A
49 14 A
50 15 A
51 16 A
52 17 A
53 18 A
54 19 A
55 20 A
</TABLE>
Net investment return percentages shown at the top of the page are calculated as
the hypothetical gross investment return less all asset-based charges shown in
the Prospectus. The amounts shown in the columns labeled under Account Value,
Net Cash Surrender Value and Death Benefit reflect these net investment returns
as well as all other applicable types of insurance costs, deductions and charges
shown in the Prospectus. This illustration does not project performance of any
Fund selected.
Page 9
<PAGE>
COLUMBUS LIFE INSURANCE COMPANY--ILLUSTRATION #2
-------------------------------------------------------------------------------
Designed for John J. Doe, M.D. $100,000.00 Specified Amount
Male Issue Age ___ Death Benefit Option 1
-------------------------------------------------------------------------------
Preferred - TNU $xx.xx Annual Premium
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Maximum Charges
10.00% Gross (8.01% Net) 0.00% Gross (-1.81% Net)
----------------------------------- ----------------------------------
Hypothetical Rate of Return Hypothetical Rate of Return
----------------------------------- ----------------------------------
End Net Cash Net Cash
of Premium Account Surrender Death Account Surrender Death
Age Yr Outlay Mode Value Value Benefit Value Value Benefit
--------- ------- ----------- -------- ---------- ------------ ----------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
36 1 A
37 2 A
38 3 A
39 4 A
40 5 A
41 6 A
42 7 A
43 8 A
44 9 A
45 10 A
46 11 A
47 12 A
48 13 A
49 14 A
50 15 A
51 16 A
52 17 A
53 18 A
54 19 A
55 20 A
</TABLE>
Net investment return percentages shown at the top of the page are calculated as
the hypothetical gross investment return less all asset-based charges shown in
the Prospectus. The amounts shown in the columns labeled under Account Value,
Net Cash Surrender Value and Death Benefit reflect these net investment returns
as well as all other applicable types of insurance costs, deductions and charges
shown in the Prospectus. This illustration does not project performance of any
Fund selected.
Page 10
<PAGE>
<TABLE>
<CAPTION>
SUPPLEMENT B
TABLE OF APPLICABLE DEATH BENEFIT FACTORS
INSURED'S AGE LAST APPLICABLE DEATH INSURED'S AGE APPLICABLE DEATH INSURED'S AGE APPLICABLE DEATH
POLICY ANNIVERSARY BENEFIT FACTOR LAST POLICY BENEFIT FACTOR LAST POLICY BENEFIT FACTOR
ANNIVERSARY ANNIVERSARY
------------------ ---------------- ------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
1 through 40 2.50 54 1.57 68 1.17
41 2.43 55 1.50 69 1.16
42 2.36 56 1.46 70 1.15
43 2.29 57 1.42 71 1.13
44 2.22 58 1.38 72 1.11
45 2.15 59 1.34 73 1.09
46 2.09 60 1.30 74 1.07
47 2.03 61 1.28 75 through 90 1.05
48 1.97 62 1.26 91 1.04
49 1.91 63 1.24 92 1.03
50 1.85 64 1.22 93 1.02
51 1.78 65 1.20 94 1.01
52 1.71 66 1.19 95 or higher 1.00
53 1.64 67 1.18
</TABLE>
Page 1
<PAGE>
SUPPLEMENT C
TABLE OF COST OF INSURANCE CHARGES
The Guaranteed Maximum Monthly Cost of Insurance Charges per $1,000 of Specified
Amount for an Insured in the standard or preferred underwriting class are listed
in the table below (Based on 1980 CSO Mortality Table, Age Last Birthday). For
any insured in a special or substandard rate class, the rate above must be
multiplied by the appropriate rating factor, as shown in an amendment added to
the policy.
