As Filed with the Securities and Exchange Commission on September 13, 1999
Registration No. 333- ______
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
PFL VARIABLE LIFE ACCOUNT A
(EXACT NAME OF TRUST)
PFL LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)
4333 Edgewood Road NE
Cedar Rapids, Iowa 52499
(COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
(NAME AND COMPLETE ADDRESS
OF AGENT FOR SERVICE) COPY TO: Stephen E. Roth, Esq.
John D. Cleavenger, Esq. Sutherland Asbill & Brennan LLP
PFL Life Insurance Company 1275 Pennsylvania Avenue, N.W.
4333 Edgewood Road NE Washington, DC 20004-2415
Cedar Rapids, Iowa 52499
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after the effective date of this Registration Statement
SECURITIES BEING OFFERED: Flexible Premium Variable Life Insurance Policy
The Registrant hereby amends this Registration Statement on such dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment that specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PART I
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
issued by
PROSPECTUS
PFL VARIABLE LIFE ACCOUNT A ____________, 1999
and
PFL LIFE INSURANCE COMPANY
4333 EDGEWOOD ROAD NE
CEDAR RAPIDS, IOWA 52499
(319) 398-8511
PFL Life Insurance Company (the "Company") is offering the flexible premium
variable life insurance policy ("Policy") described in this prospectus. The
Policy is designed as a long-term investment that attempts to provide
significant life insurance benefits for the Insured. This prospectus provides
information that a prospective owner should know before investing in the Policy.
You should consider the Policy in conjunction with other insurance you own.
You can allocate your Policy's values to:
o PFL Variable Life Account A (the "Separate Account"), which invests in
the portfolios listed on this page; or
o a Fixed Account, which credits a specified
rate of interest.
A prospectus for each of the portfolios available through the Separate Account
must accompany this prospectus. Please read these documents before investing and
save them for future reference.
PLEASE NOTE THAT THE POLICIES AND THE PORTFOLIOS:
O ARE NOT GUARANTEED TO ACHIEVE THEIR GOALS;
O ARE NOT FEDERALLY INSURED;
O ARE NOT ENDORSED BY ANY BANK OR
GOVERNMENT AGENCY; AND
O ARE SUBJECT TO RISKS, INCLUDING LOSS OF THE
AMOUNT INVESTED.
The following portfolios are available:
O JANUS ASPEN SERIES
Janus Growth Portfolio
Janus Worldwide Growth Portfolio
Janus Balanced Portfolio
Janus Capital Appreciation Portfolio
Janus Aggressive Growth Portfolio
O AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Value Fund
AIM V.I. Capital Appreciation Fund
AIM V.I. Growth Fund
AIM V.I. International Equity Fund
AIM V.I. Government Securities Fund
O OPPENHEIMER VARIABLE ACCOUNT FUNDS
Oppenheimer Main Street Growth & Income
Fund/VA
Oppenheimer Multiple Strategies Fund/VA
Oppenheimer Bond Fund/VA
Oppenheimer Strategic Bond Fund/VA
Oppenheimer High Income Fund/VA
O FIDELITY VARIABLE INSURANCE PRODUCTS FUNDS
Fidelity VIP II Index 500 Portfolio
Fidelity VIP Money Market Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP II Contrafund Portfolio
Fidelity VIP III Growth & Income Portfolio
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THIS
POLICY OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
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GLOSSARY.....................................................................1
POLICY SUMMARY...............................................................3
RISK SUMMARY.................................................................7
PORTFOLIO EXPENSE TABLE......................................................8
THE COMPANY AND THE FIXED ACCOUNT............................................9
PFL Life Insurance Company..............................................9
The Fixed Account.......................................................9
THE SEPARATE ACCOUNT AND THE PORTFOLIOS......................................9
The Separate Account....................................................9
The Portfolios.........................................................11
Voting Portfolio Shares................................................13
THE POLICY..................................................................14
Purchasing a Policy....................................................14
When Insurance Coverage Takes Effect...................................14
Canceling a Policy (Free-Look Right)...................................15
Ownership Rights.......................................................15
Selecting and Changing the
Beneficiary.................................................15
Changing the Owner.................................................16
Assigning the Policy...............................................16
PREMIUMS....................................................................16
Premium Flexibility....................................................16
Allocating Premiums....................................................17
POLICY VALUES...............................................................18
Policy Value...........................................................18
Cash Surrender Value...................................................18
Subaccount Value.......................................................18
Unit Value.............................................................19
Fixed Account Value....................................................19
CHARGES AND DEDUCTIONS......................................................20
Expense Charge.........................................................20
Monthly Deduction......................................................20
Cost of Insurance..................................................21
Monthly Administrative Charge......................................21
Charges for Riders.................................................21
Charges for a Substandard Premium
Class Rating................................................21
Mortality and Expense Risk Charge......................................21
Surrender and Withdrawal Charges.......................................22
Transfer Charge........................................................23
Portfolio Expenses.....................................................23
DEATH BENEFIT...............................................................23
Death Benefit Proceeds.................................................23
Death Benefit Options..................................................24
Changing Death Benefit Options.........................................25
Effects of Withdrawals on the
Death Benefit...............................................25
Changing the Specified Amount..........................................26
Payment Options........................................................26
SURRENDERS AND PARTIAL WITHDRAWALS..........................................27
Surrenders.............................................................27
Withdrawals............................................................27
TRANSFERS...................................................................28
Exchange Privilege.....................................................29
Dollar Cost Averaging..................................................29
Asset Rebalancing Program..............................................29
LOANS.......................................................................30
Loan conditions........................................................30
Effect of Policy Loans.................................................31
POLICY LAPSE AND REINSTATEMENT..............................................32
Lapse..................................................................32
Reinstatement..........................................................32
FEDERAL TAX CONSIDERATIONS..................................................32
OTHER POLICY INFORMATION....................................................35
Our Right to Contest the Policy........................................35
Suicide Exclusion......................................................35
Misstatement of Age or Sex.............................................35
Modifying the Policy...................................................35
Payments We Make.......................................................36
Reports to Owners......................................................36
Records................................................................36
Policy Termination.....................................................37
Supplemental Benefits and Riders.......................................37
PERFORMANCE DATA............................................................38
ADDITIONAL INFORMATION......................................................49
Sale of the Policies...................................................49
Legal Matters..........................................................49
Legal Proceedings......................................................49
Year 2000 Matters......................................................49
Financial Statements...................................................50
Additional Information about the Company...............................50
PFL's Executive Officers and Directors.................................50
ILLUSTRATIONS...............................................................51
<PAGE>
GLOSSARY
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AGE
The Insured's age on the Insured's last birthday.
BENEFICIARY
The person(s) you select to receive the death benefit from this Policy.
CASH SURRENDER VALUE
The amount we pay when you surrender your Policy. It is equal to: (1) the Policy
Value as of the date of surrender; MINUS (2) any surrender charge; MINUS (3) any
Indebtedness.
COMPANY (WE, US, OUR, PFL, HOME OFFICE) PFL Life Insurance Company, 4333
Edgewood Road NE, Cedar Rapids, Iowa 52499, telephone: 319-398-8511.
CUMULATIVE MINIMUM MONTHLY PREMIUM
The sum of all Minimum Monthly Premiums beginning on the Policy Date.
DEATH BENEFIT PROCEEDS
The amount we pay to the beneficiary when we receive due proof of the Insured's
death. We deduct any Indebtedness or unpaid Monthly Deductions before making any
payment.
FIXED ACCOUNT
Part of our general account. Amounts allocated to the Fixed Account earn at
least 3% annual interest (4% for Policies issued in Florida).
FREE LOOK PERIOD
The period shown on your Policy's cover page during which you may examine and
return the Policy and receive a refund. The length of the free look period
varies by state.
GRACE PERIOD
A 61-day period after which a Policy will lapse if you do not make a sufficient
payment.
INDEBTEDNESS
The total amount of all outstanding Policy loans, including both principal and
interest due.
INSURED
The person whose life is Insured by this Policy.
INVESTMENT START DATE
The later of the Policy Date or the date when we receive the first premium at
our Home Office.
LAPSE
A Policy that terminates without value after a grace period. You may reinstate a
lapsed Policy.
MATURITY DATE
The first Policy anniversary after the Insured's 100th birthday. You may elect
to continue the Policy beyond Insured's age 100 under the extended Maturity Date
option.
MINIMUM MONTHLY PREMIUM
This is the amount necessary to guarantee coverage for a No-Lapse Period. It is
shown on your Policy's specification page.
MONTHLY DATE
This is the same day as the Policy Date in each successive month. If there is no
day in a calendar month that coincides with the Policy Date, or if that day
falls on a day that is not a Valuation Date, then the Monthly Date is the next
Valuation Date. On each Monthly Date, we determine Policy charges and deduct
them from the Policy Value.
MONTHLY DEDUCTION
This is the monthly amount we deduct from the Policy Value. The Monthly
Deduction includes the cost of insurance charge, the administrative charge, a
premium charge for any riders, and any charges for a substandard premium class
rating.
NO-LAPSE PERIOD
A period you choose on the Policy application (20 Policy Years, 30 Policy Years,
or to Insured's age 100) during which the Policy will not enter a grace period
if on any Monthly Date the sum of premiums paid, less any withdrawals and
Indebtedness, equals or exceeds the Cumulative Minimum Monthly Premium.
1
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OWNER (YOU, YOUR)
The person entitled to exercise all rights as Owner under the Policy.
POLICY DATE
The Policy Date is the date when coverage becomes effective. The Policy date is
the latest of: (a) the date of the application; (b) the date all required
medical examinations or diagnostic tests are completed; (c) the date of issue
requested in the application unless underwriting is not yet completed; or (d)
the date of underwriting approval. The Policy Date is shown on the Policy's
specifications page, and we use it to measure Policy months, years, and
anniversaries. We begin to deduct the Monthly Deductions on the Policy Date.
POLICY VALUE
The sum of your Policy's value in the Subaccounts and the Fixed Account
(including amounts held in the Fixed Account to secure any loans).
PREMIUMS
All payments you make under the Policy other than repayments of Indebtedness.
PREMIUM SUSPENSE ACCOUNT
A temporary holding account where we place all premiums we receive prior to the
Investment Start Date. The Premium Suspense Account does not credit any interest
or investment return.
SEPARATE ACCOUNT
PFL Variable Life Account A. It is a separate investment account that is divided
into Subaccounts, each of which invests in a corresponding portfolio.
SEPARATE ACCOUNT VALUE
The total value of your Policy allocated to the Subaccounts of the Separate
Account.
SPECIFIED AMOUNT
The dollar amount used to determine the death benefit under the Policy.
SUBACCOUNT
A subdivision of PFL Variable Life Account A. We invest each Subaccount's assets
exclusively in shares of one investment portfolio.
SURRENDER
To cancel the Policy by signed request from the Owner.
VALUATION DATE
Each day that both the New York Stock Exchange and the Company are open for
business, except for any days when a Subaccount's corresponding investment
portfolio does not value its shares. As of the date of this prospectus: the
Company is open whenever the New York Stock Exchange is open; and there is no
day when both the New York Stock Exchange and the Company are open for business
but an investment portfolio does not value its shares.
VALUATION PERIOD
The period beginning at the close of business of the New York Stock Exchange on
one Valuation Date and continuing to the close of business on the next Valuation
Date.
WRITTEN NOTICE
The Written Notice you must sign and send us to request or exercise your rights
as Owner under the Policy. To be complete, each Written Notice must: (1) be in a
form we accept, (2) contain the information and documentation that we determine
in our sole discretion is necessary for us to take the action you request or for
you to exercise the right specified, and (3) be received at our Home Office.
YOU (YOUR, OWNER)
The person entitled to exercise all rights as Owner under the Policy.
2
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POLICY SUMMARY
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This summary describes the Policy's important features and corresponds to
prospectus sections that discuss the topics in more detail. The Glossary defines
certain words and phrases used in this prospectus.
PREMIUMS
o You can select a premium payment plan (monthly, quarterly, semi-annually,
or annually) but you are not required to pay premiums according to the
plan. The initial premium is due on or before the Policy Date. Thereafter,
you may make subsequent premium payments, in any frequency or amount, at
any time before the Maturity Date. We will not accept any premiums after
the Maturity Date.
o In your application, you must select one of three No-Lapse Periods we
offer: 20 Policy Years; 30 Policy Years; or to Insured's age 100. We will
establish a Minimum Monthly Premium amount for your Policy based on the
Insured's age, sex, premium class, Specified Amount, riders, and the
selected No-Lapse Period. The Minimum Monthly Premium under your Policy is
the amount necessary to guarantee insurance coverage for the No-Lapse
Period you select.
o We will notify you if your Policy enters a 61-day grace period. Your
Policy will lapse if you do not make a sufficient payment before the end
of the grace period:
If your Policy is in a No-Lapse Period, then the Policy will enter a grace
period if on any Monthly Date the Cash Surrender Value is not enough to
pay the next Monthly Deduction due, AND the sum of premiums paid minus
withdrawals and Indebtedness is less than the Cumulative Minimum Monthly
Premium.
If your Policy is not in a No-Lapse Period, then your Policy will enter a
grace period if the Cash Surrender Value on any Monthly Date is not enough
to pay the next Monthly Deduction due.
o When you receive your Policy, the 10-day FREE LOOK PERIOD begins (the free
look period may be longer in some states). You may return the Policy
during the free look period and receive a refund of all payments you made
(less any withdrawals and Indebtedness).
o We multiply each premium you pay by the expense charge, deduct that
charge, and credit the resulting amount (the net premium) to the Policy
Value.
INVESTMENT OPTIONS
FIXED ACCOUNT:
o You may place money in the Fixed Account where it earns at least 3% annual
interest (4% for Policies issued in Florida). We may declare higher rates
of interest, but are not obligated to do so.
SEPARATE ACCOUNT:
o You may direct the money in your Policy to any of the Subaccounts of the
Separate Account. WE DO NOT GUARANTEE ANY MONEY YOU PLACE IN THE
SUBACCOUNTS. THE VALUE OF EACH SUBACCOUNT WILL INCREASE OR DECREASE,
DEPENDING ON THE INVESTMENT PERFORMANCE OF THE CORRESPONDING PORTFOLIO.
YOU COULD LOSE SOME OR ALL OF YOUR MONEY.
3
<PAGE>
o Each Subaccount invests exclusively in one of the following investment
portfolios:
<TABLE>
<S> <C>
O JANUS ASPEN SERIES O OPPENHEIMER VARIABLE ACCOUNT FUNDS
Janus Growth Portfolio Oppenheimer Main Street Growth & Income
Janus Worldwide Growth Portfolio Fund/VA
Janus Balanced Portfolio Oppenheimer Multiple Strategies Fund/VA
Janus Capital Appreciation Portfolio Oppenheimer Bond Fund/VA
Janus Aggressive Growth Portfolio Oppenheimer Strategic Bond Fund/VA
Oppenheimer High Income Fund/VA
O AIM VARIABLE INSURANCE FUNDS, INC. O FIDELITY VARIABLE INSURANCE PRODUCTS FUNDS
AIM V.I. Value Fund Fidelity VIP II Index 500 Portfolio
AIM V.I. Capital Appreciation Fund Fidelity VIP Money Market Portfolio
AIM V.I. Growth Fund Fidelity VIP Growth Portfolio
AIM V.I. International Equity Fund Fidelity VIP II Contrafund Portfolio
AIM V.I. Government Securities Fund Fidelity VIP III Growth & Income Portfolio
</TABLE>
See "The Company and the Fixed Account," and "The Separate Account and the
Portfolios."
POLICY VALUE
o Policy Value is the sum of your amounts in the Subaccounts and the Fixed
Account. Policy Value is the starting point for calculating important
values under the Policy, such as the Cash Surrender Value and the death
benefit.
o Policy Value varies from day to day, depending on the investment experience
of the Subaccounts you choose, interest we credit to the Fixed Account,
charges we deduct, and any other transactions (E.G., transfers,
withdrawals, and loans). WE DO NOT GUARANTEE A MINIMUM POLICY VALUE.
o Prior to the Investment Start Date, we allocate the net premiums to the
Premium Suspense Account. On the first Valuation Date on or following the
Investment Start Date, we will transfer the amounts in the Premium Suspense
Account to the Subaccounts and the Fixed Account according to your
allocation percentages.
CHARGES AND DEDUCTIONS
$ EXPENSE CHARGE: We multiply each premium by an expense charge, deduct that
charge, and credit the remaining amount (the net premium) to your Policy
Value according to your allocation instructions.
The expense charge varies by Policy Year as follows:
Premiums paid DURING the first 10 Policy Years: expense charge = 5%
Premiums paid AFTER the first 10 Policy Years: expense charge =
currently 2.5% (maximum 5%).
$ MONTHLY DEDUCTION. On the Policy Date and on each Monthly Date thereafter,
we deduct:
-> a cost of insurance charge for the Policy
-> a $10 monthly administrative charge
-> charges for any riders
-> any charges for a substandard premium class rating
4
<PAGE>
$ SURRENDER AND WITHDRAWAL CHARGES:
-> Surrender: During the first 19 Policy Years, we deduct a surrender
charge that varies based on your age, gender, premium class, and initial
Specified Amount. A separate surrender charge applies for 19 years after
any Specified Amount increase. See "Charges and Deductions -- Surrenders
and Withdrawal Charges" for a table showing surrender charges for sample
Insureds and premium classes.
-> Withdrawals: For each withdrawal, we deduct a fee equal to the lesser
of $25 or 2% of the amount withdrawn.
$ MORTALITY AND EXPENSE RISK CHARGE: We deduct a daily charge equal to 0.75%
(at an annual rate) of the average net assets of the Separate Account.
$ TRANSFER CHARGE: We assess a $25 fee for the 13th and each additional
transfer among the Subaccounts or the Fixed Account in a Policy Year.
$ PORTFOLIO EXPENSES: The portfolios deduct investment advisory fees and
other expenses from the amounts the Subaccounts invest in the portfolios.
These fees and expenses vary by portfolio and currently range from 0.28% to
0.92% per year.
SURRENDERS AND WITHDRAWALS
o SURRENDER: At any time while the Policy is in force, you may make a written
request to surrender your Policy and receive the Cash Surrender Value
(I.E., the Policy Value minus any surrender charge, and minus any
Indebtedness).
o WITHDRAWALS: After the 1st Policy Year, you may make a written request to
withdraw part of the Policy Value, subject to the following rules.
Withdrawals may have tax consequences.
/check/ You may make one withdrawal in a Policy Year.
/check/ You must request at least $500;
/check/ If you request a withdrawal that will leave a Cash Surrender Value
of less than $500, we will treat it as a surrender request; and
/check/ For each withdrawal, we deduct a fee equal to the lesser of $25 or
2% of the amount withdrawn.
5
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DEATH BENEFITS
o You must choose between two death benefit options under the Policy. After
the first Policy Year, you may change death benefit options once each
12-month period. We calculate the amount available under each death option
as of the Insured's date of death. See "Death Benefit Options."
-> LEVEL DEATH BENEFIT is equal to the greater of:
o the Specified Amount; OR
o the Policy Value multiplied by the applicable Death Benefit
Ratio.
-> INCREASING DEATH BENEFIT is equal to the greater of :
o the Specified Amount PLUS the Policy Value; OR
o the Policy Value multiplied by the applicable Death Benefit
Ratio.
TRANSFERS
o You may make an unlimited number of transfers among the Subaccounts and the
Fixed Account.
o The minimum amount you may transfer from a Subaccount or the Fixed Account
is the lesser of $100, or the total value in the Subaccount or Fixed
Account.
o We charge $25 for the 13th and each additional transfer during a Policy
Year.
LOANS
o You may take a loan (minimum $250) from your Policy at any time. The
maximum loan amount you may take is 90% (100% in certain states) of the
Cash Surrender Value, minus 6 months of Monthly Deductions. Loans may have
tax consequences.
o As collateral for the loan, we transfer an amount equal to the loan plus
interest in advance until the next Policy Anniversary from the Separate
Account and Fixed Account to the loan reserve (part of our Fixed Account).
We credit interest on amounts in the loan reserve and we guarantee that the
annual rate will not be lower than 3% (4% in Florida).
o We charge you a maximum annual interest rate of 5.66% in advance on your
loan. Interest is due and payable at the beginning of each Policy Year.
Unpaid interest becomes part of the outstanding loan.
o After the 10th Policy Year, we consider certain portions of the loan amount
to be preferred loans. The sum of preferred loans cannot exceed 25% of the
Policy Value. We charge an annual interest rate of 3.85% in advance on
preferred loan amounts.
o You may repay all or part of your Indebtedness at any time. Loan repayments
must be at least $25, and must be clearly marked as "loan repayments" or we
will credit them as premiums.
o We deduct any unpaid Indebtedness from the proceeds payable on the
Insured's death.
6
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RISK SUMMARY
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The following are some of the risks associated with the Policy.
INVESTMENT If you invest your Policy Value in one or more Subaccounts,
RISK then you will be subject to the risk that investment
performance will be unfavorable and that the Policy Value
will decrease. You COULD lose everything you invest. If you
select the Fixed Account, then we credit your Policy Value
with a declared rate of interest, but you assume the risk
that the rate may decrease, although it will never be lower
than a guaranteed minimum annual effective rate of 3%.
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RISK OF If your Policy meets certain conditions, we will notify you
LAPSE that the Policy has entered a 61-day grace period and will
lapse unless you make a sufficient payment during the grace
period. You may reinstate a lapsed Policy.
If your Policy is in a No-Lapse Period, then the Policy will
enter a grace period if on any Monthly Date the Cash
Surrender Value is not enough to pay the next Monthly
Deduction due, AND the sum of premiums paid minus withdrawals
and Indebtedness is less than the Cumulative Minimum Monthly
Premium.
If your Policy is not in a No-Lapse Period, then your Policy
will enter a grace period if the Cash Surrender Value on any
Monthly Date is not enough to pay the next Monthly Deduction
due.
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TAX RISKS We anticipate that the Policy will be deemed a life insurance
contract under Federal tax law, so that the death benefit
paid to the beneficiary will not be subject to Federal income
tax. However, depending on the total amount of premiums you
pay, the Policy may be treated as a modified endowment
contract ("MEC") under Federal tax laws. If a Policy is
treated as a MEC, then surrenders, partial withdrawals, and
loans under a Policy will be taxable as ordinary income to
the extent there are earnings in the Policy. In addition, a
10% penalty tax may be imposed on surrenders, partial
withdrawals, and loans taken before you reach age 59 1/2. You
should consult a qualified tax advisor for assistance in all
Policy-related tax matters.
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SURRENDER The surrender charge under this Policy applies for 19 Policy
RISKS Years after the Policy Date. An additional surrender charge
will be applicable for 19 years from the date of any increase
in the Specified Amount. It is possible that you will receive
no Cash Surrender Value if you surrender your Policy in the
first few Policy Years. You should purchase this Policy only
if you have the financial ability to keep it in force for a
substantial period of time.
Even if you do not ask to surrender your Policy, surrender
charges MAY play a role in determining whether your Policy
will lapse, because surrender charges affect the Cash
Surrender Value which is a measure we use to determine
whether your Policy will enter a grace period (and possibly
lapse). See "Risk of Lapse," above.
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LOAN RISKS A Policy loan, whether or not repaid, will affect Policy
Value over time because we subtract the amount of the loan
from the Subaccounts and Fixed Account as collateral, and the
loan collateral does not participate in the investment
results of the Subaccounts or receive any higher current
interest rate credited to the Fixed Account.
We reduce the amount we pay on the Insured's death by the
amount of any Indebtedness. Your Policy may lapse if your
Indebtedness reduces the Cash Surrender Value to zero.
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7
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PORTFOLIO EXPENSE TABLE
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The following table shows the fees and expenses charged by the portfolios. The
purpose of the table is to assist you in understanding the various costs and
expenses that you will bear directly and indirectly. The table reflects charges
and expenses of the portfolios for the fiscal year ended December 31, 1998.
Expenses of the portfolios may be higher or lower in the future. Please refer to
the portfolios' prospectuses (which accompany this prospectus) for more
information on the fees and expenses described in this table.
ANNUAL PORTFOLIO OPERATING EXPENSES (As a percentage of average portfolio assets
AFTER fee waivers and expense reimbursements)
<TABLE>
<CAPTION>
TOTAL
MANAGEMENT OTHER ANNUAL
PORTFOLIO FEES EXPENSES EXPENSES
- --------- ---- -------- --------
<S> <C> <C> <C>
Janus Growth Portfolio (1) .......................... 0.65% 0.03% 0.68%
Janus Worldwide Growth Portfolio (1) ................ 0.65% 0.07% 0.72%
Janus Balanced Portfolio ............................ 0.72% 0.02% 0.74%
Janus Capital Appreciation Portfolio (1) ............ 0.70% 0.22% 0.92%
Janus Aggressive Growth Portfolio ................... 0.72% 0.03% 0.75%
AIM V.I. Value Fund ................................. 0.61% 0.05% 0.66%
AIM V.I. Capital Appreciation Fund .................. 0.62% 0.05% 0.67%
AIM V.I. Growth Fund ................................ 0.64% 0.08% 0.72%
AIM V.I. International Equity Fund .................. 0.75% 0.16% 0.91%
AIM V.I. Government Securities Fund ................. 0.50% 0.26% 0.76%
Oppenheimer Main Street Growth & Income Fund/VA ..... 0.74% 0.05% 0.79%
Oppenheimer Multiple Strategies Fund/VA ............. 0.72% 0.04% 0.76%
Oppenheimer Bond Fund/VA ............................ 0.72% 0.02% 0.74%
Oppenheimer Strategic Bond Fund/VA .................. 0.74% 0.06% 0.80%
Oppenheimer High Income Fund/VA ..................... 0.74% 0.04% 0.78%
Fidelity VIP II Index 500 Portfolio (2) ............. 0.24% 0.04% 0.28%
Fidelity VIP Money Market Portfolio ................. 0.20% 0.10% 0.30%
Fidelity VIP Growth Portfolio (3) ................... 0.59% 0.16% 0.75%
Fidelity VIP II Contrafund Portfolio (3) ............ 0.59% 0.16% 0.75%
Fidelity VIP III Growth & Income Portfolio (3) ...... 0.49% 0.21% 0.70%
</TABLE>
(1) Fee reductions by the investment adviser reduce the Management Fee.
Without such reductions, the Management Fee would have been the
following: 0.72% for Growth; 0.67% for Worldwide Growth; and 0.75% for
Capital Appreciation. The investment adviser has agreed to continue the
waivers and fee reductions until at least the next annual renewal of the
advisory agreement.
(2) The investment adviser agreed to reimburse a portion of the portfolio's
expenses during this period. Without this reimbursement, the total
annual expenses would have been 0.35%.
(3) The investment adviser or the portfolio has entered into varying
arrangements with third parties who either paid or reduced a portion of
the expenses. Without these reductions, total annual expenses would have
been the following: 0.80% for Growth; 0.80% for Contrafund; and 0.71%
for Growth & Income.
8
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THE COMPANY AND THE FIXED ACCOUNT
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PFL LIFE INSURANCE COMPANY
PFL Life Insurance Company is the insurance company issuing the Policy. PFL was
incorporated under Iowa law on April 19, 1961, and is a wholly owned indirect
subsidiary of AEGON USA, Inc. PFL established the Separate Account to support
the investment options under this Policy and under other variable life insurance
policies we may issue. Our general account supports the Fixed Account options
under the Policy.
IMSA. PFL is a member of the Insurance Marketplace Standards Association
("IMSA"). IMSA members subscribe to a set of ethical standards involving the
sales and service of individually sold life insurance and annuities. As a member
of IMSA, PFL may use the IMSA logo and language in advertisements.
THE FIXED ACCOUNT
The Fixed Account is part of our general account. We own the assets in the
general account and we use these assets to support our insurance and annuity
obligations other than those funded by our separate investment accounts. Subject
to applicable law, the Company has sole discretion over investment of the Fixed
Account's assets. The Company bears the full investment risk for all amounts
allocated or transferred to the Fixed Account. We guarantee that the amounts
allocated to the Fixed Account will be credited interest daily at a net
effective annual interest rate of at least 3% (4% for Policies issued in
Florida). We will determine any interest rate credited in excess of the
guaranteed rate at our sole discretion.
THE FIXED ACCOUNT IS NOT REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
AND THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION HAS NOT REVIEWED THE
DISCLOSURE IN THIS PROSPECTUS RELATING TO THE FIXED ACCOUNT.
THE SEPARATE ACCOUNT AND THE PORTFOLIOS
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THE SEPARATE ACCOUNT
We established PFL Variable Life Account A as a separate investment account
under Iowa law on July 1, 1999. We own the assets in the Separate Account and we
are obligated to pay all benefits under the Policies. We may use the Separate
Account to support other variable life insurance policies we issue. The Separate
Account is registered with the Securities and Exchange Commission as an unit
investment trust under the Investment Company Act of 1940 and qualifies as a
"separate account" within the meaning of the Federal securities laws.
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We have divided the Separate Account into Subaccounts, each of which invests in
shares of one portfolio among the following mutual funds:
X Janus Aspen Series (managed by Janus Capital Corporation)
X AIM Variable Insurance Funds, Inc. (managed by AIM Advisors, Inc.)
X Oppenheimer Variable Account Funds (managed by OppenheimerFunds,
Inc.)
X Fidelity Variable Insurance Products Funds (managed by Fidelity
Management & Research Company)
The Subaccounts buy and sell portfolio shares at net asset value. Any dividends
and distributions from a portfolio are reinvested at net asset value in shares
of that portfolio.
Income, gains, and losses credited to, or charged against, a Subaccount of the
Separate Account reflect the Subaccount's own investment experience and not the
investment experience of our other assets. We may not use the Separate Account's
assets to pay any of our liabilities other than those arising from the Policies.
If the Separate Account's assets exceed the required reserves and other
liabilities, we may transfer the excess to our general account.
The Separate Account may include other Subaccounts that are not available under
the Policies and are not discussed in this prospectus. Where permitted by
applicable law, we reserve the right to:
1. Create new separate accounts;
2. Combine the Separate Account with other separate accounts;
3. Remove, combine or add Subaccounts and make the new
Subaccounts available to you at our discretion;
4. Make new portfolios available under the Separate Account or
remove existing portfolios;
5. Substitute new portfolios for any existing portfolios if
shares of a portfolio are no longer available for investment
or if we determine that investment in a portfolio is no longer
appropriate in light of the Separate Account's purposes;
6. Deregister the Separate Account under the Investment Company
Act of 1940 if such registration is no longer required;
7. Operate the Separate Account as a management investment
company under the Investment Company Act of 1940, or as any
other form permitted by law;
8. Manage the Separate Account under the direction of a committee
at any time;
9. Fund additional classes of variable life insurance contracts
through the Separate Account; and
10. Make any changes required by the Investment Company Act of
1940 or any other law.
We will not make any such changes without receiving any necessary approval of
the Securities and Exchange Commission and applicable state insurance
departments. We will notify you of any changes.
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THE PORTFOLIOS
The Separate Account invests in shares of certain portfolios. Each portfolio is
part of a mutual fund that is registered with the Securities and Exchange
Commission as an open-end management investment Company. Such registration does
not involve supervision of the management or investment practices or policies of
the portfolios by the Securities and Exchange Commission.
Each portfolio's assets are held separate from the assets of the other
portfolios, and each portfolio has investment objectives and policies that are
different from those of the other portfolios. Thus, each portfolio operates as a
separate investment fund, and the income or losses of one portfolio generally
have no effect on the investment performance of any other portfolio. Pending any
prior approval by a state insurance regulatory authority, certain Subaccounts
and corresponding portfolios may not be available to residents of some states.
The following table summarizes each portfolio's investment objective(s) and
policies. THERE IS NO ASSURANCE THAT ANY OF THE PORTFOLIOS WILL ACHIEVE ITS
STATED OBJECTIVE(S). You can find more detailed information about the
portfolios, including a description of risks, in the prospectuses for the
portfolios.
You should read these prospectuses carefully.
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT OBJECTIVE
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<S> <C>
JANUS GROWTH o Seeks long-term growth of capital in a manner consistent with the
preservation of capital. Invests primarily in common stocks of issuers
of any size.
JANUS WORLDWIDE o Seeks long-term growth of capital in a manner consistent with the
GROWTH preservation of capital. Invests primarily in common stocks of foreign
and domestic issuers of any size.
JANUS BALANCED o Seeks long-term capital growth, consistent with preservation of capital and
balanced by current income.
JANUS CAPITAL o Seeks long-term growth of capital. Invests in common stocks of issuers
APPRECIATION of any size.
JANUS AGGRESSIVE o Seeks long-term growth of capital. Normally invests at least 50% of its
GROWTH equity assets in securities issued by medium-sized companies.
AIM V.I. VALUE o Seeks to achieve long-term growth of capital by investing primarily in
equity securities judged by the fund's investment adviser to be undervalued
relative to the investment adviser's appraisal of the current or projected
earnings of the companies issuing the securities, or relative to current market
values or assets owned by the companies issuing the securities, or relative to the
equity market generally. Income is a secondary objective.
AIM V.I. CAPITAL o Seeks to provide growth of capital through investments in common
APPRECIATION stocks, with emphasis on medium-sized and small-sized growth
companies.
AIM V.I. GROWTH o Seeks to provide growth of capital primarily by investing in seasoned
and better capitalized companies considered to have strong earnings
momentum.
</TABLE>
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<TABLE>
<CAPTION>
Portfolio Investment Objective
--------- --------------------
<S> <C>
AIM V.I. INTERNATIONAL o Seeks to provide long-term growth of capital by investing in a
EQUITY diversified portfolio of international equity securities whose issuers are
considered to have strong earnings momentum.
AIM V.I. GOVERNMENT o Seeks to achieve a high level of current income consistent with
SECURITIES reasonable concern for safety of principal by investing in debt securities
issued, guaranteed or otherwise backed by the United States
Government.
OPPENHEIMER MAIN o Seeks a high total return (which includes growth in the value of its
STREET GROWTH & shares as well as current income) from equity and debt securities.
INCOME
OPPENHEIMER MULTIPLE o Seeks a high total investment return, which includes current income and
STRATEGIES capital appreciation in the value of its shares.
OPPENHEIMER BOND o Seeks a high level of current income as its primary objective. As a
secondary objective, seeks capital appreciation when consistent with its
primary objective.
OPPENHEIMER STRATEGIC o Seeks a high level of current income principally derived from interest on
BOND debt securities and seeks to enhance such income by writing covered
call options on debt securities.
OPPENHEIMER HIGH o Seeks a high level of current income from investment in high-yield,
INCOME fixed-income securities. Investments include unrated securities or high-
risk securities in the lower rating categories, commonly known as "junk bonds,"
which are subject to a greater risk of loss of principal and nonpayment of interest
than higher-rated securities.
FIDELITY INDEX 500 o Seeks to provide investment results that correspond to the total return of
a broad range of common stocks publicly traded in the United States, as
represented by the Standard & Poor's(R)Composite Index of 500
Stocks.
FIDELITY MONEY MARKET o Seeks to earn a high level of current income while maintaining a stable $1.00
share price by investing in high-quality, short-term securities.
FIDELITY GROWTH o Seeks capital appreciation by investing primarily in common stocks.
FIDELITY CONTRAFUND o Seeks capital appreciation by investing in securities of companies whose value the
adviser believes is not fully recognized by the public.
FIDELITY GROWTH & o Seeks high total return through a combination of current income and
INCOME capital appreciation.
</TABLE>
In addition to the Separate Account, the portfolios may sell shares to other
separate investment accounts established by other insurance companies to support
variable annuity contracts and variable life insurance policies or qualified
retirement plans. It is possible that, in the future, it may become
disadvantageous for variable life insurance separate accounts and variable
annuity separate accounts to invest in the portfolios simultaneously. Although
neither the Company nor the portfolios currently foresee any such disadvantages,
either to variable life insurance policy owners or to variable annuity contract
owners, each
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portfolio's Board of Directors (Trustees) will monitor events in order to
identify any material conflicts between the interests of such variable life
insurance policy owners and variable annuity contract owners, and will determine
what action, if any, it should take. Such action could include the sale of
portfolio shares by one or more of the separate accounts, which could have
adverse consequences. Material conflicts could result from, for example, (1)
changes in state insurance laws, (2) changes in Federal income tax laws, or (3)
differences in voting instructions between those given by variable life
insurance policy owners and those given by variable annuity contract owners.
If a portfolio's Board of Directors (Trustees) were to conclude that separate
portfolios should be established for variable life insurance and variable
annuity separate accounts, we will bear the attendant expenses, but variable
life insurance policy owners and variable annuity contract owners would no
longer have the economies of scale resulting from a larger combined portfolio.
THESE PORTFOLIOS ARE NOT AVAILABLE FOR PURCHASE DIRECTLY BY THE GENERAL PUBLIC,
AND ARE NOT THE SAME AS OTHER MUTUAL FUND PORTFOLIOS WITH VERY SIMILAR OR NEARLY
IDENTICAL NAMES THAT ARE SOLD DIRECTLY TO THE PUBLIC. However, the investment
objectives and policies of certain portfolios available under the Policy are
very similar to the investment objectives and policies of other portfolios that
are or may be managed by the same investment adviser or manager. Nevertheless,
the investment performance and results of the portfolios available under the
Policy may be lower or higher than the investment results of such other
(publicly available) portfolios. THERE CAN BE NO ASSURANCE, AND WE MAKE NO
REPRESENTATION, THAT THE INVESTMENT RESULTS OF ANY OF THE PORTFOLIOS AVAILABLE
UNDER THE POLICY WILL BE COMPARABLE TO THE INVESTMENT RESULTS OF ANY OTHER
PORTFOLIO, EVEN IF THE OTHER PORTFOLIO HAS THE SAME INVESTMENT ADVISER OR
MANAGER, THE SAME INVESTMENT OBJECTIVES AND POLICIES, AND A VERY SIMILAR NAME.
PLEASE READ THE ATTACHED PORTFOLIO PROSPECTUSES TO OBTAIN MORE COMPLETE
INFORMATION REGARDING THE PORTFOLIOS. KEEP THESE PROSPECTUSES FOR FUTURE
REFERENCE.
VOTING PORTFOLIO SHARES
Even though we are the legal owner of the portfolio shares held in the
Subaccounts, and have the right to vote on all matters submitted to shareholders
of the portfolios, we will vote our shares only as Owners instruct, so long as
such action is required by law.
Before a vote of a portfolio's shareholders occurs, you will receive voting
materials. We will ask you to instruct us on how to vote and to return your
proxy to us in a timely manner. You will have the right to instruct us on the
number of portfolio shares that corresponds to the amount of Policy Value you
have in that portfolio (as of a date set by the portfolio).
If we do not receive voting instructions on time from some Owners, we will vote
those shares in the same proportion as the timely voting instructions we
receive. Should Federal securities laws, regulations and interpretations change,
we may elect to vote portfolio shares in our own right. If required by state
insurance officials, or if permitted under Federal regulation, we may disregard
certain Owner voting instructions. If we ever disregard voting instructions, we
will send you a summary in the next annual report to Owners advising you of the
action and the reasons we took such action.
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<PAGE>
THE POLICY
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PURCHASING A POLICY
To purchase a Policy, you must submit a completed application and an initial
premium to us at our Home Office. You may also send the application and initial
premium to us through any licensed life insurance agent who is also a registered
representative of a broker-dealer having a selling agreement with AFSG
Securities Corporation, the principal underwriter for the Policy.
We determine the minimum Specified Amount benefit for a Policy based on the
Insured's age when we issue the Policy. The minimum Specified Amount is $100,000
for issue ages 0-49, and $50,000 for issue ages 50-85.
Generally, the Policy is available for Insureds between issue ages 0-85 for
preferred risk classes, and between issue ages 18-85 for tobacco risk classes.
Starting at Specified Amounts of $250,000, we add a better risk class
(super-preferred) for non-tobacco users only. Super-preferred rates are
available for issue ages 18-75. We can provide you with details as to these
underwriting standards when you apply for a Policy. We reserve the right to
modify our underwriting requirements at any time. We must receive evidence of
insurability that satisfies our underwriting standards before we will issue a
Policy. We reserve the right to reject an application for any reason permitted
by law.
WHEN INSURANCE COVERAGE TAKES EFFECT
Full insurance coverage under the Policy will take effect only if the proposed
Insured is alive and in the same condition of health as described in the
application when we deliver the Policy to you, and if the initial premium is
paid.
CONDITIONAL INSURANCE COVERAGE. Before full insurance coverage takes effect, you
may receive conditional insurance converge subject to certain requirements. This
coverage shall not exceed (1) the amount of insurance applied for; or (2)
$500,000, whichever is smaller, less all other sums we pay upon the death of a
proposed Insured under any other pending application or policy. If a proposed
Insured is less than 15 days old or more than 60 years old, no insurance shall
take effect until the Policy is delivered. If we do not approve your
application, we will make a full refund of the initial premium paid with the
application.
If all of the following conditions of coverage have been met, then conditional
insurance coverage will go into effect on the Policy Date subject to the
liability limits shown above and subject to the conditions of the Policy as
applied for. The conditions of such coverage are that:
1. the full first premium on the premium mode selected for the Policy
benefits applied for, including any additional premium required for
restrictions or benefits, is paid when the application is signed; and
2. each proposed Insured has completed any required medical examinations,
diagnostic tests, and interviews, or has supplied us with any additional
information we require; and
3. each proposed Insured is, on the Policy Date, insurable and acceptable
to us under our rules, limits and underwriting standards for the plan
and for the amount applied for without modification and at the rate of
premium paid.
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If insurance does not take effect under these conditions, then no insurance
shall take effect unless a Policy is delivered to and accepted by the applicant,
and the full first premium is paid before any change in the insurability of any
proposed Insured since the date of application.
Conditional life insurance coverage is void if the application contains any
material misrepresentation. Benefits will also be denied if any proposed Insured
commits suicide.
Conditional life insurance coverage terminates automatically, and without
notice, on the earliest of:
o the date we notify you that the application is declined and we
return the initial premium; or
o the date we determine the Insured has satisfied our
underwriting requirements; or
o 10 days following any counteroffer we make to offer insurance
to any proposed Insured under a different policy, or at an
increased premium, or under a different underwriting class; or
o 60 days from the beginning of conditional insurance coverage.
