<PAGE> 1
File Number 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
NORTHSTAR LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
(Exact Name of Trust)
Northstar Life Insurance Company
(Name of Depositor)
University Corporate Centre at Amherst
100 Corporate Parkway
Amherst, New York 14226
(Address of Depositor's Principal Executive Offices)
Donna Adams
Northstar Life Insurance Company
University Corporate Centre at Amherst
100 Corporate Parkway
Amherst, New York 14226
(Name and Address of Agent for Service)
Copy to:
J. Sumner Jones, Esq.
Jones & Blouch L.L.P.
1025 Thomas Jefferson St., N.W.
Suite 410 East
Washington, D.C. 20007
Title of Securities Being Registered: Group and Individual Variable Universal
Life Policies.
Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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NORTHSTAR LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
OF
NORTHSTAR LIFE INSURANCE COMPANY
CROSS REFERENCE TO ITEMS
REQUIRED BY FORM N-8B-2
N-8B-2 Item Caption in Prospectus
1. Cover Page
2. Cover Page; General Descriptions, Northstar Life Insurance
Company, Variable Universal Life Account
3. Not Applicable
4. Distribution of Policies
5. General Descriptions, Northstar Life Variable Universal
Life Account
6. General Descriptions, Northstar Life Variable Universal
Life Account
7. Not Applicable
8. Not Applicable
9. Legal Proceedings
10. Summary; Detailed Information About the Northstar Life
Variable Universal Life Insurance Policy; Charges;
Voting Rights
11. Summary; Detailed Information About the Northstar Life
Variable Universal Life Insurance Policy; General
Descriptions, Advantus Series Fund, Inc., Fidelity
Variable Insurance Products Fund, and Fidelity Variable
Insurance Products Fund II
12. Summary; Detailed Information About the Northstar Life
Variable Universal Life Insurance Policy; General
Descriptions, Advantus Series Fund, Inc., Fidelity
Variable Insurance Products Fund, and Fidelity Variable
Insurance Products Fund II
13. Detailed Information About the Northstar Life Variable
Universal Life Insurance Policy; Charges
14. Detailed Information About the Northstar Life Variable
Universal Life Insurance Policy; Applications and Policy
Issue
15. Detailed Information About the Northstar Life Variable
Universal Life Insurance Policy; Policy Premiums
16. Account Values
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17. Summary; Detailed Information About the Northstar Life
Variable Universal Life Insurance Policy; Account Values
18. General Descriptions, Advantus Series Fund, Inc.,
Fidelity Variable Insurance Products Fund, and Fidelity
Variable Insurance Products Fund II
19. General Matters Relating to the Policy
20. Not Applicable
21. Account Values; Loans
22. Not Applicable
23. Not Applicable
24. General Matters Relating to the Policy; General Provisions
of the Group Contract
25. General Descriptions, Northstar Life Insurance Company
26. Not Applicable
27. General Descriptions, Northstar Life Insurance Company
28. Directors and Principal Officers of Northstar Life
Insurance Company
29. General Descriptions, Northstar Life Insurance Company
30. Not Applicable
31. Not Applicable
32. Not Applicable
33. Not Applicable
34. Not Applicable
35. General Descriptions, Northstar Life Insurance Company
36. Not Applicable
37. Not Applicable
38. Distribution of Policies
39. Distribution of Policies
40. Not Applicable
41. Distribution of Policies
42. Not Applicable
43. Not Applicable
<PAGE> 4
44. Detailed Information About the Northstar Life Variable
Universal Life Insurance Policy; Policy Values
45. Not Applicable
46. Not Applicable
47. Detailed Information About the Northstar Life Variable
Universal Life Insurance Policy; Loans; Surrender
48. Not Applicable
49. Not Applicable
50. General Descriptions, Northstar Life Variable
Universal Life Account
51. Summary; Detailed Information About the Northstar Life
Variable Universal Life Insurance Policy; Policy Charges
52. Summary; General Descriptions, Northstar Life Variable
Universal Life Account; Advantus Series Fund, Inc.;
Fidelity Variable Insurance Products Fund; Fidelity
Variable Insurance Products Fund II
53. Federal Tax Status
54. Not Applicable
55. Not Applicable
56. Not Applicable
57. Not Applicable
58. Not Applicable
59. Financial Statements
<PAGE> 5
Variable Universal Life Insurance Policy
This prospectus describes Variable Universal Life Insurance Policies issued by
Northstar Life Insurance Company ("Northstar Life"). The policies are designed
for use in group-sponsored insurance programs to provide life insurance
protection and the flexibility to vary premium payments. Certificates setting
forth or summarizing the rights of the owners and/or insureds will be issued
under the group contract. Individual policies can also be issued in connection
with group-sponsored insurance programs in circumstances where a group contract
is not issued.