<TABLE>
<CAPTION>
[***NUMBERS TO BE UPDATED***]
---------------------------- --------------------------------------------------------
Juvenile Ages Adult Ages
---------------------------- --------------------------------------------------------
Male Male Female Female
Attained Attained Tobacco Tobacco Tobacco Tobacco
Age Male Female Age Abstainer* User** Abstainer* User**
--- ---- ------ --- ---------- ------ ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
0 0.09 0.07 20 0.14 0.19 0.08 0.10
1 0.09 0.07 21 0.14 0.19 0.09 0.10
2 0.08 0.07 22 0.14 0.19 0.09 0.10
3 0.08 0.07 23 0.13 0.19 0.09 0.10
4 0.08 0.06 24 0.13 0.18 0.09 0.11
5 0.07 0.06 25 0.13 0.18 0.09 0.11
6 0.07 0.06 26 0.12 0.17 0.09 0.11
7 0.07 0.06 27 0.12 0.17 0.10 0.12
8 0.06 0.06 28 0.12 0.17 0.10 0.12
9 0.06 0.06 29 0.12 0.17 0.10 0.13
10 0.06 0.06 30 0.12 0.18 0.10 0.13
11 0.07 0.06 31 0.12 0.18 0.11 0.14
12 0.08 0.06 32 0.13 0.19 0.11 0.14
13 0.09 0.06 33 0.13 0.20 0.12 0.15
14 0.10 0.07 34 0.14 0.21 0.12 0.16
15 0.12 0.07 35 0.14 0.23 0.13 0.17
16 0.13 0.08 36 0.15 0.24 0.13 0.18
17 0.14 0.08 37 0.16 0.26 0.14 0.20
18 0.15 0.08 38 0.17 0.29 0.16 0.22
19 0.16 0.09 39 0.18 0.31 0.17 0.24
---------------------------- 40 0.20 0.35 0.18 0.26
41 0.21 0.38 0.20 0.29
42 0.23 0.42 0.21 0.32
* Abstainer generally 43 0.25 0.46 0.23 0.34
means the Insured does not 44 0.27 0.50 0.24 0.37
use tobacco products. 45 0.29 0.55 0.26 0.40
46 0.31 0.60 0.28 0.43
47 0.34 0.65 0.29 0.46
** User generally means 48 0.36 0.71 0.31 0.49
the Insured uses tobacco 49 0.39 0.77 0.34 0.53
products. 50 0.43 0.84 0.36 0.57
51 0.47 0.92 0.39 0.61
52 0.51 1.00 0.42 0.65
53 0.57 1.11 0.46 0.71
54 0.62 1.22 0.49 0.76
55 0.69 1.33 0.53 0.81
--------------------------------------------------------
Page 1
<PAGE>
<CAPTION>
--------------------------------------------------------
Adult Ages
--------------------------------------------------------
Male Male Female Female
Attained Tobacco Tobacco Tobacco Tobacco
Age Abstainer* User** Abstainer* User**
<S> <C> <C> <C> <C>
56 0.76 1.46 0.57 0.87
57 0.83 1.59 0.61 0.92
58 0.92 1.73 0.65 0.97
59 1.01 1.88 0.69 1.02
60 1.12 2.04 0.74 1.09
61 1.23 2.23 0.80 1.16
62 1.37 2.45 0.88 1.27
63 1.52 2.68 0.97 1.39
64 1.69 2.95 1.08 1.53
65 1.88 3.22 1.20 1.68
66 2.08 3.52 1.32 1.83
67 2.30 3.82 1.44 1.97
68 2.53 4.14 1.57 2.12
69 2.80 4.49 1.71 2.28
70 3.10 4.88 1.88 2.47
71 3.44 5.31 2.08 2.71
72 3.84 5.81 2.33 3.01
73 4.29 6.37 2.64 3.36
74 4.79 6.98 2.98 3.77
75 5.33 7.64 3.38 4.21
76 5.91 8.32 3.80 4.69
77 6.51 9.01 4.26 5.19
78 7.15 9.71 4.76 5.73
79 7.85 10.45 5.32 6.31
80 8.62 11.26 5.96 6.97
81 9.50 12.15 6.70 7.73
* Abstainer generally 82 10.50 13.16 7.56 8.60
means the Insured does not 83 11.63 14.26 8.55 9.61
use tobacco products. 84 12.86 15.43 9.65 10.73
85 14.18 16.62 10.86 11.93
86 15.57 17.80 12.17 13.21
** User generally means 87 17.00 19.04 13.59 14.57
the Insured uses tobacco 88 18.49 20.35 15.13 16.01
products. 89 20.04 21.67 16.79 17.53
90 21.69 23.03 18.61 19.26
91 23.49 24.47 20.64 21.16
92 25.50 26.17 22.97 23.32