FULL INSURANCE COVERAGE. Once we determine that the Insured meets our
underwriting requirements, full insurance coverage begins, we issue the Policy,
and we begin to deduct monthly charges from your Policy Value. This date is the
Policy Date. Prior to the Investment Start Date, we will place your premium
(less charges) in the Premium Suspense Account. On the first Valuation Date on
or following the Investment Start Date, we will transfer the amount in the
Premium Suspense Account to the Subaccounts and/or the Fixed Account as you
directed on your application. See "Allocating Premiums."
CANCELING A POLICY (FREE-LOOK RIGHT)
You may cancel a Policy during the free-look period by returning it to the
Company, or to the agent who sold it. The free-look period generally expires 10
days after you receive the Policy, but this period will be longer if required by
state law. If you decide to cancel the Policy during the free-look period, we
will treat the Policy as if we never issued it. Within seven calendar days after
we receive the returned Policy, we will refund all payments you made under the
Policy (less any withdrawals and Indebtedness).
OWNERSHIP RIGHTS
The Policy belongs to the Owner named in the application. The Owner may exercise
all of the rights and options described in the Policy. The Owner is the Insured
unless the application specifies a different person as the Insured. If the Owner
dies before the Insured and no contingent Owner is named, then Ownership of the
Policy will pass to the Owner's estate. The Owner may exercise certain rights
described below.
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SELECTING AND o You designate the beneficiary (the person to receive the
CHANGING THE death benefit when the Insured dies) in the application.
BENEFICIARY o If you designate more than one beneficiary, then each
beneficiary shares equally in any death benefit unless the
beneficiary designation states otherwise.
o If the beneficiary dies before the Insured, then any
contingent beneficiary becomes the beneficiary.
o If both the beneficiary and contingent beneficiary
die before the Insured, then we will pay the death benefit
to the Owner or the Owner's estate once the Insured dies.
o You can change the beneficiary by providing us with a
written request while the Insured is living.
o The change in beneficiary is effective as of the date you
sign the written request.
o We are not liable for any actions we take before we
received the written request.
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CHANGING THE o You may change the Owner by providing a written request to
OWNER us at any time while the Insured is alive.
o The change takes effect on the date you sign the written
request.
o We are not liable for any actions we take before we
received the written request.
o Changing the Owner does not automatically change the
beneficiary and does not change the Insured.
o Changing the Owner may have tax consequences.
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ASSIGNING THE o You may assign Policy rights while the Insured is alive by
POLICY submitting a written request to our Home Office.
o The Owner retains any Ownership rights that are not
assigned.
o Assignee may not change the Owner or the beneficiary, and
may not elect or change an optional method of payment. We
will pay any amount payable to the assignee in a lump sum.
o Claims under any assignment are subject to proof of
interest and the extent of the assignment.
o We are not:
-> bound by any assignment unless we receive a Written
Notice of the assignment;
-> responsible for the validity of any assignment; or
-> liable for any payment we make before we received
Written Notice of the assignment.
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PREMIUMS
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PREMIUM FLEXIBILITY
When you apply for a Policy, you may elect to pay premiums on a monthly,
quarterly, semi-annual, or annual basis (planned premiums). However, you do not
have to pay premiums according to any schedule. You have flexibility to
determine the frequency and the amount of the premiums you pay. You must send
all premium payments to our Home Office. You may not pay any premiums after the
Policy's Maturity Date. You may not pay premiums less than $25.
We have the right to limit or refund any premium if (1) the premium would
disqualify the Policy as a life insurance contract under the Internal Revenue
Code; or (2) the amount you pay is less than $25; or (3)
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payment of a greater amount would increase the death benefit by application of
the death benefit ratio (unless you provide us with satisfactory evidence of
insurability).
You can stop paying premiums at any time and your Policy will continue in force
until the earlier of the Maturity Date, or the date when either (1) the Insured
dies, or (2) the grace period ends without a sufficient payment (see "Lapse,"
below), or (3) we receive your Written Notice requesting a surrender of the
Policy.
MINIMUM MONTHLY PREMIUM. On your application, you must select one of the three
No-Lapse Periods we offer under the Policy: 20 Policy Years; 30 Policy Years; or
to Insured's age 100. Certain states may require No-Lapse Periods that differ
from those we offer. Your Policy's specification page will show a Minimum
Monthly Premium amount for your Policy, which is based on the Insured's age,
sex, premium class, Specified Amount, riders, and the selected No-Lapse Period.
(For two Policies covering Insured's with the same age, sex, premium class,
Specified Amount and riders, the Minimum Monthly Premium is higher for the
Policy with the longer No-Lapse Period.) Beginning on the Policy Date until the
end of the No-Lapse Period, your Policy will not enter a grace period if on any
Monthly Date, the sum of premiums paid less any withdrawals and Indebtedness,
equals or exceeds the Cumulative Minimum Monthly Premium. See "Policy Lapse and
Reinstatement."
The Minimum Monthly Premium will increase if you increase the Specified Amount
or add supplemental benefits to your Policy. The Minimum Monthly Premium will
decrease for any supplemental benefit you decrease or discontinue. The Minimum
Monthly Premium will not decrease if you decrease the Specified Amount. See
"Changing the Specified Amount."
LAPSE. Under certain conditions, your Policy will enter into a 61-day grace
period and possibly lapse:
o If your Policy is in a No-Lapse Period, then the Policy will enter a
grace period if on any Monthly Date the Cash Surrender Value is not
enough to pay the next Monthly Deduction due, AND the sum of premiums
paid minus withdrawals and Indebtedness is less than the Cumulative
Minimum Monthly Premium.
o If your Policy is not in a No-Lapse Period, then your Policy will enter
a 61-day grace period if the Cash Surrender Value on any Monthly Date is
not enough to pay the next Monthly Deduction due.
We will notify you when your Policy is in a grace period. If you do not make a
sufficient payment before the end of the grace period, then your Policy will
lapse. You may reinstate a lapsed Policy if you meet certain requirements. See
"Policy Lapse and Reinstatement."
TAX-FREE EXCHANGES (1035 EXCHANGES). We may accept as part of your initial
premium, money from another life insurance contract that qualified for a
tax-free exchange under Section 1035 of the Internal Revenue Code, contingent
upon receipt of the cash from that contract. If you contemplate such an
exchange, you should consult a tax advisor to discuss the potential tax effects
of such a transaction.
ALLOCATING PREMIUMS
When you apply for a Policy, you must instruct us to allocate your net premium
to one or more Subaccounts of the Separate Account and to the Fixed Account
according to the following rules:
o You must allocate at least 5% of each net premium to any
Subaccount or the Fixed Account you select.
o Allocation percentages must be in whole numbers and the sum of
the percentages must equal 100%.
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o No more than 10 accounts (Subaccounts and Fixed Account) may
be concurrently active (have net premiums allocated to it).
o Up to 4 times each Policy Year, you can change the allocation
instructions for additional net premiums without charge by
providing us with written notification (or any other
notification we deem satisfactory). Any change in allocation
instructions will be effective on the date we record the
change.
Investment returns from amounts allocated to the Subaccounts will vary with the
investment experience of these Subaccounts and will be reduced by Policy
charges. YOU BEAR THE ENTIRE INVESTMENT RISK FOR AMOUNTS YOU ALLOCATE TO THE
SUBACCOUNTS.
Prior to the Investment Start Date, we will place your premium (less charges) in
the Premium Suspense Account. We do not credit any interest or investment
returns to amounts in the Premium Suspense Account. On the first Valuation Date
on or following the Investment Start Date, we will transfer the amount in the
Premium Suspense Account to the Subaccounts and/or the Fixed Account in
accordance with the allocation percentages provided in your application. We
invest all net premiums paid thereafter on the first Valuation Date on or
following the date we receive them at our Home Office.
POLICY VALUES
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POLICY VALUE o serves as the starting point for calculating values
under a Policy;
o equals the sum of all values in the Fixed Account and
in each Subaccount;
o is determined on the Policy Date and on each Valuation
Date; and
o has no guaranteed minimum amount and may be more or
less than premiums paid.
CASH SURRENDER VALUE
The Cash Surrender Value is the amount we pay to you when you surrender your
Policy. We determine the Cash Surrender Value at the end of the Valuation Period
when we receive your written surrender request.
CASH SURRENDER o the Policy Value as of such date; MINUS
VALUE ON ANY o any surrender charge as of such date; MINUS
VALUATION DATE o any outstanding Indebtedness.
EQUALS:
SUBACCOUNT VALUE
Each Subaccount's value is the Policy Value in that Subaccount. At the end of
any Valuation Period, the Subaccount's value is equal to the number of units
that the Policy has in the Subaccount, multiplied by the unit value of that
Subaccount.
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THE NUMBER OF o the initial units purchased at the unit value on
UNITS IN ANY the Investment Start Date; PLUS
SUBACCOUNT ON o units purchased with additional net premiums; PLUS
ANY VALUATION o units purchased via transfers from another
DATE EQUALS: Subaccount or the Fixed Account (including amounts
transferred from the loan reserve); MINUS
o units redeemed to pay for Monthly Deductions; MINUS
o units redeemed to pay for partial withdrawals;
MINUS
o units redeemed as part of a transfer to another
Subaccount or the Fixed Account (including amounts
transferred to the loan reserve).
Every time you allocate or transfer money to or from a Subaccount, we convert
that dollar amount into units. We determine the number of units we credit to, or
subtract from, your Policy by dividing the dollar amount of the transaction by
the unit value for that Subaccount at the end of the Valuation Period.
UNIT VALUE
We determine a unit value for each Subaccount to reflect how investment results
affect the Policy values. Unit values will vary among Subaccounts. The unit
value of each Subaccount was originally established at $10 per unit. The unit
value may increase or decrease from one Valuation Period to the next.
THE UNIT VALUE OF o the total value of the assets held in the Subaccount,
ANY SUBACCOUNT determined by multiplying the number of shares of the
AT THE END OF A designated portfolio owned by the Subaccount times the
VALUATION PERIOD portfolio's net asset value per share; MINUS
IS CALCULATED AS: o a deduction for the mortality and expense risk
charge; MINUS
o the accrued amount of reserve for any taxes or other
economic burden resulting from applying tax laws that
we determine to be properly attributable to the
Subaccount;
AND THE RESULT DIVIDED BY
o the number of outstanding units in the Subaccount.
FIXED ACCOUNT VALUE
On the Investment Start Date, the Fixed Account value is equal to the net
premiums allocated to the Fixed Account, less the portion of the first Monthly
Deduction taken from the Fixed Account.
THE FIXED ACCOUNT o the net premium(s) allocated to the Fixed Account;
VALUE AT THE END OF PLUS
ANY VALUATION o any amounts transferred to the Fixed Account
PERIOD IS EQUAL TO: (including amounts transferred from the loan
reserve); PLUS
o interest credited to the Fixed Account; MINUS
o amounts charged to pay for Monthly Deductions; MINUS
o amounts withdrawn from the Fixed Account; MINUS
o amounts transferred from the Fixed Account to a
Subaccount (including amounts transferred to the loan
reserve).
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CHARGES AND DEDUCTIONS
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We make certain charges and deductions under the Policy. These charges and
deductions compensate us for: (1) services and benefits we provide; (2) costs
and expenses we incur; and (3) risks we assume.
SERVICES AND o the death benefit, cash and loan benefits under
BENEFITS WE the Policy
PROVIDE: o investment options, including premium allocations
o administration of elective options
o the distribution of reports to Owners
COSTS AND o costs associated with processing and underwriting
EXPENSES WE administering the Policy (including any riders)
INCUR: applications, issuing and
o overhead and other expenses for providing services
and benefits
o sales and marketing expenses
o other costs of doing business, such as collecting
premiums, maintaining records, processing claims,
effecting transactions, and paying Federal, state
and local premium and other taxes and fees
RISKS WE ASSUME: o that the cost of insurance charges we may deduct
are insufficient to meet our actual claims because
Insureds die sooner than we estimate
o that the costs of providing the services and
benefits under the Policies exceed the charges we
deduct
EXPENSE CHARGE
We deduct an expense charge from each premium payment to compensate us for
distribution expenses and state and local premium taxes. We credit the remaining
amount (the net premium) to your Policy Value according to your allocation
instructions. The expense charge currently varies by Policy Year and is
guaranteed not to exceed 5% of each premium in any Policy Year:
Premiums paid DURING first 10 Policy Years: expense charge = 5%
Premiums paid AFTER first 10 Policy Years: expense charge = 2.5%
While we may change the expense charge, we guarantee that the expense charge
will not exceed 5% of premiums paid in any Policy Year.
MONTHLY DEDUCTION
We deduct a Monthly Deduction from the Policy Value on the Policy Date and on
each Monthly Date. We will make deductions from each Subaccount and the Fixed
Account on a pro rata basis (I.E., in the same proportion that the value in each
Subaccount and the Fixed Account bears to the total Policy Value on the Monthly
Date). Because portions of the Monthly Deduction (such as the cost of insurance)
can vary from month-to-month, the Monthly Deduction will also vary.
The Monthly Deduction has four components:
-> a cost of insurance charge for the Policy;
-> a $10 monthly administrative charge;
-> charges for any riders; and
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-> any charges for a substandard premium class rating.
COST OF INSURANCE. We assess a monthly cost of insurance charge to compensate us
for underwriting the death benefit. The charge depends on a number of variables
(age, sex, premium class, and Specified Amount) that would cause it to vary from
Policy to Policy and from Monthly Date to Monthly Date.
We calculate the cost of insurance charge separately for the initial Specified
Amount and for any increase in Specified Amount. If we approve an increase in
your Policy's Specified Amount, then a different premium class (and a different
cost of insurance charge) may apply to the increase, based on the Insured's
circumstances at the time of the increase.
COST OF The COST OF INSURANCE CHARGE is equal to:
INSURANCE
CHARGE -> the monthly cost of insurance rate; MULTIPLIED BY
-> the net amount at risk for your Policy on the
Monthly Date.
The NET AMOUNT AT RISK is equal to:
-> the death benefit at the beginning of the month;
DIVIDED BY
-> 1.0024663 (1.0032737 for Policies issued in
Florida) which is a "risk rate divisor" (a factor
that reduces the net amount at risk, for purposes
of computing the cost of insurance, by taking into
account assumed monthly earnings at an annual rate
of 3.0% (4.0% for Policies issued in Florida));
MINUS
-> the Policy Value at the beginning of the month.
We base the cost of insurance rates on the Insured's age, gender, premium class
and Specified Amount. The actual monthly cost of insurance rates are based on
our expectations as to future mortality experience. The rates will never be
greater than the guaranteed amount stated in your Policy. These guaranteed rates
are based on the 1980 Commissioner's Standard Ordinary (C.S.O.) Mortality Tables
and the Insured's age and premium class. For standard premium classes, these
guaranteed rates will never be greater than the rates in the C.S.O. tables.
MONTHLY ADMINISTRATIVE CHARGE. Each month we deduct a $10 monthly administrative
charge to compensate us for expenses such as record keeping, processing death
benefit claims and Policy changes, and overhead costs. This charge will not
exceed $10 per month.
CHARGES FOR RIDERS. The Monthly Deduction includes charges for any supplemental
insurance benefits you add to your Policy by rider. See "Supplemental Benefits
and Riders."
CHARGES FOR A SUBSTANDARD PREMIUM CLASS RATING. The Monthly Deduction includes a
charge we apply if our underwriting places the Insured in a substandard premium
class rating.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a daily charge from each Subaccount (not the Fixed Account) to
compensate us for certain mortality and expense risks we assume. The mortality
risk is that an Insured will live for a shorter time than we project. The
expense risk is that the expenses that we incur will exceed the administrative
charge limits we set in the Policy. This charge is equal to:
o the assets in each Subaccount, MULTIPLIED BY
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o 0.00002047, which is the daily portion of the annual mortality
and expense risk charge rate of 0.75% during all Policy Years.
If this charge does not cover our actual costs, we absorb the loss. Conversely,
if the charge more than covers actual costs, the excess is added to our surplus.
We expect to profit from this charge and may use such profits for any lawful
purpose including covering distribution expenses.
SURRENDER AND WITHDRAWAL CHARGES
SURRENDER CHARGE. If you fully surrender your Policy during the first 19 Policy
Years, we deduct a surrender charge from your Policy Value and pay the remaining
amount (less any outstanding Indebtedness) to you. The payment you receive is
called the Cash Surrender Value. The surrender charge varies based on your age,
gender, premium class, and initial Specified Amount. The table below provides
the maximum applicable surrender charges for the initial Specified Amount for
selected sample Insureds. Your Policy's specifications page indicates the
surrender charges applicable to your Policy. A separate surrender charge that
lasts for 19 years applies to each Specified Amount increase. No surrender
charges apply to withdrawals or Specified Amount decreases.
SURRENDER CHARGE PER $1,000 OF SPECIFIED AMOUNT; INSURED AGE 35
<TABLE>
<CAPTION>
MALE MALE FEMALE FEMALE
POLICY YEAR NON-TOBACCO TOBACCO NON-TOBACCO TOBACCO
- -------------------- -------------------- ---------------- -------------------- -------------------
<S> <C> <C> <C> <C>
1 $24.00 $28.00 $22.00 $24.00
2 $22.80 $26.60 $20.90 $22.80
3 $21.60 $25.20 $19.80 $21.60
4 $20.40 $23.80 $18.70 $20.40
5 $19.20 $22.40 $17.60 $19.20
6 $18.00 $21.00 $16.50 $18.00
7 $16.80 $19.60 $15.40 $16.80
8 $15.60 $18.20 $14.30 $15.60
9 $14.40 $16.80 $13.20 $14.40
10 $13.20 $15.40 $12.10 $13.20
11 $12.00 $14.00 $11.00 $12.00
12 $10.80 $12.60 $ 9.90 $10.80
13 $ 9.60 $11.20 $ 8.80 $ 9.60
14 $ 8.40 $ 9.80 $ 7.70 $ 8.40
15 $ 7.20 $ 8.40 $ 6.60 $ 7.20
16 $ 6.00 $ 7.00 $ 5.50 $ 6.00
17 $ 4.80 $ 5.60 $ 4.40 $ 4.80
18 $ 3.60 $ 4.20 $ 3.30 $ 3.60
19 $ 2.40 $ 2.80 $ 2.20 $ 2.40
20 $ 0.00 $ 0.00 $ 0.00 $ 0.00
</TABLE>
THE SURRENDER CHARGE MAY BE SIGNIFICANT. YOU SHOULD CAREFULLY CALCULATE THIS
CHARGE BEFORE YOU REQUEST A SURRENDER. Under some circumstances the level of
surrender charges might result in no Cash Surrender Value available.
WITHDRAWAL CHARGE. After the first Policy Year, you may request a partial
withdrawal from your Policy Value. For each withdrawal, we will deduct from your
Policy Value a fee equal to the lesser of $25 or 2% of the amount withdrawn.
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TRANSFER CHARGE
o We currently allow you to make 12 transfers each Policy Year
free of charge.
o We charge $25 for the 13th and each additional transfer among
the Subaccounts and Fixed Account during a Policy Year. We
will not increase this charge.
o For purposes of assessing the transfer charge, each written or
telephone request is considered to be one transfer, regardless
of the number of Subaccounts (or Fixed Account) affected by
the transfer.
o We deduct the transfer charge from the amount being
transferred.
o Transfers we effect to reallocate amounts on the Investment
Start Date, and transfers due to dollar cost averaging, asset
rebalancing, or loans, do NOT count as transfers for the
purpose of assessing this charge.
PORTFOLIO EXPENSES
The value of the net assets of each Subaccount reflects the investment advisory
fees and other expenses incurred by the corresponding portfolio in which the
Subaccount invests. See the Portfolio Annual Expenses Table in this prospectus,
and the portfolios' prospectuses for further information on these fees and
expenses.
DEATH BENEFIT
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DEATH BENEFIT PROCEEDS
As long as the Policy is in force, we will pay the death benefit proceeds to the
primary beneficiary or a contingent beneficiary once we receive satisfactory
proof of the Insured's death. We may require you to return the Policy. If the
beneficiary dies before the Insured and there is no contingent beneficiary, we
will pay the death benefit proceeds to the Owner or the Owner's estate. We will
pay the death benefit proceeds in a lump sum or under a payment option. See
"Payment Options."
DEATH BENEFIT o the death benefit (described below); PLUS
PROCEEDS EQUAL: o any additional insurance provided by rider; MINUS
o any past due Monthly Deductions; MINUS
o any outstanding Indebtedness on the date of
death.
If all or part of the death benefit proceeds are paid in one sum, we will pay
interest on this sum as required by applicable state law from the date we
receive due proof of the Insured's death to the date we make payment.
We may further adjust the amount of the death benefit proceeds under certain
circumstances. See "Our Right to Contest the Policy," and "Misstatement of Age
or Sex."
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DEATH BENEFIT OPTIONS
The Policy provides two death benefit options: Increasing Option (varying death
benefit), and Level Option (level death benefit). We calculate the amount
available under each death benefit option as of the date of the Insured's death.
After the first Policy Year, you may change death benefit options once each
12-month period.
The death benefit under o the Specified Amount PLUS the Policy Value
the INCREASING OPTION on the Insured's date of death; OR
is the greater of: o the Policy Value on the Insured's date of
death multiplied by the applicable death
benefit ratio.
Under the Increasing Option, the death benefit always varies as the Policy Value
varies.
The death benefit under o the Specified Amount on the Insured's date
the LEVEL OPTION is the of death; or
greater of: o the Policy Value on the Insured's date of
death multiplied by the applicable death
benefit ratio.
Under the Level Option, your death benefit does not change unless the death
benefit ratio multiplied by the Policy Value is greater than the Specified
Amount. Then the death benefit will vary as the Policy Value varies. The death
benefit will also vary if you change the Specified Amount or Death Benefit
Option.
The DEATH BENEFIT RATIO is a ratio set forth in the Federal tax code based on
the Insured's age at the beginning of each Policy Year. The following table
indicates the applicable death benefit ratio for different ages:
AGE DEATH BENEFIT RATIO
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40 and under 2.50
41 to 45 2.50 minus 0.07 for each age over age 40
46 to 50 2.15 minus 0.06 for each age over age 45
51 to 55 1.85 minus 0.07 for each age over age 50
56 to 60 1.50 minus 0.04 for each age over age 55
61 to 65 1.30 minus 0.02 for each age over age 60
66 to 70 1.20 minus 0.01 for each age over age 65
71 to 74 1.15 minus 0.02 for each age over age 70
75 to 90 1.05
91 to 94 1.05 minus 0.01 for each age over age 90
95 and above 1.00
If the Federal tax code requires us to determine the death benefit by reference
to these death benefit ratios, the Policy is described as "in the corridor." An
increase in the Policy Value will increase our risk, and we will increase the
cost of insurance we deduct from the Policy Value.
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<PAGE>
CHANGING DEATH BENEFIT OPTIONS
After the first Policy Year, you may change death benefit options once each
12-month period. Changing the death benefit option may have tax consequences.
Please note the following when changing death benefit options:
o You must make your request in writing.
o The effective date of the change will be the Monthly Date on or
following the date when we approve your request for a change.
o We will send you a Policy endorsement with the change to attach to your
Policy.
If you change FROM INCREASING OPTION TO LEVEL OPTION:
/check/ We may require that you provide satisfactory evidence
of insurability.
/check/ The Specified Amount will change. The new Level
Option Specified Amount will equal the Increasing
Option Specified Amount plus the Policy Value on the
effective date of the change.
If you change FROM LEVEL OPTION TO INCREASING OPTION:
-> We may require that you provide satisfactory evidence
of insurability.
-> The Specified Amount will change. The new Increasing
Option Specified Amount will equal the Level Option
Specified Amount less the Policy Value immediately
before the change, but the new Specified Amount may
not be less than the minimum Specified Amount shown
on your Policy's specifications page.
EFFECTS OF WITHDRAWALS ON THE DEATH BENEFIT
If the Level Option is in effect, a withdrawal will reduce the Specified Amount
by the amount of the withdrawal (not including the withdrawal fee), and will
reduce the Policy Value by the amount of the withdrawal (including the
withdrawal fee). The reduction in Specified Amount will be subject to the terms
of the Changing the Specified Amount section below.
If the Increasing Option is in effect, a withdrawal will not affect the
Specified Amount.
CHANGING THE SPECIFIED AMOUNT
You select the Specified Amount when you apply for the Policy. After the first
Policy Year, you may change the Specified Amount once each 12-month period
subject to the conditions described below. We will not permit any change that
would result in your Policy being disqualified as a life insurance contract
under Section 7702 of the Internal Revenue Code.
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<PAGE>
INCREASING THE SPECIFIED AMOUNT
o You may increase the Specified Amount by submitting a
written request and providing evidence of
insurability satisfactory to us. The increase will be
effective on the next Monthly Date after we approve
the increase request.
o The minimum increase is $10,000.
o Increasing the Specified Amount will increase your
Minimum Monthly Premium and cause the No-Lapse Period
to begin again.
o Increasing the Specified Amount will result in an
additional surrender charge that lasts for 19 years.
o A different cost of insurance charge may apply to the
increase in Specified Amount, based on the Insured's
circumstances at the time of the increase.
DECREASING THE SPECIFIED AMOUNT
o You must submit a written request to decrease the
Specified Amount, but you may not decrease the
Specified Amount below the minimum amount shown on
your Policy specifications page.
o Any decrease will be effective on the next Monthly
Date after we process your written request.
o For purposes of determining the effect of decreasing
the Specified Amount on the cost of insurance, any
decrease will first be used to reduce the most recent
increase, then the next most recent increases in
succession, and then the initial Specified Amount.
o A decrease in Specified Amount may require that a
portion of Policy Value be distributed as a
withdrawal in order to maintain Federal tax
compliance.
o Decreasing the Specified Amount will not effect the
Minimum Monthly Premium or the surrender charges.
PAYMENT OPTIONS
There are several ways of receiving proceeds under the death benefit and
surrender provisions of the Policy, other than in a lump sum. None of these
options vary with the investment performance of a Separate Account. More
detailed information concerning these settlement options is available on request
to our Home Office.
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SURRENDERS AND PARTIAL WITHDRAWALS
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SURRENDERS
o You may make a written request to surrender your Policy for
its Cash Surrender Value as calculated at the end of the
Valuation Date when we receive your request. A surrender may
have tax consequences.
o The Insured must be alive and the Policy must be in force when
you make your written request. A surrender is effective as of
the date when we receive your written request.
We may require that you return the Policy.
o If you surrender your Policy during the first 19 Policy Years
(or during the first 19 years after an increase in the
Specified Amount), you will incur a surrender charge that
varies based on the Insured's age, gender, premium class and
Specified Amount. See "Charges and Deductions -- Surrender and
Withdrawal Charges."
o Once you surrender your Policy, all coverage and other
benefits under it cease and cannot be reinstated.
o We will pay you the Cash Surrender Value in a lump sum within
seven days unless you request other arrangements.
WITHDRAWALS
After the 1st Policy Year, you may request to withdraw a portion of your Policy
Value subject to certain conditions.
-> You may make only one withdrawal per Policy Year.
-> You must: (1) make your request in writing, and (2) request at
least $500.
-> If you request a withdrawal that would leave a Cash Surrender
Value of less than $500, then we will treat it as a request to
surrender your Policy.
-> For each withdrawal, we deduct (from the remaining Policy
Value) a fee equal to the lesser of $25 or 2% of the amount
withdrawn. See "Charges and Deductions -- Surrender and
Withdrawal Charges."
-> You can specify the Subaccount(s) and Fixed Account from which
to make the withdrawal; otherwise we will deduct the amount
(including any fee) from the Subaccounts and the Fixed Account
on a pro-rata basis (that is, according to the percentage of
Policy Value contained in each Subaccount and the Fixed
Account).
-> We will process the withdrawal at the unit values next
determined after we receive your request.
-> We generally will pay a withdrawal request within seven days
after the Valuation Date when we receive the request.
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TRANSFERS
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You may make transfers from the Subaccounts or from the Fixed Account. We
determine the amount you have available for transfers at the end of the
Valuation Period when we receive your transfer request. The following features
apply to transfers under the Policy:
o You may make an unlimited number of transfers in a Policy
Year.
o You may request transfers in writing (in a form we accept), or
by telephone.
o You must transfer at least $100, or, if less, the total value
in the Subaccount or Fixed Account.
o We deduct a $25 charge from the amount transferred for the
13th and each additional transfer in a Policy Year. Transfers
we effect from the Premium Suspense Account, and transfers
resulting from loans, dollar cost averaging, asset
rebalancing, and the exchange privilege are NOT treated as
transfers for purposes of the transfer charge.
o We consider each written or telephone request to be a single
transfer, regardless of the number of Subaccounts (or Fixed
Account) involved.
o We process transfers based on unit values determined at the
end of the Valuation Date when we receive your transfer
request.
Your Policy, as applied for and issued, will automatically receive telephone
transfer privileges unless you provide other instructions. The telephone
transfer privileges allow you to give authority to the registered representative
or agent of record for your Policy to make telephone transfers and to change the
allocation of future payments among the Subaccounts and the Fixed Account on
your behalf according to your instructions. To make a telephone transfer, you
may call 1-800-625-4213.
Please note the following regarding telephone transfers:
-> We are not liable for any loss, damage, cost or expense from
complying with telephone instructions we reasonably believe to
be authentic. You bear the risk of any such loss.
-> We will employ reasonable procedures to confirm that telephone
instructions are genuine.
-> Such procedures may include requiring forms of personal
identification prior to acting upon telephone instructions,
providing written confirmation of transactions to you, and/or
tape recording telephone instructions received from you.
-> If we do not employ reasonable confirmation procedures, we may
be liable for losses due to unauthorized or fraudulent
instructions.
The corresponding portfolio of any Subaccount determines its net asset value per
each share once daily, as of the close of the regular business session of the
New York Stock Exchange ("NYSE") (usually 4:00 p.m. Eastern time), which
coincides with the end of each Valuation Period. Therefore, we will process any
transfer request we receive after the close of the regular business session of
the NYSE, using the net asset value for each share of the applicable portfolio
determined as of the close of the next regular business session of the NYSE.
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EXCHANGE PRIVILEGE
At any one time, you may exercise the Exchange Privilege under your Policy which
results in the transfer of the entire amount in the Separate Account to the
Fixed Account, and the allocation of all future net premiums to the Fixed
Account. This serves as an exchange of the Policy for the equivalent of a
flexible premium fixed benefit life insurance policy. We will not assess any
transfer or other charges in connection with the Exchange Privilege.
DOLLAR COST AVERAGING
You may elect to participate in a dollar cost averaging program. Dollar cost
averaging is an investment strategy designed to reduce the investment risks
associated with market fluctuations. The strategy spreads the allocation of your
premium into the Subaccounts or Fixed Account over a period of time. This allows
you to potentially reduce the risk of investing most of your premium into the
Subaccounts at a time when prices are high. We do not assure the success of this
strategy and the success depends on market trends. You should carefully consider
your financial ability to continue the program over a long enough period of time
to purchase units when their value is low as well as when it is high.
To participate in dollar cost averaging, you must place at least $5,000 in a
"source account" (either the Fixed Account, AIM V.I. Government Securities Fund
Subaccount, Oppenheimer Bond Fund/VA Subaccount, or the Fidelity VIP Money
Market Portfolio Subaccount). There can be only one source account. Each month,
we will automatically transfer equal amounts (minimum $100) from the source
account to your designated "target accounts." You may have multiple target
accounts.
There is no charge for dollar cost averaging. A transfer under this program is
NOT considered a transfer for purposes of assessing the transfer fee.
DOLLAR COST AVERAGING -> we receive your written request to cancel your
WILL END IF: participation;
-> the value in the source account is exhausted;
-> you elect to participate in the asset
rebalancing program.
We may modify, suspend, or discontinue the dollar cost averaging program at any
time.
ASSET REBALANCING PROGRAM
We also offer an asset rebalancing program under which we will automatically
transfer amounts semi-annually to maintain a particular percentage allocation
among the Subaccounts. Policy Value allocated to each Subaccount will grow or
decline in value at different rates. The asset rebalancing program automatically
reallocates the Policy Value in the Subaccounts at the end of each semi-annual
period to match your Policy's currently effective premium allocation schedule.
The asset rebalancing program will transfer Policy Value from those Subaccounts
that have increased in value to those Subaccounts that have declined in value
(or not increased as much). Over time, this method of investing may help you buy
low and sell high. The asset rebalancing program does not guarantee gains, nor
does it assure that any Subaccount will not have losses. Policy Value in the
Fixed Account is not available for this program.
TO PARTICIPATE IN THE -> you must complete an asset rebalancing
ASSET REBALANCING request form and submit it to us before the
PROGRAM: Maturity Date
-> you must have a minimum Policy Value of
$5,000.
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If you elect asset rebalancing, it will occur on each semi-annual anniversary of
the Policy Date. You may modify your allocations up to 4 times in a Policy Year.
Once we receive the asset rebalancing request form, we will effect the initial
rebalancing semi-annually, in accordance with the Policy's current premium
allocation schedule. We will credit the amounts transferred at the unit value
next determined on the dates the transfers are made. If a day on which
rebalancing would ordinarily occur falls on a day on which the NYSE is closed,
rebalancing will occur on the next day the NYSE is open. There is no charge for
the asset rebalancing program. Any reallocation which occurs under the asset
rebalancing program will NOT be counted towards the 12 free transfers allowed
during each Policy Year. You can begin or end this program only once each Policy
Year.
ASSET REBALANCING -> you elect to participate in the dollar cost
WILL END IF: averaging program;
-> we receive your request to discontinue
participation; OR
-> you make a transfer to or from any Subaccount
other than under a scheduled rebalancing (not
including transfers in connection with loans).
We may modify, suspend, or discontinue the asset rebalancing program at any
time.
LOANS
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While the Policy is in force, you may borrow money from us using the Policy as
the only collateral for the loan. A loan that is taken from, or secured by, a
Policy may have tax consequences.
LOAN CONDITIONS:
o The MINIMUM LOAN you may take is $250.
o The MAXIMUM LOAN you may take is 90% (100% in certain states)
of the Cash Surrender Value, minus 6 months of Monthly
Deductions.
o To secure the loan, we transfer an amount equal to the loan
(plus loan interest in advance) from the Separate Account and
Fixed Account to the loan reserve, which is a part of the
Fixed Account. Unless you specify otherwise, we will transfer
the loan from the Subaccounts and the Fixed Account on a
pro-rata basis.
o Amounts in the loan reserve earn interest at an annual rate
guaranteed not to be lower than 3.0% (4.0% for Policies issued
in Florida). We may credit the loan reserve with an interest
rate different than the rate credited to net premiums
allocated to the Fixed Account.
o We normally pay the amount of the loan within seven days after
we receive a proper loan request. We may postpone payment of
loans under certain conditions. See "Payments We Make."
o We charge you a maximum interest rate of 5.66% per year on
your loan. Interest is due and payable at the start of each
Policy Year. Unpaid interest becomes part of the outstanding
loan and accrues interest if it is not paid before the start
of the next Policy Year.
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o After the 10th Policy Year, we consider certain portions of
the loan amount to be preferred loans. The sum of preferred
loans cannot exceed 25% of the Policy Value. We charge a
maximum annual interest rate of 3.85% in advance on preferred
loan amounts.
o You may repay all or part of your Indebtedness at any time.
Loan repayments must be at least $25, and must be clearly
marked as "loan repayments" or they will be credited as
premiums if they meet minimum premium requirements.
o Upon each loan repayment, we will transfer an amount equal to
the loan repayment from the loan reserve to the Fixed and/or
Separate Account according to your current premium allocation
schedule.
o We deduct any Indebtedness from the Policy Value upon
surrender, and from the death benefit proceeds payable on the
Insured's death.
o If your Indebtedness equals or exceeds the Policy Value less
any applicable surrender charge, then your Policy will enter a
grace period. See "Policy Lapse and Reinstatement."
EFFECT OF POLICY LOANS
A loan affects the Policy, because the death benefit proceeds and Cash Surrender
Value include reductions for the amount of any Indebtedness. Repaying a loan
causes the death benefit and Cash Surrender Value to increase by the amount of
the repayment. As long as a loan is outstanding, we hold an amount equal to the
loan in the loan reserve. This amount is not affected by the Subaccounts'
investment performance and may not be credited with the interest rates accruing
on the Fixed Account. Amounts transferred from the Separate Account to the loan
reserve will affect the Policy Value, even if the loan is repaid, because we
credit such amounts with an interest rate we declare rather than a rate of
return reflecting the investment results of the Separate Account.
There are risks involved in taking a loan, including the potential for a Policy
to lapse if projected earnings, taking into account outstanding loans, are not
achieved. If the Policy is a "modified endowment contract" (see "Federal Tax
Considerations"), then a loan will be treated as a withdrawal for Federal income
tax purposes. A loan may also have possible adverse tax consequences that could
occur if a Policy lapses with loans outstanding.
We will notify you (and any assignee of record) if the sum of your Indebtedness
is more than the Policy Value less any applicable surrender charge. If you do
not submit a sufficient payment within 61 days from the date of the notice, your
Policy may lapse. See "Policy Lapse and Reinstatement."
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POLICY LAPSE AND REINSTATEMENT
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LAPSE
Under certain conditions, your Policy may enter a 61-day grace period, and
possibly lapse (terminate without value):
o If your Policy is in a No-Lapse Period, then the Policy will enter a
grace period if on any Monthly Date the Cash Surrender Value is not
enough to pay the next Monthly Deduction due, AND the sum of premiums
paid minus withdrawals and Indebtedness is less than the Cumulative
Minimum Monthly Premium.
o If your Policy is not in a No-Lapse Period, then your Policy will enter
a grace period if the Cash Surrender Value on any Monthly Date is not
enough to pay the next Monthly Deduction due.
If your Policy enters into a grace period, we will mail a notice to your last
known address and to any assignee of record. The 61-day grace period begins on
the date of the notice. The notice will specify the minimum payment required and
the final date by which we must receive the payment to keep the Policy from
lapsing. If we do not receive the specified minimum payment by the end of the
grace period, all coverage under the Policy will terminate and you will receive
no benefits.
REINSTATEMENT
Unless you have surrendered your Policy for its Cash Surrender Value, you may
reinstate a lapsed Policy at any time within 5 years after the end of the grace
period (and prior to the Maturity Date) by submitting all of the following items
to us at our Home Office:
1. a Written Notice requesting reinstatement;
2. the Insured's written consent to reinstatement;
3. evidence of insurability we deem satisfactory;
4. payment or reinstatement of any Indebtedness; and
5. payment of enough premium to keep the Policy in force
for at least 3 months.
The effective date of reinstatement will be the first Monthly Date on or next
following the date we approve your application for reinstatement. We reserve the
right to decline a reinstatement request.
FEDERAL TAX CONSIDERATIONS
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The following summarizes some of the basic Federal income tax considerations
associated with a Policy and does not purport to be complete or to cover all
situations. THIS DISCUSSION IS NOT INTENDED AS TAX ADVICE. Please consult
counsel or other qualified tax advisors for more complete information. We base
this discussion on our understanding of the present Federal income tax laws as
they are currently interpreted by the Internal Revenue Service (the "IRS").
Federal income tax laws and the current interpretations by the IRS may change.
TAX STATUS OF THE POLICY. A Policy must satisfy certain requirements set forth
in the Internal Revenue Code ("Code") in order to qualify as a life insurance
contract for Federal income tax purposes and to receive the tax treatment
normally accorded life insurance contracts. The manner in which these
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<PAGE>
requirements are to be applied to certain innovative features of the Policy are
not directly addressed by the Code, and/or there is limited guidance as to how
these requirements are to be applied. Nevertheless, we believe that a Policy
should satisfy the applicable Code requirements. Because of the absence of
pertinent interpretations of the Code requirements, there is, however, some
uncertainty about the application of such requirements to the Policy. If it is
subsequently determined that a Policy does not satisfy the applicable
requirements, we may take appropriate steps to bring the Policy into compliance
with such requirements and we reserve the right to restrict Policy transactions
in order to do so.
In certain circumstances, Owners of variable life insurance contracts have been
considered for Federal income tax purposes to be the Owners of the assets of the
Separate Account supporting their contracts due to their ability to exercise
investment control over those assets. Where this is the case, the contract
Owners have been currently taxed on income and gains attributable to the
Separate Account assets. There is little guidance in this area, and some
features of the Policies, such as the flexibility to allocate premiums and
Policy Values, have not been explicitly addressed in published rulings. While we
believe that the Policy does not give you investment control over Separate
Account assets, we reserve the right to modify the Policy as necessary to
prevent you from being treated as the Owner of the Separate Account assets
supporting the Policy.
In addition, the Code requires that the investments of the Separate Account be
"adequately diversified" in order to treat the Policy as a life insurance
contract for Federal income tax purposes. We intend that the Separate Account,
through the Portfolios, will satisfy these diversification requirements.
The following discussion assumes that the Policy will qualify as a life
insurance contract for Federal income tax purposes.
TAX TREATMENT OF POLICY BENEFITS
IN GENERAL. We believe that the death benefit under a Policy should be
excludible from the beneficiary's gross income. Federal, state and local
transfer, and other tax consequences of Ownership or receipt of Policy proceeds
depend on your circumstances and the beneficiary's circumstances. You should
consult a tax advisor on these consequences.
Generally, you will not be deemed to be in constructive receipt of the Policy
Value until there is a distribution. In addition, if you elect the Terminal
Illness Accelerated Death Benefit, the tax consequences associated with
continuing the Policy after a distribution is made are unclear. Please consult a
tax advisor on these consequences. When distributions from a Policy occur, or
when loans are taken out from or secured by a Policy (E.G., by assignment), then
the tax consequences depend on whether the Policy is classified as a "Modified
Endowment Contract."
MODIFIED ENDOWMENT CONTRACTS. Under the Code, certain life insurance contracts
are classified as "Modified Endowment Contracts" ("MECs") and receive less
favorable tax treatment than other life insurance contracts. Due to the Policy's
flexibility, each Policy's circumstances will determine whether the Policy is
classified as a MEC. If you do not want your Policy to be classified as a MEC,
you should consult a tax advisor to determine the circumstances, if any, under
which your Policy would or would not be classified as a MEC.