The owner may allocate net premiums to one or more of the sub-accounts of a
separate account of Northstar Life called the Northstar Life Variable Universal
Life Account (herein "separate account"). Net premiums may also be allocated to
a guaranteed account of Northstar Life. To the extent of the investment of a
policy in the separate account, the account value will vary with the investment
experience of the sub-accounts of the separate account. There is no guaranteed
minimum value associated with the separate account and its sub-accounts.
The separate account invests its assets in shares of Advantus Series Fund, Inc.,
Fidelity's Variable Insurance Products Fund, and Fidelity's Variable Insurance
Products Fund II (the "Funds"). The Funds have eighteen Portfolios which are
available:
- - Growth Portfolio
- - Bond Portfolio
- - Money Market Portfolio
- - Asset Allocation Portfolio
- - Mortgage Securities Portfolio
- - Index 500 Portfolio
- - Capital Appreciation Portfolio
- - International Stock Portfolio
- - Small Company Growth Portfolio
- - Value Stock Portfolio
- - Small Company Value Portfolio
- - Global Bond Portfolio
- - Index 400 Mid-Cap Portfolio
- - Macro-Cap Value Portfolio
- - Micro-Cap Growth Portfolio
- - Fidelity VIP--High Income Portfolio
- - Fidelity VIP--Equity-Income Portfolio
- - Fidelity VIP II--Contrafund Portfolio
This prospectus must be accompanied by the current prospectuses of the Funds.
This prospectus should be read carefully and retained for future reference.
The policies have not been approved or disapproved by the Securities and
Exchange Commission ("SEC"). Neither the SEC nor any state has determined
whether this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
Northstar Life Insurance Company
University Corporate Centre at Amherst, Suite 424
100 Corporate Parkway
Amherst, New York 14226
(716) 832-8678
Dated:
Prospectus
NORTHSTAR LIFE
VARIABLE UNIVERSAL
LIFE ACCOUNT
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Special Terms............................................... 1
Summary..................................................... 2
Condensed Financial Information............................. 7
General Descriptions........................................ 7
Northstar Life Insurance Company....................... 7
Northstar Life Variable Universal Life Account......... 7
Advantus Series Fund, Inc.............................. 8
Fidelity Variable Insurance Products Funds............. 8
Additions, Deletions or Substitutions.................. 9
The Guaranteed Account................................. 9
General Description............................... 10
Guaranteed Account Value.......................... 10
Information About the Policy................................ 10
Applications and Policy Issue.......................... 10
Policy Premiums........................................ 11
Death Benefit.......................................... 12
Change in Face Amount.................................. 14
Payment of Death Benefit Proceeds...................... 15
Account Values......................................... 15
Loans.................................................. 17
Surrender and Withdrawal............................... 18
Transfers.............................................. 19
Dollar Cost Averaging.................................. 21
Free Look.............................................. 21
Conversion Privilege to an Individual Policy........... 21
Continuation of Group Coverage......................... 22
Charges................................................ 23
Premium Expense Charges........................... 23
Account Value Charges............................. 24
Separate Account Charges.......................... 25
Fund Charges...................................... 25
Guarantee of Certain Charges........................... 26
Additional Benefits.................................... 26
General Matters Relating to the Policy................. 26
General Provisions of the Group Contract............... 29
Other Matters............................................... 30
Federal Tax Status..................................... 30
Directors and Principal Officers of Northstar Life..... 33
Voting Rights.......................................... 34
Distribution of Policies............................... 35
Legal Matters.......................................... 36
Legal Proceedings...................................... 36
Experts................................................ 36
Registration Statement................................. 36
Financial Statements of Northstar Life Variable Universal
Life Account..............................................