93 27.96 28.41 25.80 25.94
94 31.38 31.56 29.59 29.59
95 36.80 36.80 35.37 35.37
96 46.59 46.59 45.53 45.53
97 67.04 67.04 66.32 66.32
98 120.67 120.67 120.23 120.23
99 120.67 120.67 120.23 120.23
--------------------------------------------------------
</TABLE>
Page 2
<PAGE>
SUPPLEMENT D
TABLE OF SURRENDER TARGET AMOUNTS
[***TO BE ADDED***]
<PAGE>
SUPPLEMENT E
CALCULATION OF SURRENDER CHARGES
The surrender charge is assessed on each Coverage Layer. The surrender charge
depends on the Surrender Target Amount and number of Coverage Years for each
Coverage Layer. The total surrender charge is the sum of the surrender charges
for all of the Coverage Layers.
COVERAGE YEAR SURRENDER CHARGE
PERCENTAGE OF SURRENDER TARGET AMOUNT
FOR COVERAGE LAYER
Year 1 to Year 5 90%
Year 6 to Year 10 90% - [(monthly duration less 60) x 1.00%]
Year 11 to Year 12 30% - [(monthly duration less 120) x 1.25%]
Year 13 and later None
Page 1
<PAGE>
SUPPLEMENT F
CONTINUATION PROVISIONS
CONTINUATION UNDER THE FIVE-YEAR NO-LAPSE GUARANTEE
To determine if your adjusted total premium payments are sufficient to maintain
the Five-Year No-Lapse Guarantee for continuation of your Policy during the
first 5 years beginning on the Policy Date, we use the following procedure:
o We determine your adjusted total premium payments (the total
amount of your premium payments less the amount of any
withdrawals and the amount of your Loan Account).
o We determine if you have made any changes in your Policy that
resulted in an increase in the Monthly Deduction. In this
discussion, we call this type of change a policy change.
o We determine the total required amount for this guarantee provision.
o If you have not made any policy changes, the total required
amount is 1/12th of the minimum annual premium for the Five-Year
No-Lapse Guarantee multiplied by the number of months from the
Policy Date to the next Monthly Anniversary Day. The minimum
annual premium for the Five-Year No-Lapse Guarantee is shown on
your Policy Schedule.
For example, if the minimum annual premium for the Five-Year
No-Lapse Guarantee is $_____ , your Policy Date is June 15, 2000,
the next Monthly Anniversary Day is March 15, 2001, and you have
not made any policy changes, the required amount is $____ ($____
($____ divided by 12) x 9 (number of months since the Policy
Date).
o If you have made a policy change, we calculate a required amount
for the period from the Policy Date to the date on which the
policy change was effective and a required amount for the period
from the date on which the policy change was effective to the
next Monthly Anniversary Day. Each calculation is based on the
minimum annual premium for the Five-Year No-Lapse Guarantee
applicable for each period. We then add the 2 required amounts to
determine the total required amount.
o If you have made more than one policy change, we calculate a
required amount for each period. We then add the required amounts
to determine the total required amount.
o We then compare your adjusted total premium payments to the total
required amount.