DISTRIBUTIONS FROM MODIFIED ENDOWMENT CONTRACTS. Policies classified as MECs
are subject to the following tax rules:
o All distributions other than death benefits from a MEC,
including distributions upon surrender and withdrawals, will
be treated as ordinary income subject to tax up to an amount
equal to the excess (if any) of the unloaned Policy Value
immediately before the distribution plus prior distributions
over the Owner's total investment in the Policy at that
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<PAGE>
time. They will be treated as tax-free recovery of the Owner's
investment in the Policy only after all such excess has been
distributed. "Total investment in the Policy" means the
aggregate amount of any premiums or other considerations paid
for a Policy, plus any previously taxed distributions.
o Loans taken from such a Policy (or secured by such a Policy,
E.G., by assignment) are treated as distributions and taxed
accordingly.
o A 10% additional income tax penalty is imposed on the amount
included in income except where the distribution or loan is
made when you have attained age 59 1/2 or are disabled, or
where the distribution is part of a series of substantially
equal periodic payments for your life (or life expectancy) or
the joint lives (or joint life expectancies) of you the
beneficiary.
DISTRIBUTIONS FROM POLICIES THAT ARE NOT MODIFIED ENDOWMENT CONTRACTS.
Distributions from a Policy that is not a MEC are generally treated first as a
recovery of your investment in the Policy, and as taxable income after the
recovery of all investment in the Policy. However, certain distributions which
must be made in order to enable the Policy to continue to qualify as a life
insurance contract for Federal income tax purposes if Policy benefits are
reduced during the first 15 Policy Years may be treated in whole or in part as
ordinary income subject to tax.
Loans from or secured by a Policy that is not a MEC are generally not treated as
distributions.
Finally, neither distributions from nor loans from (or secured by) a Policy that
is not a MEC are subject to the 10% additional tax.
DEDUCTIBILITY OF POLICY LOAN INTEREST. In general, interest you pay on a loan
from a Policy will not be deductible. Before taking out a Policy loan, you
should consult a tax advisor as to the tax consequences.
MULTIPLE POLICIES. All MECs that we issue (or that our affiliates issue) to the
same Owner during any calendar year are treated as one MEC for purposes of
determining the amount includible in the Owner's income when a taxable
distribution occurs.
BUSINESS USES OF THE POLICY. The Policy may be used in various arrangements,
including nonqualified deferred compensation or salary continuance plans, split
dollar insurance plans, executive bonus plans, retiree medical benefit plans and
others. The tax consequences of such plans and business uses of the Policy may
vary depending on the particular facts and circumstances of each individual
arrangement and business uses of the Policy. Therefore, if you are contemplating
using the Policy in any arrangement the value of which depends in part on its
tax consequences, you should be sure to consult a tax advisor as to tax
attributes of the arrangement.
POSSIBLE TAX LAW CHANGES. While the likelihood of legislative or other changes
is uncertain, there is always a possibility that the tax treatment of the Policy
could change by legislation or otherwise. It is even possible that any
legislative change could be retroactive (effective prior to the date of the
change). Consult a tax advisor with respect to legislative developments and
their effect on the Policy.
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<PAGE>
OTHER POLICY INFORMATION
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OUR RIGHT TO CONTEST THE POLICY
In issuing this Policy, we rely on all statements made by or for you and/or the
Insured in the application or in a supplemental application. Therefore, if you
make any material misrepresentation of a fact in the application (or any
supplemental application), then we may contest the Policy's validity or may
resist a claim under the Policy.
In the absence of fraud or non-payment of Monthly Deduction, we cannot bring any
legal action to contest the validity of the Policy after the Policy has been in
force during the Insured's lifetime for two years after:
(a) the Policy Date;
(b) the effective date of any increase in the Specified
Amount (and then only for the increased amount); or
(c) the effective date of any reinstatement.
SUICIDE EXCLUSION
If the Insured commits suicide, while sane or insane, within two years of the
Policy Date, the Policy will terminate and our liability is limited to an amount
equal to the premiums paid, less any Indebtedness, and less any withdrawals
previously paid.
If the Insured commits suicide, while sane or insane, within two years from the
effective date of any increase in the Specified Amount, the Policy will
terminate and our liability for the amount of increase will be limited to the
cost of insurance for the increase.
Certain states may require suicide exclusion provisions that differ from those
stated here.
MISSTATEMENT OF AGE OR SEX
If the Insured's age or sex was stated incorrectly in the application, we will
adjust the death benefit proceeds to the amount that would have been payable at
the correct age and sex based on the most recent deduction for cost of
insurance.
MODIFYING THE POLICY
Any modification or waiver of our rights or requirements under this Policy must
be in writing and signed by our president, a vice president, our secretary, or
one of our officers. No agent may bind us by making any promise not contained in
this Policy.
Upon notice to you, we may modify the Policy:
-> to conform the Policy, our operations, or the Separate
Account's operations to the requirements of any law (or
regulation issued by a government agency) to which the Policy,
our Company or the Separate Account is subject; or
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<PAGE>
-> to assure continued qualification of the Policy as a life
insurance contract under the Federal tax laws; or
-> to reflect a change in the Separate Account's operation.
If we modify the Policy, we will make appropriate endorsements to the Policy. If
any provision of the Policy conflicts with the laws of a jurisdiction that
govern the Policy, we reserve the right to amend the provision to conform with
such laws.
PAYMENTS WE MAKE
We usually pay the amounts of any surrender, withdrawal, death benefit, or
settlement options within seven business days after we receive all applicable
Written Notices and/or due proofs of death. However, we can postpone such
payments if:
o the NYSE is closed, other than customary weekend and holiday
closing, or trading on the NYSE is restricted as determined by
the Securities and Exchange Commission (SEC); OR
o the SEC permits, by an order or less formal interpretation
(E.G., no-action letter), the postponement of any payment for
the protection of Owners; OR
o the SEC determines that an emergency exists that would make
the disposal of securities held in the Separate Account or the
determination of their value is not reasonably practicable.
We have the right to defer payment of amounts from the Fixed Account for up to 6
months.
If you have submitted a recent check or draft, we have the right to defer
payment of surrenders, withdrawals, death benefit proceeds, or payments under a
payment option until such check or draft has been honored.
REPORTS TO OWNERS
At least once each year, or more often as required by law, we will mail to
Owners at their last known address a report showing the following information as
of the end of the report period:
/check/ the current Policy Value
/check/ the current Cash Surrender Value
/check/ the current death benefit
/check/ any activity since the last report (E.G., premiums paid,
withdrawals, deductions, loans or loan repayments, and other
transactions)
/check/ any other information required by law
RECORDS
We will maintain all records relating to the Separate Account and the Fixed
Account at our Home Office.
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<PAGE>
POLICY TERMINATION
Your Policy will terminate on the earliest of:
o the Maturity Date;
o the end of the grace period without a sufficient
payment;
o the date the Insured dies; or
o the date you surrender the Policy.
SUPPLEMENTAL BENEFITS AND RIDERS
The following supplemental benefits and riders are available under the Policy.
We deduct any monthly charges for these benefits and riders from Policy Value as
part of the Monthly Deduction. The benefits and riders available (which are
summarized below) provide fixed benefits that do not vary with the investment
experience of the Separate Account. Please contact us for further details on
these supplemental benefits and riders.
SUPPLEMENTAL BENEFITS
/check/ EXTENDED MATURITY DATE: Extends the Maturity Date past the
original Maturity Date. You must make a written request for
this benefit (and we must receive it) within 30 days prior to
the original Maturity Date.
/check/ TERMINAL ILLNESS ACCELERATED BENEFIT: You may elect to receive
a portion of the death benefit proceeds in a "single sum
benefit" if the Insured has incurred a terminal condition
while the Policy is in force. Payment of any amounts under
this benefit will result in reductions in your Policy Value,
Specified Amount, and certain Policy benefits.
RIDERS
o WAIVER OF PREMIUM BENEFIT: Waives the Minimum Monthly Premium
if the Insured becomes totally and permanently disabled for at
least six consecutive months prior to the Policy anniversary
following the Insured's 60th birthday.
o WAIVER OF MONTHLY DEDUCTION: Waives the Monthly Deduction if
the Insured becomes totally and permanently disabled for at
least six consecutive months prior to the Policy
anniversary following the Insured's 60th birthday.
o LEVEL ONE-YEAR TERM INSURANCE: Provides one-year renewable
term insurance on the Insured.
o ADDITIONAL INSURED'S LEVEL ONE-YEAR TERM INSURANCE: Provides
one-year renewable term insurance on an additional Insured.
o ACCIDENTAL DEATH BENEFIT: Provides for payment of an
additional benefit if the Insured dies due to and within 90
days of an accidental injury that occurred on or before the
Policy anniversary when the Insured is age 65.
o GUARANTEED INSURABILITY BENEFIT: Provides options to purchase
additional insurance without evidence of insurability.
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<PAGE>
o INCOME REPLACEMENT BENEFIT: Provides a monthly benefit to the
beneficiary for a period of 20 years upon the Insured's death.
In addition, a lump sum benefit of 100 times the monthly
benefit is paid 20 years after the Insured's death.
o MONTHLY BENEFIT: Provides a monthly benefit to the
beneficiary upon the Insured's death.
o DISABILITY INCOME/WAIVER OF PREMIUM BENEFIT: Provides a
disability income benefit and waiver of premium benefit in the
event of the Insured's total and permanent disability for at
least six consecutive months prior to the Policy anniversary
following the Insured's 60th birthday.
o CHILDREN'S BENEFIT: Provides level term insurance on each of
the Insured's dependent children, until their 25th birthday.
PERFORMANCE DATA
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HYPOTHETICAL ILLUSTRATIONS BASED ON ADJUSTED HISTORIC PORTFOLIO PERFORMANCE
In order to demonstrate how the actual investment experience of the portfolios
could have affected the death benefit, Policy Value and Cash Surrender Value of
the Policy, we may provide hypothetical illustrations using the actual
investment experience of each portfolio since its inception. THESE HYPOTHETICAL
ILLUSTRATIONS ARE DESIGNED TO SHOW THE PERFORMANCE THAT COULD HAVE RESULTED IF
THE POLICY HAD BEEN IN EXISTENCE DURING THE PERIOD ILLUSTRATED.
The values we illustrate for death benefit, Policy Value and Cash Surrender
Value take into account charges and deductions from the Policy (current and
guaranteed), the Separate Account and the portfolios. We have not deducted
premium taxes or charges for any riders. These charges would lower the
performance figures significantly if reflected.
38
<PAGE>
The following example shows how the hypothetical net return of the Janus Growth
Portfolio would have affected benefits for a Policy dated January 1, 1994. This
example assumes that the net premiums and related Policy Values were in the
Subaccount for the entire period and that the values were determined on the
first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
JANUS GROWTH PORTFOLIO
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1995 $655 $653 $0 $0
1996* $1,706 $1,702 $0 $0
1997* $2,747 $2,739 $227 $219
1998* $4,095 $4,085 $1,715 $1,705
1999* $6,338 $6,322 $4,098 $4,082
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
The following example shows how the hypothetical net return of the Janus
Worldwide Growth Portfolio would have affected benefits for a Policy dated
January 1, 1994. This example assumes that the net premium and related Policy
Values were in the Subaccount for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
JANUS WORLDWIDE GROWTH PORTFOLIO
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1995 $645 $643 $0 $0
1996* $1,653 $1,648 $0 $0
1997* $2,943 $2,935 $423 $415
1998* $4,312 $4,302 $1,932 $1,922
1999* $6,289 $6,274 $4,049 $4,034
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
39
<PAGE>
The following example shows how the hypothetical net return of the Janus
Balanced Portfolio would have affected benefits for a Policy dated January 1,
1994. This example assumes that the net premium and related Policy Values were
in the Subaccount for the entire period and that the values were determined on
the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
JANUS BALANCED PORTFOLIO
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1995 $640 $638 $0 $0
1996* $1,608 $1,603 $0 $0
1997* $2,577 $2,569 $57 $49
1998* $3,865 $3,856 $1,485 $1,476
1999* $5,963 $5,948 $3,723 $3,708
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
The following example shows how the hypothetical net return of the Janus Capital
Appreciation Portfolio would have affected benefits for a Policy dated January
1, 1998. This example assumes that the net premium and related Policy Values
were in the Subaccount for the entire period and that the values were determined
on the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
JANUS CAPITAL APPRECIATION PORTFOLIO
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1999 $1,113 $1,110 $0 $0
</TABLE>
40
<PAGE>
The following example shows how the hypothetical net return of the Janus
Aggressive Growth Portfolio would have affected benefits for a Policy dated
January 1, 1994. This example assumes that the net premium and related Policy
Values were in the Subaccount for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
JANUS AGGRESSIVE GROWTH PORTFOLIO
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1995 $766 $764 $0 $0
1996* $1,808 $1,803 $0 $0
1997* $2,594 $2,587 $74 $67
1998* $3,568 $3,560 $1,188 $1,180
1999* $5,565 $5,551 $3,325 $3,311
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
The following example shows how the hypothetical net return of the AIM V.I.
Value Fund would have affected benefits for a Policy dated January 1, 1994. This
example assumes that the net premium and related Policy Values were in the
Subaccount for the entire period and that the values were determined on the
first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
AIM V.I. VALUE FUND
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1995 $666 $664 $0 $0
1996* $1,810 $1,805 $0 $0
1997* $2,780 $2,772 $260 $252
1998* $4,169 $4,159 $1,789 $1,779
1999* $6,277 $6,262 $4,037 $4,022
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
41
<PAGE>
The following example shows how the hypothetical net return of the AIM V.I.
Capital Appreciation Fund would have affected benefits for a Policy dated
January 1, 1994. This example assumes that the net premium and related Policy
Values were in the Subaccount for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
AIM V.I. CAPITAL APPRECIATION FUND
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1995 $653 $651 $0 $0
1996* $1,785 $1,780 $0 $0
1997* $2,817 $2,809 $297 $289
1998* $3,849 $3,840 $1,469 $1,460
1999* $5,251 $5,238 $3,011 $2,998
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
The following example shows how the hypothetical net return of the AIM V.I.
Growth Fund would have affected benefits for a Policy dated January 1, 1994.
This example assumes that the net premium and related Policy Values were in the
Subaccount for the entire period and that the values were determined on the
first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
AIM V.I. GROWTH FUND
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1995 $613 $611 $0 $0
1996* $1,717 $1,712 $0 $0
1997* $2,751 $2,743 $231 $223
1998* $4,245 $4,235 $1,865 $1,855
1999* $6,463 $6,447 $4,223 $4,207
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
42
<PAGE>
The following example shows how the hypothetical net return of the AIM V.I.
International Equity Fund would have affected benefits for a Policy dated
January 1, 1994. This example assumes that the net premium and related Policy
Values were in the Subaccount for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
AIM V.I. INTERNATIONAL EQUITY FUND
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1995 $620 $618 $0 $0
1996* $1,476 $1,471 $0 $0
1997* $2,511 $2,504 $0 $0
1998* $3,287 $3,279 $907 $899
1999* $4,430 $4,418 $2,190 $2,178
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
The following example shows how the hypothetical net return of the AIM V.I.
Government Securities Fund would have affected benefits for a Policy dated
January 1, 1994. This example premium and related Policy Values were in the
Subaccount for the entire period and that the values were determined on the
first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
AIM V.I. GOVERNMENT SECURITIES FUND
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1995 $603 $601 $0 $0
1996* $1,432 $1,427 $0 $0
1997* $2,065 $2,058 $0 $0
1998* $2,846 $2,839 $466 $459
1999* $3,643 $3,633 $1,403 $1,393
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
43
<PAGE>
The following example shows how the hypothetical net return of the Oppenheimer
Main Street Growth & Income Fund would have affected benefits for a Policy dated
January 1, 1996. This example assumes that the net premium and related Policy
Values were in the Subaccount for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.
OPPENHEIMER MAIN STREET GROWTH & INCOME FUND
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1996 $899 $897 $0 $0
1998* $2,062 $2,057 $0 $0
1999* $2,776 $2,768 $256 $248
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
The following example shows how the hypothetical net return of the Oppenheimer
Multiple Strategies Fund would have affected benefits for a Policy dated January
1, 1989. This example assumes that the net premium and related Policy Values
were in the Subaccount for the entire period and that the values were determined
on the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
OPPENHEIMER MULTIPLE STRATEGIES FUND
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1990 $761 $759 $0 $0
1991* $1,342 $1,337 $0 $0
1992* $2,296 $2,289 $0 $0
1993* $3,121 $3,114 $741 $734
1994* $4,256 $4,246 $2,016 $2,006
1995* $4,782 $4,625 $2,682 $2,525
1996* $6,567 $6,203 $4,607 $4,243
1997* $8,260 $7,662 $6,440 $5,842
1998* $10,323 $9,440 $8,643 $7,760
1999* $11,530 $10,404 $9,990 $8,864
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
44
<PAGE>
The following example shows how the hypothetical net return of the Oppenheimer
Bond Fund would have affected benefits for a Policy dated January 1, 1989. This
example assumes that the net premium and related Policy Values were in the
Subaccount for the entire period and that the values were determined on the
first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
OPPENHEIMER BOND FUND
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1990 $741 $739 $0 $0
1991* $1,473 $1,469 $0 $0
1992* $2,454 $2,447 $0 $0
1993* $3,212 $3,204 $832 $824
1994* $4,246 $4,235 $2,006 $1,995
1995* $4,772 $4,616 $2,672 $2,516
1996* $6,313 $5,958 $4,353 $3,998
1997* $7,210 $6,670 $5,390 $4,850
1998* $8,464 $7,695 $6,784 $6,015
1999* $9,567 $8,557 $8,027 $7,017
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
The following example shows how the hypothetical net return of the Oppenheimer
Strategic Bond Fund would have affected benefits for a Policy dated January 1,
1994. This example assumes that the net premium and related Policy Values were
in the Subaccount for the entire period and that the values were determined on
the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
OPPENHEIMER STRATEGIC BOND FUND
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1995 $602 $600 $0 $0
1996* $1,428 $1,424 $0 $0
1997* $2,278 $2,271 $0 $0
1998* $3,092 $3,085 $712 $705
1999* $3,721 $3,712 $1,481 $1,472
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
45
<PAGE>
The following example shows how the hypothetical net return of the Oppenheimer
High Income Fund would have affected benefits for a Policy dated January 1,
1989. This example assumes that the net premium and related Policy Values were
in the Subaccount for the entire period and that the values were determined on
the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
OPPENHEIMER HIGH INCOME FUND
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1990 $672 $670 $0 $0
1991* $1,351 $1,347 $0 $0
1992* $2,660 $2,652 $140 $132
1993* $3,822 $3,813 $1,442 $1,433
1994* $5,542 $5,528 $3,302 $3,288
1995* $5,959 $5,802 $3,859 $3,702
1996* $7,922 $7,562 $5,962 $5,602
1997* $9,796 $9,207 $7,976 $7,387
1998* $11,590 $10,754 $9,910 $9,074
1999* $12,096 $11,081 $10,556 $9,541
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
The following example shows how the hypothetical net return of the Fidelity VIP
II Index 500 Portfolio would have affected benefits for a Policy dated January
1, 1993. This example assumes that the net premium and related Policy Values
were in the Subaccount for the entire period and that the values were determined
on the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
FIDELITY VIP II INDEX 500 PORTFOLIO
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1994 $712 $710 $0 $0
1995* $1,338 $1,334 $0 $0
1996* $2,713 $2,705 $193 $185
1997* $4,051 $4,042 $1,671 $1,662
1998* $6,143 $6,127 $3,903 $3,887
1999* $8,722 $8,538 $6,622 $6,438
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
46
<PAGE>
The following example shows how the hypothetical net return of the Fidelity VIP
Money Market Portfolio would have affected benefits for a Policy dated January
1, 1989. This example assumes that the net premium and related Policy Values
were in the Subaccount for the entire period and that the values were determined
on the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
FIDELITY VIP MONEY MARKET PORTFOLIO
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1990 $707 $705 $0 $0
1991* $1,438 $1,434 $0 $0
1992* $2,156 $2,149 $0 $0
1993* $2,820 $2,813 $440 $433
1994* $3,454 $3,445 $1,214 $1,205
1995* $4,263 $4,101 $2,163 $2,001
1996* $5,157 $4,823 $3,197 $2,863
1997* $6,040 $5,516 $4,220 $3,696
1998* $6,936 $6,205 $5,256 $4,525
1999* $7,838 $6,877 $6,298 $5,337
</TABLE>
*For each year shown, benefits and values reflect only premiums paid during
previous Policy Years.
The following example shows how the hypothetical net return of the Fidelity VIP
Growth Portfolio would have affected benefits for a Policy dated January 1,
1998. This example assumes that the net premium and related Policy Values were
in the Subaccount for the entire period and that the values were determined on
the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
FIDELITY VIP GROWTH PORTFOLIO
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1999 $956 $954 $0 $0
</TABLE>
47
<PAGE>
The following example shows how the hypothetical net return of the Fidelity VIP
II Contrafund Portfolio would have affected benefits for a Policy dated January
1, 1998. This example assumes that the net Premiums and related Policy Values
were in the Subaccount for the entire period and that the values were determined
on the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
FIDELITY VIP II CONTRAFUND PORTFOLIO
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1999 $878 $876 $0 $0
</TABLE>
The following example shows how the hypothetical net return of the Fidelity VIP
III Growth & Income Portfolio would have affected benefits for a Policy dated
January 1, 1998. This example assumes that the net premium and related Policy
Values were in the Subaccount for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.
<TABLE>
<CAPTION>
FIDELITY VIP III GROWTH & INCOME PORTFOLIO
Male, Issue Age 35, $1,080 Annual Premium
($100,000 Specified Amount, Tobacco Risk)
Level Death Benefit
Both Current and Guaranteed Costs and Expenses
POLICY VALUE CASH SURRENDER VALUE
---------------------- ------------------------
POLICY ANNIVERSARY ON JANUARY 1 OF CURRENT GUARANTEED CURRENT GUARANTEED
- ---------------------------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C>
1999 $873 $870 $0 $0
</TABLE>
48
<PAGE>
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SALE OF THE POLICIES
The Policy will be sold by individuals who are licensed as our life insurance
agents and who are also registered representatives of broker-dealers having
written sales agreements for the Policy with AFSG Securities Corporation
("AFSG"), the principal underwriter of the Policy. AFSG is located at 4425 North
River Blvd., NE, Cedar Rapids, IA 52402, is registered with the SEC under the
Securities Exchange Act of 1934 as a broker-dealer, and is a member of the
National Association of Securities Dealers, Inc. The maximum sales commission
payable to our agents or other registered representatives will be approximately
90% of all premiums paid during the first Policy Year, and 2.5% of all premiums
paid during Policy Years 2 through 10. In addition, certain production,
persistency and managerial bonuses may be paid.
LEGAL MATTERS
Sutherland Asbill & Brennan LLP of Washington, D.C. has provided advice on
certain legal matters relating to the Policy under the Federal securities laws.
John D. Cleavenger, Esq., Vice President and General Counsel (Individual
Division) of the Company, has passed upon all matters of Iowa law pertaining to
the Policy.
LEGAL PROCEEDINGS
Like other life insurance companies, we are involved in lawsuits. In some class
action and other lawsuits involving other insurers, substantial damages have
been sought and/or material settlement payments have been made. We believe that
there are no pending or threatened lawsuits that will adversely impact us or the
Separate Account.
YEAR 2000 MATTERS
We have in place a Year 2000 Project Plan (the "Plan") to review and analyze
existing hardware and software systems, as well as voice and data communications
systems, to determine if they are Year 2000 compliant. As of the date of this
prospectus, all of our mission-critical systems are Year 2000 compliant and
ready. The Plan is continuing as scheduled, as we continue with the validation
of our mission-critical and non-mission-critical systems, including revalidation
testing in 1999. In addition, PFL has undertaken aggressive initiatives to test
all systems that interface with any third parties and other business partners.
All of these steps are aimed at allowing current operations to remain unaffected
by the Year 2000 date change.
As of the date of this prospectus, we have identified and made available what we
believe are the appropriate resources of hardware, people, and dollars,
including the engagement of outside third parties, to ensure that the Plan will
be completed.
Our actions under the Plan are intended to significantly reduce PFL's risk of a
material business interruption based on the Year 2000 issues. Resolving the Year
2000 computer problem is complex and multifaceted. We cannot know conclusively
whether a response plan is successful until the Year 2000 arrives (or an earlier
date if the systems or equipment address Year 2000 data prior to the Year 2000).
In spite of its efforts or results, PFL's ability to function unaffected to and
through the Year 2000 may be
49
<PAGE>
adversely affected by actions, or failure to act, of third parties beyond our
knowledge or control. See the portfolios' prospectuses for information on their
preparation for Year 2000.
This statement is a Year 2000 Readiness Disclosure pursuant to Section 3(9) of
the Year 2000 Information and Readiness Disclosure Act, 15 U.S.C. Section 1
(1998).
FINANCIAL STATEMENTS
This prospectus does not include financial statements of the Separate Account
because, as of the date of this prospectus, the Separate Account had not yet
commenced operations, had no assets, and had incurred no liabilities. The
Company's financial statements appear at the end of this prospectus. The
Company's financial statements should be distinguished from the Separate
Account's financial statements and you should consider our financial statements
only as bearing upon our ability to meet our obligations under the Policies.
ADDITIONAL INFORMATION ABOUT THE COMPANY
PFL is a stock life insurance Company that is a wholly owned indirect subsidiary
of AEGON USA, Inc. AEGON USA, Inc. is a wholly owned indirect subsidiary of
AEGON NV, a Netherlands corporation that is a publicly traded international
insurance group. PFL's Home Office is located at 4333 Edgewood Road NE, Cedar
Rapids, Iowa 52499.
PFL was incorporated in 1961 under Iowa law and is subject to regulation by the
Iowa Commissioner of Insurance. PFL is engaged in the business of issuing life
insurance policies and annuity contracts, and is licensed to do business in the
District of Columbia, Guam and all states except New York. PFL submits annual
statements on its operations and finances to insurance officials in all states
and jurisdictions in which it does business. PFL has filed the Policy described
in this prospectus with insurance officials in those jurisdictions in which the
Policy is sold.
PFL intends to reinsure a portion of the risks assumed under the Policies.
PFL'S EXECUTIVE OFFICERS AND DIRECTORS
PFL is governed by a board of directors. The following tables set forth the
name, address and principal occupation during the past five years of each of
PFL's executive officers and directors. Each person is located at PFL Life
Insurance Company, 4333 Edgewood Road, NE, Cedar Rapids, IA 52449.
<TABLE>
<CAPTION>
BOARD OF DIRECTORS AND SENIOR OFFICERS
--------------------------------------
NAME POSITION WITH PFL PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- ----------------- ------------------------ ---------------------------------------------------------
<S> <C> <C>
William L. Busler Director, Chairman of the Director, Chairman of the Board, and President
Board, and President
Larry N. Norman Director, Executive Vice Director, Executive Vice President
President
Patrick S. Baird Director, Senior Vice Executive Vice President (1995-present), Chief
President, and Chief Operating Officer (1996-present), Chief Financial Officer
Operating Officer (1992-1995), Vice President and Chief Tax Officer
(1984-1995) of AEGON USA.
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
NAME POSITION WITH PFL PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- ------------------ ------------------------ ---------------------------------------------------------
<S> <C> <C>
Douglas C. Kolsrud Director, Senior Vice Director, Senior Vice President, Chief Investment Officer
President, Chief Investment and Corporate Actuary
Officer and Corporate
Actuary
Craig D. Vermie Director, Vice President, Director, Vice President, Secretary and General Counsel
Secretary and General
Counsel
Robert J. Kontz Vice President and Vice President and Corporate Controller
Corporate Controller
Brenda K. Clancy Vice President, Treasurer Vice President, Treasurer and Chief Financial Officer
and Chief Financial Officer
</TABLE>
PFL holds the Separate Account's assets physically segregated and apart from the
general account. PFL maintains records of all purchases and sale of portfolio
shares by each of the Subaccounts. A blanket bond in the amount of $10 million
(subject to a $1 million deductible), covering directors, officers and all
employees of AEGON USA, Inc. and its affiliates has been issued to PFL and its
affiliates.
ILLUSTRATIONS
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The following illustrations show how certain values under a sample Policy would
change with different rates of fictional investment performance over an extended
period of time. In particular, the illustrations show how the death benefit,
Policy Value, and Cash Surrender Value under a Policy covering a male or female
Insured of age 35 on the Policy Date in a tobacco or non-tobacco class, would
change over time if the planned premiums were paid and the return on the assets
in the Subaccounts were a uniform gross annual rate (before any expenses) of 0%,
6% or 12%. The tables also show how the Policy would operate if premiums
accumulated at 5% interest. The tables illustrate Policy values that would
result based on assumptions that you pay the premiums indicated, you do not
increase your Specified Amount, and you do not make any withdrawals or Policy
loans. The values under the Policy will be different from those shown even if
the returns averaged 0%, 6% or 12%, but fluctuated over and under those averages
throughout the years shown.
THE HYPOTHETICAL INVESTMENT RETURNS ARE PROVIDED ONLY TO ILLUSTRATE THE
MECHANICS OF A HYPOTHETICAL POLICY AND DO NOT REPRESENT PAST OR FUTURE
INVESTMENT RATES OF RETURN. Actual rates of return for a particular Policy may
be more or less than the hypothetical investment rates of return. The actual
return on your Policy Value will depend on factors such as the amounts you
allocate to particular portfolios, the amounts deducted for the Policy's monthly
charges, the portfolios' expense ratios, and your Policy loan and withdrawal
history.
The illustrations assume that the assets in the portfolios are subject to an
annual expense ratio of 0.71% of the average daily net assets. This annual
expense ratio is based on the average of the expense ratios of each of the
portfolios for the last fiscal year and takes into account current expense
reimbursement arrangements. For information on portfolio expenses, see
"Portfolio Expense Table" in this prospectus, and see the portfolios'
prospectuses .
Separate illustrations on each of the following pages reflect our current
expense charge and cost of insurance charge and the higher guaranteed maximum
expense charge and cost of insurance charge that
51
<PAGE>
we have the contractual right to charge. The illustrations assume no charges for
Federal or state taxes or charges for supplemental benefits.
After deducting portfolio expenses and mortality and expense risk charges, the
illustrated gross annual investment rates of return of 0%, 6% and 12% would
correspond to approximate net annual rates for the Separate Account of -1.45%,
4.51% and 10.46%, respectively.
The illustrations are based on our sex distinct rates for tobacco and
non-tobacco users. Upon request, we will furnish a comparable illustration based
upon the proposed Insured's individual circumstances. Such illustrations may
assume different hypothetical rates of return than those shown in the following
illustrations.
52
<PAGE>
<TABLE>
<CAPTION>
PFL LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
MALE ISSUE AGE 35
Specified Amount $100,000 Tobacco Class
Annual Premium $1,080 Level Death Benefit
Minimum Monthly Premium $90.00 Age 100 No Lapse Guarantee
Using Current Cost Assumptions
DEATH BENEFIT
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS AND
POLICY ACCUMULATED NET ANNUAL INVESTMENT RETURN OF
YEAR AT 5% 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C>
1 $1,134 $100,000 $100,000 $100,000
2 $2,325 $100,000 $100,000 $100,000
3 $3,575 $100,000 $100,000 $100,000
4 $4,888 $100,000 $100,000 $100,000
5 $6,266 $100,000 $100,000 $100,000
6 $7,713 $100,000 $100,000 $100,000
7 $9,233 $100,000 $100,000 $100,000
8 $10,829 $100,000 $100,000 $100,000
9 $12,504 $100,000 $100,000 $100,000
10 $14,263 $100,000 $100,000 $100,000
15 $24,470 $100,000 $100,000 $100,000
20 $37,497 $100,000 $100,000 $100,000
30 (AGE 65) $75,342 $100,000 $100,000 $147,195
40 (AGE 75) $136,987 $100,000* $100,000 $354,281
50 (AGE 85) $237,401 $100,000* $100,000 $930,254
60 (AGE 95) $400,964 $100,000* $100,000* $2,319,901
</TABLE>
<TABLE>
<CAPTION>
END OF POLICY VALUE CASH SURRENDER VALUE
POLICY ASSUMING HYPOTHETICAL GROSS AND ASSUMING HYPOTHETICAL GROSS AND
YEAR NET ANNUAL INVESTMENT RETURN OF NET ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross) 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net) -1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C> <C> <C>
1 $627 $676 $725 $0 $0 $0
2 $1,227 $1,364 $1,507 $0 $0 $0
3 $1,796 $2,060 $2,348 $0 $0 $0
4 $2,330 $2,760 $3,249 $0 $380 $869
5 $2,829 $3,465 $4,217 $589 $1,225 $1,977
6 $3,434 $4,319 $5,408 $1,334 $2,219 $3,308
7 $4,006 $5,186 $6,699 $2,046 $3,226 $4,739
8 $4,540 $6,064 $8,098 $2,720 $4,244 $6,278
9 $5,030 $6,946 $9,609 $3,350 $5,266 $7,929
10 $5,480 $7,835 $11,249 $3,940 $6,295 $9,709
15 $7,630 $12,997 $22,623 $6,790 $12,157 $21,783
20 $8,716 $18,547 $40,752 $8,716 $18,547 $40,752
30 (AGE 65) $6,346 $30,457 $120,652 $6,346 $30,457 $120,652
40 (AGE 75) $0* $37,713 $331,104 $0* $37,713 $331,104
50 (AGE 85) $0* $20,128 $885,956 $0* $20,128 $885,956
60 (AGE 95) $0* $0* $2,296,932 $0* $0* $2,296,932
</TABLE>
*The Policy would not enter the Grace Period since the cumulative minimum
monthly premiums have been met.
The hypothetical rates of return shown above are illustrative only and should
not be deemed a representation of past or future investment rates of return.
Actual rates of return may be more or less than those shown and will depend on a
number of factors, including the investment allocations made by an Owner and the
actual investment experience of the Portfolios. The Policy Value, Cash Surrender
Value, and Death Benefit for a Policy would be different from those shown if the
actual rates of return averaged 0.00%, 6.00%, and 12.00% over a period of years,
but also flucutated above or below those averages for individual Policy Years.
No representations can be made that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
53
<PAGE>
<TABLE>
<CAPTION>
PFL LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
MALE ISSUE AGE 35
Specified Amount $100,000 Tobacco Class
Annual Premium $1,080 Level Death Benefit
Minimum Monthly Premium $90.00 Age 100 No Lapse Guarantee
Using Guaranteed Cost Assumptions
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS AND
POLICY ACCUMULATED NET ANNUAL INVESTMENT RETURN OF
YEAR AT 5% 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C>
1 $1,134 $100,000 $100,000 $100,000
2 $2,325 $100,000 $100,000 $100,000
3 $3,575 $100,000 $100,000 $100,000
4 $4,888 $100,000 $100,000 $100,000
5 $6,266 $100,000 $100,000 $100,000
6 $7,713 $100,000 $100,000 $100,000
7 $9,233 $100,000 $100,000 $100,000
8 $10,829 $100,000 $100,000 $100,000
9 $12,504 $100,000 $100,000 $100,000
10 $14,263 $100,000 $100,000 $100,000
15 $24,470 $100,000 $100,000 $100,000
20 $37,497 $100,000 $100,000 $100,000
30 (AGE 65) $75,342 $100,000* $100,000 $100,127
40 (AGE 75) $136,987 $100,000* $100,000* $237,194
50 (AGE 85) $237,401 $100,000* $100,000* $610,110
60 (AGE 95) $400,964 $100,000* $100,000* $1,475,849
</TABLE>
<TABLE>
<CAPTION>
END OF POLICY VALUE CASH SURRENDER VALUE
POLICY ASSUMING HYPOTHETICAL GROSS AND ASSUMING HYPOTHETICAL GROSS AND
YEAR NET ANNUAL INVESTMENT RETURN OF NET ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross) 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net) -1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C> <C> <C>
1 $625 $674 $723 $0 $0 $0
2 $1,223 $1,360 $1,502 $0 $0 $0
3 $1,790 $2,054 $2,341 $0 $0 $0
4 $2,324 $2,754 $3,241 $0 $374 $861
5 $2,821 $3,456 $4,206 $581 $1,216 $1,966
6 $3,277 $4,156 $5,240 $1,177 $2,056 $3,140
7 $3,690 $4,852 $6,347 $1,730 $2,892 $4,387
8 $4,058 $5,541 $7,532 $2,238 $3,721 $5,712
9 $4,377 $6,218 $8,801 $2,697 $4,538 $7,121
10 $4,642 $6,879 $10,161 $3,102 $5,339 $8,621
15 $5,094 $9,825 $18,657 $4,254 $8,985 $17,817
20 $3,525 $11,494 $31,094 $3,525 $11,494 $31,094
30 (AGE 65) $0* $3,045 $82,072 $0* $3,045 $82,072
40 (AGE 75) $0* $0* $221,677 $0* $0* $221,677
50 (AGE 85) $0* $0* $581,057 $0* $0* $581,057
60 (AGE 95) $0* $0* $1,461,236 $0* $0* $1,461,236
</TABLE>
*The Policy would not enter the Grace Period since the cumulative minimum
monthly premiums have been met.
The hypothetical rates of return shown above are illustrative only and should
not be deemed a representation of past or future investment rates of return.
Actual rates of return may be more or less than those shown and will depend on a
number of factors, including the investment allocations made by an Owner and the
actual investment experience of the Portfolios. The Policy Value, Cash Surrender
Value, and Death Benefit for a Policy would be different from those shown if the
actual rates of return averaged 0.00%, 6.00%, and 12.00% over a period of years,
but also flucutated above or below those averages for individual Policy Years.
No representations can be made that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
54
<PAGE>
<TABLE>
<CAPTION>
PFL LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
MALE ISSUE AGE 35
Specified Amount $100,000 Preferred Class
Annual Premium $1,080 Level Death Benefit
Minimum Monthly Premium $66.66 Age 100 No Lapse Guarante
Using Current Cost Assumptions
DEATH BENEFIT
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS AND
POLICY ACCUMULATED NET ANNUAL INVESTMENT RETURN OF
YEAR AT 5% 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C>
1 $1,134 $100,000 $100,000 $100,000
2 $2,325 $100,000 $100,000 $100,000
3 $3,575 $100,000 $100,000 $100,000
4 $4,888 $100,000 $100,000 $100,000
5 $6,266 $100,000 $100,000 $100,000
6 $7,713 $100,000 $100,000 $100,000
7 $9,233 $100,000 $100,000 $100,000
8 $10,829 $100,000 $100,000 $100,000
9 $12,504 $100,000 $100,000 $100,000
10 $14,263 $100,000 $100,000 $100,000
15 $24,470 $100,000 $100,000 $100,000
20 $37,497 $100,000 $100,000 $100,000
30 (AGE 65) $75,342 $100,000 $100,000 $182,533
40 (AGE 75) $136,987 $100,000 $100,000 $442,127
50 (AGE 85) $237,401 $100,000* $126,625 $1,171,023
60 (AGE 95) $400,964 $100,000* $196,423 $2,985,961
</TABLE>
<TABLE>
<CAPTION>
END OF POLICY VALUE CASH SURRENDER VALUE
POLICY ASSUMING HYPOTHETICAL GROSS AND ASSUMING HYPOTHETICAL GROSS AND
YEAR NET ANNUAL INVESTMENT RETURN OF NET ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross) 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net) -1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C> <C> <C>
1 $722 $774 $826 $0 $0 $0
2 $1,427 $1,576 $1,731 $0 $0 $0
3 $2,111 $2,403 $2,720 $0 $243 $560
4 $2,774 $3,256 $3,802 $734 $1,216 $1,762
5 $3,415 $4,136 $4,985 $1,495 $2,216 $3,065
6 $4,151 $5,163 $6,402 $2,351 $3,363 $4,602
7 $4,866 $6,226 $7,958 $3,186 $4,546 $6,278
8 $5,558 $7,324 $9,664 $3,998 $5,764 $8,104
9 $6,225 $8,457 $11,535 $4,785 $7,017 $10,095
10 $6,868 $9,628 $13,590 $5,548 $8,308 $12,270
15 $9,836 $16,248 $27,576 $9,116 $15,528 $26,856
20 $12,137 $24,083 $50,378 $12,137 $24,083 $50,378
30 (AGE 65) $13,754 $44,097 $149,617 $13,754 $44,097 $149,617
40 (AGE 75) $7,538 $72,898 $413,203 $7,538 $72,898 $413,203
50 (AGE 85) $0* $120,595 $1,115,260 $0* $120,595 $1,115,260
60 (AGE 95) $0* $194,479 $2,956,397 $0* $194,479 $2,956,397
</TABLE>
*The Policy would not enter the Grace Period since the cumulative minimum
monthly premiums have been exceeded.
The hypothetical rates of return shown above are illustrative only and should
not be deemed a representation of past or future investment rates of return.
Actual rates of return may be more or less than those shown and will depend on a
number of factors, including the investment allocations made by an Owner and the
actual investment experience of the Portfolios. The Policy Value, Cash Surrender
Value, and Death Benefit for a Policy would be different from those shown if the
actual rates of return averaged 0.00%, 6.00%, and 12.00% over a period of years,
but also flucutated above or below those averages for individual Policy Years.