Financial Statements of Northstar Life Insurance Company....
Appendix I-Illustrations of Account Values and Death
Benefits.................................................. 37
Appendix II-Loan Example.................................... 47
</TABLE>
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SPECIAL TERMS
As used in this prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: The sum of the separate account value, guaranteed account value
and loan principal.
ASSOCIATED COMPANY: Any company which is a subsidiary or affiliate of the
contractholder which is designated by the contractholder and agreed to by us to
participate under the group contract.
ATTAINED AGE: The issue age of the insured plus the number of completed policy
years.
BENEFICIARY: The person(s) named in a signed application for insurance or by
later designation to receive policy proceeds in the event of the insured's
death. A beneficiary may be changed as set forth in the policy and this
prospectus.
CERTIFICATE: A document issued to the owner of a policy issued under a group
contract setting forth or summarizing the owner's rights and benefits.
CODE: The Internal Revenue Code of 1986, as amended.
CONTRACTHOLDER: The entity that is issued a group contract.
ELIGIBLE MEMBER: A member of the group seeking insurance who meets the
requirements stated on the specifications page of the group contract or policy
to be an owner and/or insured of a policy under the group-sponsored insurance
program.
FACE AMOUNT: The minimum amount of death benefit proceeds paid upon the death
of the insured, so long as the policy remains in force and there are no
outstanding loans. The face amount is shown on the specifications page attached
to the policy.
FUNDS: The mutual fund or separate investment portfolio within a series mutual
fund which we have designated as an eligible investment for the Northstar Life
Variable Universal Life Account, currently, Advantus Series Fund, Inc. and its
Portfolios, Fidelity's Variable Insurance Products Fund and its Portfolios, and
Fidelity's Variable Insurance Products Fund II and its Portfolio.
GENERAL ACCOUNT: All of our assets other than those in the Northstar Life
Variable Universal Life Account or in other separate accounts established by us.
GROUP CONTRACT: A Northstar Life Variable Universal Life Insurance Policy
issued to the contractholder.
GROUP SPONSOR: The employer, association or organization that is sponsoring a
program of insurance for the group members.
GUARANTEED ACCOUNT: Assets other than the loan principal that are attributable
to a policy and held in our general account.
GUARANTEED ACCOUNT VALUE: The sum of all net premiums and transfers allocated
to the guaranteed account and interest declared thereon and experience credits,
if any, minus amounts transferred to the separate account or removed in
connection with a withdrawal or loan and minus charges assessed against the
guaranteed account value.
INDIVIDUAL INSURANCE: Insurance provided under a group contract or under an
individual policy issued in connection with a group-sponsored insurance program.
INSURED: The person whose life is covered by life insurance under a policy.
ISSUE AGE: The insured's age at his or her last birthday as of the issue date.
ISSUE DATE: The effective date of an insured's coverage under a policy.
LOAN PRINCIPAL: The portion of the general account attributable to loans under
policies of this type.
MATURITY DATE: The 95th birthday of the insured or a later birthday which is
established for policies issued under the group-sponsored insurance program.
MEMBER: An individual belonging to the group seeking insurance.
MONTHLY ANNIVERSARY: The first day of each calendar month on, or following, the
issue date.
NET CASH VALUE: The account value of a policy less any outstanding loan
principal and accrued loan interest charges and less any charges due, plus
accrued loan interest credits. It is the amount an owner may obtain through
surrender of the policy.
OWNER: The owner of a policy, as designated in the signed application or as
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<PAGE> 8
subsequently changed. An owner may be changed as set forth in the policy and
this prospectus.