Page 1
<PAGE>
o If your adjusted total premium payments are equal to or greater
than the total required amount, your Policy will continue to be
effective, your Five-Year No-Lapse Guarantee will remain in
effect and your Policy will not lapse.
o If your adjusted total premium payments are less than the total
required amount, a Grace Period will start.
o We will send you a notice if you are in jeopardy of losing your
Five-Year No-Lapse Guarantee. If your Five-Year No-Lapse
Guarantee is lost, it will not be reinstated.
Page 2
<PAGE>
SUPPLEMENT G
VALUATION PROCEDURES
SUB-ACCOUNTS ACCUMULATION UNIT VALUE
In this discussion, the term Valuation Period means the period of time beginning
at the close of trading on the NYSE on one Valuation Date, as defined below, and
ending at the close of trading on the NYSE on the next succeeding Valuation
Date. A Valuation Date is each day valuation of the Sub-Accounts is required by
law including every day that the NYSE is open.
The value of an Accumulation Unit at the close of any Valuation Period is
determined for each Sub-Account by multiplying the Accumulation Unit Value of
the Sub-Account at the close of the immediately preceding Valuation Period by
the "Net Investment Factor" (described below). Depending upon investment
performance of the underlying Fund in which the Sub-Account is invested, the
Accumulation Unit Value may increase or decrease.
The Net Investment Factor for each Sub-Account for any Valuation Period is
determined by dividing (a) by (b), where:
(a) equals: (1) the net asset value per share of the underlying
Fund at the end of the current Valuation Period, plus
(2) the per share amount of any dividend or capital
gain distribution made by the underlying Fund on
shares held in the Sub-Account if the "ex-dividend"
date occurs during the current Valuation Period, plus
or minus
(3) a per share charge or credit for any taxes
reserved, which are determined by Columbus Life to
have resulted from the investment operations of the
Sub-Account during the current Valuation Period;
(b) is the net asset value per share of the corresponding underlying
Fund determined at the end of the immediately preceding Valuation
Period.
FIXED ACCOUNT VALUE
The value of the Fixed Account is calculated on a daily basis by the following
formula:
NP + XFT + I - XFF - WD = value of the Fixed Account where
NP = the sum of all Net Premiums allocated to the Fixed Account
XFT = any amount transferred to the Fixed Account from the Sub-Accounts
I = interest credited by Columbus Life to the Fixed Account
XFF = any amounts transferred from the Fixed Account to the
Sub-Accounts
WD = any amounts withdrawn for charges or deductions or in connection
with withdrawals
Page 1
<PAGE>
SEPARATE ACCOUNT 1 ANNUAL FINANCIAL STATEMENTS
[*** To Be Added By Pre-Effective Amendment ***]
Page 2
<PAGE>
COLUMBUS LIFE ANNUAL FINANCIAL STATEMENTS
[*** To Be Added By Pre-Effective Amendment ***]
Page 1
<PAGE>
UNAUDITED INTERIM FINANCIAL STATEMENTS - SEPARATE ACCOUNT 1
[*** To Be Added By Pre-Effective Amendment ***]
<PAGE>
UNAUDITED INTERIM FINANCIAL STATEMENTS - COLUMBUS LIFE
<PAGE>
GLOSSARY
ACCOUNT VALUE The sum of the value of your
interests in the Sub-Accounts, the
value of your interests in the Fixed
Account and the value of your Loan
Account.
ACCUMULATION UNIT A unit of measure used to calculate a
Policyholder's share of a Sub-Account.
ACCUMULATION UNIT VALUE The dollar value of an Accumulation Unit
in a Sub-Account.
ADDITIONAL LIFE RIDER The portion of the Specified Amount
SPECIFIED AMOUNT provided by the purchase of the
Additional Life Rider. If you do not
purchase the Additional Life Rider, the
Additional Life Rider Specified Amount
will equal $0.