No representations can be made that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
55
<PAGE>
<TABLE>
<CAPTION>
PFL LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
MALE ISSUE AGE 35
Specified Amount $100,000 Preferred Class
Annual Premium $1,080 Level Death Benefit
Minimum Monthly Premium $66.66 Age 100 No Lapse Guarantee
Using Guaranteed Cost Assumptions
DEATH BENEFIT
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS AND
POLICY ACCUMULATED NET ANNUAL INVESTMENT RETURN OF
YEAR AT 5% 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C>
1 $1,134 $100,000 $100,000 $100,000
2 $2,325 $100,000 $100,000 $100,000
3 $3,575 $100,000 $100,000 $100,000
4 $4,888 $100,000 $100,000 $100,000
5 $6,266 $100,000 $100,000 $100,000
6 $7,713 $100,000 $100,000 $100,000
7 $9,233 $100,000 $100,000 $100,000
8 $10,829 $100,000 $100,000 $100,000
9 $12,504 $100,000 $100,000 $100,000
10 $14,263 $100,000 $100,000 $100,000
15 $24,470 $100,000 $100,000 $100,000
20 $37,497 $100,000 $100,000 $100,000
30 (AGE 65) $75,342 $100,000 $100,000 $159,892
40 (AGE 75) $136,987 $100,000* $100,000 $378,744
50 (AGE 85) $237,401 $100,000* $100,000* $976,667
60 (AGE 95) $400,964 $100,000* $100,000* $2,366,588
</TABLE>
<TABLE>
<CAPTION>
END OF POLICY VALUE CASH SURRENDER VALUE
POLICY ASSUMING HYPOTHETICAL GROSS AND ASSUMING HYPOTHETICAL GROSS AND
YEAR NET ANNUAL INVESTMENT RETURN OF NET ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross) 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net) -1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C> <C> <C>
1 $722 $774 $826 $0 $0 $0
2 $1,427 $1,576 $1,731 $0 $0 $0
3 $2,110 $2,403 $2,720 $0 $243 $560
4 $2,773 $3,256 $3,801 $733 $1,216 $1,761
5 $3,414 $4,136 $4,984 $1,494 $2,216 $3,064
6 $4,031 $5,041 $6,277 $2,231 $3,241 $4,477
7 $4,624 $5,971 $7,691 $2,944 $4,291 $6,011
8 $5,192 $6,928 $9,239 $3,632 $5,368 $7,679
9 $5,733 $7,911 $10,933 $4,293 $6,471 $9,493
10 $6,247 $8,921 $12,789 $4,927 $7,601 $11,469
15 $8,342 $14,336 $25,132 $7,622 $13,616 $24,412
20 $9,378 $20,236 $44,947 $9,378 $20,236 $44,947
30 (AGE 65) $5,069 $31,412 $131,059 $5,069 $31,412 $131,059
40 (AGE 75) $0* $31,361 $353,967 $0* $31,361 $353,967
50 (AGE 85) $0* $0* $930,160 $0* $0* $930,160
60 (AGE 95) $0* $0* $2,343,156 $0* $0* $2,343,156
</TABLE>
*The Policy would not enter the Grace Period since the cumulative minimum
monthly premiums have been exceeded.
The hypothetical rates of return shown above are illustrative only and should
not be deemed a representation of past or future investment rates of return.
Actual rates of return may be more or less than those shown and will depend on a
number of factors, including the investment allocations made by an Owner and the
actual investment experience of the Portfolios. The Policy Value, Cash Surrender
Value, and Death Benefit for a Policy would be different from those shown if the
actual rates of return averaged 0.00%, 6.00%, and 12.00% over a period of years,
but also flucutated above or below those averages for individual Policy Years.
No representations can be made that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
56
<PAGE>
<TABLE>
<CAPTION>
PFL LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
FEMALE ISSUE AGE 35
Specified Amount $100,000 Tobacco Class
Annual Premium $1,080 Level Death Benefit
Minimum Monthly Premium $75.00 Age 100 No Lapse Guarantee
Using Current Cost Assumptions
DEATH BENEFIT
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS AND
POLICY ACCUMULATED NET ANNUAL INVESTMENT RETURN OF
YEAR AT 5% 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C>
1 $1,134 $100,000 $100,000 $100,000
2 $2,325 $100,000 $100,000 $100,000
3 $3,575 $100,000 $100,000 $100,000
4 $4,888 $100,000 $100,000 $100,000
5 $6,266 $100,000 $100,000 $100,000
6 $7,713 $100,000 $100,000 $100,000
7 $9,233 $100,000 $100,000 $100,000
8 $10,829 $100,000 $100,000 $100,000
9 $12,504 $100,000 $100,000 $100,000
10 $14,263 $100,000 $100,000 $100,000
15 $24,470 $100,000 $100,000 $100,000
20 $37,497 $100,000 $100,000 $100,000
30 (AGE 65) $75,342 $100,000 $100,000 $170,503
40 (AGE 75) $136,987 $100,000 $100,000 $413,479
50 (AGE 85) $237,401 $100,000* $108,118 $1,094,144
60 (AGE 95) $400,964 $100,000* $167,908 $2,764,668
</TABLE>
<TABLE>
<CAPTION>
END OF POLICY VALUE CASH SURRENDER VALUE
POLICY ASSUMING HYPOTHETICAL GROSS AND ASSUMING HYPOTHETICAL GROSS AND
YEAR NET ANNUAL INVESTMENT RETURN OF NET ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross) 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net) -1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C> <C> <C>
1 $696 $747 $798 $0 $0 $0
2 $1,366 $1,511 $1,663 $0 $0 $0
3 $2,008 $2,291 $2,599 $0 $131 $439
4 $2,621 $3,087 $3,614 $581 $1,047 $1,574
5 $3,202 $3,895 $4,712 $1,282 $1,975 $2,792
6 $3,890 $4,858 $6,047 $2,090 $3,058 $4,247
7 $4,546 $5,843 $7,500 $2,866 $4,163 $5,820
8 $5,172 $6,852 $9,086 $3,612 $5,292 $7,526
9 $5,769 $7,888 $10,820 $4,329 $6,448 $9,380
10 $6,339 $8,952 $12,720 $5,019 $7,632 $11,400
15 $9,012 $15,033 $25,737 $8,292 $14,313 $25,017
20 $11,151 $22,324 $47,097 $11,151 $22,324 $47,097
30 (AGE 65) $11,250 $39,573 $139,756 $11,250 $39,573 $139,756
40 (AGE 75) $4,288 $63,844 $386,429 $4,288 $63,844 $386,429
50 (AGE 85) $0* $102,969 $1,042,042 $0* $102,969 $1,042,042
60 (AGE 95) $0* $166,245 $2,737,295 $0* $166,245 $2,737,295
</TABLE>
*The Policy would not enter the Grace Period since the cumulative minimum
monthly premiums have been exceeded.
The hypothetical rates of return shown above are illustrative only and should
not be deemed a representation of past or future investment rates of return.
Actual rates of return may be more or less than those shown and will depend on a
number of factors, including the investment allocations made by an
Owner and the actual investment experience of the Portfolios. The Policy Value,
Cash Surrender Value, and Death Benefit for a Policy would be
different from those shown if the actual rates of return averaged 0.00%, 6.00%,
and 12.00% over a period of years, but also flucutated above or below
those averages for individual Policy Years. No representations can be made that
these hypothetical rates of return can be achieved for any one year or
sustained over any period of time.
57
<PAGE>
<TABLE>
<CAPTION>
PFL LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
FEMALE ISSUE AGE 35
Specified Amount $100,000 Tobacco Class
Annual Premium $1,080 Level Death Benefit
Minimum Monthly Premium $75.00 Age 100 No Lapse Guarantee
Using Guaranteed Cost Assumptions
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS AND
POLICY ACCUMULATED NET ANNUAL INVESTMENT RETURN OF
YEAR AT 5% 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C>
1 $1,134 $100,000 $100,000 $100,000
2 $2,325 $100,000 $100,000 $100,000
3 $3,575 $100,000 $100,000 $100,000
4 $4,888 $100,000 $100,000 $100,000
5 $6,266 $100,000 $100,000 $100,000
6 $7,713 $100,000 $100,000 $100,000
7 $9,233 $100,000 $100,000 $100,000
8 $10,829 $100,000 $100,000 $100,000
9 $12,504 $100,000 $100,000 $100,000
10 $14,263 $100,000 $100,000 $100,000
15 $24,470 $100,000 $100,000 $100,000
20 $37,497 $100,000 $100,000 $100,000
30 (AGE 65) $75,342 $100,000 $100,000 $141,870
40 (AGE 75) $136,987 $100,000* $100,000 $340,749
50 (AGE 85) $237,401 $100,000* $100,000* $887,600
60 (AGE 95) $400,964 $100,000* $100,000* $2,170,224
</TABLE>
<TABLE>
<CAPTION>
END OF POLICY VALUE CASH SURRENDER VALUE
POLICY ASSUMING HYPOTHETICAL GROSS AND ASSUMING HYPOTHETICAL GROSS AND
YEAR NET ANNUAL INVESTMENT RETURN OF NET ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross) 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net) -1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C> <C> <C>
1 $695 $746 $797 $0 $0 $0
2 $1,364 $1,510 $1,661 $0 $0 $0
3 $2,006 $2,290 $2,598 $0 $130 $438
4 $2,619 $3,084 $3,611 $579 $1,044 $1,571
5 $3,199 $3,892 $4,709 $1,279 $1,972 $2,789
6 $3,745 $4,710 $5,895 $1,945 $2,910 $4,095
7 $4,254 $5,536 $7,177 $2,574 $3,856 $5,497
8 $4,727 $6,371 $8,568 $3,167 $4,811 $7,008
9 $5,166 $7,218 $10,080 $3,726 $5,778 $8,640
10 $5,569 $8,076 $11,727 $4,249 $6,756 $10,407
15 $7,038 $12,529 $22,560 $6,318 $11,809 $21,840
20 $7,383 $17,114 $39,822 $7,383 $17,114 $39,822
30 (AGE 65) $3,227 $25,762 $116,287 $3,227 $25,762 $116,287
40 (AGE 75) $0* $25,598 $318,457 $0* $25,598 $318,457
50 (AGE 85) $0* $0* $845,333 $0* $0* $845,333
60 (AGE 95) $0* $0* $2,148,737 $0* $0* $2,148,737
</TABLE>
*The Policy would not enter the Grace Period since the cumulative minimum
monthly premiums have been exceeded.
The hypothetical rates of return shown above are illustrative only and should
not be deemed a representation of past or future investment rates of return.
Actual rates of return may be more or less than those shown and will depend on a
number of factors, including the investment allocations made by an Owner and the
actual investment experience of the Portfolios. The Policy Value, Cash Surrender
Value, and Death Benefit for a Policy would be different from those shown if the
actual rates of return averaged 0.00%, 6.00%, and 12.00% over a period of years,
but also flucutated above or below those averages for individual Policy Years.
No representations can be made that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
58
<PAGE>
<TABLE>
<CAPTION>
PFL LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
FEMALE ISSUE AGE 35
Specified Amount $100,000 Preferred Class
Annual Premium $1,080 Level Death Benefit
Minimum Monthly Premium $55.83 Age 100 No Lapse Guarantee
Using Current Cost Assumptions
DEATH BENEFIT
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS AND
POLICY ACCUMULATED NET ANNUAL INVESTMENT RETURN OF
YEAR AT 5% 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C>
1 $1,134 $100,000 $100,000 $100,000
2 $2,325 $100,000 $100,000 $100,000
3 $3,575 $100,000 $100,000 $100,000
4 $4,888 $100,000 $100,000 $100,000
5 $6,266 $100,000 $100,000 $100,000
6 $7,713 $100,000 $100,000 $100,000
7 $9,233 $100,000 $100,000 $100,000
8 $10,829 $100,000 $100,000 $100,000
9 $12,504 $100,000 $100,000 $100,000
10 $14,263 $100,000 $100,000 $100,000
15 $24,470 $100,000 $100,000 $100,000
20 $37,497 $100,000 $100,000 $100,000
30 (AGE 65) $75,342 $100,000 $100,000 $191,632
40 (AGE 75) $136,987 $100,000 $100,000 $466,867
50 (AGE 85) $237,401 $100,000 $145,133 $1,243,001
60 (AGE 95) $400,964 $100,000* $224,579 $3,185,840
</TABLE>
<TABLE>
<CAPTION>
END OF POLICY VALUE CASH SURRENDER VALUE
POLICY ASSUMING HYPOTHETICAL GROSS AND ASSUMING HYPOTHETICAL GROSS AND
YEAR NET ANNUAL INVESTMENT RETURN OF NET ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross) 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net) -1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C> <C> <C>
1 $757 $810 $863 $0 $0 $0
2 $1,494 $1,647 $1,807 $0 $0 $0
3 $2,212 $2,513 $2,841 $232 $533 $861
4 $2,911 $3,410 $3,975 $1,041 $1,540 $2,105
5 $3,591 $4,339 $5,219 $1,831 $2,579 $3,459
6 $4,351 $5,402 $6,688 $2,701 $3,752 $5,038
7 $5,088 $6,501 $8,299 $3,548 $4,961 $6,759
8 $5,804 $7,640 $10,070 $4,374 $6,210 $8,640
9 $6,500 $8,820 $12,017 $5,180 $7,500 $10,697
10 $7,176 $10,045 $14,160 $5,966 $8,835 $12,950
15 $10,382 $17,049 $28,808 $9,722 $16,389 $28,148
20 $13,043 $25,499 $52,790 $13,043 $25,499 $52,790
30 (AGE 65) $16,060 $47,877 $157,075 $16,060 $47,877 $157,075
40 (AGE 75) $15,245 $82,420 $436,324 $15,245 $82,420 $436,324
50 (AGE 85) $1,890 $138,222 $1,183,811 $1,890 $138,222 $1,183,811
60 (AGE 95) $0* $222,355 $3,154,297 $0* $222,355 $3,154,297
</TABLE>
*The Policy would not enter the Grace Period since the cumulative minimum
monthly premiums have been exceeded.
The hypothetical rates of return shown above are illustrative only and should
not be deemed a representation of past or future investment rates of return.
Actual rates of return may be more or less than those shown and will depend on a
number of factors, including the investment allocations made by an Owner and the
actual investment experience of the Portfolios. The Policy Value, Cash Surrender
Value, and Death Benefit for a Policy would be different from those shown if the
actual rates of return averaged 0.00%, 6.00%, and 12.00% over a period of years,
but also flucutated above or below those averages for individual Policy Years.
No representations can be made that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
59
<PAGE>
<TABLE>
<CAPTION>
PFL LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
FEMALE ISSUE AGE 35
Specified Amount $100,000 Preferred Class
Annual Premium $1,080 Level Death Benefit
Minimum Monthly Premium $55.83 Age 100 No Lapse Guarantee
Using Guaranteed Cost Assumptions
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS AND
POLICY ACCUMULATED NET ANNUAL INVESTMENT RETURN OF
YEAR AT 5% 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C>
1 $1,134 $100,000 $100,000 $100,000
2 $2,325 $100,000 $100,000 $100,000
3 $3,575 $100,000 $100,000 $100,000
4 $4,888 $100,000 $100,000 $100,000
5 $6,266 $100,000 $100,000 $100,000
6 $7,713 $100,000 $100,000 $100,000
7 $9,233 $100,000 $100,000 $100,000
8 $10,829 $100,000 $100,000 $100,000
9 $12,504 $100,000 $100,000 $100,000
10 $14,263 $100,000 $100,000 $100,000
15 $24,470 $100,000 $100,000 $100,000
20 $37,497 $100,000 $100,000 $100,000
30 (AGE 65) $75,342 $100,000 $100,000 $168,884
40 (AGE 75) $136,987 $100,000* $100,000 $406,187
50 (AGE 85) $237,401 $100,000* $100,000 $1,060,232
60 (AGE 95) $400,964 $100,000* $100,000 $2,596,489
</TABLE>
<TABLE>
<CAPTION>
END OF POLICY VALUE CASH SURRENDER VALUE
POLICY ASSUMING HYPOTHETICAL GROSS AND ASSUMING HYPOTHETICAL GROSS AND
YEAR NET ANNUAL INVESTMENT RETURN OF NET ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross) 0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.45% (Net) 4.51% (Net) 10.46% (Net) -1.45% (Net) 4.51% (Net) 10.46% (Net)
<S> <C> <C> <C> <C> <C> <C>
1 $744 $797 $849 $0 $0 $0
2 $1,469 $1,620 $1,778 $0 $0 $0
3 $2,172 $2,470 $2,794 $192 $490 $814
4 $2,854 $3,347 $3,904 $984 $1,477 $2,034
5 $3,514 $4,252 $5,119 $1,754 $2,492 $3,359
6 $4,150 $5,183 $6,447 $2,500 $3,533 $4,797
7 $4,761 $6,140 $7,900 $3,221 $4,600 $6,360
8 $5,348 $7,127 $9,491 $3,918 $5,697 $8,061
9 $5,911 $8,143 $11,237 $4,591 $6,823 $9,917
10 $6,451 $9,191 $13,153 $5,241 $7,981 $11,943
15 $8,763 $14,928 $26,003 $8,103 $14,268 $25,343
20 $10,279 $21,510 $46,883 $10,279 $21,510 $46,883
30 (AGE 65) $9,768 $37,436 $138,429 $9,768 $37,436 $138,429
40 (AGE 75) $0* $55,515 $379,614 $0* $55,515 $379,614
50 (AGE 85) $0* $68,243 $1,009,745 $0* $68,243 $1,009,745
60 (AGE 95) $0* $11,987 $2,570,781 $0* $11,987 $2,570,781
</TABLE>
*The Policy would not enter the Grace Period since the cumulative minimum
monthly premiums have been exceeded.
The hypothetical rates of return shown above are illustrative only and should
not be deemed a representation of past or future investment rates of return.
Actual rates of return may be more or less than those shown and will depend on a
number of factors, including the investment allocations made by an Owner and the
actual investment experience of the Portfolios. The Policy Value, Cash Surrender
Value, and Death Benefit for a Policy would be different from those shown if the
actual rates of return averaged 0.00%, 6.00%, and 12.00% over a period of years,
but also flucutated above or below those averages for individual Policy Years.
No representations can be made that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
60
<PAGE>
PART II.
OTHER INFORMATION
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.
REPRESENTATION PURSUANT TO SECTION 26(e)(2)(A)
PFL Life Insurance Company ("PFL LIFE") hereby represents that the fees
and charges deducted under the Policies, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by PFL Life.
RULE 484 UNDERTAKING
Insofar as indemnification for liability arising under the Securities
Act of 1933 (the "Act") 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.
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and documents:
The facing sheet
The Prospectus, consisting of 52 pages
The undertaking to file reports
Representation pursuant to Section 26(e)(2)(A)
The Rule 484 undertaking
The signatures
Written consent of the following persons:
(a) Roger Hallquist, Actuary
(b) John D. Cleavenger, Esq.
(c) Sutherland Asbill & Brennan LLP
(d) Ernst & Young LLP
II-1
<PAGE>
The following exhibits:
1. The following exhibits correspond to those required by paragraph A to
the instructions as to exhibits in Form N-8B-2:
A. (1) Resolution of the Board of Directors of PFL Life
establishing PFL Variable Life Account A (the
"Separate Account") @
(2) Not Applicable (Custody Agreement)
(3) Distribution of Policies
(a) Form of Principal Underwriting Agreement (1)
(b) Form of Broker-Dealer Supervision and Sales
Agreement (1)
(4) Not Applicable (Agreements between PFL Life, the
principal underwriter, or custodian other than those
set forth above in A. (1), (2), and (3))
(5) Specimen Flexible Premium Variable Life Insurance
Policy @
(a) Waiver of Premium Benefit @
(b) Waiver of Monthly Deduction @
(c) Level One-Year Term Insurance @
(d) Additional Insured's Level One-Year Term
Insurance @
(e) Accidental Death Benefit @
(f) Guaranteed Insurability Benefit @
(g) Income Replacement Benefit @
(h) Monthly Benefit @
(i) Disability Income/Waiver of Premium Benefit
Rider @
(j) Children's Benefit Rider @
(6) (a) Certificate of Incorporation of PFL Life (2)
(b) By-Laws of PFL Life (2)
(7) Not Applicable (Any insurance policy under a contract
between the Separate Account and PFL Life)
(8) (a) Form of Participation Agreement regarding
Janus Aspen Series (1)
(b) Form of Participation Agreement regarding
AIM Variable Insurance Funds, Inc. (1)
(c) Form of Participation Agreement regarding
Oppenheimer Variable Account Funds (1)
(d) Form of Participation Agreement regarding
Fidelity Variable Insurance Products
Funds (1)
(9) Not Applicable (All other material contracts
concerning the Separate Account)
(10) Application for Flexible Premium Variable Life
Insurance Policy @
(11) Memorandum describing issuance, transfer and
redemption procedures (1)
2. Opinion of Counsel as to the legality of the securities being
registered (1)
II-2
<PAGE>
3. Not Applicable (Financial statements omitted from the prospectus
pursuant to Instruction 1(b) or (c) of Part I
4. Not Applicable
5. Opinion and consent of Roger Hallquist as to actuarial matters
pertaining to the securities being registered
6. Consent of Sutherland Asbill & Brennan LLP (1)
7. Consent of Ernst & Young LLP (1)
8. Powers of Attorney @
- -------------------------------------------
@ Filed herewith
(1) To be filed by amendment.
(2) Incorporated herein by reference to Pre-Effective Amendment No. 2 to
the Registration Statement on Form N-3 (File No. 333-36297) filed on
February 27, 1998.
II-3
<PAGE>
Pursuant to the requirements of the Investment Company Act of 1940, the
Depositor of the Registrant has caused this registration Statement to be duly
signed on behalf of the Registrant in the City of Cedar Rapids, and the State of
Iowa on the 9th day of September, 1999.
[Seal]
PFL VARIABLE LIFE ACCOUNT A
---------------------------
(Name of Registrant)
By: PFL LIFE INSURANCE COMPANY
------------------------------
(Name of depositor)
By: /s/ CRAIG D. VERMIE
------------------------
Typed Name: CRAIG D. VERMIE
Title: Vice President, Secretary and General Counsel
Attest: /s/ R. HANNEN
--------------------
Typed Name: ROSIE HANNEN
Title: EXECUTIVE ASSISTANT
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant, PFL
Variable Life Account A, has duly caused this Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized, and its seal
to be hereunto affixed and attested, all in the City of Cedar Rapids and State
of Iowa on the 9th day of September, 1999.
(Seal) PFL VARIABLE LIFE ACCOUNT A
- ------ ---------------------------
(Registrant)
PFL LIFE INSURANCE COMPANY
--------------------------
(Depositor)
/s/ CRAIG D. VERMIE /s/ WILLIAM L. BUSLER
- ------------------------ ----------------------------------
Craig D. Vermie William L. Busler
Vice President, Secretary President, Chairman of the Board
General Counsel and Director and Chief Executive Officer
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the dates indicated.
Signature and Title Date
/s/ WILLIAM L. BUSLER September 7, 1999
- -------------------------------
William L. Busler
President, Chairman of the Board,
Chief Executive Officer and President
/s/ PATRICK S. BAIRD September 9, 1999
- -------------------------------
Patrick S. Baird
Senior Vice President and Director
/s/ CRAIG D. VERMIE September 9, 1999
- -------------------------------
Craig D. Vermie
Vice President, Secretary,
General Counsel and Director
/s/ LARRY N. NORMAN September 7, 1999
- -------------------------------
Larry N. Norman
Executive Vice President and Director
/s/ DOUGLAS C. KOLSRUD September 7, 1999
- -------------------------------
Douglas C. Kolsrud
Senior Vice President, Chief
Investment Officer, Corporate
Actuary and Director
/s/ ROBERT J. KONTZ September 9, 1999
- -------------------------------
Robert J. Kontz
Vice President and Corporate Controller
/s/ BRENDA K. CLANCY* September 9, 1999
- -------------------------------
Brenda K. Clancy*
Vice President, Treasurer and
Financial Officer (Principal
Financial Officer)
<PAGE>
EXHIBIT INDEX
1.A.
(1) Resolution of the Board of Directors of PFL Life establishing
PFL Variable Life Account A
(5) Specimen Flexible Premium Variable Life Insurance Policy
(a) Waiver of Premium Benefit
(b) Waiver of Monthly Deduction
(c) Level One-Year Term Insurance
(d) Additional Insured's Level One-Year Term Insurance
(e) Accidental Death Benefit
(f) Guaranteed Insurability Benefit
(g) Income Replacement Benefit
(h) Monthly Benefit
(i) Disability Income/Waiver of Premium Benefit Rider
(8) Powers of Attorney
(10) Application for Flexible Premium Variable Life Insurance
Policy
EXHIBIT 1
CERTIFICATION
I, Sara L. Haas, being a duly constituted Assistant Secretary of PFL
Life Insurance Company, hereby certify that the following is a true and correct
copy of resolutions duly adopted by the Board of Directors of the Company by
Written Consent dated July 1, 1999 and that said resolutions are still in full
force and effect:
RESOLVED, that, in accordance with Iowa Insurance Law Section 508A.1
the officers of the Company be and they are authorized to establish the
PFL Variable Life Account A, as a separate account (the "Account");
BE IT FURTHER RESOLVED that the Account shall be established for the
purpose of funding variable life insurance policies ("Policies") which
may be issued by the Company and shall constitute a separate account
into which are allocated amounts paid to the Company which are to be
applied under the terms of said Policies; and
BE IT FURTHER RESOLVED that the income, gains and losses, whether or
not realized, from assets allocated to the Account shall, in accordance
with the Policies, be credited to or charged against such Account
without regard to either income, gains or losses of another separate
account or of the Company; and
BE IT FURTHER RESOLVED that the portion of the assets of the Account
equal to the reserves and other policy liabilities with respect to the
Account shall not be chargeable with liabilities arising out of any
other business the Company may conduct; and
BE IT FURTHER RESOLVED that separate investment divisions be, and
hereby are, established within the Account to which payments under the
Policies will be allocated in accordance with instructions received
from policy owners, and that the appropriate officers be, and hereby
are, authorized to add, combine or remove any investment division of
the Account as they deem necessary or appropriate; and
<PAGE>
BE IT FURTHER RESOLVED that the income, gains and losses, whether or
not realized, from assets allocated to each investment division of the
Account shall in accordance with the Policies, be credited to or
charged against such investment division of the Account without regard
to other income, gains or losses of any other investment division of
the Account; and
BE IT FURTHER RESOLVED that the appropriate officers be authorized to
deposit such amount in the Account or in each investment division
thereof as may be necessary or appropriate to facilitate the
commencement of the Account's operations; and
BE IT FURTHER RESOLVED that the appropriate officers are authorized to
transfer funds from time to time between the Company's general account
and the Account in order to establish the Account or to support the
operation of the Policies with respect to the Account as deemed
necessary or appropriate and consistent with the terms of the Policies;
and
BE IT FURTHER RESOLVED that the appropriate officers of the Company are
authorized to change the designation of the Account to such other
designation as they may deem necessary or appropriate; and
BE IT FURTHER RESOLVED that the appropriate officers of the Company,
with such assistance from the Company's auditors, legal counsel and
independent consultant or others as they may require, be, and they
hereby are, authorized and directed to take all action necessary to:
(a) register the Account as a unit investment trust under the
Investment Company Act of 1940, as amended, and to change the
classification under which the Account is registered or to de-register
the Account as they deem necessary or appropriate; (b) register the
Policies in such amounts, which may be an indefinite amount, as the
officers of the Company shall from time to time deem appropriate under
the Securities Act of 1933; and (c) take all other actions which are
necessary in connection with the offering of said Policies for sale and
the operation of the Account in order to comply with the Investment
Company Act of 1940, as amended, the Securities Exchange Act of 1934
and the Securities Act of 1933, and other applicable Federal laws,
including the filing of any registration statements, any amendments to
registration statements, any undertakings, any applications, and any
amendments to such applications, for exemptions from the Investment
Company Act of 1940, as amended, or exemptions from other applicable
Federal laws as the officers of the Company shall deem necessary or
appropriate; and
BE IT FURTHER RESOLVED that the appropriate officers are authorized and
empowered to prepare, execute and cause to be filed with the Securities
and Exchange Commission on behalf of the Account, and by the Company as
sponsor and depositor, documents necessary for registering the Account
as an investment company under the Investment Company Act of 1940, as
amended, documents necessary for registering the Policies under
2
<PAGE>
the Securities Act of 1933, any applications for exemptions from the
Investment Company Act of 1940, as amended, or other applicable Federal
laws, and any and all amendments to the foregoing on behalf of the
Account and the Company and on behalf of and as attorneys for the
principal executive officer and/or the principal financial officer
and/or the principal accounting officer and/or any other officer of the
Company; and
BE IT FURTHER RESOLVED that John Cleavenger of 4333 Edgewood Road NE,
Cedar Rapids, Iowa 52499 is appointed agent for service under such
registration statements and is duly authorized to receive communication
and notices from the Securities and Exchange Commission with respect
thereto; and
BE IT FURTHER RESOLVED that the Company be authorized and directed to
obtain any required approvals with respect to the establishment of the
Account and marketing of the Policies, from the Commissioner of
Insurance of Iowa, and any other statutory or regulatory approvals
required by the Company as an Iowa Corporation; and
BE IT FURTHER RESOLVED that the appropriate officers of the Company be,
and they hereby are, authorized on behalf of the Account and on behalf
of the Company to take any and all action they may deem necessary or
advisable in order to sell the Policies, including any registrations,
filings, and qualifications of the Company, its officers, agents and
employees, and the Policies under the insurance and securities laws of
any of the states of the United States of America or other
jurisdiction, and in connection therewith to prepare, execute, deliver
and file all such applications, reports, covenants, resolutions,
applications for exemptions, consents to service of process, and other
papers and instruments as may be required under such laws, and to take
any and all further action which may be required under such law, and to
take any and all further action which said officers or counsel of the
Company may deem necessary or desirable (including entering into
whatever agreement may be necessary) in order to maintain such
registrations or qualifications for as long as the said officers or
counsel deem it to be in the best interests of the Account and the
Company; and
BE IT FURTHER RESOLVED that the appropriate officers are authorized in
the name and on behalf of the Account and the Company to execute and
file irrevocable written consent on the part of the Account and of the
Company to be used in such states wherein such consents to service of
process may be required under the insurance or securities laws therein
in connections with said registration or qualification of Policies and
to appoint the appropriate state official or such other person as may
be allowed by said insurance or securities laws, agent of the Account
and of the Company for the purpose of receiving and accepting process;
and
3
<PAGE>
BE IT FURTHER RESOLVED that the appropriate officers are authorized to
cause the Company to institute procedures for providing voting rights
for owners of such Policies with respect to securities owned by the
Account; and
BE IT FURTHER RESOLVED that the appropriate officers are authorized to
execute such agreement or agreements as deemed necessary and
appropriate with underwriters and distributors for the Policies to
provide distribution services, and with one or more qualified banks or
other qualified entities to provide administrative and/or custodial
services, all in connection with the establishment, operation and
maintenance of the Account and the design, issuance, and administration
of the Policies; and
BE IT FURTHER RESOLVED that the Company be authorized as deemed
necessary and appropriate either to enter into an agreement with a
qualified custodial bank for the purpose of the safekeeping of the
assets of the Account, or to undertake this safekeeping and custody of
assets after seeking and obtaining the required exemptive relief from
the Securities Exchange Commission; and
BE IT FURTHER RESOLVED that the appropriate officers of the Company,
and each of them are, hereby authorized to execute and deliver all such
documents and papers to do or cause to be done all such acts and things
as they may deem necessary or desirable to carry out the foregoing
resolutions and the intent and purposes thereof; and
BE IT FURTHER RESOLVED that the term "appropriate officers" as used
herein, shall include all of the elected and appointed officers of the
Company, either severally or individually, subject to any applicable
resolutions of the Board of Directors dealing with signing authority
for the Company.
Dated at Cedar Rapids, Iowa, this 1st day of July, 1999.
BY: /s/ SARA L. HAAS
--------------------------------------
Sara L. Haas
4
EXHIBIT 5
[PFL LIFE LOGO] PFL Life Insurance Company
A Stock Company
Home Office located at:
4333 Edgewood Road N.E.,
Cedar Rapids, Iowa 52499
(Hereafter called the Company, we our or us)
(319)398-8511
INSURED: JOHN DOE INITIAL FACE AMOUNT: $100,000
POLICY NUMBER: 710 01 sample POLICY DATE: July 01, 1999
OWNER: JOHN DOE
WE AGREE -To pay Proceeds of this policy to the beneficiary upon receiving
due proof of the Insured's death prior to the Maturity Date. THE
AMOUNT OF THE DEATH BENEFIT PROCEEDS WILL INCREASE OR DECREASE
DEPENDING ON THE INVESTMENT EXPERIENCE OF THE SUB-ACCOUNTS IN THE
SEPARATE ACCOUNT AND ON THE DEATH BENEFIT OPTION SELECTED AS
DESCRIBED IN THE DEATH BENEFIT PROVISION.
-To pay the Proceeds of this policy to the Owner if the Insured is
living on the Maturity Date. POLICY VALUES WILL INCREASE OR
DECREASE IN ACCORDANCE WITH THE POLICY VALUE PROVISIONS AND THE
INVESTMENT EXPERIENCE OF THE SUB-ACCOUNTS IN THE SEPARATE
ACCOUNT. POLICY VALUES ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
-To provide you with the other rights and benefits of this policy.
These agreements are subject to the provisions of this policy.
10 DAY RIGHT You may cancel this policy by delivering or mailing a written
request to us or to the agent from whom it was purchased. You
must return the policy to us or the agent before midnight of the
tenth day after the day you receive it. Your written request
given by mail and return of the policy by mail are effective on
being postmarked, properly addressed and postage prepaid. We must
return all payments made for this policy, less any withdrawals
and indebtedness, after we receive notice of cancellation and the
returned policy.
Signed for us at our home office.
[SIGNATURE] [SIGNATURE]
SECRETARY PRESIDENT
This policy is a legal contract between the policyowner and the Company.
READ YOUR POLICY CAREFULLY
Benefits paid under the Terminal Illness Accelerated Death Benefit
may be considered taxable income to you. We urge you to consult
your personal tax advisor regarding matters of possible taxation.
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
TERMINAL ILLNESS ACCELERATED DEATH BENEFIT
PREMIUMS PAYABLE TO MATURITY DATE OR UNTIL PRIOR DEATH OF INSURED
PROCEEDS PAYABLE AT DEATH OR MATURITY DATE
NON-PARTICIPATING
SOME BENEFITS REFLECT INVESTMENT RESULTS
<PAGE>
DEFINITIONS
When we use the following words, this is what we mean:
ACCOUNTS Allocation options including the Fixed Account and the
Sub-accounts of the Separate Account.
AGE The Insured's age at the Insured's last birthday.
BENEFICIARY The person to receive the proceeds in the event of the
Insured's death.
DEATH BENEFIT Includes any Policy or Rider which provides a death
benefit on the Insured, excluding the supplementary
rider for accidental death benefit.
FIXED ACCOUNT Allocation option other than the Separate Account.
FUND A designated investment fund from which each
Sub-account of the Separate Account will buy shares.
IMMEDIATE A spouse, child, brother, sister, grandparent or
FAMILY grandchild of the Insured or Owner.
INDEBTEDNESS All policy loans, if any, plus any accrued interest you
owe.
IN FORCE The period of time the Insured's life remains insured
under the terms of this policy.
INSURED The person whose life is insured under this policy as
shown on page 3.
INVESTMENT The later of the Policy Date or the date the first
START DATE premium is received at our home office.
MATURITY DATE The first Policy Anniversary following the Insured's
100th birthday.
MONTHLY DATE The same day of each month as the Policy Date.
PHYSICIAN An individual licensed to practice medicine and treat
injury or illness in the state in which treatment is
received and who is acting within the scope of that
license. A Physician must be someone other than:
(a) the Insured;
(b) the Owner;
(c) a person who lives with the Insured or Owner; or
(d) a person who is part of the Insured's or Owner's
Immediate Family.
PHYSICIAN'S A written statement acceptable to the Company and
STATEMENT signed by a Physician which:
(a) gives the Physician's diagnosis of the Insured's
terminal medical condition; and
(b) states with reasonable medical certainty the
terminal medical condition will result in the death
of the Insured within 12 months from the date of
the Physician's Statement. This statement must take
into consideration the ordinary and reasonable
medical care, advice, and treatment available in
the same or similar communities.
POLICY The same day and month as your policy date for each
ANNIVERSARY succeeding year your policy remains in force.
POLICY DATE The date coverage under this policy becomes effective
and the date from which policy anniversaries, policy
years, and policy months are determined.
PREMIUM A temporary holding account into which all premiums are
SUSPENSE allocated prior to the Investment Start Date. The
ACCOUNT Premium Suspense Account does not credit any interest
or investment return.
PAGE 2
<PAGE>
PROCEEDS The amount we are obligated to pay under the terms of
this policy when your policy is surrendered or when
the Insured dies. Upon Maturity the proceeds are
equal to the Cash Surrender Value providing the
Insured is living.
REINSTATE To restore coverage after the policy has lapsed.
SEC The United States Securities and Exchange Commission.
SEPARATE A separate investment account shown on the Policy
ACCOUNT Specifications Page, which is composed of several
Sub-accounts established to receive and invest Net
Premiums under the Policy.
SPECIFIED The amount upon which death benefits are determined.
AMOUNT The Initial Specified Amount is shown on page 3.
SUB-ACCOUNT A sub-division of the Separate Account. Each
Sub-account invests exclusively in the shares of a
specified Fund Portfolio.
TERMINAL A condition resulting from injury or illness which, as
CONDITION determined by a Physician, has reduced the Insured's
life expectancy to not more than 12 months from the
date of the Physician's Statement.
TERMINATE The Insured's life is no longer insured under any of
the terms of this policy.
VALUATION DATE Any day we are required by law to value the assets of
the Separate Account.
VALUATION The period commencing at the end of one Valuation Date
PERIOD and continuing to the end of the next succeeding
Valuation Date.
WRITTEN REQUEST A request in writing signed by you on a form agreeable
to us.
YOU, YOUR The owner of this policy is as shown in the
application, unless subsequently changed as provided
for in this policy. The owner is the Insured unless
otherwise stated.
PAGE 2A
<PAGE>
POLICY SPECIFICATIONS PAGE
POLICY NUMBER: 710 01 SAMPLE INSURED: JOHN DOE
INITIAL SPECIFIED AMOUNT: $100,000 AGE/SEX: 35 / MALE
MINIMUM SPECIFIED AMOUNT: $100,000 POLICY DATE: July 1, 1999
DEATH BENEFIT OPTION: LEVEL MATURITY DATE: JULY 1, 2064
NO LAPSE ENDING DATE: JULY 1, 2019
OWNER: JOHN DOE
ADMINISTRATIVE CHARGE:
GUARANTEED: $10.00 per month (all years)
CURRENT: $10.00 per month (all years)
EXPENSE CHARGE:
GUARANTEED: 5.00% of any premium collected (all years)
CURRENT: 5.00% of any premium payment collected (years 1-10)
2.50% of any premium payment collected (years 11+)
PARTIAL WITHDRAWAL FEE: lesser of $25.00 or 2% of amount withdrawn
TRANSFER FEE: $25.00 for the 13th and any subsequent transfers in a policy
year.
SEPARATE ACCOUNT PROVISIONS:
SEPARATE ACCOUNT: PFL Variable Life Account A
MORTALITY AND EXPENSE RISK CHARGE: 0.00002047 daily (0.75% annually)
Premiums are payable to Maturity Date or until prior death of the Insured. It is
possible that coverage will expire prior to the Maturity Date where either no
premiums are paid following payment of the Initial Premium or subsequent
premiums are insufficient to continue coverage to such date. Coverage will be
affected by changes in the current interest rate for the Fixed Account, Loans,
Withdrawals, Administrative and Expense Charges, and Cost of Insurance in
addition to the investment experience of the Sub-accounts of the Separate
Account.
If the insured is living on the Maturity Date, we will pay the Proceeds equal to
the Cash Surrender Value, if any, to you.
THE TAX STATUS OF THIS POLICY MAY CHANGE. WE URGE YOU TO CONSULT YOUR PERSONAL
TAX ADVISOR EACH YEAR REGARDING MATTERS OF POSSIBLE TAXATION.
PREMIUM CLASS: TOBACCO
TYPE PAYABLE TO PLANNED
OF SPECIFIED INSURED'S PREMIUM
COVERAGE AMOUNT AGE PAYMENTS
(ANNUAL)
BASIC POLICY $100,000 100 $1,080.00
Total Planned Premium Payments.........................................$1,080.00
Basic Policy Initial Premium..... .....................................$1,080.00
PAGE 3
<PAGE>
SURRENDER CHARGES
End of Surrender End of Surrender
POLICY YEAR CHARGE POLICY YEAR CHARGE
----------- ------ ----------- --------
1 $2,800 11 $1,400
2 2,660 12 1,260
3 2,520 13 1,120
4 2,380 14 980
5 2,240 15 840
6 2,100 16 700
7 1,960 17 560
8 1,820 18 420
9 1,680 19 280
10 1,540 20 0
PAGE 3A
<PAGE>
<TABLE>
<CAPTION>
TABLE OF MINIMUM MONTHLY PREMIUMS
END OF YEAR END OF YEAR
SUM OF ALL SUM OF ALL
MINIMUM MINIMUM MINIMUM MINIMUM
MONTHLY MONTHLY MONTHLY MONTHLY
POLICY YEAR PREMIUM PREMIUMS POLICY YEAR PREMIUM PREMIUMS
- ------------- -------- ----------- ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
1 $43.33 $ 519.96 11 $43.33 $ 5,719.56
2 43.33 1,039.92 12 43.33 6,239.52
3 43.33 1,559.88 13 43.33 6,759.48
4 43.33 2,079.84 14 43.33 7,279.44
5 43.33 2,599.80 15 43.33 7,799.40
6 43.33 3,119.76 16 43.33 8,319.36
7 43.33 3,639.72 17 43.33 8,839.32
8 43.33 4,159.68 18 43.33 9,359.28
9 43.33 4,679.64 19 43.33 9,879.24
10 43.33 5,199.60 20 43.33 10,399.20
</TABLE>
PAGE 3B
<PAGE>
PART 1. GENERAL PROVISIONS
THE CONTRACT Your policy is issued in consideration of the application
and the payment of premiums as provided for in this policy.
Your policy and the copy of the application attached to it
contain the entire contract between you and us. Any
statements made in the application either by you or by the
Insured will, in the absence of fraud, be considered
representations and not warranties. Also, any written
statement made either by you or by the Insured will not be
used to void your policy nor defend against a claim under
your policy unless the statement is contained in the
application.
No change or waiver of any of the provisions of this policy
will be valid unless made in writing by us and signed by
our president, a vice president, our secretary or an
officer of the company. No agent or other person has the
authority to change or waive any provision of your policy.
Any extra benefit rider attached to this policy will become
a part of this policy and will be subject to all the terms
and conditions of this policy unless we state otherwise in
the rider.