POLICY: Either the certificate or the individual policy offered by us and
described in this prospectus.
POLICY ANNIVERSARY: The same day and month in each succeeding year as the
policy date, or the same day and month in each succeeding year as the date
agreed to between the contractholder and us. The policy anniversary is shown on
the specifications page attached to the policy.
POLICY DATE: The first day of the calendar month on, or following, the issue
date. This is the date from which policy years and policy months are measured.
POLICY MONTH: A calendar month.
POLICY YEAR: A period of one year measured from the policy date and from each
successive policy anniversary.
SEPARATE ACCOUNT: Northstar Life Variable Universal Life Account, a separate
investment account with eighteen "sub-accounts" or "Variable Universal Life
Account" (each investing in a different Portfolio of the Funds), the investment
experience of each of which is separate from that of our general account and our
other assets.
SEPARATE ACCOUNT VALUE: The sum of all sub-account values.
SERIES FUND: The Advantus Series Fund, Inc., a mutual fund of the series type
which is an investment alternative for the Northstar Life Variable Universal
Life Account.
SUB-ACCOUNT VALUE: The number of units of a sub-account credited to a policy
times the current unit value for that sub-account.
UNIT: An accounting device used to determine the interest of a policy in a sub-
account of the Northstar Life Variable Universal Life Account.
VALUATION DATE: Each date on which a Fund Portfolio is valued.
VALUATION PERIOD: The period between successive valuation dates measured from
the time of one determination to the next.
VIP: Fidelity's Variable Insurance Products Fund, a mutual fund of the series
type which is an investment alternative of the Northstar Life Variable Universal
Life Account.
VIP II: Fidelity's Variable Insurance Products Fund II, a mutual fund of the
series type which is an investment alternative of the Northstar Life Variable
Universal Life Account.
WE, OUR, US: Northstar Life Insurance Company.
SUMMARY
The following summary is designed to answer certain general questions
concerning the policy and to give a brief overview of the more significant
policy features. This summary is not comprehensive. You should review the
information contained elsewhere in this prospectus.
WHAT IS A UNIVERSAL LIFE INSURANCE POLICY?
A universal life insurance policy is an adjustable benefit life insurance
policy. It allows for the accumulation of cash values while the policy's life
insurance coverage remains in force and which permits the flexible payment of
premiums. An adjustable benefit policy has a stated face amount of insurance
payable in the event of the death of the insured, which is supported by the
deduction of specified monthly charges from the cash values. This amount of
insurance may be increased or decreased by the owner of the policy, without the
necessity of issuing a new policy for that owner. There are limitations to these
changes and we may require evidence of insurability before requested increases
go into effect. In addition, the coverage for an insured is provided without
specifying the frequency and amount of each premium payment (as is the practice
for scheduled premium life insurance policies). The time and amount of the
payment of premium may be determined by the owner. The life insurance coverage
will remain in force for an insured so long as monthly charges may be deducted
from the existing balance in the policy's net cash values. Subject to
restrictions described herein, an owner may also make payments in excess of that
minimum amount required to
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keep a policy in force. If cash values are insufficient for the payment of the
required monthly charges, then a premium payment is required or the life
insurance coverage provided to the owner will lapse.
A universal life insurance policy is intended for the use of persons who
wish to combine both life insurance and the accumulation of cash values. Such a
policy may be inappropriate for individuals seeking life insurance protection
which is the equivalent of term-type coverage.
WHAT MAKES THE POLICY "VARIABLE"?
The policy is termed "variable" because unlike a universal life policy
which provides for the accumulation of policy values at fixed rates determined
by the insurance company, variable universal life insurance policy values may be
invested in a separate accounts of ours called the Northstar Life Variable
Universal Life Account ("separate account"). The sub-accounts of the separate
account invest in corresponding Portfolios of the Funds. Thus, the owner's
account value, to the extent invested in the sub-accounts of the separate
account, will vary with the positive or negative investment experience of the
corresponding Portfolios of the Funds.