ATTAINED AGE The Attained Age of the Insured is the
age of the Insured on the last Policy
Anniversary or on the last anniversary
of an added Coverage Layer.
BASE SPECIFIED AMOUNT The portion of the Specified Amount
provided by the purchase of the basic
Policy. If you do not purchase the
Additional Life Rider, the Base Specified
Amount and the Specified Amount are the
same.
BENEFICIARY The person or persons you have named to
receive the Death Proceeds when the
Insured dies.
CASH SURRENDER VALUE The Account Value minus any surrender
charge.
COLUMBUS LIFE, WE, US AND OUR Columbus Life Insurance Company.
CONTINGENT BENEFICIARY The person or persons you have named
to receive the Death Proceeds when no
Beneficiaries remain alive and
the Insured dies.
COVERAGE LAYER A Coverage Layer consists of all
insurance coverage provided under your
Policy or provided by riders to your
Policy that becomes effective on a single
Monthly Anniversary Day. The first
Coverage Layer includes insurance
coverage effective on the Policy Date. An
increase in Specified Amount or the
addition of other riders to your Policy
will create another Coverage Layer.
COVERAGE YEAR A year that starts on the Monthly
Anniversary day on which a Coverage
Page 1
<PAGE>
Layer begins. The Coverage Year for the
first Coverage Layer is the same as the
Policy Year.
DEATH BENEFIT The amount we pay to the Beneficiary
under the Policy when the Insured dies.
DEATH PROCEEDS Death Benefit plus any insurance
on the Insured's life that was provided
by riders, other than the Additional Life
Rider, to your Policy.
FIXED ACCOUNT An investment option that provided a
fixed rate of interest.
FUND A Fund is a series of a registered
management investment company. Each
Sub-Account invests in a Fund that has
the same investment objective as the
Sub-Account.
INDEBTEDNESS The sum of your Policy loans plus accrued
and unpaid interest on the loans.
INSURED The person whose life we provide
insurance coverage under your Policy.
LOAN ACCOUNT The portion of your Account Value that
is collateral for your loans.
MINIMUM ISSUE LIMIT The minimum amount of insurance you must
purchase with the basic Policy. No change
to the Policy can be made that would
reduce your Base Specified Amount below
the Minimum Issue Limit.
MONTHLY ANNIVERSARY DAY The date each month on which we deduct
the Monthly Deduction and Monthly Expense
Charge. This is generally the same date
each month as the Policy Date, so long as
that date is a day on which processing
occurs.
MONTHLY DEDUCTION The Monthly Deduction includes
the amount deducted for the cost of
insurance charge plus the cost of any
additional benefits provided under your
Policy by rider.
MONTHLY EXPENSE CHARGE The Monthly Expense Charge consists of
the per policy charge, the per $1,000
charge and the mortality and expense
risk charge.
NET CASH SURRENDER VALUE Your Account Value minus any surrender
charge and any Indebtedness.
NET PREMIUMS The amount of premium payment you paid
less the premium expense charge and
the state tax charge.
PAYEE The person who actually receives the
payment of proceeds from us under on of
the Income Plans. Depending on the
circumstances, the Payee might mean you,
the Beneficiary, the
Page 2
<PAGE>
Contingent Beneficiary, your estate or
another designated person.
POLICY The Voyager Variable Universal Life
Insurance Policy issued by Columbus Life,
including the application and any
amendments, any supplemental application,
riders or endorsements.
POLICY ANNIVERSARY The same date each year as the Policy
Date.
POLICY DATE The date from which the Policy months,
years and anniversaries are measured.
POLICY SCHEDULE The schedule that begins on page
3 of your Policy. It contains specific
information about your Policy such as the
Specified Amount, your planned premium,
the death benefit option you selected,
required payment for guaranteed
continuation of your Policy and the
maximum amount of various charges.
POLICY YEAR A year that starts on your Policy Date
or your Policy Anniversary.