SUICIDE If the Insured, whether sane or insane, dies by suicide
within two years from the Policy Date, our liability will
be limited to an amount equal to the premiums paid for this
policy.
If the Insured, whether sane or insane, dies by suicide
within two years from the effective date of any increase in
the Specified Amount, our liability for the amount of
increase will be limited to the Cost of Insurance for the
increase.
If you were a Missouri citizen at the time of issue or
reinstatement, the following provision will apply: The
suicide of the Insured is no defense to payment of regular
life insurance benefits, nor is the suicide of the Insured
while insane a defense to payment of accidental death
benefits, if any, available under this policy, unless we
can show that the Insured intended suicide when he applied
for these benefits.
If this Policy is reinstated, this Section will be
reinstated. A new two-year period shall apply beginning on
the date of reinstatement. If the Insured, whether sane or
insane, dies by suicide within two years from the
reinstatement date, our liability will be limited to an
amount equal to the premiums paid from the date of
reinstatement.
INCONTESTABILITY We cannot contest this policy, except for fraud or
non-payment of Monthly Deduction, after it has been
in force during the lifetime of the Insured for two
years after:
(a) the Policy Date;
(b) the effective date of any increase in the Specified
Amount, and then only for the increased amount; or
(c) the effective date of reinstatement of this policy.
In the absence of fraud, only statements material to such
reinstatement shall be contested during the lifetime of the
Insured for two years after the effective date of
reinstatement.
ASSIGNMENT You may assign your policy. The assignment must be in
writing and filed at our home office. We assume no
responsibility for the validity or effect of any assignment
of this policy or of any interest in it. Any proceeds which
become payable to an assignee will be payable in a single
sum and will be subject to proof of the assignee's interest
and the extent of the assignment.
PAGE 4
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MISSTATEMENT If the age and/or sex of the Insured has been misstated,
OF AGE OR SEX the death benefits will be adjusted to that which would
have been purchased by the most recent cost of insurance
charge at the correct age and/or sex.
BENEFICIARY When we receive due proof of the Insured's death, we will
pay the proceeds of this policy to the beneficiary or
beneficiaries who are named in the application for this
policy unless you subsequently change the beneficiary. In
that event, we will pay the proceeds to the beneficiary
named in your last change of beneficiary request as
provided for in this policy.
If a primary or contingent beneficiary dies before the
Insured, that beneficiary's interest in this policy ends
with that beneficiary's death. Only those beneficiaries who
survive the Insured will be eligible to share in the
proceeds. If no beneficiary survives the Insured, we will
pay the proceeds of this policy to you, if living,
otherwise to your estate.
CHANGE OF OWNER If you have reserved the right to change the owner or
OR BENEFICIARY beneficiary, you can file a written request with us on a
form satisfactory to the Company to make such a change. If
you have not reserved the right to change the beneficiary,
the written consent of the irrevocable beneficiary will be
required.
Your written request will not be effective until it is
recorded in our home office records. After it has been so
recorded, it will take effect as of the date you signed the
request. However, if the Insured dies before the request
has been so recorded, the request will not be effective as
to those proceeds we have paid before your request was
recorded in our home office records.
NONPARTICIPATING This policy will not share in our surplus distributions.
ILLUSTRATIVE A new projection is available on an annual basis.
REPORTS Additional projections are available but may incur a fee,
not to exceed $25.00.
PREMIUMS The Initial Premium is the premium due on the Policy Date,
and is payable in advance. All premiums are payable to us
in advance and must be mailed to our home office or to an
agent authorized by us to collect premiums. A premium
receipt signed by a company officer will be provided upon
request.
PLANNED PREMIUM The amount and frequency of the planned premium payments
PAYMENTS are shown on page 3 of your policy. However, premium
payments are flexible and the Owner may change the amount
and frequency of payments.
Interruption of planned premium payments or reduction in
the amount of planned premium payments may cause your
policy to enter the Grace Period prior to Maturity Date.
UNSCHEDULED Additional premiums may be paid at any time before the
PREMIUMS Maturity Date, provided that the policy is in force and
there is no indebtedness.
We reserve the right to limit the amount of premiums that
may be paid on the policy if we determine that: (a) the
amount is below our current minimum payment requirement; or
(b) payment of a greater amount may cause the proceeds of
this policy to lose their tax status as life insurance
under the Internal Revenue Code; or (c) payment of a
greater amount would increase the Death Benefit by
application of the Death Benefit Ratio (unless we are
provided evidence of insurability satisfactory to us.)
The minimum amount of any premium that will be accepted is
$25.00.
PAGE 5
<PAGE>
CONTINUATION If planned premium payments are not paid and no unscheduled
OF COVERAGE premiums are received, this policy will continue in force
unless the conditions of the Grace Period provision apply.
If the Insured is living on the Maturity Date, any proceeds
will become payable unless a different nonforfeiture option
has been elected.
GRACE PERIOD If the Cash Surrender Value on any Monthly Date is not
sufficient to pay the Monthly Deduction then due, a grace
period of 61 days will begin when notice has been sent to
your last known address of record. If sufficient premium is
not paid by the end of the grace period, the policy will
terminate without value. If the Insured dies during the
grace period, we will pay the Death Benefit, less any
indebtedness and any unpaid Monthly Deduction.
During the period beginning on the Policy Date and ending
on the No Lapse Ending Date shown on page 3, the policy
will not enter the grace period if on any Monthly Date the
sum of the premiums that have been paid, less any
indebtedness and partial withdrawals, equals or exceeds the
sum of all Minimum Monthly Premiums beginning with the
Policy Date. The Minimum Monthly Premium is the amount you
must pay to guarantee coverage until the No Lapse Ending
Date listed on the Policy Specifications Page.
For the period beginning on the Policy Date and ending on
the No Lapse Ending Date, the Minimum Monthly Premiums and
the sum of all Minimum Monthly Premiums for each policy
year are shown on page 3B. The Minimum Monthly Premium is
increased for each policy month following the date of an
increase in the Specified Amount, or when an extra benefit
rider is added or increased. The Minimum Monthly Premium is
decreased for each policy month following the date an extra
benefit rider is decreased or discontinued. The Minimum
Monthly Premium will not decrease following the date of
decrease in the Specified Amount. The new Minimum Monthly
Premiums will be shown on a new page 3B. Any new No Lapse
Ending Date will be shown on a new page 3.
In any case, the policy will lapse if the total
indebtedness equals or exceeds the Cash Surrender Value.
REINSTATEMENT If a premium is not received before the end of the 61 day
grace period, your policy will terminate without value and
no further premium payments may be made.
However, even if your policy terminates, during the
lifetime of the Insured, this policy can be reinstated if
it was terminated because a grace period ended without
sufficient payment. Any reinstatement must be done within 5
years from the end of the grace period. We will require:
(1) Your written request to reinstate this policy,
(2) the Insured's written consent to reinstatement,
(3) Evidence of insurability satisfactory to us,
(4) Payment or reinstatement of any indebtedness, and
(5) Payment of enough premium to keep this policy in force
for at least 3 months.
The date of reinstatement will be the Monthly Date on or
following the date the application for reinstatement is
approved by us, so long as the Insured is still living. If
all the conditions for reinstatement are satisfied,
coverage under this Policy will be effective as though it
had continued in force from the lapse date to the date of
reinstatement.
Your policy cannot be reinstated if your policy was
surrendered for cash.
PAGE 6
<PAGE>
PARTIAL After the first policy year, one cash withdrawal per policy
WITHDRAWALS year may be made during the lifetime of the Insured. We
must receive a written request at our home office.
The withdrawal amount will be equal to the amount of the
withdrawal requested plus a fee equal to the lesser of
$25.00 or 2% of the amount requested for each withdrawal.
No surrender charges apply to partial withdrawals. The
minimum withdrawal amount is $500.00. You must specify the
Account from which the withdrawal will be taken. The
withdrawal fee will be removed from one of the Accounts.
The Policy Value will be reduced by the withdrawal amount.
If the Death Benefit Option of this policy is Level, the
Specified Amount will also be reduced by the withdrawal
amount (without the fee). However, no withdrawal will be
allowed if the resulting Specified Amount would be less
than the Minimum Specified Amount as shown on page 3.
If the amount of the withdrawal request is greater than or
equal to the Cash Surrender Value, or if less than $500 of
Cash Surrender Value remains, the withdrawal will be
considered a surrender and the Cash Surrender Value
provision will apply.
We reserve the right to defer any withdrawals from the
Fixed Account for the period allowed by law, but not more
than six months. We will not defer a withdrawal if it is to
be applied for the payment of premiums to us.
Reductions in the Specified Amount due to any Partial
Withdrawals will be in the following order:
1) To the most recent increase in the Specified Amount.
2) To the next most recent increase in the Specified
Amount.
3) To the Initial Specified Amount or the current Specified
Amount if less.
ANNUAL REPORT We will send you, at least once a year, an Annual Report
which shows the current Death Benefit, Policy Value, the
amount of indebtedness, premiums paid, and Monthly
Deductions since the last report. Additional activity
within each Sub-account showing investment experience will
also be provided.
POLICY PAYMENT All proceeds to be paid upon termination will be paid in
one sum unless otherwise elected under the Settlement
Options of this policy.
All payments and transfers from the Sub-accounts will be
processed as provided in this policy unless one of the
following situations exist:
1. The New York Stock Exchange is closed; or
2. The SEC requires that trading be restricted or declares
an emergency; or
3. The SEC allows us to defer payments to protect our
policyowners.
We reserve the right to defer the payment of any Fixed
Account values for the period permitted by law, but not
more than six months.
EXCHANGE At any one time the Owner may exercise the Exchange
PRIVILEGE Privilege, which results in the transfer of the entire
amount in the Sub-accounts to the Fixed Account, and the
allocation of all future net premiums to the Fixed Account.
This will serve as an exchange of the Policy for the
equivalent of a flexible premium fixed benefit life
insurance policy. No charge will be imposed on such
transfer.
PAGE 7
<PAGE>
Part 2. SEPARATE ACCOUNT PROVISIONS
SEPARATE ACCOUNT The variable benefits under this Policy are provided
through the Separate Account as shown on the Policy
Specifications page. The assets of the Separate Account are
our property. Assets equal to the reserve and other
contractual liabilities under all policies issued in
connection with the Separate Account will not be charged
with liabilities arising out of any other business we may
conduct. If the assets of the Separate Account exceed the
liabilities arising under the policies supported by the
Separate Account, then the excess may be used to cover
liabilities of our general account. The assets of the
Separate Account shall be valued as often as any policy
benefits vary, but at least monthly.
SUB-ACCOUNTS The Separate Account has various Sub-accounts with
different investment objectives. We reserve the right to
add or remove any Sub-account of the Separate Account.
Income, if any, and any gains or losses, realized or
unrealized, from assets in each Sub-account are credited
to, or charged against, the amount allocated to that
Sub-account without regard to income, gains, or losses in
other Sub-accounts. Any amount charged against the
investment base for federal or state income taxes will be
deducted from that Sub-account. The assets of each
Sub-account are invested in shares of a corresponding Fund
portfolio. The value of a portfolio share is based on the
value of the net assets of the portfolio determined at the
end of each Valuation Period in accordance with applicable
law.
TRANSFERS The owner may transfer all or a portion of this Policy's
value in each Account to other Accounts. We will charge a
$25 fee for each transfer in excess of twelve per policy
year. This charge will be deducted from one of the Accounts
from which funds were transferred. A request for a transfer
must be made in a form satisfactory to us. The transfer
will ordinarily take effect on the first Valuation Date on
or following the date the request is received by us in our
home office. We will treat all transfer requests received
on the same day as a single request. A minimum of $100 (or,
if the Account is less than $100, the entire amount in the
Account) must be transferred out of each Account from which
money is being transferred.
ADDITION, DELETION We reserve the right to transfer assets of the Separate
OR SUBSTITUTION Account, which we determine to be associated with the
OF INVESTMENTS class of contracts to which this policy belongs, to another
Separate Account. If this type of transfer is made, the
term "Separate Account", as used in this policy, shall mean
the Separate Account to which the assets were transferred.
We also reserve the right to add, delete, or substitute
investments held by any Sub-account.
We reserve the right, when permitted by law, to:
1. De-register the Separate Account under the Investment
Company Act of 1940;
2. Manage the Separate Account under the direction of a
committee at any time;
3. Restrict or eliminate any voting privileges of owners or
other persons who have voting privileges as to the
Separate Account;
4. Combine the Separate Account or any Sub-account(s) with
one or more other Separate Accounts or Sub-accounts;
5. Operate the Separate Account as a management investment
company;
6. Establish additional Sub-accounts to invest in either a
new Fund or in shares of another diversified, open-end
registered investment company;
7. Fund additional classes or variable life insurance
contracts through the Separate Account.
PAGE 8
<PAGE>
CHANGE OF We reserve the right to change the investment objective of
INVESTMENT a Sub-account. If required by law or regulation, an
OBJECTIVE investment objective of the Separate Account, or of a Fund
portfolio designated for a Sub-account, will not be
materially changed unless a statement of the change is
filed with and approved by the appropriate insurance
official of the state of our domicile or deemed approved in
accordance with such law or regulation. If required,
approval of or change of any investment objective will be
filed with the Insurance Department of the state where this
policy is delivered.
UNIT VALUE Some of the policy values fluctuate with the investment
results of the Sub-accounts. In order to determine how
investment results affect the policy values, a unit value
is determined for each Sub-account. The unit value of each
Sub-account was originally established at $10 per unit. The
unit value may increase or decrease from one Valuation
Period to the next. Unit values also will vary between
Sub-accounts. The unit value of any Sub-account at the end
of a Valuation Period is the result of:
1. The total value of the assets held in the Sub-account.
This value is determined by multiplying the number of
shares of the designated Fund portfolio owned by the
Sub-account times the net asset value per share; minus
2. The accrued charges for mortality and expense
experience. The daily amount of this charge is no
greater than the net assets of the Sub-account
multiplied by the Mortality and Expense Risk Charge
shown on the Policy Specifications page; minus
3. The accrued amount of reserve for any taxes or other
economic burden resulting from the application of tax
laws that are determined by us to be properly
attributable to the Sub-account; and the result divided
by
4. The number of outstanding units in the Sub-account.
The use of the unit value in determining contract values is
described in the Policy Values provisions.
PAGE 9
<PAGE>
Part 3. POLICY VALUES
SPECIFIED The Specified Amount for your policy is shown on page 3.
AMOUNT After the first Policy Anniversary, you may change the
Specified Amount at any time by sending a written request
to our home office, subject to the restrictions set forth
below for increases in the Specified Amount. However, you
may change the Specified Amount only once during a 12-month
period. Any change in the Specified Amount will take effect
on the first Monthly Date following approval of your
written request.
If you request a change in the Specified Amount or Death
Benefit Option, we will issue a new Policy Specifications
Page (page 3) upon approval.
INCREASE IN You may, prior to the Insured's age 86 and upon completion
THE SPECIFIED of a new application, increase the Specified Amount as
AMOUNT described above. Any increase will be subject to our
underwriting requirements as well as Suicide Exclusions and
Incontestability restrictions (see page 4).
DECREASE IN You may, upon written request, decrease the Specified
THE SPECIFIED Amount as described above. The decrease will be applied
AMOUNT against the most recent increase in the Specified Amount.
It will then be applied to other increases in the reverse
order in which they occurred. No decrease in Specified
Amount below the minimum shown on page 3 will be allowed.
DEATH BENEFIT This policy will provide the following death benefits:
INCREASING: The Death Benefit is the greater of the Specified Amount
plus the Policy Value or the Policy Value multiplied by the
Death Benefit Ratio.
LEVEL: The Death Benefit is the greater of the Specified Amount or
the Policy Value multiplied by the Death Benefit Ratio.
DEATH BENEFIT RATIOS
Attained Death Benefit Attained Death Benefit
Age Ratio Age Ratio
0-40 2.50 61 1.28
41 2.43 62 1.26
42 2.36 63 1.24
43 2.29 64 1.22
44 2.22 65 1.20
45 2.15 66 1.19
46 2.09 67 1.18
47 2.03 68 1.17
48 1.97 69 1.16
49 1.91 70 1.15
50 1.85 71 1.13
51 1.78 72 1.11
52 1.71 73 1.09
53 1.64 74 1.07
54 1.57 75-90 1.05
55 1.50 91 1.04
56 1.46 92 1.03
57 1.42 93 1.02
58 1.38 94 1.01
59 1.34 95-99 1.00
60 1.30
PAGE 10
<PAGE>
After the first Policy Anniversary, you may change the
Death Benefit Option upon written request but not more
often than once during a 12 month period. The change will
go into effect on the Monthly Date on or following the date
we approve the request.
If you change from LEVEL to INCREASING, the Specified
Amount will be decreased by the Policy Value. The resulting
Specified Amount must not be less than the minimum
Specified Amount shown on the Policy Specifications Page.
If you change from INCREASING to LEVEL, the Specified
Amount will be increased by the amount of the Policy Value.
The Death Benefit Option for this policy is disclosed on
page 3.
We will pay the Death Benefit, less any indebtedness and
any Monthly Deductions due, if the Insured dies while this
policy is in force, subject to the terms of this policy. We
will pay as soon as we receive written due proof at our
home office that the Insured has died. The Death Benefit
payable will be calculated as of the actual date of death.
INTEREST FROM If the proceeds under this policy are not paid within
DATE OF DEATH thirty days after we receive due proof of the death of the
Insured (or where required by law within thirty days after
the death of the Insured), we will pay interest on the
proceeds from the date of death to the date of payment. The
interest rate will be determined by us, but never less than
3%.
POLICY VALUE At the end of any Valuation Period, the Policy Value is
equal to the sum of the Sub-account values plus the Fixed
Account value.
NET PREMIUMS The Net Premium is any premium collected minus the Expense
Charge. The Expense Charge is disclosed on page 3. We may
use an Expense Charge lower than the Guaranteed Expense
Charge but will never charge in excess of the Guaranteed
Expense Charge. Any change in the Expense Charge will be
applied uniformly to all members of the same premium class.
ALLOCATION OF All net premiums received prior to the Investment Start
NET PREMIUMS Date will be allocated to the Premium Suspense Account. On
the first Valuation Date on or following the Investment
Start Date, the values in the Premium Suspense Account will
be transferred to the Sub-accounts of the Separate Account
and the Fixed Account in accordance with the Owner's
allocation as shown in the application. All net premiums
received on or after the Investment Start Date will be
allocated to the Sub-accounts of the Separate Account and
the Fixed Account on the first Valuation Date on or
following the date the premium is received at our home
office.
Any allocation to an Account is limited to no less than 5%
of total premium. No fractional percentages may be
permitted. No more than 10 accounts may be receiving
current premium allocations. The current premium allocation
may be changed by the Owner. Only 4 premium allocation
changes are permitted within one policy year. The request
for change of allocations must be in a form satisfactory to
us. The allocation change will be effective on the date the
request for change is recorded by us.
MONTHLY On the Policy Date and each Monthly Date thereafter, a
DEDUCTION Monthly Deduction will be withdrawn from the Policy Value.
Each Monthly Deduction consists of:
1. The monthly Cost of Insurance; plus
2. The Administrative Charge (see page 3); plus
3. Any premium for additional benefits provided by riders
(see page 3); plus
4. Any charges for substandard premium class rating.
Deductions will be withdrawn from each Sub-account and the
Fixed Account on a pro-rata basis.
PAGE 11
<PAGE>
COST OF The Monthly Cost of Insurance is determined by multiplying
INSURANCE the difference between the Death Benefit divided by
1.0024663 and the Policy Value at the beginning of each
month, by the Monthly Per Dollar Cost of Insurance Rate.
The Monthly Cost of Insurance Rate is based on the
Insured's:
-Sex,
-Attained age, and
-Premium class shown on page 3.
The Monthly Guaranteed Maximum Cost of Insurance Rates are
shown in the Insured's Guaranteed Maximum Cost of Insurance
Table on pages 18 and 18A. We may use Cost of Insurance
Rates lower than the guaranteed rates but will never charge
rates in excess of the Guaranteed Maximum Cost of Insurance
Rates. Any change in the Cost of Insurance Rates will be
applied uniformly to all members of the same premium class.
SUB-ACCOUNT At the end of any Valuation Period, the Sub-account value
VALUE is equal to the number of units that the Policy has in the
Sub-account, multiplied by the unit value of that
Sub-account.
The number of units that the Policy has in each Sub-account
is equal to:
1. The initial units purchased on the Investment Start
Date; plus
2. Units purchased at the time of additional Net Premiums
are allocated to the Sub-account; plus
3. Units purchased through transfers from another
Sub-account or the Fixed Account; minus
4. Those units that are redeemed to pay for monthly
deductions as they are due; minus
5. Any units that are redeemed to pay for partial
withdrawals; minus
6. Any units that are redeemed as part of a transfer to
another Account.
FIXED ACCOUNT At the end of any Valuation Period, the Fixed Account value
VALUE is equal to:
1. The sum of all Net Premiums allocated to the Fixed
Account; plus
2. Any amounts transferred from a Sub-account to the Fixed
Account; plus
3. Total interest credited to the Fixed Account; minus
4. Any amounts charged to pay for monthly deductions as
they are due; minus
5. Any amounts withdrawn from the Fixed Account to pay for
partial withdrawals; minus
6. Any amounts transferred from the Fixed Account to a
Sub-account.
We reserve the right to defer payment of any amounts from
the Fixed Account for no longer than six months after we
receive such written request.
INTEREST RATE The guaranteed interest rate for amounts in the Fixed
Account is .24663% per month, compounded monthly which is
equivalent to 3% per year, compounded annually.
We may use current interest rates greater than the
guaranteed rates to calculate the Fixed Account Value.
These interest rates will be declared by us. We may apply a
rate of interest less than the current rate to separate
portions of the Fixed Account Value including the amount of
the Fixed Account Value equal to any outstanding loan(s).
However, each rate cannot be less than the guaranteed rate.
If any interest in excess of the Guaranteed Interest Rate
is declared by us, the following interest rates will apply
to the Fixed Account Value. It will not be applied to the
portion of the Fixed Account Value equal to any outstanding
loans.
- For All Policy Years, the current interest rate will be
applied.
If no interest in excess of the guaranteed interest rate is
declared by us, the Guaranteed Interest Rate will be
applied to the total Fixed Account Value, including any
outstanding loans.
PAGE 12
<PAGE>
EXTENDED You may elect to extend the Maturity Date shown on page 3,
MATURITY DATE by submitting a written request to our home office. The
written request must be received in our office 30 days
prior to the original Maturity Date.
1. The Death Benefit will be equal to the greater of the
Death Benefit payable on the original Maturity Date or
the Policy Value multiplied by 1.05;
2. Interest will be credited to the Fixed Account Value as
stated in the Interest Rate section of the Policy Value
provisions;
3. The Sub-account Values, Policy Value and Cash Surrender
Value will continue as stated in the Policy. The
Administrative Charge and Expense Charge will be reduced
to zero;
4. Monthly Deductions will be calculated on a basis of the
Monthly Cost of Insurance being $0.00;
5. Interest will continue to accumulate on Policy Loans as
stated in the Loan Interest provision of the Policy;
6. The Extended Maturity Date will apply to the Base
Insured Rider if attached to the Policy. All other
riders attached to the Policy will terminate as of
original Maturity Date;
7. No future premium payments will be accepted, except for
the amount required for the Policy to continue in force;
8. No further Policy Loans may be initiated against the
Policy; and
9. You may not increase or decrease the Death Benefit.
This provision may not be exercised if the event of this
option disqualifies the Policy as life insurance under any
applicable section included in the Internal Revenue Code of
1986 (as amended).
page 13
<PAGE>
Part 4. LOAN VALUES
LOANS Upon written request you can borrow up to the available
Loan Value of your policy. The amount of any policy loan
may be limited to no less than $250, except as noted below.
The loan date is the date we process a loan request.
Payment will usually be made within seven days of the date
we receive proper loan request, subject to the Policy
Payment section of the General Provisions of this Policy.
Loans have priority over the claims of any assignee or
other person. Your policy is the sole security of all
loans.
The Loan Value of your policy is:
- 90% of the Cash Surrender Value, less six months of
Monthly Deductions.
A policy which becomes over-loaned will not lapse until one
month after notice has been mailed to the last known
address of the owner. Your policy will become over-loaned
when your total indebtedness equals or exceeds the Policy
Value, less any applicable Surrender Charge.
When a loan is made, an amount equal to the loan plus
interest in advance until the next Anniversary will be
withdrawn from the Accounts and transferred to the loan
reserve. The loan reserve is a portion of the Fixed Account
used as collateral for any policy loan. The owner must
specify the Account or Accounts from which the withdrawal
will be made.
At each anniversary, we will compare the amount of the
outstanding loan (including interest in advance until the
next Anniversary, if not paid) to the amount in the loan
reserve. We will also make this comparison anytime the
owner repays all or part of the loan. At each such time, if
the amount of the outstanding loan exceeds the amount in
the loan reserve, we will withdraw the difference from the
Accounts from which the loan originated, and transfer it to
the loan reserve, in the same fashion as when a loan is
made. If the amount in the loan reserve exceeds the amount
of the outstanding loan, we will withdraw the difference
from the loan reserve and transfer it to the Accounts in
accordance with the owner's current allocation
instructions. However, we reserve the right to require the
transfer to the Fixed Account if such loans were originally
transferred from the Fixed Account.
LOAN INTEREST The Loan Interest Rate is 5.66% per annum, charged in
PROVISION advance. On each policy anniversary loan interest for the
next year is due in advance. Interest not paid when due
will be added to the loan.
Certain loan amounts taken after the tenth policy
anniversary will be considered preferred loan amounts.
Preferred loan amounts are equal to 25% of the Policy
Value. The Loan Interest Rate for preferred loan amounts is
3.85% per annum, charged in advance.
LOAN REPAYMENT You can repay all or part of a loan at any time while this
policy is in force. Each payment must be at least $25.00
unless the loan amount is less than $25.00 in which case
full payment is required.
The policy will not lapse for failure to repay any loan or
interest until the total indebtedness shall equal or exceed
the Policy Value less any applicable Surrender Charge.
PAGE 14
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Part 5. NONFORFEITURE OPTIONS
CASH You may surrender your policy for its Cash Surrender Value
SURRENDER which may be paid in cash or under an elected Settlement
VALUE Option.
Your Cash Surrender Value is determined as follows:
- The Policy Value,
MINUS - The Surrender Charge, if any,
MINUS - Any Indebtedness.
We may require that your policy be sent in with your
written request before making surrender payment. We may
defer payment of any Cash Surrender Value earned from the
Fixed Account for not more than six months. When you
surrender your policy for its Cash Surrender Value, your
policy will terminate.
SURRENDER The Surrender Charges are disclosed on page 3A for the
CHARGE Initial Specified Amount. We may use Surrender Charges
lower than those shown, but will never charge in excess of
those shown on page 3A.
If an increase in the Specified Amount is requested and
approved, additional Surrender Charges will apply to the
policy. These additional Surrender Charges are shown on
pages 21, 21A, 22, and 22A. They are listed by the
Insured's attained age and sex at the time of the increase
and by duration.
REDUCED PAID- If you elect in writing, we will use the Cash Surrender
UP INSURANCE Value to buy a nonparticipating Paid-Up Endowment at Age
100 Insurance Policy at the net single premium rate for the
Insured's attained age for an amount equal to or less than
the current Specified Amount of this policy, payable under
the same conditions as this policy.
If there is any excess Cash Surrender Value remaining,
following the purchase of the paid-up insurance, such
excess shall be returned to you in cash.
If a Paid-Up Policy is surrendered the amount of surrender
proceeds is determined by multiplying the Endowment at Age
100 Net Single Premium at the Insured's then attained age
by the amount of Reduced Paid-Up Insurance.
BASIS USED FOR All Nonforfeiture Options for this policy are based on the
CALCULATION Commissioner's Male or Female 1980 Standard Ordinary
Mortality Table (S or NS), Age Last Birthday, with an
assumed interest rate of 3% compounded annually. Reserves
are not less than the required minimum reserves and shall
never be less than the Cash Surrender Value.
All of the values are equal to or greater than the minimums
set by laws of the states where the policy is delivered. If
required, we have filed a detailed statement about this
with your State Insurance Department. It shows the figures
and methods used.
PAGE 15
<PAGE>
Part 6. TERMINAL ILLNESS ACCELERATED DEATH BENEFIT
You may elect to receive a portion of the Policy's Death Benefit in a Single Sum
Benefit, when the Insured, specified on page 3, has incurred a Terminal
Condition while the policy is in force.
When we receive your request and proof satisfactory to us that the Insured has
incurred a Terminal Condition we will pay the Single Sum Benefit to the Owner.
We will make payment when all of the terms and conditions of proof have been met
and subject to the conditions and limitations within this benefit.
The Single Sum Benefit may only be elected once.
Payment of the Single Sum Benefit will result in reductions of the Policy's
values and benefits, as described below.
The Single Sum Benefit is equal to:
The Policy Death Benefit in effect on the date the Single Sum Benefit
is paid.
MULTIPLIED BY
The Election Percentage. A percentage equal to no less than 25% but no
more than 75% of the Policy's Death Benefit, subject to a maximum
benefits of $500,000. If the maximum benefit of $500,000 is paid, the
election percentage will equal $500,000 divided by the Policy's Death
Benefit. This could result in an election percentage of less than 25%.
DIVIDED BY
(1+ i), where i equals the greater of (A) and (B) on the date the
Single Sum Benefit is paid. (A) equals the current yield on 90 day
treasury bills; and (B) equals the current maximum statutory adjustable
Policy Loan Interest Rate.
MINUS
Indebtedness, if any, at the time the Single Sum Benefit is paid,
multiplied by the Election Percentage.
Benefit and The Policy's Specified Amount, Policy Value, Surrender
Value Charge, and Reduction indebtedness, if any, as those
amounts exist on the date the Single Sum Benefit is paid,
will be reduced by the Election Percentage. The Policy
Value in the Fixed Account and each Sub-account will be
reduced by the Election Percentage.
At the time of payment we will provide you with revised
policy specification pages which reflect the reduction of
all values applicable to the Policy and all benefits it
provides.
REQUEST FOR The Request for Acceleration may be given to us any time
ACCELERATION after the date the Insured incurs a Terminal Condition as
defined on page 2A. This request must identify the Insured
and be sent to us at our Home Office.
REQUEST FORMS We will send request forms to the Owner when the request
for acceleration is received. If we do not send the request
form within 15 days, the Owner will be considered to have
complied with the Proof of Terminal Condition requirements
by giving us a Physician Statement acceptable to us and a
written statement of the nature and extent of the Terminal
Condition.
PROOF OF TERMINAL Written proof of the Insured's Terminal Condition must be
CONDITION received by us at our Home Office before we will make a
Single Sum Benefit payment. This proof will include a
properly completed request form and a Physician Statement
acceptable to us. We may request additional medical
information from the Physician submitting the statement, or
any other Physician providing care to the Insured. We will
not unreasonably withhold our acceptance of Proof of
Terminal Condition. All benefits described in the provision
will be available as soon as we receive satisfactory Proof
of Terminal Condition.
PHYSICAL We reserve the right to have a Physician of our choosing
EXAMINATION examine the Insured, at our expense, prior to making a
Single Sum Benefit payment. In the event that the Physician
we choose provides a different diagnosis of the Insured's
medical condition, we reserve the right to rely on the
statement from the Physician of our choosing for
acceleration request purposes.
PAGE 16
<PAGE>
PAYMENT OF All terminal illness accelerated death benefits will be
ACCELERATED paid to the Owner. Upon the death of the Owner, if other
BENEFITS than the Insured, we will pay the benefits to the estate of
the Owner.
BENEFIT Payment of the Single Sum Benefit is subject to the
CONDITIONS following rules:
(a) You must complete a form provided by us, signed by the
Owner;
(b) The Policy must be in force;
(c) The Policy or an eligible term rider must not be within
two years of expiration or endowment at the time the
benefit is requested;
(d) If there is an irrevocable beneficiary or assignee,
they must consent in writing to payment of this
benefit;
(e) Your Policy is not eligible for this benefit if:
(1) the Terminal Condition is the result of
intentionally self-inflicted injuries;
(2) the Owner is required by law to use this benefit to
meet the claims of creditors, whether in bankruptcy
or otherwise; or
(3) you are required by a government agency to use this
benefit to apply for, obtain, or keep a government
benefit or entitlement; and
(f) You must provide proof that the Insured has met
conditions under the Benefits provision, including an
attending Physician's Statement and any other proof we
may require. We reserve the right to seek a second
medical opinion or have the Insured examined at our
expense by a Physician we choose.
ANNUAL The Annual Statement for this Policy will reflect payment
STATEMENT of the Single Sum Benefit, if paid during the prior year,
as well as resulting reductions in Policy Value, Death
Benefit, and remaining benefits and values.
CONSENT FOR We must obtain consent from any irrevocable beneficiary and
BENEFIT any assignee Payment record before the Single Sum Benefit
is paid. An assignee's consent is required only to the
extent that benefits paid would reduce this Policy's values
and benefits below the amounts assigned.
PAGE 17
<PAGE>
MALE AND FEMALE TOBACCO (T)
GUARANTEED MAXIMUM COST OF INSURANCE RATES**
<TABLE>
<CAPTION>
MALE FEMALE MALE FEMALE
MONTHLY COST MONTHLY COST MONTHLY COST MONTHLY COST
ATTAINED OF INSURANCE OF INSURANCE ATTAINED OF INSURANCE OF INSURANCE
AGE PER $1000* PER $1000* AGE PER $1000* PER $1000*
-------- ------------ ------------ --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
0 $ .2192 $ .1567 50 $ .8333 $ .5642
1 .0858 .0700 51 .9108 .6050
2 .0825 .0667 52 .9983 .6517
3 .0808 .0650 53 1.0975 .7033
4 .0775 .0642 54 1.2058 .7558
5 .0733 .0625 55 1.3217 .8100
6 .0692 .0608 56 1.4442 .8633
7 .0650 .0592 57 1.5733 .9133
8 .0625 .0583 58 1.7092 .9625
9 .0617 .0575 59 1.8550 1.0150
10 .0625 .0567 60 2.0175 1.0775
11 .0675 .0583 61 2.2008 1.1558
12 .0767 .0608 62 2.4075 1.2567
13 .0892 .0642 63 2.6383 1.3792
14 .1033 .0683 64 2.8908 1.5158
15 .1467 .0800 65 3.1583 1.6600
16 .1633 .0842 66 3.4383 1.8067
17 .1750 .0883 67 3.7283 1.9483
18 .1842 .0925 68 4.0325 2.0917
19 .1900 .0950 69 4.3625 2.2475
20 .1933 .0975 70 4.7267 2.4317
21 .1933 .0992 71 5.1358 2.6650
22 .1900 .1017 72 5.5983 2.9508
23 .1867 .1042 73 6.1108 3.2908
24 .1817 .1067 74 6.6725 3.6783
25 .1758 .1092 75 7.2725 4.1017
26 .1725 .1133 76 7.8858 4.5517
27 .1708 .1167 77 8.5017 5.0217
28 .1708 .1208 78 9.1242 5.5183
29 .1733 .1258 79 9.7750 6.0592
30 .1775 .1317 80 10.4758 6.6650
31 .1833 .1367 81 11.2467 7.3525
32 .1908 .1425 82 12.1008 8.1342
33 .2008 .1500 83 13.0242 9.0367
34 .2125 .1583 84 13.9858 10.0150
35 .2267 .1675 85 14.9533 11.0542
36 .2433 .1817 86 15.9033 12.1458
37 .2642 .1983 87 16.8783 13.2792
38 .2875 .2175 88 17.8942 14.4600
39 .3142 .2383 89 18.9042 15.6875
40 .3450 .2633 90 19.9233 17.0483
41 .3783 .2900 91 20.9833 18.5133
42 .4150 .3167 92 22.2125 20.1383
43 .4550 .3433 93 23.7892 22.0467
44 .4992 .3700 94 25.9392 24.6025
45 .5458 .3983 95 29.3217 28.4183
46 .5942 .4275 96 35.0825 34.4900
47 .6467 .4575 97 45.0833 44.7700
48 .7033 .4900 98 62.0958 61.9967
49 .7650 .5258 99 83.3333 83.3333
</TABLE>
* See Cost of Insurance, page 12.
** When any insurance is sold on a substandard risk, the guaranteed cost of
insurance rates shown above are increased 25% for each additional rating
class above standard.
PAGE 18
<PAGE>
MALE AND FEMALE NON-TOBACCO (NT)
GUARANTEED MAXIMUM COST OF INSURANCE RATES**
<TABLE>
<CAPTION>
MALE FEMALE MALE FEMALE
MONTHLY COST MONTHLY COST MONTHLY COST MONTHLY COST
ATTAINED OF INSURANCE OF INSURANCE ATTAINED OF INSURANCE OF INSURANCE
AGE PER $1000* PER $1000* AGE PER $1000* PER $1000*
-------- ------------ ------------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
0 $ .2192 $ .1567 50 $ .4275 $ .3617
1 .0858 .0700 51 .4667 .3892
2 .0825 .0667 52 .5117 .4208
3 .0808 .0650 53 .5633 .4558
4 .0775 .0642 54 .6208 .4917
5 .0733 .0625 55 .6850 .5300
6 .0692 .0608 56 .7550 .5683
7 .0650 .0592 57 .8292 .6058
8 .0625 .0583 58 .9117 .6433
9 .0617 .0575 59 1.0042 .6858
10 .0625 .0567 60 1.1075 .7358
11 .0675 .0583 61 1.2225 .7975
12 .0767 .0608 62 1.3550 .8742
13 .0892 .0642 63 1.5050 .9683
14 .1033 .0683 64 1.6717 1.0742
15 .1133 .0717 65 1.8542 1.1883
16 .1233 .0750 66 2.0517 1.3067
17 .1308 .0775 67 2.2633 1.4275
18 .1358 .0800 68 2.4933 1.5525
19 .1392 .0825 69 2.7483 1.6917
20 .1400 .0842 70 3.0367 1.8550
21 .1383 .0858 71 3.3658 2.0542
22 .1358 .0867 72 3.7458 2.2983
23 .1325 .0883 73 4.1758 2.5908
24 .1292 .0900 74 4.6483 2.9275
25 .1250 .0917 75 5.1533 3.3033
26 .1225 .0942 76 5.6867 3.7100
27 .1208 .0958 77 6.2442 4.1458
28 .1200 .0983 78 6.8292 4.6175
29 .1200 .1017 79 7.4600 5.1400
30 .1208 .1042 80 8.1567 5.7342
31 .1233 .1075 81 8.9375 6.4175
32 .1267 .1108 82 9.8183 7.2050
33 .1317 .1150 83 10.7950 8.0933
34 .1375 .1200 84 11.8483 9.0725
35 .1442 .1258 85 12.9542 10.1317
36 .1517 .1342 86 14.0983 11.2633
37 .1617 .1442 87 15.2633 12.4658
38 .1725 .1550 88 16.4442 13.7400
39 .1842 .1667 89 17.6575 15.0958
40 .1983 .1808 90 18.9208 16.5442
41 .2133 .1958 91 20.2633 18.1183
42 .2292 .2108 92 21.7350 19.8775
43 .2467 .2258 93 23.4792 21.9458
44 .2658 .2408 94 25.8192 24.6025
45 .2875 .2575 95 29.3217 28.4183
46 .3108 .2750 96 35.0825 34.4900
47 .3358 .2942 97 45.0833 44.7700
48 .3633 .3142 98 62.0958 61.9967
49 .3933 .3367 99 83.3333 83.3333
</TABLE>
* See Cost of Insurance, page 12.
** When any insurance is sold on a substandard risk, the guaranteed cost of
insurance rates shown above are increased 25% for each additional rating
class above standard.
PAGE 18A
<PAGE>
PART 7. PAYMENT OF PROCEEDS
SETTLEMENT You may, during the Insured's lifetime, request that we pay
OPTIONS the proceeds under one of the following settlement options.
We will also use any other method of payment that is
agreeable to you and us. The following options do not
depend on the investment experience of the Sub-Accounts.
OPTION 1 - Interest Payments -
(Payment of interest on the proceeds at such times and for
a period that is agreeable to you and us.) Withdrawal of
proceeds may be made in amounts of at least $100. At the
end of the period, any remaining proceeds will be paid in
either a single sum or under other any other method we
approve.
OPTION 2 - Payments for a Specified Period -
(Monthly payments for a specified number of years.) The
amount of each monthly payment for each $1,000 of proceeds
applied under this option is shown in Option 2 Table. The
monthly payments for any period not shown will be furnished
upon request.
Option 2 Table
PAYMENTS FOR A SPECIFIED PERIOD
Number of Amount of
Years Payable Monthly Payments
------------- ----------------
5 $17.91
10 9.61
15 6.87
20 5.51
25 4.71
30 4.18
OPTION 3 - Life Income -
(Monthly payments for the life of the person who is to
receive the income.) We will require satisfactory proof of
the person's age and sex. Payments can be guaranteed for 10
or 20 years or as the "Guaranteed Return of Policy
Proceeds." The amount of each monthly payment for each
$1,000 of proceeds applied under this option is shown in
Option 3 Table. The monthly payments for any ages not shown
will be furnished upon request.
Option 3 Table
LIFE INCOME
MONTHLY INCOME PAYMENTS
Guaranteed For Guaranteed For
Life 10 Years
------------------------------------------------------------------------------
M AGE F M AGE F
------ ---------- -------- --------- --------- --------
$3.84 50 $3.53 $3.82 50 $3.52
4.20 55 3.81 4.15 55 3.79
4.67 60 4.17 4.59 60 4.14
5.33 65 4.68 5.17 65 4.61
6.26 70 5.39 5.89 70 5.24
Guaranteed Return of Guaranteed For
Policy Proceeds 20 Years
------------------------------------------------------------------------------
M AGE F M AGE F
------ ---------- -------- --------- --------- --------
$3.71 50 $3.47 $3.74 50 $3.49
4.00 55 3.71 4.02 55 3.73
4.37 60 4.02 4.34 60 4.03
4.84 65 4.42 4.69 65 4.38
5.45 70 4.94 5.02 70 4.77
PAGE 19
<PAGE>
OPTION 4 - Payments of a Specified Amount -
(Monthly payments of a specified amount until the proceeds
and interest are fully paid.)