The account values of the policies, to the extent invested in sub-accounts
of the separate account, have no guaranteed minimum account value. Therefore,
the owner bears the risk that adverse investment performance may depreciate the
owner's investment in the policy. The policy also offers the owner the
opportunity to have the account value appreciate more rapidly than it would
under comparable fixed benefit policies by virtue of favorable investment
performance. In addition, under some policies, the death benefit will also
increase and decrease (but not below the guaranteed amount) with investment
experience.
Owners seeking the traditional insurance protections of a guaranteed
account value may allocate net premiums to the policy's guaranteed account
option which provides for guaranteed accumulation at a fixed rate of interest.
Additional information on this option may be found under the heading "The
Guaranteed Account."
WHAT VARIABLE INVESTMENT OPTIONS ARE AVAILABLE?
The separate account currently invests in eighteen Portfolios of the Funds.
Not all of the Portfolios of the Funds may be made available for investment by
the separate account. Owners may direct their funds to the following Series Fund
Portfolios:
Growth Portfolio
Bond Portfolio
Money Market Portfolio
Asset Allocation Portfolio
Mortgage Securities Portfolio
Index 500 Portfolio
Capital Appreciation Portfolio
International Stock Portfolio
Small Company Growth Portfolio
Value Stock Portfolio
Small Company Value Portfolio
Global Bond Portfolio
Index 400 Mid-Cap Portfolio
Macro-Cap Value Portfolio
Micro-Cap Growth Portfolio
Owners may also direct their funds to the following additional Portfolios:
Fidelity Variable Insurance Products
Fund--High Income Portfolio
Fidelity Variable Insurance Products
Fund--Equity-Income Portfolio
Fidelity Variable Insurance Products
Fund II--Contrafund Portfolio
There is no assurance that any Portfolio will meet its objectives. Additional
information concerning investment objectives may be found in the attached Fund
prospectuses.
HOW CAN NET PREMIUMS BE ALLOCATED?
In the initial signed application for life insurance, the owner may
indicate the desired allocation of net premiums among the guaranteed account and
the available sub-accounts of the separate account, subject to the limitations
in the policy and this prospectus. All future net premiums will be allocated in
the same proportion until the owner requests a change in the allocation.
Similarly, the owner may request a transfer of amounts between sub-accounts or
between the sub-accounts and the guaranteed account, subject to the limitations
in the policy and this prospectus.
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WHAT DEATH BENEFIT OPTIONS ARE OFFERED UNDER THE POLICY?
We offer two death benefit options under the policy. Under "Option A", a
level death benefit, the death benefit is the face amount of the policy. Under
"Option B", a variable death benefit, the death benefit is the face amount of
the policy plus the net cash value. So long as a policy remains in force and
there are no loans, the minimum death benefit under either option will be at
least equal to the current face amount. The death benefit proceeds will be
adjusted by the amount of any charges due or overpaid and any outstanding loans
and accrued loan interest charges or credits determined as of the date of death.
The death benefit option for all policies issued under a group-sponsored
insurance program will initially be the death benefit option selected by the
group sponsor. For policies under some group-sponsored insurance programs, we
will allow the owner to request a change in the death benefit option once,
during the lifetime of the insured. For policies under group-sponsored insurance
programs where we do not allow the owner to request a change in the death
benefit option, the death benefit option will remain unchanged from the group
sponsor's initial selection. The current death benefit option will be shown on
the specifications page of the policy.
There is a minimum initial face amount for the policy which is stated on
the specifications page of the policy. The owner may generally change the face
amount, but evidence of insurability of the insured may be required for certain
face amount increases.
TO WHOM DO WE PAY DEATH BENEFITS?
Death benefit proceeds will be paid to the named beneficiary when the
insured under a policy dies. Benefits under the policy may be paid in a single
sum or under an elected settlement option.
DOES THE OWNER HAVE ACCESS TO THE ACCOUNT VALUE?
Yes. The net cash value, subject to the limitations in the policy and this
prospectus, is available to the owner during the insured's lifetime. The net
cash value may be used:
- - to provide retirement income,
- - as collateral for a loan,
- - to continue some amount of insurance protection without payment of premiums,
or
- - to obtain cash by surrendering the policy in full or in part.