SEPARATE ACCOUNT 1 A separate account of Columbus Life that
supports your Policy.
SPECIFIED AMOUNT The amount of insurance coverage provided
by your Policy. The Specified Amount is
divided between the Base Specified Amount
and the Additional Life Rider Specified
Amount.
SUB-ACCOUNTS A division of Separate Account 1. Each
Sub-Account invests in a Fund, which has
the same investment objective as the
Sub-Account.
TARGET PREMIUM A level of premium payments allocated to
a Coverage Layer in a Coverage Year that
determines the rate of the premium
expense charge deducted from premium
payments allocated to a Coverage Layer.
Page 3
<PAGE>
PART II
INFORMATION NOT REQUIRED TO BE FILED IN A PROSPECTUS
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
INFORMATION AND UNDERTAKING PURSUANT TO RULE 484(B)(1) UNDER THE SECURITIES
ACT OF 1933
The Code of Regulations of Columbus Life Insurance Company provides in Article
VI that:
ARTICLE VI
Indemnification and Insurance
SECTION 1. INDEMNIFICATION. To the fullest extent not prohibited by
applicable law, the corporation shall indemnify each director, officer
and employee against any and all costs and expenses (including attorney
fees, judgments, fines, penalties, amounts paid in settlement, and
other disbursements) actually and reasonably incurred by or imposed
upon such director, officer or employee in connection with any action,
suit, investigation or proceeding (or any claim or other matter
therein), whether civil, criminal, administrative or otherwise in
nature, including any settlements thereof or any appeals therein, with
respect to which such director, officer or employee is named or
otherwise becomes or is threatened to be made a party by reason of
being or at any time having been a director, officer or employee of the
corporation, or, at the direction or request of the corporation, a
director, trustee, officer, administrator, manager, employee, adviser
or other agent of or fiduciary for any other corporation, partnership,
trust, venture or other entity or enterprise including any employee
benefit plan; provided, however, that no person shall be indemnified to
the extent, if any, ,that the directors, acting at a meeting at which a
quorum of directors who are not parties to or threatened with any such
action, suit, investigation or proceeding, determine that such
indemnification is contrary to applicable law.
Any director who is a party to or threatened with any such action,
suit, investigation or proceeding shall not be qualified to vote; and
if for this reason a quorum of directors, who are not disqualified from
voting by reason of being parties to or threatened with such action ,
suit, investigation or proceeding, cannot be obtained, such
determination shall be made by three attorneys at law, who have not
theretofore represented the corporation in any matter and who shall be
selected by all of the officers and directors of the corporation who
are not parties to or threatened with any such action, suit,
investigation or proceeding. If there
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are no officers or directors who are qualified to make such selection,
the selection shall be made by a Judge of the Court of Common Pleas of
Hamilton County, Ohio. Such indemnification shall not be deemed
exclusive of any other right to which such director, officer or
employee may be entitled under the Articles of Incorporation, this
Code of Regulations, any agreement, any insurance purchased by the
corporation, vote of shareholders or otherwise.
Section 2. Insurance. The Board of Directors of the corporation may
secure and maintain such policies of insurance as it may consider
appropriate to insure any person who is serving or has served as a
director, officer or employee of the corporation, or who is serving or
has served at the request of the corporation as a director, trustee,
officer, manager, employee, adviser or other agent of or fiduciary for
any other corporation, partnership, trust, venture, or other entity or
enterprise including any employee benefit plan against any liability
asserted against and incurred by such person.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
REPRESENTATION REGARDING THE REASONABLENESS OF AGGREGATE FEES AND CHARGES
DEDUCTED UNDER POLICIES PURSUANT TO SECTION 26(E)(2)(A) OF THE INVESTMENT
COMPANY ACT OF 1940
Pursuant to Section 26(e) of the Investment Company Act of 1940, as amended,
Columbus Life Insurance Company represents that, with respect to the Policies
registered with the Securities and Exchange Commission by this Registration
Statement, as it may be amended, and offered by the Prospectus included in the
Registration Statement, all fees and charges imposed for any purpose and in any
manner and deducted under the Policies, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by Columbus Life Insurance Company.