OPTION 5 - Joint and Survivor Life Income -
(Monthly payments during the joint lifetime of two persons
and continued during the lifetime of the survivor.) We will
pay the amount retained, with interest, in equal monthly
payments, as shown in the Option 5 Table for example. The
monthly payment for other age or sex combinations will be
furnished upon request.
OPTION 5 TABLE
-------------------------------------------------------------------------------
JOINT AND SURVIVOR LIFE INCOME
-------------------------------------------------------------------------------
MONTHLY PAYMENTS FOR EACH
$1,000 OF AMOUNT RETAINED
-------------------------------------------------------------------------------
AGE OF OTHER PAYEE*
AGE (FEMALE)
OF
ONE 15 YEARS 10 YEARS LESS 5 YEARS
PAYEE* LESS THAN THAN LESS THAN SAME AS
(MALE) MALE MALE PAYEE'S MALE MALE
PAYEE'S PAYEE'S PAYEE'S
- ------- --------- ------------- ------------ ----------
50 $2.98 $3.08 $3.19 $3.30
55 3.10 3.23 3.36 3.51
60 3.26 3.42 3.60 3.80
65 3.45 3.67 3.91 4.18
70 3.72 4.00 4.34 4.72
* Age nearest birthday.
OTHER The proceeds will be paid in any other manner agreed to by
SETTLEMENT us.
OPTIONS
CONDITIONS Proceeds of less than $1,000 may not be applied under any
settlement option. We may change the payment frequency if
payments under an option become less than $20.
A corporation may receive payments under a life income
option only if the payments are based on the life of the
Insured, or a surviving spouse or a dependant of the
Insured.
If a settlement option is requested, we will prepare an
agreement to be signed which will state the terms and
conditions under which the payments will be made. This
agreement will include a statement regarding the withdrawal
value, if any, and to whom any remaining proceeds will be
paid following the death of the person receiving the
payments.
A beneficiary may select a settlement option only after the
Insured's death. However, you may provide that the
beneficiary will not be permitted to change the settlement
option you have selected.
PROCEEDS EXEMPT To the extent permitted by law, each option payment and any
FROM CLAIMS OF withdrawal shall be free from legal process and the claim
CREDITORS of any creditor of the person entitled to them.
RATE OF INTEREST Options 1 through 5 are based on a guaranteed interest rate
of 3.0% using the "1983 Table a" Mortality Table with
projection.
PAGE 20
<PAGE>
SURRENDER CHARGES PER $1000 OF
INCREASES IN SPECIFIED AMOUNTS (MALE TOBACCO)
<TABLE>
<CAPTION>
DURATION
ATTAINED
AGE 1 2 3 4 5 6 7 8 9 10
-------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
18 19.00 18.05 17.10 16.15 15.20 14.25 13.30 12.35 11.40 10.45
19 19.00 18.05 17.10 16.15 15.20 14.25 13.30 12.35 11.40 10.45
20 20.00 19.00 18.00 17.00 16.00 15.00 14.00 13.00 12.00 11.00
21 20.00 19.00 18.00 17.00 16.00 15.00 14.00 13.00 12.00 11.00
22 20.00 19.00 18.00 17.00 16.00 15.00 14.00 13.00 12.00 11.00
23 21.00 19.95 18.90 17.85 16.80 15.75 14.70 13.65 12.60 11.55
24 21.00 19.95 18.90 17.85 16.80 15.75 14.70 13.65 12.60 11.55
25 22.00 20.90 19.80 18.70 17.60 16.50 15.40 14.30 13.20 12.10
26 22.00 20.90 19.80 18.70 17.60 16.50 15.40 14.30 13.20 12.10
27 23.00 21.85 20.70 19.55 18.40 17.25 16.10 14.95 13.80 12.65
28 23.00 21.85 20.70 19.55 18.40 17.25 16.10 14.95 13.80 12.65
29 24.00 22.80 21.60 20.40 19.20 18.00 16.80 15.60 14.40 13.20
30 24.00 22.80 21.60 20.40 19.20 18.00 16.80 15.60 14.40 13.20
31 25.00 23.75 22.50 21.25 20.00 18.75 17.50 16.25 15.00 13.75
32 26.00 24.70 23.40 22.10 20.80 19.50 18.20 16.90 15.60 14.30
33 27.00 25.65 24.30 22.95 21.60 20.25 18.90 17.55 16.20 14.85
34 27.00 25.65 24.30 22.95 21.60 20.25 18.90 17.55 16.20 14.85
35 28.00 26.60 25.20 23.80 22.40 21.00 19.60 18.20 16.80 15.40
36 29.00 27.55 26.10 24.65 23.20 21.75 20.30 18.85 17.40 15.95
37 30.00 28.50 27.00 25.50 24.00 22.50 21.00 19.50 18.00 16.50
38 31.00 29.45 27.90 26.35 24.80 23.25 21.70 20.15 18.60 17.05
39 32.00 30.40 28.80 27.20 25.60 24.00 22.40 20.80 19.20 17.60
40 33.00 31.35 29.70 28.05 26.40 24.75 23.10 21.45 19.80 18.15
41 34.00 32.30 30.60 28.90 27.20 25.50 23.80 22.10 20.40 18.70
42 35.00 33.25 31.50 29.75 28.00 26.25 24.00 22.75 21.00 19.25
43 36.00 34.20 32.40 30.60 28.80 27.00 25.20 23.40 21.60 19.80
44 38.00 36.10 34.20 32.30 30.40 28.50 26.60 24.70 22.80 20.90
45 39.00 37.05 35.10 33.15 31.20 29.25 27.30 25.35 23.40 21.45
46 41.00 38.95 36.90 34.85 32.80 30.75 28.70 26.65 24.60 22.55
47 42.00 39.90 37.80 35.70 33.60 31.50 29.40 27.30 25.20 23.10
48 44.00 41.80 39.60 37.40 35.20 33.00 30.80 28.60 26.40 24.20
49 46.00 43.70 41.40 39.10 36.80 34.50 32.20 29.90 27.60 25.30
</TABLE>
Years 11-20 are shown on page 21A.
PAGE 21
<PAGE>
SURRENDER CHARGES PER $1000 OF
INCREASES IN SPECIFIED AMOUNTS (MALE TOBACCO)
<TABLE>
<CAPTION>
DURATION
ATTAINED 20 &
AGE 11 12 13 14 15 16 17 18 19 THEREAFTER
-------- ------ ------ ----- ----- ----- ----- ----- ----- ----- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
18 9.50 8.55 7.60 6.65 5.70 4.75 3.80 2.85 1.90 -0-
19 9.50 8.55 7.60 6.65 5.70 4.75 3.80 2.85 1.90 -0-
20 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 -0-
21 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 -0-
22 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 -0-
23 10.50 9.45 8.40 7.35 6.30 5.25 4.20 3.15 2.10 -0-
24 10.50 9.45 8.40 7.35 6.30 5.25 4.20 3.15 2.10 -0-
25 11.00 9.90 8.80 7.70 6.60 5.50 4.40 3.30 2.20 -0-
26 11.00 9.90 8.80 7.70 6.60 5.50 4.40 3.30 2.20 -0-
27 11.50 10.35 9.20 8.05 6.90 5.75 4.60 3.45 2.30 -0-
28 11.50 10.35 9.20 8.05 6.90 5.75 4.60 3.45 2.30 -0-
29 12.00 10.80 9.60 8.40 7.20 6.00 4.80 3.60 2.40 -0-
30 12.00 10.80 9.60 8.40 7.20 6.00 4.80 3.60 2.40 -0-
31 12.50 11.25 10.00 8.75 7.50 6.25 5.00 3.75 2.50 -0-
32 13.00 11.70 10.40 9.10 7.80 6.50 5.20 3.90 2.60 -0-
33 13.50 12.15 10.80 9.45 8.10 6.75 5.40 4.05 2.70 -0-
34 13.50 12.15 10.80 9.45 8.10 6.75 5.40 4.05 2.70 -0-
35 14.00 12.60 11.20 9.80 8.40 7.00 5.60 4.20 2.80 -0-
36 14.50 13.05 11.60 10.15 8.70 7.25 5.80 4.35 2.90 -0-
37 15.00 13.50 12.00 10.50 9.00 7.50 6.00 4.50 3.00 -0-
38 15.50 13.95 12.40 10.85 9.30 7.75 6.20 4.65 3.10 -0-
39 16.00 14.40 12.80 11.20 9.60 8.00 6.40 4.80 3.20 -0-
40 16.50 14.85 13.20 11.55 9.90 8.25 6.60 4.95 3.30 -0-
41 17.00 15.30 13.60 11.90 10.20 8.50 6.80 5.10 3.40 -0-
42 17.50 15.75 14.00 12.25 10.50 8.75 7.00 5.25 3.50 -0-
43 18.00 16.20 14.40 12.60 10.80 9.00 7.20 5.40 3.60 -0-
44 19.00 17.10 15.20 13.30 11.40 9.50 7.60 5.70 3.80 -0-
45 19.50 17.55 15.60 13.65 11.70 9.75 7.80 5.85 3.90 -0-
46 20.50 18.45 16.40 14.35 12.30 10.25 8.20 6.15 4.10 -0-
47 21.00 18.90 16.80 14.70 12.60 10.50 8.40 6.30 4.20 -0-
48 22.00 19.80 17.60 15.40 13.20 11.00 8.80 6.60 4.40 -0-
49 23.00 20.70 18.40 16.10 13.80 11.50 9.20 6.90 4.60 -0-
</TABLE>
Attained Ages 50-85 are shown on page 22.
PAGE 21A
<PAGE>
SURRENDER CHARGES PER $1000 OF
INCREASES IN SPECIFIED AMOUNTS (MALE TOBACCO)
<TABLE>
<CAPTION>
DURATION
ATTAINED
AGE 1 2 3 4 5 6 7 8 9 10
-------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 47.00 44.65 42.30 39.95 37.60 35.25 32.90 30.55 28.20 25.85
51 49.00 46.55 44.10 41.65 39.20 36.75 34.30 31.85 29.40 26.95
52 51.00 48.45 45.90 43.35 40.80 38.25 35.70 33.15 30.60 28.05
53 53.00 50.35 47.70 45.05 42.40 39.75 37.10 34.45 31.80 29.15
54 56.00 53.20 50.40 47.60 44.80 42.00 39.20 36.40 33.60 30.80
55 58.00 55.10 52.20 49.30 46.40 43.50 40.60 37.70 34.80 31.90
56 58.00 55.10 52.20 49.30 46.40 43.50 40.60 37.70 34.80 31.90
57 58.00 55.10 52.20 49.30 46.40 43.50 40.60 37.70 34.80 31.90
58 58.00 55.10 52.20 49.30 46.40 43.50 40.60 37.70 34.80 31.90
59 58.00 55.10 52.20 49.30 46.40 43.50 40.60 37.70 34.80 31.90
60 58.00 55.10 52.20 49.30 46.40 43.50 40.60 37.70 34.80 31.90
61 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
62 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
63 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
64 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
65 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
66 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
67 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
68 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
69 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
70 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
71 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
72 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
73 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
74 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
75 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
76 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
77 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
78 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
79 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
80 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
81 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
82 57.00 54.15 51.30 48.45 45.60 42.75 39.90 37.05 34.20 31.35
83 52.00 49.40 46.80 44.20 41.60 39.00 36.40 33.80 31.20 28.60
84 45.00 42.75 40.50 38.25 36.00 33.75 31.50 29.25 27.00 24.75
85 40.00 38.00 36.00 34.00 32.00 30.00 28.00 26.00 24.00 22.00
</TABLE>
Years 11-20 are shown on page 22A.
PAGE 22
<PAGE>
SURRENDER CHARGES PER $1000 OF
INCREASES IN SPECIFIED AMOUNTS (MALE TOBACCO)
<TABLE>
<CAPTION>
DURATION
ATTAINED 20 &
AGE 11 12 13 14 15 16 17 18 19 THEREAFTER
--- -- -- -- -- -- -- -- -- -- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 23.50 21.15 18.80 16.45 14.10 11.75 9.40 7.05 4.70 -0-
51 24.50 22.05 19.60 17.15 14.70 12.25 9.80 7.35 4.90 -0-
52 25.50 22.95 20.40 17.85 15.30 12.75 10.20 7.65 5.10 -0-
53 26.50 23.85 21.20 18.55 15.90 13.25 10.60 7.95 5.30 -0-
54 28.00 25.20 22.40 19.60 16.80 14.00 11.20 8.40 5.60 -0-
55 29.00 26.10 23.20 20.30 17.40 14.50 11.60 8.70 5.80 -0-
56 29.00 26.10 23.20 20.30 17.40 14.50 11.60 8.70 5.80 -0-
57 29.00 26.10 23.20 20.30 17.40 14.50 11.60 8.70 5.80 -0-
58 29.00 26.10 23.20 20.30 17.40 14.50 11.60 8.70 5.80 -0-
59 29.00 26.10 23.20 20.30 17.40 14.50 11.60 8.70 5.80 -0-
60 29.00 26.10 23.20 20.30 17.40 14.50 11.60 8.70 5.80 -0-
61 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
62 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
63 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
64 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
65 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
66 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
67 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
68 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
69 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
70 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
71 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
72 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
73 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
74 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
75 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
76 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
77 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
78 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
79 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
80 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 5.70 -0-
81 28.50 25.65 22.80 19.95 17.10 14.25 11.40 8.55 0.00 -0-
82 28.50 25.65 22.80 19.95 17.10 14.25 11.40 0.00 0.00 -0-
83 26.00 23.40 20.80 18.20 15.60 13.00 0.00 0.00 0.00 -0-
84 22.50 20.25 18.00 15.75 13.50 0.00 0.00 0.00 0.00 -0-
85 20.00 18.00 16.00 14.00 0.00 0.00 0.00 0.00 0.00 -0-
</TABLE>
PAGE 22A
<PAGE>
Part 8. SUMMARY OF POLICY BENEFITS
LIVING BENEFITS Your policy has certain guaranteed values which are
available to you during your lifetime. These values consist
of the cash surrender values or loan values. You may use
these values:
- To provide supplemental income (see page 19).
- As collateral for a loan or as the basis for a policy
loan (see page 14).
- To continue some insurance protection if you cannot or do
not wish to continue paying premiums (see pages 5 and
15).
- To obtain cash by surrendering your policy (see page 15).
- To obtain cash by partial withdrawal, (see page 7).
The available Cash Surrender Value of your policy is:
- The Policy Value (see page 11).
MINUS - The Surrender Charge, if any (see page 15).
MINUS - Any Indebtedness (see definition, page 2).
The available Loan Value of your policy is:
- 90% of the Cash Surrender Value, less six months of
Monthly Deductions (see page 15).
DEATH The amount payable to the beneficiary is the total of the
PROCEEDS following amounts determined on the date of the Insured's
death:
- The death benefit amount of this policy (see page 10).
PLUS - Any additional insurance on the Insured's
life provided by an extra benefit rider (see
page 3).
MINUS - Any Indebtedness (see definition, page 2).
MINUS - Any Monthly Deductions due (see page 11).
EXTRA The extra benefits, if any, listed on page 3 are fully
BENEFIT RIDERS described in the extra benefit riders that are attached to
this policy.
PART 9. YOUR RIGHTS
During the Insured's lifetime and unless otherwise provided in this policy,
you have the exclusive right to assign this policy, to receive every
benefit and to exercise every right, privilege and option this policy
grants or that we allow. Some of your rights are:
- To change the owner or beneficiary. (Change of Owner and Beneficiary,
page 5).
- To transfer money between Accounts. (Transfers, page 8)
- To withdraw cash. (Partial Withdrawals, page 7).
- To surrender this policy. (Nonforfeiture Options, page 15).
- To stop premium payments but keep the policy in force. (Continuation
of Coverage, page 6).
- To change the frequency of premium payments. (Premiums, page 5).
- To change the Specified Amount. (Increase or Decrease in The
Specified Amount, page 10).
- To change the Death Benefit Option. (Change in the Death Benefit
Option, page 10).
- To borrow on the life insurance base policy. (Policy Loans, page 14).
- To reinstate the policy after lapse. (Reinstatement, page 6).
- To receive policy benefits as income. (Settlement Options, pages 19,
and 20).
To exercise any of these rights, or to apply for the proceeds or any
benefits under this policy, communicate with our nearest representative or
directly with our home office. Please notify us promptly of any change of
address.
PAGE 23
<PAGE>
PFL Life Insurance Company
Home Office located at 4333 Edgewood Road NE, Cedar Rapids, Iowa 52499
[PFL LIFE LOGO]
Flexible Premium Variable Life Insurance Policy
Terminal Illness Accelerated Death Benefit
Premiums Payable to Maturity Date or Until Prior Death of Insured
Proceeds Payable at Death or Maturity Date
Non-Participating
Some Benefits Reflect Investment Results
INDEX
Page
Annual Report.........................................7
Assignment............................................4
Basis Used for Calculations..........................15
Beneficiary...........................................5
Cash Surrender Value.................................15
Change of Owner or Beneficiary........................5
Change of Specified Amount...........................10
Continuation of Coverage..............................6
Contract..............................................4
Cost of Insurance....................................12
Death Benefit Options................................10
Definitions...........................................2
Exchange Privilege....................................7
Extended Maturity Date...............................13
Fixed Account Value..................................12
General Provisions....................................4
Grace Period..........................................6
Guaranteed Cost of Insurance Rates...................18
Illustrative Reports..................................5
Incontestability......................................4
Indebtedness..........................................2
Interest from Date of Death..........................11
Interest Rate........................................12
Page
Loan Values..........................................14
Loan Interest........................................14
Misstatement of Age or Sex............................5
Monthly Deduction....................................11
Nonforfeiture Options................................15
Non-participating.....................................5
Partial Withdrawals...................................7
Payment Intervals (Premiums)..........................5
Payment of Proceeds..................................19
Policy Loans.........................................14
Policy Value.........................................11
Policy Specifications.................................3
Premiums..............................................5
Reduced Paid-Up Insurance............................15
Reinstatement.........................................6
Separate Account......................................8
Settlement Options...................................19
Specified Amount.....................................10
Sub-Account Value....................................12
Suicide Exclusion.....................................4
Surrender Charge.....................................15
Terminal Illness Accelerated Death Benefit...........16
Transfers.............................................8
Unit Value............................................9
- - Please examine your policy and the attached copy of the application
carefully. Contact your agent if you desire additional service or
information.
- - If you change your address, please notify us at the home office giving your
full name and policy number.
- - Your policy is a valuable asset. For your own protection, let us advise you
regarding any suggestion to terminate or exchange this policy.
[PFL LIFE LOGO]
PFL LIFE INSURANCE COMPANY
Home Office located at: 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
A Stock Company
(Hereafter called the Company, we, our or us)
WAIVER OF PREMIUM BENEFIT RIDER
This extra benefit rider, attached to and made a part of the policy, provides as
described below, waiver of premium in the event of total and permanent
disability of the Insured.
We agree to waive payment of premiums for the policy and any riders when we
receive proof of the following:
1. That the Insured is totally and permanently disabled.
2. That the disability began while this rider was in force.
3. That the disability has lasted continuously for at least six months during
the Insured's lifetime.
4. That the disability commenced prior to the policy anniversary following the
Insured's 60th birthday.
PREMIUMS TO BE WAIVED
We will waive the Waiver of Premium Benefit as shown on page 3, while the
Insured is totally and permanently disabled. Premiums waived will be in the same
frequency of payment as when disability began. No premium will be waived for the
due date which is more than one year prior to our receipt at the home office of
written notice and proof of the Insured's disability.
When you claim waiver of premiums, you are to pay premiums for at least six
months or until we approve the claim. If we waive a premium that has been paid,
we will refund it, or include it in the proceeds payable under the policy.
If total and permanent disability begins in the grace period of an unpaid
premium, we will not waive that premium.
No Premiums will be waived for periods of Total Disability during which you are
not under the normal and customary care of a physician. No Premiums will be
waived after Total Disability ceases.
Separate periods of Total Disability beginning while this benefit is in force
will be considered as one continuous disability period unless such separate
periods are:
1. due to unrelated causes; or
2. due to the same or related causes, but are separated by at least six months
during which the Insured has returned to work.
Page 1 of 4
<PAGE>
POLICY BENEFITS CONTINUE
Benefits under the policy will be the same as if the premiums waived had been
paid in cash. This rider will not affect the Nonforfeiture Options in the
policy, if any. It is possible that coverage will expire prior to the Maturity
Date based on the amount of premium being waived. If the current interest or
cost of insurance change, this would also affect coverage.
DEFINITION OF TOTAL AND PERMANENT DISABILITY
Disability shall be considered to be total when the Insured is unable to
gainfully perform the major duties of his or her regular occupation.
During the first two years of disability, occupation means the Insured's
occupation at the time disability began. The Insured's occupation includes
attending school or college as a full time student.
After the first two years of disability, occupation means any occupation for
which the Insured is reasonably suited by education, training or experience.
Such total disability shall be presumed to be permanent (but only for the
purpose of determining the commencement of liability hereunder) when it is
present and has existed continuously for not less than six consecutive months.
If the total disability begins while the Insured is retired or temporarily
unemployed, the word "occupation' means the last regular occupation at which the
Insured was gainfully employed on a full time basis before the injury or
sickness started.
PRESUMED DISABILITIES
We will consider the total and permanent loss of any of the following as a total
and permanent disability even though the Insured engages in an occupation:
1. The sight of both eyes.
2. The use of both hands or both feet.
3. The use of one hand and one foot.
NOTICE AND PROOF
Before we waive any premium, we must receive at our home office written notice
and due proof of the total and permanent disability. The notice and proof must
reach us:
1. While the Insured is living; and
2. While the Insured is totally and permanently disabled; and
3. Not later than one year after the due date of any premium that is to be
waived.
However, these time limits will not apply if we are satisfied that notice (or
proof) was given as soon as reasonably possible.
Page 2 of 4
<PAGE>
At reasonable intervals, we can require due proof that the total and permanent
disability is continuing. If proof is not given, we will stop waiving premiums.
After the first two years of total and permanent disability, we will not
ordinarily require proof more often than once a year.
As part of due proof, we can require that the Insured be examined by doctors of
our choice.
You have the obligation to inform us immediately if you are no longer disabled
or if you return to work.
DISABILITIES NOT COVERED
We will not waive premiums if the Insured's disability results from:
1. War, declared or undeclared, or
2. The Insured's military service for any country at war, or
3. Intentionally self-inflicted injury.
THE CONTRACT
In this rider "policy" means the policy in which you have requested that this
rider be included. "Page 3" means page 3 of the policy.
This rider is issued in consideration of the application and the payment of
premiums as provided. The amount of premium and the premium-paying period for
this rider are shown on page 3.
The Insured is the person shown as the Insured on page 3.
This rider is a part of the policy. All provisions of the policy which are not
inconsistent with the provisions of this rider apply to this rider.
RIDER DATE
Rider months, years and anniversaries are measured from the rider date. The
rider date is the policy date unless a different rider date is shown in the
policy. When used in the rider, "date of issue" means the rider date.
INCONTESTABILITY
This rider is subject to the Incontestability provisions of the policy. However,
the contestable period shall, as far as this rider is concerned, be measured
from the date of issue of this rider.
Page 3 of 4
<PAGE>
TERMINATION
This rider will terminate on the earliest of the following dates:
1. Unless the Insured is totally and permanently disabled, the policy
anniversary following the Insured's 60th birthday.
2. The date this rider or the policy lapses for failure to pay a premium.
3. The date the policy becomes paid up, expires, matures as an endowment or
otherwise terminates.
4. The date a Nonforfeiture Option under the policy, if any, becomes effective.
Any premium on the policy falling due on or after the termination of this rider
shall automatically be reduced by the premium for this rider.
You may terminate this rider by written request.
Termination will not affect any claim which may be made because of total and
permanent disability which began prior to termination.
Signed for us at our home office.
[SIGNATURE] [SIGNATURE]
SECRETARY PRESIDENT
Page 4 of 4
[PFL LIFE LOGO]
PFL LIFE INSURANCE COMPANY
Home Office located at: 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
A Stock Company
(Hereafter called the Company, we, our or us)
WAIVER OF MONTHLY DEDUCTION RIDER
This extra benefit rider, attached to and made a part of the policy, provides as
described below, waiver of monthly deduction in the event of total and permanent
disability of the Insured.
We agree to waive payment of Monthly Deductions for the policy when we receive
proof of the following:
1. That the Insured is totally and permanently disabled.
2. That the disability began while this rider was in force.
3. That the disability has lasted continuously for at least six months during
the Insured's lifetime. 4. That the disability commenced prior to the policy
anniversary following the Insured's 60th birthday.
WAIVER OF MONTHLY DEDUCTION
We will waive the Monthly Deduction, as described in the Policy, if the Primary
Insured suffers six months of continuous Total Disability due to Injury or
Sickness.
We will return to the Policy Value all Monthly Deductions since the start of the
Total Disability.
On each Monthly Anniversary thereafter we will waive the Monthly Deduction for
as long as Total Disability continues.
No Monthly Deductions will be waived for periods of Total Disability during
which you are not under the normal and customary care of a physician. No Monthly
Deductions will be waived after Total Disability ceases. You have an obligation
to inform us immediately when the Insured's Total Disability ceases, the Insured
returns to work, or the Insured is not under the normal and customary care of a
physician.
Separate periods of Total Disability beginning while this benefit is in force
will be considered as one continuous disability period unless such separate
periods are:
1. due to unrelated causes; or
2. due to the same or related causes, but are separated by at least six months
during which the Insured has returned to work.
Page 1 of 4
<PAGE>
POLICY BENEFITS CONTINUE
Benefits under the policy will be the same as if the monthly deductions waived
had been paid in cash. This rider will not affect the Nonforfeiture Options or
the Table of Guaranteed Values in the policy, if any.
DEFINITION OF TOTAL AND PERMANENT DISABILITY
Disability shall be considered to be total when the Insured is unable to
gainfully perform the major duties of his or her regular occupation.
During the first two years of disability, occupation means the Insured's
occupation at the time disability began. The Insured's occupation includes
attending school or college as a full time student.
After the first two years of disability, occupation means any occupation for
which the Insured is reasonably suited by education, training or experience.
Such total disability shall be presumed to be permanent (but only for the
purpose of determining the commencement of liability hereunder) when it is
present and has existed continuously for not less than six consecutive months.
If the total disability begins while the Insured is retired or temporarily
unemployed, the word "occupation" means the last regular occupation at which the
Insured was gainfully employed on a full time basis before the injury or
sickness started.
PRESUMED DISABILITIES
We will consider the total and permanent loss of any of the following as a total
and permanent disability even though the Insured engages in an occupation:
1. The sight of both eyes.
2. The use of both hands or both feet.
3. The use of one hand and one foot.
NOTICE AND PROOF
Before we waive any monthly deduction, we must receive at our home office
written notice and due proof of the total and permanent disability. The notice
and proof must reach us:
1. While the Insured is living; and
2. While the Insured is totally and permanently disabled; and
3. Not later than one year after the due date of any monthly deduction that is
to be waived.
However, these time limits will not apply if we are satisfied that notice (or
proof) was given as soon as reasonably possible.
At reasonable intervals, we can require due proof that the total and permanent
disability is continuing. If proof is not given, we will stop waiving monthly
deductions. After the first two years of total and permanent disability, we will
not ordinarily require proof more often than once a year.
As part of due proof, we can require that the Insured be examined by doctors of
our choice at our expense.
Page 2 of 4
<PAGE>
DISABILITIES NOT COVERED
We will not waive Monthly Deductions if the Insured's disability results from:
1. War, declared or undeclared, or
2. Committing or attempting to commit a felonious act; or 3. The Insured's
military service for any country at war, or 4. Intentionally self-inflicted
injury.
THE CONTRACT
In this rider "policy" means the policy in which you have requested that this
rider be included. "Page 3" means page 3 of the policy.
This rider is issued in consideration of the application and the premiums as
provided. The amount of premium and the premium-paying period for this rider are
shown on page 3.
The Insured is the person shown as the Insured on page 3.
This rider is a part of the policy. All provisions of the policy which are not
inconsistent with the provisions of this rider apply to this rider.
RIDER DATE
Rider months, years and anniversaries are measured from the rider date. The
rider date is the policy date unless a different rider date is shown in the
policy. When used in the rider, "date of issue" means the rider date.
INCONTESTABILITY
This rider is subject to the Incontestability provisions of the policy. However,
the contestable period shall, as far as this rider is concerned, be measured
from the date of issue of this rider.
TERMINATION
This rider will terminate on the earliest of the following dates:
1. Unless the Insured is totally and permanently disabled, the policy
anniversary following the Insured's 60th birthday.
2. The date this rider or the policy lapses for failure to pay a premium.
3. The date the policy becomes paid up, expires, matures as an endowment or
otherwise terminates.
4. The date a Nonforfeiture Option under the policy, if any, becomes effective.
Any premium on the policy falling due on or after the termination of this rider
shall automatically be reduced by the premium for this rider.
Page 3 of 4
<PAGE>
You may terminate this rider by written request.
Termination will not affect any claim which may be made because of total and
permanent disability which began prior to termination.
Signed for us at our home office.
[SIGNATURE] [SIGNATURE]
SECRETARY PRESIDENT
Page 4 of 4
[PFL LIFE LOGO]
PFL LIFE INSURANCE COMPANY
Home Office located at: 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
A Stock Company
(Hereafter called the Company, we, our or us)
LEVEL ONE YEAR TERM INSURANCE RIDER
This extra benefit rider, attached to and made a part of the policy, provides as
described below, level term insurance on the Insured.
We agree to pay the death benefits to your beneficiary when we receive due proof
at our home office of the following:
1. That the Insured's death occurred while this rider was in force.
2. That the Insured's death occurred before the expiry date of this rider.
INSURED
The Insured is the person shown as the Insured on page 3.
EXPIRY DATE
The expiry date means the rider anniversary at the end of the period of coverage
for this rider shown on page 3.
AMOUNT OF DEATH BENEFIT
The amount of death benefit payable is shown on page 3. This amount is payable
in addition to the proceeds payable under the policy.
TERMINATION
This rider will terminate on the earliest of the following dates:
1. The expiry date of this rider.
2. The date the policy terminates.
3. The date the rider or policy lapses for failure to pay a premium.
4. The death of the Insured.
5. The date the conversion option is exercised.
6. The date a Nonforfeiture Option under the policy, if any, becomes effective.
You may terminate this rider by written request. Our acceptance of a premium for
any period after the date of termination of this rider shall create no liability
for us, nor will it constitute a waiver of the termination. Any premium which
has been accepted by us will be refunded.
Page 1 of 3
<PAGE>
THE CONTRACT
In this rider "policy" means the policy in which you have requested that this
rider be included. "Page 3" means page 3 of the policy.
This rider is issued in consideration of the application and the payment of
premiums as provided.
The amount of insurance under this rider, the amount of premium and the
premium-paying period are shown on page 3.
If a waiver of premium rider is included in the policy, that rider will also
apply to this rider.
This rider is a part of the policy. All provisions of the policy which are not
inconsistent with the provisions of this rider apply to this rider.
RIDER DATE
Rider months, years and anniversaries are measured from the rider date. The
rider date is the policy date unless a different rider date is shown in an
endorsement attached to the policy. When used in the rider, "effective date"
means the rider date.
INCONTESTABILITY
This rider is subject to the Incontestability provisions of the policy. However,
the contestable period shall as far as this rider is concerned, be measured from
the date of issue of this rider.
NON-PARTICIPATION
This rider will not share in our surplus earnings.
BASIS OF COMPUTATION
We use the Male and Female 1980 CSO, (S or NS), Age Last Birthday. Reserves are
not less than the required minimum reserves.
MONTHLY INSURANCE CHARGE FOR THIS RIDER
While this rider is in force, a Monthly Cost of Insurance Charge for this
coverage will be included in the Monthly Deduction to the Policy Value. The
Monthly Guaranteed Maximum Cost of Insurance Rates are shown in the Monthly
Guaranteed Maximum Cost of Insurance Rates Table as shown in the policy to which
this rider is attached. We may use Cost of Insurance Rates lower than the
guaranteed maximum rates but will never charge rates in excess of the guaranteed
maximum rates. Any change to the Cost of Insurance Rates will be applied
uniformly to all members of the same premium class. The Monthly Guaranteed
Maximum Cost of Insurance Rate is based on the Insured's:
- Sex,
- Attained age, and
- Premium class shown on page 3 of the policy.
RENEWAL
If this rider is in force on any Expiry Date, and the Insured is age 99 or less,
it may be renewed on that date or within 31 days thereafter without evidence of
insurability. Renewal will be for one year.
Upon renewal, this rider will continue in force upon deduction of the Monthly
Cost of Insurance Charges, for the Insured's then attained age, until the next
Expiry Date, subject to the provisions of this rider and the policy.
Page 2 of 3
<PAGE>
CONVERSION
While in force this rider may be converted to a new policy without evidence of
insurability. This conversion option is available while no premium is in
default, and prior to the Insured's 75th birthday. The new policy will be issued
for an amount not exceeding the amount Insured by this rider.
A rider providing benefits in event of total and permanent disability, or
additional benefits in event of death by accident, will be included in the new
policy without evidence of insurability only if:
a) such a rider is in force under the terms of the policy to which this rider
is attached at the date of conversion,
b) the Insured is not totally and permanently disabled on the date of
conversion, and
c) only if on the date of conversion, we customarily issue such riders with
new policies at the then attained insurance age of the Insured.
Such conversion will be made only on your written request.
The date of issue of the policy will be the date of conversion. The plan of
insurance under the new policy will be a plan of level premium whole life or
endowment insurance which we issue on the policy date of the new policy, at our
then current rates.
INCONTESTABILITY AND SUICIDE
If the rider is converted in accordance with the Conversion Option, the
Incontestability and Suicide provisions in the new policy shall be void.
CONTINUATION
If the policy to which this rider is attached is converted prior to the Expiry
Date, then this rider may be continued on the new policy without evidence of
insurability and at the same premium rate.
Signed for us at our home office.
[SIGNATURE] [SIGNATURE]
SECRETARY PRESIDENT
Page 3 of 3
[PFL LIFE LOGO]
PFL LIFE INSURANCE COMPANY
Home Office located at: 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
A Stock Company
(Hereafter called the Company, we, our or us)
ADDITIONAL INSUREDS LEVEL ONE YEAR
TERM INSURANCE RIDER
This extra benefit rider, attached to and made a part of the policy, provides as
described below, one year term insurance on the Additional Insured.
We agree to pay the death benefits to your beneficiary when we receive due proof
at our home office of the following:
1. The death of the Additional Insured under this rider.
2. That the Additional Insured's death occurred while this rider was in force.
3. That the Additional Insured's death occurred before the expiry date of this
rider.
ADDITIONAL INSURED
The Additional Insured is the person shown as the Additional Insured on page 3.
EXPIRY DATE
The expiry date means the rider anniversary at the end of the period of coverage
for this rider shown on page 3.
AMOUNT OF DEATH BENEFIT
The amount of death benefit payable is shown on page 3. This amount is payable
in addition to the proceeds payable under the policy.
TERMINATION
This rider will terminate on the earliest of the following dates:
1. The expiry date of this rider.
2. The date the policy terminates.
3. The date the rider or policy lapses for failure to pay a premium.
4. The death of the Additional Insured.
5. The date the conversion option is exercised.
6. The date a Nonforfeiture Option under the policy, if any, becomes effective.
Page 1 of 3
<PAGE>
You may terminate this rider by written request. Our acceptance of a premium for
any period after the date of termination of this rider shall create no liability
for us, nor will it constitute a waiver of the termination. Any premium which
has been accepted by us will be refunded.
THE CONTRACT
In this rider "policy" means the policy in which you have requested that this
rider be included. "Page 3" means page 3 of the policy.
This rider is issued in consideration of the application and the payment of
premiums as provided.
The amount of insurance under this rider, the amount of premium and the
premium-paying period are shown on page 3.
If a waiver of premium rider is included in the policy, that rider will also
apply to this rider.
This rider is a part of the policy. All provisions of the policy which are not
inconsistent with the provisions of this rider apply to this rider.
RIDER DATE
Rider months, years and anniversaries are measured from the rider date. The
rider date is the policy date unless a different rider date is shown in an
endorsement attached to the policy. When used in the rider, "effective date"
means the rider date.
INCONTESTABILITY
This rider is subject to the Incontestability provisions of the policy. However,
the contestable period shall as far as this rider is concerned, be measured from
the date of issue of this rider.
NON-PARTICIPATION
This rider will not share in our surplus earnings.
BASIS OF COMPUTATION
We use the Male and Female 1980 CSO, (S or NS), Age Last Birthday. Reserves are
not less than the required minimum reserves.
MONTHLY INSURANCE CHARGE FOR THIS RIDER
While this rider is in force, a Monthly Cost of Insurance Charge for this
coverage will be included in the Monthly Deduction to the Policy Value. The
Monthly Guaranteed Maximum Cost of Insurance Rates are shown in the Monthly
Guaranteed Maximum Cost of Insurance Rates Table as shown in the policy to which
this rider is attached. We may use Cost of Insurance Rates lower than the
guaranteed maximum rates but will never charge rates in excess of the guaranteed
maximum rates. Any change to the Cost of Insurance Rates will be applied
uniformly to all members of the same premium class. The Monthly Guaranteed
Maximum Cost of Insurance Rate is based on the Additional Insured's:
- Sex,
- Attained age, and
- Premium class shown on page 3 of the policy.
Page 2 of 3
<PAGE>
RENEWAL
If this rider is in force on any Expiry Date, and the Additional Insured is age
99 or less, it may be renewed on that date or within 31 days thereafter without
evidence of insurability. Renewal will be for one year.
Upon renewal, this rider will continue in force upon deduction of the Monthly
Cost of Insurance Charges, for the Additional Insured's then attained age, until
the next Expiry Date, subject to the provisions of this rider and the policy.
CONVERSION
While in force this rider may be converted to a new policy without evidence of
insurability. This conversion option is available while no premium is in
default, and prior to the Additional Insured's 75th birthday. The new policy
will be issued for an amount not exceeding the amount Insured by this rider.
A rider providing benefits in event of total and permanent disability, or
additional benefits in event of death by accident, will be included in the new
policy without evidence of insurability only if:
a) such a rider is in force under the terms of the policy to which this rider
is attached at the date of conversion,
b) the Additional Insured is not totally and permanently disabled on the date
of conversion, and
c) only if on the date of conversion, we customarily issue such riders with
new policies at the then attained insurance age of the Additional Insured.
Such conversion will be made only on your written request.
The date of issue of the policy will be the date of conversion. The plan of
insurance under the new policy will be a plan of level premium whole life or
endowment insurance which we issue on the policy date of the new policy, at our
then current rates.
INCONTESTABILITY AND SUICIDE
If the rider is converted in accordance with the Conversion Option, the
Incontestability and Suicide provisions in the new policy shall be void.
CONTINUATION
If the policy to which this rider is attached is converted prior to the Expiry
Date, then this rider may be continued on the new policy without evidence of
insurability and at the same premium rate.
Signed for us at our home office.
[SIGNATURE] [SIGNATURE]
SECRETARY PRESIDENT
Page 3 of 3
EXHIBIT 5.e
[PFL LIFE LOGO]
PFL LIFE INSURANCE COMPANY
Home Office located at: 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
A Stock Company
(Hereafter called the Company, we, our or us)
ACCIDENTAL DEATH BENEFIT RIDER
This extra benefit rider, attached to and made a part of the policy, provides
accidental death benefits, subject to the terms and conditions described below.
We agree to pay the additional amount of death benefits shown on page 3 to the
beneficiary when we receive due proof that the Insured's death:
1. Resulted directly and independently of all other causes, solely from
accidental bodily injury,
2. Was not caused or contributed, directly or indirectly, wholly or in part,
by a sickness, disease or physical or mental infirmity or any other cause,
3. Occurred while this rider is in force,
4. Occurred within ninety (90) days after the bodily injury, and
5. Injury occurred on or before the policy anniversary on which the attained
age of Insured is sixty-five (65).
RISKS NOT COVERED
We will not pay the accidental death benefit if the Insured's death is caused or
contributed to by or results directly or indirectly, wholly or in part, from:
1. Suicide or intentionally self-inflicted injury while sane or insane. If
the Insured was a Missouri citizen at the time of issue or reinstatement,
the following will, apply: Intentionally self-inflicted injury while sane.
2. Sickness, disease or physical or mental infirmity, pregnancy or any other
kind of illness, or any medical or surgical care, diagnosis, or treatment
for such condition.
3. Committing, or aiding and abetting in the commission of, or attempting to
commit an assault or felony. 4. Being engaged in or attempting to engage in
an illegal activity or occupation. 5. Engaging in or attempting to engage in
"Russian roulette" type activities.
6. War, declared or undeclared, or any act of war.
7. The voluntary use of any drug, whether legal or illegal.
8. Being intoxicated, whether from alcohol or drugs.
9. Being under the influence of any narcotic, sedative, alcohol or other drug.
10. Poison, gas or fumes voluntarily taken, administered, absorbed or inhaled.
11. An accident that occurs while the Insured was driving a motor vehicle while
he or she had alcohol or any intoxicant, narcotic, sedative or other drug
physically present in his or her body.
Page 1 of 3
<PAGE>
12. Operating, riding in, or descending from any kind of aircraft if it is being
flown for test or experimental purposes, or if the Insured:
a. Is a pilot, officer, or member of the crew; or
b. Has any duties aboard the aircraft or duties which require descent
from it; or c. Is giving or receiving any kind of training or
instruction.
13. The Insured's military service for any country at war.
14. The Insured's engaging in or attempting to engage in autoerotic asphyxia
type behavior.
DEFINITION OF ACCIDENTAL BODILY INJURY
Accidental bodily injury means an accident or injury which is the direct cause
of the death when the accident, injury, and death resulted directly and
independently of all other causes, solely from accidental bodily injury.
AUTOPSY
We will, at our expense, have the right to examine the body of the Insured and
to have an autopsy performed, unless prohibited by law, at any time after we
receive due proof of the death of the Insured.
THE CONTRACT
In this rider, "policy" means the policy in which you have requested that this
rider be included. "Page 3" means page 3 of the policy.