The owner may borrow, as a loan, an amount up to 90 percent of the owner's
account value less any loan principal and accrued loan interest charges. Each
alternative for accessing the owner's account value may be subject to conditions
described in the policy or under the heading "Account Values" of this
prospectus.
WHAT CHARGES ARE ASSOCIATED WITH THE POLICY?
We deduct certain charges from each premium payment and the account value
under each policy and from the asset value of the separate account. These
charges, which are largely designed to cover our expenses in providing insurance
protection and in distributing and administering the policies are fully
described under the heading "Charges" of this prospectus. The specific charges
are shown on the specifications page of the policy. There are also advisory fees
and expenses which are assessed against the asset value of each of the
portfolios of the Funds.
PREMIUM EXPENSE CHARGES
Premium expense charges vary based on the group-sponsored insurance program
under which the policy is issued. We may deduct from premium paid, a percentage
of premium for a SALES CHARGE, not to exceed 5 percent, and a percentage of
premium for a PREMIUM TAX CHARGE, not to exceed 4 percent. We will also deduct a
percentage of premium as a FEDERAL TAX CHARGE to recover a portion of our
estimated cost for the federal income tax treatment of deferred acquisition
costs. If a policy is considered an individual policy under the Omnibus Budget
Reconciliation Act, as amended, ("OBRA") the charge will not exceed 1.25 percent
of premium. If a policy is considered to be a group policy under OBRA, the
charge will not exceed .35 percent of premium.
ACCOUNT VALUE CHARGES
Account value charges vary based on the group-sponsored insurance program
under which the policy is issued. Each month, we will deduct from a policy's net
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cash value the monthly deduction, which is the sum of the following applicable
items:
- - an administration charge;
- - a cost of insurance charge; and
- - the cost of any additional insurance benefits provided by rider.
The administration charge will never exceed $4 per month. Additional
information is provided under the heading "Monthly Deduction."
A WITHDRAWAL TRANSACTION CHARGE may be deducted from the net cash value to
cover administrative processing costs. The charge will not exceed the lesser of
$25 or 2 percent of the amount withdrawn.
There is currently no TRANSFER CHARGE assessed on transfers of net cash
value between the guaranteed account and the separate account or among the
sub-accounts of the separate account. A charge, not to exceed $10 per transfer,
may be imposed in the future.
SEPARATE ACCOUNT CHARGES
We assess a MORTALITY AND EXPENSE RISK CHARGE against the separate account
assets on a daily basis. This charge will vary based on the group-sponsored
insurance program under which the policy is issued. The annual rate will not
exceed .50 percent of the average daily assets of the separate account. This
annual rate is based on the actuarial risk associated with the group that the
cost of insurance and other charges will be insufficient to cover the actual
mortality experience and other costs in connection with the policies.
We reserve the right to deduct a charge against the separate account
assets, or make other provisions, for any additional tax liability we may incur
with respect to the separate account or the policies, to the extent that those
liabilities exceed the amounts recovered through the deduction from premiums for
premium taxes and federal taxes. No such charge or provision is made at the
present time.
FUND CHARGES
Shares of the Funds are purchased for the separate account at their net
asset value, which reflects ADVISORY FEES AND PORTFOLIO EXPENSE FEES which are
assessed against the net asset value of each of the Portfolios of the Funds.
Advantus Capital Management, Inc. ("Advantus Capital") acts as the
investment adviser to the Series Fund. Advantus Capital is a wholly-owned
subsidiary of Minnesota Life. For more information about the Series Fund, see
the prospectus of Advantus Series Fund, Inc. which is attached to this
prospectus.
The Fidelity Management and Research Company ("FMR"), a subsidiary of FMR
Corp., is adviser to the VIP High Income Portfolio, the VIP Equity-Income
Portfolio and the VIP II Contrafund Portfolio. For more information about the
VIP and VIP II Funds, see the prospectuses of the Variable Insurance Products
Funds which are attached to this prospectus.