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<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet
Reconciliation and tie between the Items in Form N-8B-2 and the Prospectus
The Prospectus consisting of ____ pages
The undertaking to file reports
Other undertakings and representations
The signatures
Written consents*
The following exhibits:
1. Exhibits required by Article IX, paragraph A, of Form N-8B-2:
(1) Resolution of Board of Directors
of the Columbus Life Insurance
Company dated September 10, 1998
authorizing the establishment of
the Separate Account previously
filed on May 14, 1999 as Exhibit
1.(1) to the Registration
Statement on Form S-6, File No.
333-78489 is incorporated by
reference
(2) Not applicable
(3) (a) Distributor Agreement between the Columbus
Life Insurance Company, on behalf of Separate
Account 1, and Touchstone Securities, Inc.*
(b) Specimen of typical agreement(s) between
Touchstone Securities, Inc. and dealers,
managers, sales supervisors and salesmen*
(c) Not applicable
(4) Not applicable
(5) (a) Form of Voyager Variable Universal Life
Insurance Policy issued by Columbus Life
Insurance Company filed herewith
(b) Form of Disability Credit Rider*
(c) Form of Children's Term Rider*
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<PAGE>
(d) Form of Accidental Death Rider*
(e) Form of Accelerated Death Benefit Rider*
(f) Form of Insured Insurability Rider*
(g) Form of Other Insured Rider*
(h) Form of Accelerated Death Benefit Plus Rider*
(i) Form of Extended Maturity Benefit No. 2 Rider*
(j) Form of Extended Maturity Benefit No. 3 Rider*
(k) Form of Extended No-Lapse Guarantee Rider*
(6) (a) (i) Certificate of Incorporation of the Columbus
Life Insurance Company previously filed on
August 19, 1999 as Exhibit 6(a)(i) to
Pre-Effective Amendment No.1 to
the Registration Statement on Form S-6,
File No. 333-78489 is incorporated by
reference
(ii) Certificate of Amendment of Articles of
Incorporation of Columbus Life Insurance
Company previously filed on August 19, 1999 as
Exhibit 6(a)(ii) to Pre-Effective Amendment
No.1 to the Registration Statement on Form
S-6, File No. 333-78489 is incorporated by
reference
(b) Code of Regulations of the Columbus Life
Insurance Company previously filed on
August 19, 1999 as Exhibit 6(b) to
Pre-Effective Amendment No.1 to the
Registration Statement on Form S-6,
File No. 333-78489 is incorporated by
reference
(7) Not applicable
(8) (a) Participation Agreement by and among AIM
Variable Insurance Funds, Inc., Columbus Life
Insurance Company, on behalf of itself and its
separate accounts, and Touchstone Securities,
Inc. previously filed on August 19, 1999 as
Exhibit 8(a) to Pre-Effective Amendment No.1
to the Registration Statement on Form S-6,
File No. 333-78489 is incorporated by
reference
(b) Agreement with respect to Trademarks and Fund
Names between AIM Management Group Inc. and
Columbus Life Insurance Company previously
filed on August 19, 1999 as Exhibit 8(b) to
Pre-Effective Amendment No.1 to the
Registration Statement on Form S-6, File No.