The Insured is the person shown as the Insured on Page 3.
ACCIDENTAL DEATH BENEFIT
This rider is a part of the policy. All provisions of the policy which are not
inconsistent with the provisions of this rider apply to this rider.
Whenever premiums are waived under the policy, premiums shall likewise be waived
under this rider.
RIDER DATE
Rider months, years and anniversaries are measured from the rider date. The
rider date is the policy date unless a different rider date is shown in the
policy. When used in the rider, "date of issue" means the rider date.
Page 2 of 3
<PAGE>
INCONTESTABILITY
This rider is subject to the Incontestability provisions of the policy. However,
the contestable period shall, as far as this rider is concerned, be measured
from the date of issue of this rider.
TERMINATION
This rider will terminate on the earliest of the following dates:
1. The anniversary following the Insured's 65th birthday.
2. The date this rider or the policy lapses for failure to pay a premium.
3. The date the policy becomes paid-up, expires, matures as an endowment or
otherwise terminates.
4. The date a Nonforfeiture Option under the policy, if any, becomes effective.
You may terminate this rider by written request.
Termination will not affect any claim which began prior to termination.
PREMIUMS
This rider is issued in consideration of the application and payment of premiums
as provided.
- - The amount of premium and the premium-paying period for this rider is
shown on page 3.
- - Payment of any premiums for this rider will not create or increase any
cash, loan, paid-up or extended term insurance value, if any, or dividend,
if any, under the policy.
Signed for us at our home office.
[SIGNATURE] [SIGNATURE]
SECRETARY PRESIDENT
Page 3 of 3
EXHIBIT 5.f
[PFL LIFE LOGO]
PFL LIFE INSURANCE COMPANY
Home Office located at: 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
A Stock Company
(Hereafter called the Company, we, our or us)
GUARANTEED INSURABILITY BENEFIT RIDER
This extra benefit rider, attached to and made a part of the policy, provides as
described below, options to purchase additional insurance without evidence of
insurability.
We agree:
1. To let you buy a policy or increase your current Specified Amount on the
life of the Insured on a regular or alternate option date. We will
not ask for evidence of insurability.
2. To pay your beneficiary the amount of insurance provided by this rider if
the Insured dies during the three-month period prior to an alternate
option date.
REGULAR OPTION DATES
Regular option dates will be the policy anniversaries following the Insured's
22nd, 25th, 28th, 31st, 34th, 37th and 40th birthdays.
ALTERNATE OPTION DATES
Alternate option dates will be three months after each of the following events
which occur after the date of this rider:
1. The marriage of the Insured.
2. The birth of a child to the Insured and the Insured's spouse.
3. The legal adoption of a child by the Insured.
4. The Insured's graduation from a 4 year college.
If you buy a policy on an alternate option date, we will cancel the next regular
option which has not already been cancelled. However, you may buy a new policy
on each alternate option date even though all regular options have been
cancelled.
If more than one child is born at the same time, or if the Insured adopts more
than one child at a time, we will allow you to buy more than one policy on the
same alternate option date. We also may allow you to buy one policy equal to the
maximum amount of this rider, as shown on page 3, multiplied by the number of
children.
The number of regular option dates to be cancelled will be equal to the number
of policies purchased, or if one policy is purchased, the number of policies
that would have been purchased if they had not been combined.
Page 1 of 4
<PAGE>
THE CONTRACT
In this rider, "policy" means the policy in which you have requested that this
rider be included. "Page 3" means page 3 of the policy.
This rider is issued in consideration of the application and the payment of
premiums as provided. The amount of premium and the premium-paying period for
this rider are shown on page 3.
The Insured is the person shown as the Insured on Page 3.
This rider is a part of the policy. All provisions of the policy which are not
inconsistent with the provisions of this rider apply to this rider. This rider
will not increase the guaranteed values of the policy, if any.
Whenever premiums are waived under the policy, premiums shall likewise be waived
under this rider.
INSURANCE
We will pay your beneficiary the insurance death benefit provided by this rider
when we receive proof that the Insured died during the three-month period before
an alternate option date. The amount of the death benefit will be the maximum
amount that could have been bought on that option date. The death benefit will
be added to the death benefit of the policy.
THE NEW POLICY
NEW POLICY
New issue of the plan you select or an increased coverage on your existing plan.
AMOUNT OF NEW POLICY
The face amount for each new policy may not be less than the minimum amount or
greater than the maximum amount of this rider, as shown on page 3. The new
policy must be within the established issue limits for the plan you select.
PLAN
The new policy may be on any level premium whole life or endowment plan being
issued by us on the option date on a person of the Insured's age, except a plan
providing coverage of more than one person or including an option to purchase
additional insurance. We may include in the new policy any exclusion included in
this policy or which we are including in policies being issued on the option
date on persons of the Insured's sex and age who are in a standard risk class.
The new policy will not include a waiver of premium rider or an accidental death
benefit rider unless the Insured submits evidence of insurability satisfactory
to us at the time of issue of the new policy.
PREMIUMS
Premiums for the new policy will be for the same class of risk as for this rider
and for the Insured's age and sex.
Page 2 of 4
<PAGE>
APPLICATION
You must apply for the new policy and pay the first premium. If an alternate
option is being elected, we must receive the application by the option date. If
a regular option is elected, we must receive it by the option date or within
sixty days before the option date.
If an alternate option is being exercised, you must give proof satisfactory to
us of the marriage, birth, adoption or graduation.
OWNER AND BENEFICIARY
The owner and beneficiary of the new policy will be as requested in the
application for the new policy.
POLICY DATE
If a regular or alternate option is elected, the date of the new policy will be
the option date. Insurance provided by the new policy will be effective on the
date of the new policy if the Insured is then living.
UNDERWRITING SAVINGS CREDIT
We will allow a credit when you buy each new policy. The credit will not be less
than $5, plus an additional $1 for each full $1,000 by which the face amount of
the new policy exceeds $5,000. We will apply the credit to reduce the first
premium for the new policy.
RIDER DATE
Rider months, years and anniversaries are measured from the rider date. The
rider date is the policy date unless a different rider date is shown in the
policy. When used in the rider, "date of issue" means the rider date.
INCONTESTABILITY
This rider is subject to the Incontestability provisions of the policy. However,
the contestable period shall, as far as this rider is concerned, be measured
from the date of issue of this rider.
TERMINATION
This rider will terminate on the earliest of the following dates:
1. The anniversary following the Insured's 40th birthday.
2. The date this rider or the policy lapses for failure to pay a premium.
3. The date the policy becomes paid-up, expires, matures as an endowment or
otherwise terminates.
4. The date a Nonforfeiture Option under the policy, if any, becomes effective .
Page 3 of 4
<PAGE>
You may terminate this rider by written request.
Termination will not affect an alternate option or the term insurance resulting
from a marriage, birth, adoption, death or graduation which occurred before this
rider terminated.
Signed for us at our home office.
[SIGNATURE] [SIGNATURE]
SECRETARY PRESIDENT
Page 4 of 4
[PFL LIFE LOGO]
PFL LIFE INSURANCE COMPANY
Home Office located at: 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
A Stock Company
(Hereafter called the Company, we, our or us)
INCOME REPLACEMENT BENEFIT RIDER
This extra benefit rider, attached to and made a part of the policy, provides a
monthly benefit for a period of 20 years to the beneficiary upon receipt of due
proof of death of the Insured.
We agree to pay the monthly benefit to your beneficiary when we receive due
proof at our Home Office of the following:
1. That the Insured's death occurred while this rider was in force.
2. That the Insured's death occurred before the expiry date of this rider.
INSURED
The Insured is the person shown as the Insured on page 3.
EXPIRY DATE
The expiry date means the rider date following the Insured's 95th birthday.
AMOUNT OF BENEFIT
We will pay the monthly benefit, which is specified on page 3, for a period of
20 years to your beneficiary upon receipt of due proof of death of the Insured.
At the end of 20 years, we will pay a lump sum death benefit of 100 times the
monthly benefit.
If the beneficiary dies prior to the payment of full benefits under this rider,
any remaining proceeds will be paid to their beneficiary over the remaining
period. If no beneficiary has been designated by you or if the designated
beneficiary does not survive you, any remaining proceeds will be paid to the
first of the following classes of successive preference beneficiaries of which a
member survives you: (a) you; (b) your spouse; (c) your children, including
legally adopted children, but not step children; (d) your parents; (e) your
brothers and sisters; (f) your estate.
In determining such person or persons, we may rely upon an affidavit by a member
of any of the classes of preference beneficiaries. Payment based upon such
affidavit shall be full acquittance unless, before such payment is made, we have
received at our Home Office written notice of a valid claim by some other
person.
If two or more persons become entitled to benefits as preference beneficiaries,
they shall share equally. Any benefits payable to a minor may be paid to the
legally appointed guardian of the minor's estate. This amount is payable in
addition to the proceeds payable under the policy.
Page 1 of 3
<PAGE>
TERMINATION
This rider will terminate on the earliest of the following dates:
1. The expiry date of this rider.
2. The date the policy terminates.
3. The date the rider or policy lapses for failure to pay a premium.
4. The death of the Insured.
5. The date a Nonforfeiture Option under the policy, if any, becomes effective.
You may terminate this rider by written request. Our acceptance of a premium for
any period after the date of termination of this rider shall create no liability
for us, nor will it constitute a waiver of the termination. Any premium which
has been accepted by us will be refunded.
THE CONTRACT
In this rider "policy" means the policy in which you have requested that this
rider be included. "Page 3" means page 3 of the policy.
If a waiver of premium or waiver of monthly deductions rider is included in the
policy, that rider will also apply to this rider.
This rider is a part of the policy. All provisions of the policy which are not
inconsistent with the provisions of this rider apply to this rider. All
definitions of the policy which are not inconsistent with the definitions of
this rider apply to this rider.
CONVERSION PRIVILEGE
This rider is not convertable.
RIDER DATE
Rider months, years and anniversaries are measured from the rider date. The
rider date is the policy date unless a different rider date is shown in an
endorsement attached to the policy. When used in the rider, "effective date"
means the rider date.
INCONTESTABILITY
This rider is subject to the Incontestability provisions of the policy. However,
the contestable period shall as far as this rider is concerned, be measured from
the date of issue of this rider.
NON-PARTICIPATION
This rider will not share in our surplus earnings.
BASIS OF COMPUTATION
We use the Male and Female 1980 CSO, (S or NS), Age Last Birthday. Reserves are
not less than the required minimum reserves.
PREMIUMS
This rider is issued in consideration of the application and payment of premiums
as provided.
- The amount of premium and the premium paying period for this rider
are shown on Page 3 of this rider.
- Payment on any premiums for this rider will not create or increase
any cash, loan, paid-up, or extend term insurance value, if any, or
dividend, if any, under the policy.
Page 2 of 3
<PAGE>
GUARANTEED MAXIMUM PREMIUM SCHEDULE
ANNUAL PREMIUMS FOR RIDER BENEFITS
Policy Number: 710 01 SAMPLE
Issue Age: 3 /
Tobacco
<TABLE>
<CAPTION>
TOTAL TOTAL
POLICY ANNUAL ANNUAL POLICY ANNUAL ANNUAL
YEAR PREMIUM PREMIUM YEAR PREMIUM PREMIUM
------ -------- -------- ------ -------- ---------
<S> <C> <C> <C> <C> <C>
1 240.00 240.00 31 9,245.00 94,531.00
2 240.00 480.00 32 10,080.00 104,611.00
3 240.00 720.00 33 10,958.00 115,569.00
4 240.00 960.00 34 11,858.00 127,427.00
5 240.00 1,200.00 35 12,816.00 140,243.00
6 240.00 1,440.00 36 13,878.00 154,121.00
7 240.00 1,680.00 37 15,053.00 169,174.00
8 240.00 1,920.00 38 16,387.00 185,561.00
9 240.00 2,160.00 39 17,888.00 203,449.00
10 240.00 2,400.00 40 19,526.00 222,975.00
11 1,598.00 3,998.00 41 21,339.00 244,314.00
12 1,739.00 5,737.00 42 23,785.00 268,099.00
13 1,895.00 7,632.00 43 26,348.00 294,447.00
14 2,057.00 9,689.00 44 29,003.00 323,450.00
15 2,241.00 11,930.00 45 31,799.00 355,249.00
16 2,419.00 14,349.00 46 34,844.00 390,093.00
17 2,660.00 17,009.00 47 37,647.00 427,740.00
18 2,907.00 19,916.00 48 40,770.00 468,510.00
19 3,195.00 23,111.00 49 44,240.00 512,750.00
20 3,515.00 26,626.00 50 47,941.00 560,691.00
21 3,857.00 30,483.00 51 51,768.00 612,459.00
22 4,226.00 34,709.00 52 55,206.00 667,665.00
23 4,608.00 39,317.00 53 58,561.00 726,226.00
24 5,018.00 44,335.00 54 62,219.00 788,445.00
25 5,438.00 49,773.00 55 65,828.00 854,273.00
26 5,909.00 55,682.00 56 69,444.00 923,717.00
27 6,435.00 62,117.00 57 73,141.00 996,858.00
28 7,029.00 69,146.00 58 77,065.00 1,073,923.00
29 7,700.00 76,846.00 59 82,107.00 1,156,030.00
30 8,440.00 85,286.00 60 88,601.00 1,244,631.00
</TABLE>
Signed for us at our home office.
[SIGNATURE] [SIGNATURE]
SECRETARY PRESIDENT
Page 3 of 3
EXHIBIT 5.h
[PFL LIFE LOGO]
PFL LIFE INSURANCE COMPANY
Home Office located at: 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
A Stock Company
(Hereafter called the Company, we, our or us)
MONTHLY BENEFIT RIDER
This extra benefit rider, attached to and made a part of the policy, provides as
described below, a monthly benefit to the beneficiary upon due proof of the
Insured's death.
We agree to provide a monthly benefit to the beneficiary when we receive due
proof at our home office of the following:
1. That the Insured's death occurred while this rider was in force.
2. That the Insured's death occurred before the termination date of this rider
as stated in the Termination provision.
INSURED
The Insured is the person shown as the insured on page 3.
EXPIRY DATE
The expiry date is the earliest of: (a) the rider anniversary following the
Insured's 65th birthday; or (b) the rider anniversary 20 years after the rider
date.
AMOUNT OF INSURANCE
The amount of monthly benefit payable under this rider as shown on page 3. This
amount will be payable in addition to the proceeds payable under the policy. The
monthly benefit payments will cease on the expiry date.
NON-PARTICIPATION
This rider will not share in our surplus earnings. No guaranteed values under
the policy shall be increased by reason of this rider.
PAYMENT TO EXECUTORS
If the beneficiary dies after the death of the insured, the then commuted value
of the entire amount remaining unpaid under this rider will be payable to the
executors, administrators or assignees of the beneficiary. The commuted values
are shown in the Table of Commuted Values in this rider.
Page 1 of 3
<PAGE>
THE CONTRACT
In this rider, "policy" means the policy to which this rider is attached. In
this rider, "page 3" means the page 3 of the policy.
This rider is issued in consideration of the application and the payment of
premiums as provided. The amount of premium and the premium-paying period for
this rider are shown on page 3.
If a waiver of premiums rider is attached to the policy, that rider will also
apply to this rider.
This rider is part of the policy. All provisions of the policy which are not
inconsistent with the provisions of this rider apply to this rider.
RIDER DATE
Rider months, years and anniversaries are measured from the rider date. The
rider date is the Policy Date unless a different rider date is shown in the
policy or in an endorsement to the policy or this rider.
INCONTESTABILITY
This rider is subject to the incontestability provisions of the policy. However,
the contestable period for this rider shall be measured from the rider date.
TERMINATION
This rider will terminate on the earliest of the following dates:
1. The expiry date of this rider.
2. The date the policy terminates.
3. The date of death of the Insured.
4. The date a Nonforfeiture Option under the policy, if any, becomes effective.
Our acceptance of a premium for any period after the date of termination of this
rider shall create no liability for us; nor will it constitute a wavier of the
termination unless we expressly agree to it in writing. Any such premium which
has been accepted by us will be refunded.
You may terminate this rider by written request.
REINSTATEMENT
This rider may be reinstated upon presentation of evidence of insurability
satisfactory to us and payment of all past due premiums with interest as
provided by the policy, provided that, in accordance with its terms, the policy
is reinstated at the time of reinstatement of the rider.
COMMUTATION
Any commutation of payments to be made under this rider shall be at any interest
rate of 3% per year.
Page 2 of 3
<PAGE>
EXCESS INTEREST
The monthly benefit amount provided by this rider may be increased by such share
of interest in excess of 3% per year, computed on the amount payable hereunder
remaining with us, as may be declared by us.
TABLE OF COMMUTED VALUES
(AT POLICY ANNIVERSARY DATE FOR EACH $10 OF MONTHLY BENEFIT)
YEARS TO EXPIRY COMMUTED VALUE
20 $1815
19 1746
18 1678
17 1606
16 1532
15 1456
14 1378
13 1297
12 1214
11 1129
10 1041
9 950
8 857
7 760
6 661
5 559
4 454
3 345
2 234
1 119
Signed for us at our home office.
[SIGNATURE] [SIGNATURE]
SECRETARY PRESIDENT
Page 3 of 3
[PFL LIFE LOGO]
PFL LIFE INSURANCE COMPANY
Home Office located at: 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
A Stock Company
(Hereafter called the Company, we, our or us)
DISABILITY INCOME/WAIVER OF PREMIUM BENEFIT RIDER
This extra benefit rider, attached to and made part of the policy, provides as
described below a disability income benefit and waiver of premium benefit in the
event of total and permanent disability.
We agree to pay the Disability Income Benefit shown on page 3 and to waive the
Waiver of Premium Amount shown on page 3 when we receive proof of the following:
1. That the Insured is totally and permanently disabled.
2. That the disability began while this rider was in force.
3. That the disability has lasted continuously for at least six months during
the Insured's lifetime.
4. That the disability began prior to the policy anniversary following the
Insured's 60th birthday.
WAIVER OF PREMIUM AMOUNT
We will waive monthly, 1/12 of the annual Waiver of Premium Amount shown on page
3 while the Insured is totally and permanently disabled. No premium will be
waived the due date of which is more than one year prior to our receipt at the
home office of written notice and proof of the Insured's disability.
When you claim waiver of premiums, you are to pay premiums for at least six
months or until we approve the claim. If we waive a premium that has been paid,
we will refund it, or include it in the proceeds payable under the policy.
If total and permanent disability begins in the grace period of an unpaid
premium, we will not waive that premium.
POLICY BENEFITS CONTINUE
Benefits under the policy will be the same as if the Waiver of Premium Amount
had been paid in cash. This rider will not affect the Guaranteed Value Options
or the Table of Guaranteed Values in the policy, if any.
DISABILITY INCOME BENEFIT
During the period that the Waiver of Premium Amount is paid, we will pay to you
monthly, 1/12 of the annual Disability Income Benefit shown on page 3.
Page 1 of 3
<PAGE>
DEFINITION OF TOTAL AND PERMANENT DISABILITY
Disability shall be considered to be total when the Insured is unable to
gainfully perform the major duties of his or her regular occupation.
During the first two years of disability, occupation means the Insured's
occupation at the time disability began. The Insured's occupation includes
attending school or college as a full time student.
After the first two years of disability, occupation means any occupation for
which the Insured is reasonably suited by education, training or experience.
Such total disability shall be presumed to be permanent (but only for the
purpose of determining the commencement of liability hereunder) when it is
present and has existed continuously for not less than six consecutive months.
If the total disability begins while the Insured is retired or temporarily
unemployed, the word "occupation" means the last regular occupation at which the
Insured was gainfully employed on a full time basis before the injury or
sickness started.
PRESUMED DISABILITIES
We will consider the total and permanent loss of any of the following as a total
and permanent disability even though the Insured engages in an occupation:
1. The sight of both eyes.
2. The use of both hands or both feet.
3. The use of one hand and one foot.
NOTICE AND PROOF
Before we pay the Disability Income Benefit and waive any Waiver of Premium
Amount, we must receive at our home office written notice and due proof of the
total and permanent disability. The notice and proof must reach us:
1. While the Insured is living; and
2. While the Insured is totally and permanently disabled; and
3. Not later than one year after the due date of any premium that is to be
waived; and
4. Before the policy anniversary following the Insured's 60th birthday.
However, these time limits will not apply if we are satisfied that notice (or
proof) was given as soon as reasonably possible. At reasonable intervals, we can
require due proof that the total and permanent disability is continuing. If
proof is not given, all benefits will cease. After the first two years of total
and permanent disability, we will not require proof more often than once a year.
As part of due proof, we, at our own expense, shall have the right to have the
Insured examined by doctors of our choice.
DISABILITIES NOT COVERED
We will not provide benefits under this rider if the Insured's disability
results from:
1. War, declared or undeclared, or
2. The Insured's military services or any country at war, or
3. Intentionally self-inflicted injury.
Page 2 of 3
<PAGE>
THE CONTRACT
In this rider "policy" means the policy in which you have requested that this
rider be included. "Page 3" means page 3 of the policy.
This rider is issued in consideration of the application and the payment of
premiums as provided. The amount of premium and the premium-paying period for
this rider are shown on page 3.
The Insured is the person shown as the Insured on page 3.
This rider is a part of the policy. All provisions of the policy which are not
inconsistent with the provisions of this rider apply to this rider.
RIDER DATE
Rider months, years and anniversaries are measured from the rider date. The
rider date is the policy date unless a different rider date is shown in an
endorsement attached to the policy. When used in the rider, "effective date"
means the rider date.
INCONTESTABILITY
This rider is subject to the incontestability provisions of the policy. However,
the contestable period shall as far as this rider is concerned, be measured from
the date of issue of this rider.
TERMINATION
This rider will terminate at the earliest of the following dates:
1. Unless the Insured is totally and permanently disabled, the policy
anniversary following the Insured's 60th birthday. In which case the
disability income and waiver of premium benefits shall continue no longer
than the policy anniversary following the Insured's 65th birthday.
2. The date the rider or the policy lapses for failure to pay a premium.
3. The date the policy becomes paid up, expires, matures as an endowment or
otherwise terminates.
4. The date a Guaranteed Value Option under the policy, if any, becomes
effective.
Any premiums on the policy falling due on or after the termination of this rider
shall automatically be reduced by the premium for this rider.
You may terminate this rider by written request.
Termination will not affect any claim which may be made because of total and
permanent disability which began prior to termination.
Signed for us at our home office.
[SIGNATURE] [SIGNATURE]
SECRETARY PRESIDENT
Page 3 of 3
[PFL LIFE LOGO]
PFL LIFE INSURANCE COMPANY
Home Office located at: 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
A Stock Company
(Hereafter called the Company, we, our or us)
CHILDRENS BENEFIT RIDER
This extra benefit rider, attached to and made a part of the policy, provides as
described below, term insurance on each insured dependent child of the Insured.
While this rider and policy remain in force, we agree:
1. To pay the amount of insurance provided by this rider to the beneficiary
when we receive due proof of the death of an insured dependent child of
the Insured on or before the expiry date of this rider.
2. To continue this rider in force until the Expiry Date without any further
premiums being paid when we receive due proof of the death of the Insured.
INSURED
The Insured is the person shown as the Insured on page 3 of the policy.
DEPENDENT CHILD
A dependent child is a child, stepchild, or legally adopted child of the
Insured. A child is not a dependent child prior to becoming 14 days old.
To become an insured dependent child at the time of application, a dependent
child must:
1. Be named in the application for this rider, unless specifically excluded;
2. Be under 18 years old on the date of the application; and
3. Receive principal support from the Insured.
To become an insured dependent child after the date of the application, a child
must:
1. Become a dependent child after the date of the application;
2. Be under 18 years old on the date the child becomes a dependent child;
3. Receive principal support from the Insured;
4. Provide evidence of insurability if the child is a stepchild of the Insured;
and
5. Provide evidence of insurability, if at the time of application for this
rider that child was specifically excluded.
EXPIRY DATE
The expiry date of this rider is the policy anniversary after every insured
dependent child has reached his or her 25th birthday.
Page 1 of 4
<PAGE>
AMOUNT OF INSURANCE
We will pay a death benefit to the beneficiary upon our receipt of due proof of
the death of any insured dependent child of the Insured. The amount of death
benefit with respect to each insured dependent child is $1,000 per unit
multiplied by the number of units shown on page 3. After one rider year, the
Insured, upon completion of a new application, may increase the death benefit of
an insured dependent child. Any increase will be subject to our underwriting
requirements as well as the Incontestability provision of this rider.
OWNERSHIP
Unless the Insured requests otherwise, the following ownership arrangement will
apply:
1. You, the Insured, are the owner of this rider.
2. Upon your death, the insurance on each insured dependent child will be
owned by your spouse at the time of your death if that child had been born
to, or legally adopted by that spouse.
3. If you have died and if any requirement of 2 above is not met with respect
to an insured dependent child, the insurance on that insured dependent
child will be owned by that child.
BENEFICIARY
Unless the Insured requests otherwise, the beneficiary arrangement of this rider
will be as follows:
1. The Insured, if living.
2. If the Insured is not living, the beneficiary of the insurance on each
insured dependent child will be the Insured's spouse at the time of the
Insured's death if that insured dependent child had been born to, or legally
adopted by that spouse.
3. If the Insured is not living and if any requirement of 2 above is not met
with respect to an insured dependent child, the beneficiary of the
insurance on that insured dependent child will be that child's estate.
REINSTATEMENT
If this rider lapses, the Insured may reinstate it at any time during his
lifetime by submitting the following items:
1. A written application for reinstatement.
2. Evidence of insurability satisfactory to us for the Insured and each
dependent child.
3. Overdue premiums with interest as provided by the policy.
You must also reinstate the policy at the time you reinstate this rider.
PAID-UP INSURANCE UPON DEATH OF INSURED
Upon the death of the Insured while this policy is in force other than under a
Nonforfeiture Option, any insurance provided by this rider shall become paid-up
term insurance for the unexpired period.
THE CONTRACT
In this rider "policy" means the policy in which you have requested that this
rider be included. "Page 3" means page 3 of the policy.
This rider is issued in consideration of the application and the payment of
premiums as provided. The amount of premium and the premium-paying period for
this rider are shown on page 3.
Page 2 of 4
2
<PAGE>
If a waiver of premium rider is included in the policy, that rider will also
apply to this rider.
This rider is a part of the policy. All provisions of the policy which are not
inconsistent with the provisions of this rider apply to this rider.
RIDER DATE
Rider months, years and anniversaries are measured from the rider date. The
rider date is the policy date unless a different rider date is shown in the
policy. When used in the rider, "date of issue" means the rider date.
INCONTESTABILITY
We cannot contest this rider after it has been in force during the lifetime of
the Insured for two years after the later of:
1. The Rider Date;
2. The effective date of any increase in the death benefit of an insured
dependent child, and then for the increased amount only;
3. The effective date that any insured dependent child is added by endorsement,
and then for that child only; or 4. The effective date of reinstatement of
this rider.
Only statements material to such reinstatement shall be contestable for one year
from the date of reinstatement.
TERMINATION
The term insurance on an insured dependent child shall terminate on the earliest
of the following dates:
1. The expiry date of this rider.
2. The date this rider or policy lapses for failure to pay a premium.
3. The date the policy becomes paid-up, expires, matures as an endowment or
otherwise terminates.
4. The date a Nonforfeiture Option under the policy, if any, becomes effective.
5. The conversion of the policy to another policy under which premiums would
not continue to the expiry date of this rider.
6. The policy anniversary following the date of marriage for that child.
7. The policy anniversary following that child's 25th birthday.
CONVERSION
When the insurance on the life of an insured dependent child terminates for any
reason provided above, except for lapse of rider, while the basic policy
continues in force other than as paid-up or extended term insurance, that child
has the option to convert to an individual policy. Such insurance may be
converted at the then attained age to any level premium whole life or endowment
plan of insurance then being issued by us, for the then current rates and
limits, without further evidence of insurability in accordance with the
following:
1. Proper written application for the new policy accompanied by the first
premium must be made to us at our home office within 31 days after such
expiry.
2. The policy date of the new policy shall be the date such application is made
and the premium is paid.
Page 3 of 4
<PAGE>
3. The amount of insurance on any insured dependent child under the new policy
may be increased up to the lesser of :
a) 5 times the death benefit at the termination date, or
b) 50,000.
4. The new policy shall not provide for benefits in event of total disability
or for benefits in event of total disability or for any accidental death
benefit unless at the time of conversion the life to be insured submits
evidence of insurability which is satisfactory to us.
Signed for us at our home office.
[SIGNATURE] [SIGNATURE]
SECRETARY PRESIDENT
Page 4 of 4
EXHIBIT 8
POWER OF ATTORNEY
The undersigned, acting in the capacity or capacities stated opposite their
respective names below on behalf of PFL VARIABLE LIFE ACCOUNT A, a separate
account established by PFL Life Insurance Company under the laws of the State of
Iowa, hereby make, constitute, and appoint CRAIG D. VERMIE AND JOHN D.
CLEAVENGER, and each of them, singularly, as his true and lawful
attorney-in-fact with full power:
(1) to sign and cause to be filed with the Securities and Exchange
Commission, a registration statement on Form S-6 under the Securities
Act of 1933, as amended (the "1933 Act") and the Investment Company Act
of 1940, as amended, on behalf of PFL Variable Life Account A;
(2) to sign and cause to be filed with the Securities and Exchange
Commission any and all amendments to such Form S-6 registration
statement including post-effective amendments pursuant to Rule 485
under the 1933 Act; and
(3) to take any and all other actions of whatever kind or nature in
connection with such registration statements which said
attorneys-in-fact may deem advisable, including providing any
certifications or exhibits, and making any requests for acceleration.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ROBERT J. KONTZ VICE PRESIDENT AND CORPORATE CONTROLLER SEPTEMBER 13, 1999
</TABLE>
<PAGE>
POWER OF ATTORNEY
The undersigned, acting in the capacity or capacities stated opposite their
respective names below on behalf of PFL VARIABLE LIFE ACCOUNT A, a separate
account established by PFL Life Insurance Company under the laws of the State of
Iowa, hereby make, constitute, and appoint CRAIG D. VERMIE AND JOHN D.
CLEAVENGER, and each of them, singularly, as his true and lawful
attorney-in-fact with full power:
(1) to sign and cause to be filed with the Securities and Exchange
Commission, a registration statement on Form S-6 under the Securities
Act of 1933, as amended (the "1933 Act") and the Investment Company Act
of 1940, as amended, on behalf of PFL Variable Life Account A;
(2) to sign and cause to be filed with the Securities and Exchange
Commission any and all amendments to such Form S-6 registration
statement including post-effective amendments pursuant to Rule 485
under the 1933 Act; and
(3) to take any and all other actions of whatever kind or nature in
connection with such registration statements which said
attorneys-in-fact may deem advisable, including providing any
certifications or exhibits, and making any requests for acceleration.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ DOUGLAS C. KOLSRUD SR. VICE PRESIDENT, CHIEF INVESTMENT SEPTEMBER 9, 1999
OFFICER, CORPORATE ACTUARY AND DIRECTOR
</TABLE>
<PAGE>
POWER OF ATTORNEY
The undersigned, acting in the capacity or capacities stated opposite their
respective names below on behalf of PFL VARIABLE LIFE ACCOUNT A, a separate
account established by PFL Life Insurance Company under the laws of the State of
Iowa, hereby make, constitute, and appoint CRAIG D. VERMIE AND JOHN D.
CLEAVENGER, and each of them, singularly, as his true and lawful
attorney-in-fact with full power:
(1) to sign and cause to be filed with the Securities and Exchange
Commission, a registration statement on Form S-6 under the Securities
Act of 1933, as amended (the "1933 Act") and the Investment Company Act
of 1940, as amended, on behalf of PFL Variable Life Account A;
(2) to sign and cause to be filed with the Securities and Exchange
Commission any and all amendments to such Form S-6 registration
statement including post-effective amendments pursuant to Rule 485
under the 1933 Act; and
(3) to take any and all other actions of whatever kind or nature in
connection with such registration statements which said
attorneys-in-fact may deem advisable, including providing any
certifications or exhibits, and making any requests for acceleration.
Signature Title Date
/s/ WILLIAM L. BUSLER PRESIDENT SEPTEMBER 10, 1999
<PAGE>
POWER OF ATTORNEY
The undersigned, acting in the capacity or capacities stated opposite their
respective names below on behalf of PFL VARIABLE LIFE ACCOUNT A, a separate
account established by PFL Life Insurance Company under the laws of the State of
Iowa, hereby make, constitute, and appoint CRAIG D. VERMIE AND JOHN D.
CLEAVENGER, and each of them, singularly, as his true and lawful
attorney-in-fact with full power:
(1) to sign and cause to be filed with the Securities and Exchange
Commission, a registration statement on Form S-6 under the Securities
Act of 1933, as amended (the "1933 Act") and the Investment Company Act
of 1940, as amended, on behalf of PFL Variable Life Account A;
(2) to sign and cause to be filed with the Securities and Exchange
Commission any and all amendments to such Form S-6 registration
statement including post-effective amendments pursuant to Rule 485
under the 1933 Act; and
(3) to take any and all other actions of whatever kind or nature in
connection with such registration statements which said
attorneys-in-fact may deem advisable, including providing any
certifications or exhibits, and making any requests for acceleration.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ BRENDA K. CLANCY VICE PRESIDENT, TREASURER AND FINANCIAL OFFICER SEPTEMBER 13, 1999
(PRINCIPAL FINANCIAL OFFICER)
</TABLE>
<PAGE>
POWER OF ATTORNEY
The undersigned, acting in the capacity or capacities stated opposite their
respective names below on behalf of PFL VARIABLE LIFE ACCOUNT A, a separate
account established by PFL Life Insurance Company under the laws of the State of
Iowa, hereby make, constitute, and appoint CRAIG D. VERMIE AND JOHN D.
CLEAVENGER, and each of them, singularly, as his true and lawful
attorney-in-fact with full power:
(1) to sign and cause to be filed with the Securities and Exchange
Commission, a registration statement on Form S-6 under the Securities
Act of 1933, as amended (the "1933 Act") and the Investment Company Act
of 1940, as amended, on behalf of PFL Variable Life Account A;
(2) to sign and cause to be filed with the Securities and Exchange
Commission any and all amendments to such Form S-6 registration
statement including post-effective amendments pursuant to Rule 485
under the 1933 Act; and
(3) to take any and all other actions of whatever kind or nature in
connection with such registration statements which said
attorneys-in-fact may deem advisable, including providing any
certifications or exhibits, and making any requests for acceleration.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/LARRY N. NORMAN EXECUTIVE VICE PRESIDENT AND DIRECTOR SEPTEMBER 8, 1999
</TABLE>
<PAGE>
POWER OF ATTORNEY
The undersigned, acting in the capacity or capacities stated opposite their
respective names below on behalf of PFL VARIABLE LIFE ACCOUNT A, a separate
account established by PFL Life Insurance Company under the laws of the State of
Iowa, hereby make, constitute, and appoint CRAIG D. VERMIE AND JOHN D.
CLEAVENGER, and each of them, singularly, as his true and lawful
attorney-in-fact with full power:
(1) to sign and cause to be filed with the Securities and Exchange
Commission, a registration statement on Form S-6 under the Securities
Act of 1933, as amended (the "1933 Act") and the Investment Company Act
of 1940, as amended, on behalf of PFL Variable Life Account A;
(2) to sign and cause to be filed with the Securities and Exchange
Commission any and all amendments to such Form S-6 registration
statement including post-effective amendments pursuant to Rule 485
under the 1933 Act; and
(3) to take any and all other actions of whatever kind or nature in
connection with such registration statements which said
attorneys-in-fact may deem advisable, including providing any
certifications or exhibits, and making any requests for acceleration.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s//CRAIG D. VERMIE VICE PRESIDENT, SECRETARY, GENERAL COUNSEL SEPTEMBER 8, 1999
AND DIRECTOR
</TABLE>
<PAGE>
POWER OF ATTORNEY
The undersigned, acting in the capacity or capacities stated opposite their
respective names below on behalf of PFL VARIABLE LIFE ACCOUNT A, a separate
account established by PFL Life Insurance Company under the laws of the State of
Iowa, hereby make, constitute, and appoint CRAIG D. VERMIE AND JOHN D.
CLEAVENGER, and each of them, singularly, as his true and lawful
attorney-in-fact with full power:
(1) to sign and cause to be filed with the Securities and Exchange
Commission, a registration statement on Form S-6 under the Securities
Act of 1933, as amended (the "1933 Act") and the Investment Company Act
of 1940, as amended, on behalf of PFL Variable Life Account A;
(2) to sign and cause to be filed with the Securities and Exchange
Commission any and all amendments to such Form S-6 registration
statement including post-effective amendments pursuant to Rule 485
under the 1933 Act; and
(3) to take any and all other actions of whatever kind or nature in
connection with such registration statements which said
attorneys-in-fact may deem advisable, including providing any
certifications or exhibits, and making any requests for acceleration.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ PATRICK S. BAIRD SENIOR VICE PRESIDENT AND DIRECTOR SEPTEMBER 13, 1999
</TABLE>
EXHIBIT 10
[LOGO] PFL Life Insurance Company HOME OFFICE: 4333 EDGEWOOD RD., N.E.
CEDAR RAPIDS, IA 52499
New Business
Conversion Policy # __________
Rewrite Number _______________
APPLICATION FOR LIFE INSURANCE
Agent Name: ___________________________________________
Agent Number: _________________________________________
Broker/Dealer:(If Applicable) _________________________
Date Faxed: (If Applicable) ___________________________
Amount of initial premium with application $ ________________
Amount to be applied to application
$ ________________
$ ________________
$ ________________
DO:
------------------
o Complete the entire application (front and back).
o Print application in black ink.
o Have applicant initial all changes.
o Obtain all required signatures.
o Include certification if a trust is owner of the policy.
o Attach additional sheet of paper if necessary.
DON'T:
------------------
o Do not use pencil or whiteout.
o Do not accept or send money on applications that total more than
$1,000,000.00
o Do not submit an agent check as the initial premium.
o Do not submit starter checks or deposit slips for checkomatic withdrawals.
<PAGE>
LIFE APPLICATION-PART 1 PFL - PFL Life Insurance Company APPLICATION #_________
SECTION 1. PROPOSED PRIMARY INSURED
1. Last Name First Name M.I.
________________________________________|_______________________________|_______
2. Address Apt# City
_____________________________|__________|_______________________________________
State Zip Code 3. Years at Address 4. Home Phone 5.Driver License Number State
______|_________|___________________|_____________|_______________________|_____
6. Sex 7. Date of Birth 8. Age 9. Place of Birth - State/County
o Male MM-DD-YYYY
o Female |_____________________|____________|_______________________________
10. Social Security Number
__________________________
11. Height 12. Weight 13. Marital Status 14. Employer Years
ft in lbs
___________|___________|_________________|_________________________________|____
15. Occupation & Duties
________________________________________________________________________________
16. Employer's Address 17. Business Phone Number
( ) -_____-________
____________________________________________________|___________________________
18. Have you used TOBACCO or any other product containing NICOTINE in the last
5 years? [ ] No [ ] Yes, Date of last use ________________
19. Rate Class Quoted: [ ] Preferred non-tobacco [ ] Preferred tobacco
[ ] Standard non-tobacco [ ] Standard tobacco
[ ] Preferred Plus (Term Only)
[ ] Other _______________________________________________
SECTION 2. PROPOSED ADDITIONAL/JOINT INSURED - if more than one please use a
supplemental application
1. Last Name First Name M.I.
________________________________________|_______________________________|_______
2. Address Apt# City
_____________________________|__________|_______________________________________
State Zip Code 3. Years at Address 4. Home Phone 5.Driver License Number State
______|_________|___________________|_____________|_______________________|_____
6. Sex 7. Date of Birth 8. Age 9. Place of Birth - State/County
o Male MM-DD-YYYY
o Female |_____________________|____________|_______________________________
10. Social Security Number
__________________________
11. Height 12. Weight 13. Marital Status 14. Relationship to Proposed Insured
ft in lbs
___________|___________|_________________|______________________________________
15. Employer Years
_________________________________|_______
16. Occupation & Duties
________________________________________________________________________________
17. Employer's Address 18. Business Phone Number
( ) -_____-________
____________________________________________________|___________________________
19. Have you used TOBACCO or any other product containing NICOTINE in the last
5 years? [ ] No [ ] Yes, Date of last use ________________
20. Rate Class Quoted: [ ] Preferred non-tobacco [ ] Preferred tobacco
[ ] Standard non-tobacco [ ] Standard tobacco
[ ] Preferred Plus (Term Only)
[ ] Other _______________________________________________
SECTION 3. APPLICANT/OWNER IF OTHER THAN THE PROPOSED PRIMARY INSURED
1. Last Name First Name M.I.
________________________________________|_______________________________|_______
2. Address Apt# City
_____________________________|__________|_______________________________________
State Zip Code 3. Home Phone 4. Social Security Number/Tax ID#
( ) -_____-_________
______|_________|_______________________|________________________
5. Date of Birth/Trust Date 6. Relationship to the Proposed Primary Insured
M M - D D - Y Y Y Y
_____________________________|__________________________________________________
SECTION 4. CHILDREN'S INSURANCE RIDER
COVERAGE AMOUNT ($1,000 MINIMUM TO $15,000 TERM/25,000 UL MAXIMUM COVERAGE FOR
CHILDREN 18 AND UNDER) $ __________________________
Name Relationship Date of Birth Height Weight
- ----------------------------------------------------------------------
________|__________________|MM-DD-YYYY ____ft______in|__________lbs
- ----------------------------------------------------------------------
________|__________________|MM-DD-YYYY ____ft______in|__________lbs
- ----------------------------------------------------------------------
________|__________________|MM-DD-YYYY ____ft______in|__________lbs
- ----------------------------------------------------------------------
Are all children listed? [ ] Yes [ ] No
Are children living with proposed primary insured? [ ] Yes [ ] No
If not, explain why: ___________________________________________________________
<PAGE>
SECTION 5. PRIMARY BENEFICIARY - If percentage shares are not given they will be
equal, or to the survivor
Name Percent Relationship Social Security Number/Tax ID#
- --------------------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
SECTION 6. CONTINGENT BENEFICIARY - If percentage shares are not given they will
be equal, or to the survivor
Name Percent Relationship Social Security Number/Tax ID#
- --------------------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
SECTION 7. PROPOSED PLAN OF INSURANCE:
1. [ ] Universal Life __________________________________________________________
[ ] Variable Life (complete sections 11-16) _________________________________
[ ] Term Life (indicate term period) ________________________________________
[ ] Joint Life ______________________________________________________________
[ ] Other ___________________________________________________________________
2. No Lapse Period (if applicable) [ ] 20 years [ ] 30 years [ ] Age 100
3. Modal Premium $ _____________________________________________________________
[ ] Include rider(s) in stated premium
4. Face/Specified Amount $ _____________________________________________________
5. Excess: Modal Premium $ _____________________________________________________
Lump Sum Deposit $ __________________________________________________
6. Total Initial Life Premium $ ________________________________________________
7. Automatic Premium Loan (APL) [ ] Yes [ ] No
Automatic Premium Payment Authorization (APPA) [ ] Yes [ ] No
8. If Application is approved other than as requested:
[ ] Adjust premium [ ] Adjust face
9. Benefit/Riders Benefit Units
Monthly $ Amount
[ ] Waiver of Premium Benefit (WP) _______________________
[ ] Waiver of Monthly Deduction _______________________
[ ] Children's Rider _______________________
[ ] Additional Insured Rider (AIR) _______________________
[ ] Base Insured Rider (BIR) _______________________
[ ] Accidental Death Benefit (ADB) _______________________
[ ] Guaranteed Insurability Rider (GIR) _______________________
[ ] Double Waiver of Premium (DWP) _______________________
[ ] Completion of Deposit Rider (CDR) _______________________
[ ] Income Replacement Rider (IRBR) _______________________
[ ] Level Term Period (years) [ ]10 [ ]15 [ ]20 [ ]25 [ ]30
[ ] Other ___________________________________ _______________________
[ ] Other ___________________________________ _______________________
SECTION 8. DEATH BENEFIT OPTION:
[ ] A) Level benefit [ ] B) Increasing benefit
SECTION 9. PREMIUMS PAYABLE:
Planned Modal Premium: $_____________________
Billing Method: [ ] Checkomatic ____|____ Draft Date (1ST thru 28TH)
[ ] Payroll Deduct [ ] Direct Bill [ ] Military Allot
[ ] Civil Service Allot
Billing Frequency: [ ] Single Premium [ ] Semi-annual [ ] Monthly
[ ] Annual [ ] Quarterly [ ] Other___________
Billing Address:________________________________________________________________
SECTION 10: OTHER INSURANCE IN FORCE FOR ALL PROPOSED INSUREDS NONE
Proposed Insured Name Company Amount of insurance Year issued Replacement?