The chart below shows the ADVISORY FEES AND PORTFOLIO EXPENSE FEES AS A
PERCENT OF AVERAGE DAILY NET ASSETS for the Funds as of December 31, 1999.
The advisory fees for the Series Fund are made pursuant to a contractual
agreement between the Series Fund and Advantus Capital Management, Inc. The
advisory fees for VIP and VIP II are made pursuant to a contractual agreement
between VIP and VIP II and Fidelity Management & Research Company (FMR). Both
Advantus Capital and FMR pay a portion of the advisory fees which they receive
of investment sub-advisers to the portfolios of the Funds.
The Series Fund portfolio expense fees reflect the actual expenses incurred
by each portfolio unless the actual expenses exceed the cap. The portfolio
expense fee is capped at 0.15 percent for all Series Fund portfolios except the
International Stock and Global Bond Portfolios, which are capped at 1.00
percent. Any Series Fund portfolio expenses incurred in excess of the cap are
voluntarily absorbed by Minnesota Life. For a description of the arrangement
whereby Minnesota Life voluntarily absorbs certain expenses of the Series Fund,
see "Investment Adviser" in the attached prospectus for Advantus Series Fund,
Inc. The portfolio expense fees shown are expected to decrease as the amount of
assets in the portfolios increases.
The portfolio expense fees for the VIP Equity Income Portfolio and the VIP
II Contrafund Portfolio reflect reductions based on arrangements FMR or the
funds have entered into with third parties who either paid or reduced a portion
of the portfolio expenses.
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<TABLE>
<CAPTION>
Investment Portfolio Expense
Fund/Portfolio Name Advisory Fee Actual or Cap Total
------------------- ------------ ----------------- -----
<S> <C> <C> <C>
SERIES FUND
Growth 0.50% 0.03% 0.53%
Bond 0.50 0.05 0.55
Money Market 0.50 0.08 0.58
Asset Allocation 0.50 0.03 0.53
Mortgage Securities 0.50 0.07 0.57
Index 500 0.40 0.04 0.44
Capital Appreciation 0.75 0.03 0.78
International Stock(2) 0.71 0.24 0.94
Small Company Growth 0.75 0.04 0.79
Value Stock 0.75 0.04 0.79
Small Company Value(1) 0.75 0.15 0.90
Global Bond 0.60 0.53 1.13
Index 400 Mid-Cap(1) 0.40 0.15 0.55
Macro-Cap Value(1) 0.70 0.15 0.85
Micro-Cap Growth(1) 1.10 0.15 1.25
VIP
VIP High Income(3) 0.58 0.12 0.70
VIP Equity-Income(3) 0.49 0.09 0.58
VIP II
VIP II Contrafund(3) 0.59 0.11 0.70
AVERAGE 0.60% 0.12% 0.71%
</TABLE>
(1) Minnesota Life, the parent of Advantus Capital, voluntarily absorbed certain
expenses of the Small Company Value, Index 400 Mid-Cap, Macro-Cap Value and
Micro-Cap Growth Portfolios for the period ended December 31, 1999. If these
Portfolios had been charged for expenses, the ratio of expenses to average daily
net assets would have been 1.33%, 1.83%, 1.36%, 2.53% and 2.10%, respectively.
For these Portfolios, it is Minnesota Life's intention to waive other fund
expenses during the current fiscal year which exceed, as a percentage of average
daily net assets, .15%. Minnesota Life also reserves the option to reduce the
level of other expenses which it will voluntarily absorb.
(2) The advisory fee for this portfolio is a variable fee decreasing with
increased asset size. This figure represents the actual 1999 average.
(3) The advisory fee for each of these portfolios is calculated by adding a
group fee to an individual fund fee rate and multiplying the result by each
fund's or portfolio's average net assets. These figures represent the actual
1999 averages.
ARE THE BENEFITS UNDER A POLICY SUBJECT TO FEDERAL INCOME TAX?