333-78489 is incorporated by reference
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<PAGE>
(c) Administrative Services Agreement between
Columbus Life Insurance Company and AIM
Advisors, Inc. previously filed on August 19,
1999 as Exhibit 8(c) to Pre-Effective
Amendment No.1 to the Registration Statement
on Form S-6, File No. 333-78489 is
incorporated by reference
(d) Participation Agreement by and among
The Alger American Fund, Columbus Life
Insurance Company on its own behalf and on
behalf of its Separate Account 1 and Fred
Alger & Company previously filed on August 19,
1999 as Exhibit 8(d) to Pre-Effective
Amendment No.1 to the Registration Statement
on Form S-6, File No. 333-78489 is
incorporated by reference
(e) Service Agreement between Fred Alger
Management, Inc. and Columbus Life Insurance
Company previously filed on August 19, 1999 as
Exhibit 8(e) to Pre-Effective Amendment No.1
to the Registration Statement on Form S-6,
File No. 333-78489 is incorporated by
reference
(f) Participation Agreement among MFS
Variable Insurance Trust, Columbus Life
Insurance Company and Massachusetts Financial
Services Company previously filed on August
19, 1999 as Exhibit 8(f) to Pre-Effective
Amendment No.1 to the Registration Statement
on Form S-6, File No. 333-78489 is
incorporated by reference
(g) Participation Agreement among Columbus Life
Insurance Company, PIMCO Variable Insurance
Trust, and PIMCO Funds Distributors LLC
previously filed on August 19, 1999 as Exhibit
8(g) to Pre-Effective Amendment No.1 to the
Registration Statement on Form S-6, File No.
333-78489 is incorporated by reference
(h) Services Agreement between Pacific Investment
Management Company and Columbus Life Insurance
Company previously filed on August 19, 1999 as
Exhibit 8(h) to Pre-Effective Amendment No.1
to the Registration Statement on Form S-6,
File No. 333-78489 is incorporated by
reference
(i) Fund Participation Agreement between Columbus
Life Insurance Company and Touchstone Variable
Series Trust previously filed on August 19,
1999 as Exhibit 8(i) to Pre-Effective
Amendment No.1 to the Registration Statement
on Form S-6, File No. 333-78489 is
incorporated by reference
(9) Not applicable
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<PAGE>
(10) (a) Form of Columbus Life Insurance
Company Application for Life Insurance*
(b) Form of Columbus Life Insurance Company
Supplement to Application for Life Insurance
to be Completed When Applying for Flexible
Premium Variable Universal Life*
(11) Description of Issuance, Transfer and
Redemption Procedures and Method of Conversion
to Fixed Benefit Policies for Columbus Life
Flexible Premium Variable Universal Life
Insurance Policies Offered by Columbus Life
Insurance Company Separate Account 1 of
Columbus Life Insurance Company*
2. Opinion and Consent of Counsel*
3. None
4. Not Applicable
5. Not required
99.(1) Actuarial Opinion and Consent*
99.(2) Consent of __________________________*
99.(3) Powers of Attorney previously filed herewith
* To be filed by Pre-Effective Amendment.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Columbus Life Insurance Company Separate Account 1, has duly caused
this Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized in the City of Cincinnati and State of Ohio, on the
18th day of September, 2000.
COLUMBUS LIFE INSURANCE COMPANY
SEPARATE ACCOUNT 1
By: COLUMBUS LIFE INSURANCE COMPANY
By: /s/ Lawrence L. Grypp
____________________________
Lawrence L. Grypp
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
PRINCIPAL EXECUTIVE OFFICER:
/s/ Lawrence L. Grypp
____________________________
Lawrence L. Grypp
President and Chief Executive Officer
September 25, 2000
PRINCIPAL ACCOUNTING AND FINANCIAL
OFFICER:
/s/ Robert L. Walker
__________________________
Robert L. Walker
Chief Financial Officer
September 25, 2000
DIRECTORS:
William J. Williams*
John H. Barrett*
Lawrence L. Grypp*
Paul H. Amato*
James N. Clark*
Robert C. Savage*
Ralph E. Waldo*
*By: /s/ Lawrence L. Grypp
_________________________
Lawrence L. Grypp
as attorney in fact for each Director
September 25, 2000
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
1.(5)(a) Form of Columbus Life Flexible Premium Variable
Universal Life Insurance Policy
99.(3) Powers of Attorney