_________________________|_________|_|_|_|_|_|_|_|_|_|__|__________|___Yes ___No
_________________________|_________|_|_|_|_|_|_|_|_|_|__|__________|___Yes ___No
_________________________|_________|_|_|_|_|_|_|_|_|_|__|__________|___Yes ___No
_________________________|_________|_|_|_|_|_|_|_|_|_|__|__________|___Yes ___No
IS THIS INTENDED TO BE A 1035 EXCHANGE? [ ] Yes [ ] No [ ]
Anticipated Cash Value Transfer $ __________________________
1. Will the insurance applied for on any proposed insured
replace or change any existing life or annuity policy? [ ] Yes [ ] No
IF YES, COMPLETE REPLACEMENT FORMS, IF APPROPRIATE.
2. To your knowledge, will the initial and/or future
premiums come from dividends, policy loans, withdrawals
or cash surrender? If yes, provide details below. [ ] Yes [ ] No
PFL Policy number _________________________________ [ ] Non-PFL
Dividends $________________________________________ Loan $___________________
Surrender: [ ] Yes [ ] No
<PAGE>
LIFE APPLICATION
________________________________________________________________________________
SECTION 11. PERSONAL FINANCIAL STATEMENT
A) Gross Income Current Yr $ ______ _________ _________
B) Gross Income Previous Yr $ ______ _________ _________
C) Net Worth $ ______ _________ _________
For over $1 million applied coverage complete a separate financial questionnaire
12. COMPLETE FOR BUSINESS COVERAGE
A) Current Estimated Market Value $________ ________ ______
B) Assets $________ ________ ______
C) Liabilities $________ ________ ______
D) Net Worth $________ ________ ______
E) Percentage of business owned by Proposed Insured _________%
SECTION 13. PREMIUM ALLOCATIONS - (For Variable Plans Only) Must add up to 100%
and be a whole number.
5% minimum for each allocation/limit of 10 funds
<TABLE>
<CAPTION>
<S> <C> <C>
JANUS GROWTH __|__|__% AIM GROWTH __|__|__% OPPEN. HIGH INCOME __|__|__%
JANUS WORLDWIDE GRO. __|__|__% AIM INTERN. EQUITY __|__|__% FIDELITY INDEX 500 __|__|__%
JANUS BALANCED __|__|__% AIM GOV. SECURITIES __|__|__% FIDELITY MONEY MKT. __|__|__%
JANUS AGGR. GROWTH __|__|__% OPPEN. GROWTH & INC. __|__|__% FIDELITY GROWTH __|__|__%
JANUS CAPITAL APPR. __|__|__% OPPEN. MULTIPLE STRAT. __|__|__% FIDELITY CONTRAFUND __|__|__%
AIM VALUE __|__|__% OPPENHEIMER BOND __|__|__% FIDELITY GROWTH & INC. __|__|__%
AIM CAPITAL APPREC. __|__|__% OPPEN. STRAT. BOND __|__|__% FIXED ACCOUNT __|__|__%
OTHER ____________ __|__|__% OTHER________________ __|__|__% OTHER _______________ __|__|__%
</TABLE>
SECTION 14. Investment Objective
[ ] Long-Term Growth [ ] Tax Credit [ ] Short-Term Growth
[ ] Income [ ] Safety of Principal [ ] Other _____________________
SECTION 15. SUITABILITY FOR VARIABLE LIFE INSURANCE POLICY - Complete for all
variable plans
A) Have you, the Proposed Insured, and Purchaser, if
other than the Proposed Insured, received the current
Prospectus for the policy? [ ] Yes [ ] No
B) DO YOU UNDERSTAND THAT UNDER THE POLICY APPLIED FOR
(EXCLUSIVE OF ANY OPTIONAL BENEFITS), THE AMOUNT OF
DEATH BENEFIT AND THE ENTIRE AMOUNT OF THE POLICY
VALUE MAY INCREASE OR DECREASE DEPENDING UPON THE
INVESTMENT EXPERIENCE? [ ] Yes [ ] No
C) With this in mind, is the policy in accord with your
insurance objectives and your anticipated financial
needs? [ ] Yes [ ] No
SECTION 16. TO BE COMPLETED BY APPLICANT/OWNER
Telephone Transfer Authorization: (See Prospectus for telephone transfer
procedures.)
Your policy applied for, if issued, will automatically receive telephone
transfer privileges described in the applicable prospectus unless instructions
to the contrary are indicated below. These privileges allow you to give the
registered representative/agent of record for this policy authority to make
telephone transfers and to change the allocation of future payments among the
Sub-Accounts on your behalf according to your instructions.
[ ] I do NOT want telephone transfer privileges.
PFL Life Insurance Company will not be liable for complying with telephone
instructions it reasonably believes to be authentic, nor for any loss, damage,
costs or expense in acting on such telephone instructions, and Policyowners will
bear the risk of any such loss. PFL Life Insurance Company will employ
reasonable procedures to confirm that telephone instructions are genuine, such
as requiring forms of personal identification prior to acting upon such
telephone instruction, providing written confirmation of such transactions to
Policyowners and/or tape recording of telephone transfer request instructions
received. If PFL Life Insurance Company does not employ such procedures, it may
be liable for losses due to unauthorized or fraudulent instructions.
<PAGE>
LIFE APPLICATION - PART 2
________________________________________________________________________________
SECTION 17. GENERAL INFORMATION - Provide details to "yes" answers in REMARKS.
Include question number and related insured.
1. Have you or any Proposed Insured,
(A) Ever had life, disability or health insurance
declined, rated, modified, issued with an exclusion
rider, canceled, or not renewed? [ ] Yes [ ] No
(B) Is there an application for life, accident or
sickness insurance now pending or contemplated on any
proposed insured in this or any other company? If
yes, give details in Agent's Report, Question 3. [ ] Yes [ ] No
(C) Within the past 5 years traveled or resided, or do
you intend to travel or reside, outside the United
States or Canada? If "yes," please indicate the
destination(s), purpose, and duration. [ ] Yes [ ] No
(D) Ever used or been convicted for possession of drugs,
including but not limited to hallucinogens (LSD),
Opiates (Heroin, Morphine), Marijuana, Cocaine,
Sedatives or Inhalants? [ ] Yes [ ] No
(E) Within the past 3 years been charged with or
convicted of any felony, or been on probation? [ ] Yes [ ] No
(F) Within the past 5 years been convicted of, a moving
traffic violation, or plead guilty or no contest to,
reckless driving or driving under the influence of
alcohol or drugs? If "yes," list the violation(s),
provide conviction(s) and date(s) of occurrence. [ ] Yes [ ] No
(G) Within the past 5 years engaged in, or planned to
engage in, any sport including but not limited to:
scuba diving, skydiving, or auto, motorcycle or
motorboat racing? If "yes", please complete Sports
Questionnaire, (Section 20). [ ] Yes [ ] No
(H) Within the past 5 years made, or contemplated making,
any flight other than as a fare-paying passenger? [ ] Yes [ ] No
If "yes," will you accept an exclusion rider? If "no"
please complete Aviation Questionnaire, (Section 19).
(I) Had any weight change in the past year? [ ] Yes [ ] No
(J) Within the past 5 years been partially or totally
disabled due to injury or disease? [ ] Yes [ ] No
(K) Are you presently or do you intend to become a member
of the Armed Forces, National Guard or a Reserve
Unit? If "yes," please provide date(s). [ ] Yes [ ] No
(L) Do you exercise? If "yes," describe type, how often
per week, and how long per session? [ ] Yes [ ] No
(M) Have you or any Proposed Insured ever used or are
currently using alcoholic beverages? [ ] Yes [ ] No
If "yes," please provide type of drinks consumed, the
number of occasions a year, and the number of drinks
consumed on those occasions.
Remarks
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
SECTION 18. NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONAL PHYSICIAN
(If none, so state)
Primary Insured Joint or Additional Insured Children
______________________ ___________________________ _______________________
______________________ ___________________________ _______________________
______________________ ___________________________ _______________________
______________________ ___________________________ _______________________
Date and reason last Date and reason last Date and reason last
consulted this physician consulted this physician consulted this physician
______________________ ___________________________ _______________________
______________________ ___________________________ _______________________
<PAGE>
LIFE APPLICATION
SECTION 19. AVIATION QUESTIONNAIRE (Complete if applicable)
Type of License Now Held _________________ Date of Issue ______________________
Do you have an IFR (Instrument Flight Rating)? [ ] Yes [ ] No
If expired, do you intend to renew? [ ] Yes [ ] No
Total solo hours flown as pilot. _______ Date of last flight as pilot. _________
Have you ever had an airplane accident? If yes, explain. [ ] Yes [ ] No
________________________________________________________________________________
Do you intend to fly outside the U.S.? If yes, explain. [ ] Yes [ ] No
________________________________________________________________________________
Is the aircraft you fly kept at an airport with suitable maintenance facilities?
If no, explain. [ ] Yes [ ] No
________________________________________________________________________________
Do you want full coverage if an extra premium is necessary? [ ] Yes [ ] No
Do any of your duties require you to make flights?
If yes, explain. [ ] Yes [ ] No
________________________________________________________________________________
Hours as Pilot or Co-Pilot
Contemplated Past One to Two
TYPE OF FLYING Next 12 Months 12 Months Years Ago
COMMERCIAL (Flying for pay)
Scheduled passenger airline
- --------------------------------------------------------------------------------
Employer owned aircraft for
employee transportation
- --------------------------------------------------------------------------------
Crop dusting or aerial
spraying
- --------------------------------------------------------------------------------
Check flying of repaired or
production line aircraft
- --------------------------------------------------------------------------------
Student instruction
- --------------------------------------------------------------------------------
Freight carrying or
non-scheduled passenger service,
charter or sight-seeing flying
- --------------------------------------------------------------------------------
Other (describe)
- --------------------------------------------------------------------------------
NON-COMMERCIAL (not flying
for pay)
Pleasure
- --------------------------------------------------------------------------------
Personal business
transportation
- --------------------------------------------------------------------------------
Instruction as student
- --------------------------------------------------------------------------------
Other (describe)
- --------------------------------------------------------------------------------
MILITARY
- --------------------------------------------------------------------------------
SECTION 20. SPORTS QUESTIONNAIRE (Complete if applicable)
1. Parachuting - Skydiving - Jumps per year ________ Total No. of Jumps _______
Name of club ___________________________________
2. Racing - Have you engaged in or do you contemplate engaging in any of the
following form(s) of racing? Give details below.
[ ] Automobile [ ] Hydroplane [ ] Motorcycle [ ] Motorboat
[ ] Other(s) Specify ___________________________________________________________
<TABLE>
<CAPTION>
Last 12 Months Contemplated Next 12 Months
---------------------- Average ---------------------------
Types of Number of Total Miles Speed of Fastest Speed Number of Total Miles
Racing* Races Raced Fastest Race Attained Races Raced
<S> <C> <C> <C> <C> <C> <C>
_____________ __________ __________ ____________ ____________ _________ ____________
_____________ __________ __________ ____________ ____________ _________ ____________
_____________ __________ __________ ____________ ____________ _________ ____________
</TABLE>
* Examples:
Automobile - midget, sportscar, stock car, championship, drag, kart.
Motorcycle - hill climbing, cross country, circular track
Motorboat - unmodified, modified, experimental. Unlimited hydroplane - jet,
other.
Over what type track do you race? (e.g., oval, simulated road.)_________________
Do you race professionally or for cash prizes? _________________________________
Additional remarks clarifying answers to above questions _______________________
3. Scuba Diving - Have you engaged in or do you contemplate engaging in any form
of scuba diving? [ ] Yes [ ] No Give details below.
<TABLE>
<CAPTION>
Last 12 Months Contemplated Next 12 Months
--------------------------------------- --------------------------------------
Number of Dives Avg Time Underwater Number of Dives Avg Time Underwater
Depth of Dives (Feet) Per Dive Per Dive
- --------------------- --------------- -------------------- ---------------- --------------------
<S> <C> <C> <C> <C>
Less Than 75 _______________ ____________________ ________________ ____________________
76-100 _______________ ____________________ ________________ ____________________
100 and Over _______________ ____________________ ________________ ____________________
</TABLE>
<PAGE>
SECTION 21. MEDICAL QUESTIONS - Each question must be individually asked and
answered.
Give the details of "Yes" answers below. Identify question number; state signs,
symptoms and diagnosis of each illness or injury. List the details and results
of any treatment; List the name, full address and dates of each health care
provider consulted.
To the best of your knowledge, has any Proposed Insured within the last 10 years
had or been told by a member of the medical profession that he or she had, or
has been treated for:
1) Illness, injury or disease of the eyes, ears, nose or
throat? [ ] Yes [ ] No
2) Epilepsy, seizures, chronic headaches, head injury,
paralysis, or other disorder of the nervous system? [ ] Yes [ ] No
3) Anxiety, depression, affective disorder, eating
disorder, psychotic disorder, or other psychiatric
treatment? [ ] Yes [ ] No
4) Asthma, emphysema, tuberculosis, shortness of breath,
persistent hoarseness or cough, or other respiratory
illness or disease? [ ] Yes [ ] No
5) High blood pressure, heart attack, stroke, heart
murmur, palpitation, arrhythmia, chest pain,
rheumatic fever, or other illness or disease of the
heart or circulatory system? [ ] Yes [ ] No
6) Ulcer, colitis, Crohn's disease, diverticulitis,
hepatitis, intestinal bleeding, or illness or disease
of the gallbladder, stomach, intestines, or liver? [ ] Yes [ ] No
7) Sugar, albumin, or blood in urine, or other illness
or disease of the kidneys, bladder, or urinary
system? [ ] Yes [ ] No
8) Diabetes, thyroid disorder, cholesterol elevation,
anemia, or other illness or disease of the blood? [ ] Yes [ ] No
9) Arthritis, gout, lupus, illness, injury or disease of
the back, spine or joints, or other illness, injury
or disease of the muscles or bones? [ ] Yes [ ] No
10) Disease or disorder of the skin, cysts, tumor, skin
cancer or any other cancer or malignancy? [ ] Yes [ ] No
11) Any illness or disease of the male or female
reproductive organs, sexually transmitted disease,
prostate problems, irregular menstruation or abnormal
pap test? [ ] Yes [ ] No
12) An examination, treatment or consultation with a
doctor or health care provider other than above? [ ] Yes [ ] No
13) Had or been advised to have a check-up, consultation,
lab test, EKG, X-Ray, or other diagnostic test? [ ] Yes [ ] No
14) Received or been advised to have treatment for drug
usage, whether legal or illegal, alcoholism or been a
member of AA? [ ] Yes [ ] No
15) Are you currently under the observation of a
physician or taking medication? [ ] Yes [ ] No
16) Family History: Is there a history of cardiovascular
disease or cancer in parent/siblings prior to age 60? [ ] Yes [ ] No
FAMILY HISTORY
Age if Age of
Insured Living? Status of Health Death? Cause of Death?
- ------- ------- ---------------- ------ ------------------------
Father _______ ________________ ______ ________________________
Mother _______ ________________ ______ ________________________
Sibling(s) _______ ________________ ______ ________________________
Age if Age of
Spouse Living? Status of Health Death? Cause of Death?
- ------- ------- ---------------- ------ ------------------------
Father _______ ________________ ______ ________________________
Mother _______ ________________ ______ ________________________
Sibling(s) _______ ________________ ______ ________________________
SECTION 21A. DETAILS TO "YES" ANSWERS FOR MEDICAL QUESTIONS SECTION
<TABLE>
<CAPTION>
Name, Address and Phone# of
Question # Proposed Insured's Name Date, Diagnosis, Treatment, Results, and Duration Attending Doctor and Hospital
- ---------- ----------------------- ------------------------------------------------- -----------------------------
<S> <C> <C> <C>
__________ _______________________ _________________________________________________ _____________________________
__________ _______________________ _________________________________________________ _____________________________
__________ _______________________ _________________________________________________ _____________________________
__________ _______________________ _________________________________________________ _____________________________
__________ _______________________ _________________________________________________ _____________________________
__________ _______________________ _________________________________________________ _____________________________
__________ _______________________ _________________________________________________ _____________________________
__________ _______________________ _________________________________________________ _____________________________
__________ _______________________ _________________________________________________ _____________________________
__________ _______________________ _________________________________________________ _____________________________
__________ _______________________ _________________________________________________ _____________________________
__________ _______________________ _________________________________________________ _____________________________
</TABLE>
<PAGE>
SECTION 21B. MEDICAL QUESTIONS - CONTINUED - Provide details to "yes" answer in
REMARKS. Include related insured.
Please complete the AIDS question for the state the application is signed in as
indicated below. If this state is not listed, answer the first question.
17) Have you or any Proposed Insured EVER been diagnosed as
having or been treated for AIDS, or AIDS Related
Complex (ARC) or tested positive for the AIDS virus? [ ] Yes [ ] No
For applicants in:
ARIZONA Have you or any Proposed Insured EVER, been
diagnosed as having or been treated for AIDS,
or AIDS Related Complex (ARC)? [ ] Yes [ ] No
CALIFORNIA Have you or any Proposed Insured EVER, had or
been told you/they have AIDS, or AIDS Related
Complex (ARC), or been tested for HIV
antibodies for the purpose of obtaining
insurance? [ ] Yes [ ] No
CONNECTICUT Have you or any Proposed Insured EVER, been
diagnosed as having or been treated for
Acquired Immune Deficiency Syndrome (AIDS),
AIDS Related Complex (ARC), or AIDS related
conditions? [ ] Yes [ ] No
FLORIDA Have you or any Proposed Insured EVER, tested
positive for exposure to the HIV infection,
or been diagnosed as having ARC, or AIDS
caused by the HIV infection? [ ] Yes [ ] No
GEORGIA,HAWAII, ILLINOIS, NEW JERSEY Have you or any
Proposed insured EVER, been diagnosed as
having or been treated, by a member of the
medical profession for AIDS, or AIDS Related
Complex (ARC)? [ ] Yes [ ] No
MAINE Have you or any Proposed Insured EVER, been
diagnosed as having or been treated for AIDS,
or AIDS Related Complex (ARC)? ANSWER THIS
QUESTION NO IF YOU HAVE TESTED POSITIVE FOR
HIV AND HAVE NOT DEVELOPED SYMPTOMS OF THE
DISEASE AIDS. [ ] Yes [ ] No
MARYLAND, MASSACHUSETTS, NEW MEXICO, and NORTH CAROLINA
Have you or any Proposed Insured EVER, been
diagnosed as having or been treated for
Acquired Immune Deficiency Syndrome (AIDS) or
AIDS Related Complex (ARC), or tested
positive for Human Immunodeficiency Virus
(HIV)? [ ] Yes [ ] No
MISSOURI, OHIO Have you or any Proposed Insured EVER,
been diagnosed as having or been treated for
AIDS, or AIDS Related Complex (ARC) or tested
positive for the HTLV-III test? [ ] Yes [ ] No
NORTH DAKOTA Have you been diagnosed or treated by
a member of the medical profession as having
AIDS, ARC or the HIV infection? [ ] Yes [ ] No
VERMONT Have you or any Proposed Insured EVER, been
diagnosed, by a person licensed as a medical
physician, as having or been treated for AIDS
or AIDS Related Complex (ARC)? [ ] Yes [ ] No
WASHINGTON Have you or any Proposed Insured EVER had or
been treated or diagnosed by a member of the
medical profession for immune deficiency
disorder, AIDS (Acquired Immune Deficiency
Syndrome) or ARC (AIDS Related Complex) or
test results indicating exposure to the AIDS
virus? [ ] Yes [ ] No
WISCONSIN Have you or any Proposed Insured EVER, been
diagnosed, by a member of the medical
profession as having or been treated for
AIDS, or AIDS Related Complex (ARC) or tested
positive for the AIDS virus? Tests for
HIV/AIDS must be limited to FDA-licensed
blood test. Test results received at
anonymous counseling and testing sites or
from home test kits need not be disclosed. [ ] Yes [ ] No
REMARKS
SECTION 22. FAIR CREDIT REPORTING PRE-NOTICE
A routine investigative consumer report may possibly be made regarding your
general reputation, character, mode of living and personal characteristics. This
information may be obtained through personal interviews with your friends,
neighbors and associates. Should you desire additional information on the nature
and scope of such a report, you may write the Underwriting Department, PFL Life
Insurance Company, 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499, (319)
398-8511.
Information regarding your insurability will be treated as confidential. PFL
Life Insurance Company or its reinsurers may, however, make a brief report
thereon to the Medical Information Bureau, a non-profit membership organization
of life insurance companies, which operates an information exchange on behalf of
its members. If you apply to another Bureau member for life or health insurance
coverage, or a claim for benefits is submitted to such a company, the Bureau,
upon request, will supply such company with the information in its file.
Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file. If you question the accuracy of
information in the Bureau's file, you may contact the Bureau and seek a
correction in accordance with the procedures set forth in the Federal Fair
Credit Reporting Act. The address of the Bureau's information office is Post
Office Box 105, Essex Station, Boston, Massachusetts 02122, telephone number
(617) 426-3660.
PFL Life Insurance Company or its reinsurers may also release information in
this file to other life insurance companies to whom you may apply for life or
health insurance or to whom a claim for benefits may be submitted.
<PAGE>
SECTION 23. TAXPAYER ID
TAXPAYER IDENTIFICATION NUMBER STATEMENT
Taxpayer Identification Number of Policyholder:_________________________________
Social Security Number or Employer Identification Number
- --------------------------------------------------------------------------------
Check the box if you ARE NOT subject to backup withholding under the
provisions of section 3406(a)(1)(C) of the Internal Revenue Code [ ]
- --------------------------------------------------------------------------------
Check the box if you ARE subject to backup withholding under the
provisions of section 3406(a)(1)(C) of the Internal Revenue Code [ ]
- --------------------------------------------------------------------------------
The Internal Revenue Service does not require your consent to any provision of
this document other than the following certification required to avoid backup
withholding.
- --------------------------------------------------------------------------------
Under penalties of perjury, I hereby certify (1) that the Social Security or
Taxpayer I.D. number listed above is correct and (2) that my current status
regarding backup withholding is correct.
- --------------------------------------------------------------------------------
SECTION 24. AUTHORIZATION TO OBTAIN INFORMATION
I authorize any physician, medical professional, hospital, clinic, other medical
care institution, the Medical Information Bureau, Inc., insurance company,
Department of Motor Vehicle Records, consumer reporting agency, or employer
having information available as to employment, other insurance coverage, medical
care, advice or treatment with respect to any physical or mental condition
regarding me to give such information to PFL Life Insurance Company, its
reinsurers, or any consumer reporting agency except the Medical Information
Bureau acting on PFL Life Insurance Company's behalf.
I authorize PFL Life Insurance Company to obtain an investigative consumer
report on me.
I understand that this information will be used by PFL Life Insurance Company or
its reinsurers, to determine eligibility for life insurance.
I agree that this authorization is valid for two and one-half years from the
date signed. I know that I have the right to receive a copy of this
authorization upon request. I agree that a photographic copy of this
authorization is as valid as the original.
I have received a copy of the "Notice of Information Practices" attached to this
application.
I also hereby authorize PFL Life Insurance Company to provide its affiliated
companies any and all information provided herein and obtained hereafter on me.
This authorization shall be valid from the date signed below until affirmatively
withdrawn in writing by myself.
SECTION 25. REPRESENTATIONS
I represent that the statements and answers in this application are true and
complete to the best of my knowledge.
I understand that I should consult my own tax and/or legal counsel as to the
consequences of using this product in conjunction with my own particular tax or
financial plan.
It is agreed that:
(a) the statements and answers given in this application, and any amendments or
application supplements to it or statements made to the medical examiner,
will be the basis of any insurance issued;
(b) no agent or medical examiner has the authority to make or alter any
contract for the Company;
(c) if a premium deposit is given in exchange for the Conditional Receipt, no
insurance shall take effect unless all of the conditions set out in that
receipt are satisfied;
(d) if a premium deposit is not given, no insurance shall take effect unless
all of the following conditions are satisfied;
(1) a policy issued by the Company is delivered to and accepted by the
owner during the lifetime of each person to be covered by such policy,
(2) the full first premium is paid, and (3) the health and
insurability of each person proposed for insurance has not changed
since the date of this application.
Signed at ______________________________ __________________ on _______________
(city) (state) (date)
_____________________________ _________________________________________________
Signature of proposed insured Print Agent Name Social Security # of Agent
_____________________________ _________________________________________________
Signature of Additional/ Signature of Agent State License #
Joint Insured
_____________________________ _________________________________________________
Signature of Additional/ Signature of Agent State License #
Joint Insured
_____________________________ _________________________________________________
Signature of applicant Signature of Agent State License #
(owner) other than the
proposed insured
(If business insurance,
show title of officer and
name of firm)
_____________________________ _________________________________________________
Signature of parent or legal Signature of Agent State License #
guardian for insured(s)
Total Amount Paid: $ ______________ [ ] Check [ ] COM [ ] Other ________________
<PAGE>
PFL LIFE INSURANCE COMPANY
FRAUD WARNING
The following states require that insurance applicants acknowledge a fraud
warning statement.
Please refer to the fraud warning statement for your state as indicated below.
For applicants in ARKANSAS
- --------------------------
Any person who knowingly presents a false or fraudulent claim for payment of a
loss or benefit or knowingly presents false information in an application for
insurance is guilty of a crime and may be subject to fines and confinement in
prison.
_______________________________________________ ____________________________
Applicant's Signature Date
For applicants in COLORADO
- --------------------------
It is unlawful to knowingly provide false, incomplete, or misleading facts or
information to an insurance company for the purpose of defrauding or attempting
to defraud the company. Penalties may include imprisonment, fines, denial of
insurance, and civil damages. Any insurance company or agent of an insurance
company who knowingly provides false, incomplete, or misleading facts or
information to a policyholder or claimant for the purpose of defrauding or
attempting to defraud the policyholder or claimant with regard to a settlement
or award payable from insurance proceeds shall be reported to the Colorado
Division of Insurance within the Department of Regulatory Agencies.
_______________________________________________ ____________________________
Applicant's Signature Date
For applicants in FLORIDA
- -------------------------
Any person who knowingly and with intent to injure, defraud, or deceive any
insurer files a statement of claim or an application containing any false,
incomplete, or misleading information is guilty of a felony in the third degree.
_______________________________________________ ____________________________
Applicant's Signature Date
For applicants in KENTUCKY, OHIO, and PENNSYLVANIA
- --------------------------------------------------
Any person who knowingly and with intent to defraud any insurance company or
other person files an application for insurance or a statement of claim
containing any materially false information or conceals for the purpose of
misleading, information concerning any fact material thereto commits a
fraudulent insurance act, which is a crime and subjects such person to criminal
and civil penalties.
_______________________________________________ ____________________________
Applicant's Signature Date
For applicants in MAINE, VIRGINIA and DISTRICT OF COLUMBIA
- ----------------------------------------------------------
It is a crime to knowingly provide false, incomplete or misleading information
to an insurance company for the purpose of defrauding the company. Penalties
include imprisonment, fines and denial of insurance benefits.
_______________________________________________ ____________________________
Applicant's Signature Date
For applicants in MINNESOTA
- ---------------------------
A person who files a claim with intent to defraud or helps commit a fraud
against an insurer is guilty of a crime.
_______________________________________________ ____________________________
Applicant's Signature Date
For applicants in NEW JERSEY
- ----------------------------
Any person who includes any false or misleading information on an application
for an insurance policy is subject to criminal and civil penalties.
_______________________________________________ ____________________________
Applicant's Signature Date
For applicants in NEW MEXICO
- ----------------------------
Any person who knowingly presents a false or fraudulent claim for payment of a
loss or benefit or knowingly presents false information in an application for
insurance is guilty of a crime and may be subject to fines and criminal
penalties.
_______________________________________________ ____________________________
Applicant's Signature Date
<PAGE>
AGENT'S REPORT
1. a) How long have you known the Proposed Insured?
_____________________________________________________________________________
b) Relationship to the Proposed Primary Insured:
_____________________________________________________________________________
c) Are you financially responsible for the Proposed Primary Insured?
[ ] Yes [ ] No
2. Did you give the "Notice of Information Practices" to the Proposed Insured?
[ ] Yes [ ] No
3. Are you submitting or do you plan to submit an application on any
Proposed Insured on this application to any other company?
[ ] Yes [ ] No
Company Name ___________________________
Face amount $___________________________
Total face amount to be placed with all companies
_________________________________________________
4. Will the policy applied for replace or change any existing life insurance
policy or annuity?
[ ] Yes [ ] No
If "Yes", explain and submit special replacement form if required in your
state._______________________________________________________________________
5. Medical Examination
Are you arranging for the Medical Requirements
[ ] Yes Paramedical Service used: ___________________________________________
[ ] No Request PFL Life Insurance Company order medical reqs.
6. Was the money taken with the application?
[ ] Yes [ ] No
If "Yes", was the Conditional Receipt completed and given to the applicant?
[ ] Yes [ ] No
7. Did you ask all questions in the presence of the Proposed Insured(s)?
[ ] Yes [ ] No
8. Was a Confidential Service Sheet or some other needs analysis tool completed
during the interview?
[ ] Yes [ ] No
(If "No," explain) _________________________________________
9. Are you aware of anything about the health, habits, avocation,
environment or mode of living, except as may be related directly or
indirectly to sexual orientation, which may affect the insurability of any
person proposed for insurance?
[ ] Yes [ ] No
10. If Proposed Insured is a juvenile (ages 0 through 15):
(a) Did you personally see child? [ ] Yes [ ] No
(b) Does child live with parents? [ ] Yes [ ] No
(If "No," explain) __________________________________________________________
(c) Life insurance in force on parent's life?
_________________________________________________________________________
(d) Life insurance applied for or in force on brothers and sisters?
_________________________________________________________________________
11. Is Proposed Insured or Owner related to any InterSecurities, Inc.
officer or employee?
[ ] Yes [ ] No
12. Is Proposed Insured or Owner a licensed Representative of any Broker/
Dealer?
[ ] Yes [ ] No
If "Yes," Name and Address of Broker/Dealer
____________________________________________________________________________
13. Type of Sale (check two)
[ ] Direct [ ] Pension or Profit Sharing
[ ] Personal Needs Analysis [ ] Salary Savings (EICS)
[ ] Estate Planning [ ] Gift
[ ] Business Insurance [ ] Salary Allotment
Purpose of Policy
[ ] Personal Insurance [ ] Business Insurance
[ ] Mortgage [ ] Buy-Sell
[ ] Retirement [ ] Key Employee
[ ] Education [ ] Executive Bonus
[ ] Estate Liquidity [ ] Deferred Compensation
[ ] Income to Family [ ] Split Dollar
[ ] Cash Accumulation [ ] Reserve Split Dollar
[ ] Wealth Replacement [ ] Other
14. Was this plan sold, presented or illustrated as a VEBA, welfare benefit
concept as defined under IRC Section 419, Charitable Legacy Plan, Charitable
Retirement Plan, Charitable Remainder Life Program, or other similar
arrangement?
[ ] Yes [ ] No
If "Yes," have you completed and attached the required Disclosure,
Acknowledgment and Release Form and the accompanying Attorney's Statement?
[ ] Yes [ ] No
15. Did you comply with all requirements relative to obtaining Informed Consent
for HIV and AIDS testing?
[ ] Yes [ ] No
Writing Agent Name _____________________________________________________________
Agent No. ______________________________________________________________________
Agent's Telephone Number _______________________________________________________
Agent's Social Security Number _________________________________________________
Agent's Fax Number _____________________________________________________________
Percent of Agent's Split _______________________________________________________
Split Agent Name _______________________________________________________________
Agent No. Percent of Agent's Split _____________________________________________
Split Agent Name _______________________________________________________________
Agent No. Percent of Agent's Split _____________________________________________
Remarks _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
I submit this application assuming full responsibility for delivery of any
coverage issued and for immediate transmittal to the Company of the first
premium when collected. I know of no condition affecting the insurability of any
person proposed for insurance not fully set forth herein. I certify that a
Notice of Information Practices statement was given to the Applicant when this
application was taken. (If applicable)
$________________ has been paid by the Applicant with this application
____________________________________________________________________
Signature of Writing Agent
<PAGE>
PFL LIFE INSURANCE COMPANY
(Hereafter called the Company, we, our or us) (319-398-8511)
Home Office located at: 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO THE INSURANCE COMPANY - DO NOT MAKE
CHECK PAYABLE TO THE AGENT OR LEAVE THE PAYEE BLANK.
Received from _______________________ this _______ day of ______________, ______
an automatic payment authorization to withdraw the sum of _____ from my account,
cash/check for the sum of _______________________________________ ,
in connection with the application with PFL LIFE INSURANCE COMPANY. You
understand and agree that, subject to the Conditions of Coverage stated below,
the insurance shall be effective on the date of the application, or the date of
performance of any medical examination or other Underwriting requirements
required by PFL LIFE INSURANCE COMPANY, whichever is later, or any later date
requested by the applicant. Any offer of insurance and/or any insurance that
comes into effect according to the terms of this conditional receipt shall only
become effective if the Conditions of Coverage provision below is satisfied.
Liability Limits
The insurance which may take effect under this receipt before the policy and/or
certificate is delivered shall not exceed: (a) the amount applied for, or (b)
$500,000, whichever is smaller, less all other sums payable by the Company for
the death of a proposed insured under any other receipt or pending application.
If a proposed insured is not yet 15 days old or is more than 60 years old, no
insurance shall take effect until the policy and/or certificate is delivered.
If the insurance is not approved, a full refund of the amount shown above will
be made upon surrender of this receipt.
Conditions of Coverage
1. If all of the following conditions of coverage have been met, then
insurance will go into force on the effective date subject to the liability
limits shown above and subject to the conditions of the policy applied for.
The conditions of coverage are that:
(a) the full first premium on the premium mode selected for the policy
benefits applied for, including any additional premium required for
restrictions or benefits, is paid when the application is signed, and
(b) each proposed insured has completed any required medical examinations,
diagnostic tests, interviews or supplied PFL LIFE INSURANCE COMPANY with
any additional information, and
(c) each proposed insured is, on the effective date, insurable and
acceptable to the Company under its rules, limits and underwriting
standards for the plan and for the amount applied for without modification
and at the rate of premium paid.
2. If insurance does not take effect, under these conditions, then no
insurance shall take effect unless a policy is delivered to and accepted by
the applicant, and the full first premium paid before any change in the
insurability of any proposed insured since the date of application.
3. The "Effective Date" is the latest of:
(a) the date of the application, or
(b) the date all required medical examinations or diagnostic tests are
completed, or
(c) the date of issue if any requested in the application unless
underwriting is not yet completed, or
(d) the date of underwriting approval.
4. If insurance does not take effect as provided in this receipt, or if the
sum receipted for herein is less than the full first premium on the premium
mode selected and for the policy applied for, the Company's only liability
shall be to accept this receipt as cash toward payment on the first payment
on the first premium of any policy and/or certificate issued under the
application, or return the amount paid if no policy and/or certificate is
issued.
Type of Policy and/or Certificate ______________________________________________
____________________________________ ________________________________________
Signature of Applicant Signature of Licensed Agent
____________________________________ ________________________________________
Signature of Applicant Signature of Licensed Agent
<PAGE>
PFL LIFE INSURANCE COMPANY
Home Office: 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499
NOTICE OF INFORMATION PRACTICES
(Please detach and give to the Proposed Insured)
Thank you for applying to PFL Life Insurance Company. We appreciate your efforts
in completing each part of the application truthfully, accurately and
completely.
Underwriting
Once we receive your application, we will begin an evaluation process called
underwriting to determine whether you are eligible for insurance and, if so, the
rate you should pay for that insurance. We may find that we are unable to give
you the insurance you have applied for or that we are able to give it to you
only on a modified basis or at a rate greater than our lowest rate. For example,
if you have ever used any kind of tobacco or any other nicotine product, you may
not be eligible for our lowest rate. Your application will be our primary source
of information; therefore, it must be true, complete, and accurate. You must
inform us of a change to any answer in any part of your application before
accepting delivery of a policy; in fact, you agree to do so when you sign your
application. We may seek information from other sources to help us evaluate the
information you give us on your application.
Contestability
We strongly urge you to review the completed application closely for accuracy. A
claim may be denied or your coverage may be rescinded or contested by a lawsuit
if the application is incomplete or if it contains false statements,
misrepresentations, acts omissions, or is procured by fraud. If the policy is
rescinded or the lawsuit is successful, the policy will be void and coverage
will be lost. Any policy that is delivered to you will indicate when and under
what circumstances it may be contested as required by law. Please be aware that
if the application contains false or deceptive statements and you submitted it
with the intent to defraud or to facilitate fraud against us, you may also be
guilty of insurance fraud.
Replacement of Existing Coverage
If you intend to replace existing coverage, tell the agent of your intention and
answer "yes" to the replacement question in the application; state law may
require the agent to give you information that will help you compare the policy
you are applying for with the policy you intend to replace. If you are undecided
about keeping existing coverage, indicating an intention to replace existing
coverage may help you get the information you need to make a decision. If you do
replace existing coverage, the new policy may contain new suicide and
contestable periods as required by law. The following would be considered
replacement; you stop paying premiums on an existing policy or surrender an
existing policy before or shortly after applying to us or you borrow from an
existing policy to pay premiums for the insurance for which you are applying.
State law may define replacement to include other situations. Please ask your
agent if you are unsure.
Insurance Information Practices
We will rely primarily on information provided by you. We may supplement that
information with information from other sources such as medical professionals
who have treated you. In some cases, we may ask a consumer reporting agency to
collect information and submit an investigative consumer report to us as
explained in this Notice under Federal Fair Credit Reporting Act. You may
request to be interviewed in connection with the preparation of this report. In
certain limited situations, we are allowed by law to disclose necessary items of
personal information to third parties without your specific authorization. You
have the right to be told about, and to see and copy if you wish, items of
personal information about you that appear in our files, including information
contained in investigative consumer reports. You also have the right to seek
correction of information you believe to be inaccurate. We will send you a more
detailed explanation of our information practices if you send us a written
request. You may send your request to the Director of Underwriting, PFL Life
Insurance Company, 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499.
Fair Credit Reporting Pre-Notice
A routine investigative consumer report may possibly be made regarding your
general reputation, character, mode of living, and personal characteristics.
This information may be obtained through personal interviews with your friends,
neighbors and associates. Should you desire additional information on the nature
and scope of such a report, you may write the Underwriting Department, PFL Life
Insurance Company, 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499. You have
the right to request additional information concerning the nature and scope of
the investigation to be performed. To make this request, you must write the
Underwriting Department, PFL Life Insurance Company, 4333 Edgewood Road N.E.,
Cedar Rapids, Iowa 52499. You are entitled to be interviewed in connection with
any investigative consumer report and to receive a copy of such report.
MIB Disclosure Notice
Information regarding your insurability will be treated as confidential. PFL
Life Insurance Company or its reinsurers may, however, make a brief report to
the Medical Information Bureau, a non-profit membership organization of life
insurance companies, which operates an information exchange on behalf of its
members. If you apply to another Bureau member for life or health insurance
coverage, or a claim for benefits is submitted to such a Company, the Bureau,
upon request, will supply such company with the information in its file.
Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file. If you question the accuracy of
information in the Bureau's file, you may contact the Bureau and seek a
correction in accordance with the procedures set forth in the Federal Fair
Credit Reporting Act. The address of the Bureau's information office is Post
Office Box 105, Essex Station, Boston, Massachusetts 02122, telephone number
(617)426-3660.
PFL Life Insurance Company or its reinsurers may also release information in
this file to other life insurance companies to whom you may apply for life or
health insurance or to whom a claim for benefits may be submitted.