We believe that the owner's policy should qualify as a life insurance
contract for federal income tax purposes. Assuming that a policy qualifies as a
life insurance contract for federal income tax purposes, the benefits under
policies described in this prospectus should receive the same tax treatment
under the Code as benefits under traditional fixed benefit life insurance
policies. Therefore, death proceeds payable under variable life insurance
policies should be excludable from the beneficiary's gross income for federal
income tax purposes. The owner should not be in constructive receipt of the net
cash values of the policy until actual distribution.
Under recent legislation the tax treatment described above relating to
distributions is available only for policies not described as "modified
endowment contracts." Policies described as modified endowment contracts are
treated as life insurance with respect to the tax treatment of death proceeds
and the tax-free inside buildup of yearly account value increases. Any amounts
received by the owner, such as experience credits, loans and amounts received
from partial or total surrender of the policy will be subject to the same tax
treatment as amounts received under an annuity during the accumulation period.
Annuity tax treatment includes the
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<PAGE> 13
10 percent additional income tax imposed on the portion of any distribution that
is included in income, except:
- - where the distribution or loan is made on or after the owner attains age
59 1/2,
- - is attributable to the owner becoming disabled, or
- - is part of a series of substantially equal periodic payments for the life of
the owner or the joint lives of the owner and beneficiary.
A determination as to whether a policy is a modified endowment contract and
subject to this special tax treatment will require an examination of the premium
paid in relation to the death benefit of the policy. A policy would be a
modified endowment contract if the cumulative premiums during the first seven
contract years exceed the sum of the net level premiums which would be paid
under a seven-pay life policy. In addition, a policy which is subject to a
material change will be treated as a new policy on the date that such a material
change takes effect. A determination must be made at that time to test whether
such a policy meets the seven-pay standard by taking into account the previously
existing account value.
CAN THE OWNER RETURN THE POLICY?
For a limited time after the signed application for the policy and its
delivery, the policy may be returned for a refund of all premium payments within
the terms of its "free look" or right of cancellation provision.
CONDENSED FINANCIAL INFORMATION
The financial statements of Northstar Life Insurance Company may be found
in this prospectus. No condensed financial information or financial statements
are provided for the Separate Account as no Policies utilizing that Separate
Account have been sold prior to the date of this Prospectus.
GENERAL DESCRIPTIONS
NORTHSTAR LIFE INSURANCE COMPANY
We are a stock life insurance company organized in 1988 under the laws of
New York. We are a wholly-owned subsidiary of Minnesota Life Insurance Company,
("Minnesota Life") incorporated in and having its principal office in the State
of Minnesota. Minnesota Mutual Life was formerly known as The Minnesota Mutual
Life Insurance Company ("Minnesota Mutual"), a mutual life insurance company
organized in 1880 under the laws of Minnesota. On October 1, 1998, a plan of
reorganization created a mutual insurance holding company named Minnesota Mutual
Companies, Inc. Minnesota Mutual reorganized as a stock life insurance company
subsidiary of the new holding company and took the new name Minnesota Life. We
are licensed to conduct a life insurance business in New York.
NORTHSTAR LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
The separate account was established on May 1, 1996, by our Board of
Directors in accordance with certain provisions of the New York insurance law.
The separate account is registered as a "unit investment trust" with the
Securities and Exchange Commission under the Investment Company Act of 1940, but
such registration does not signify that the Securities and Exchange Commission
supervises the management, or the investment practices or policies, of the
separate account. The separate account meets the definition of a "separate
account" under the federal securities laws.
We are the legal owner of the assets in the separate account. The
obligations to policy owners and beneficiaries arising under the policies are
general corporate obligations of Northstar Life and thus our general assets back
the policies. The New York law under which the separate account was established
7
<PAGE> 14
provides that the assets of the separate account shall not be chargeable with
liabilities arising out of any other business which we may conduct, but shall be
held and applied exclusively to the benefit of the holders of those variable
life insurance policies for which the separate account was established. The
investment performance of the separate account is entirely independent of both
the investment performance of our guaranteed account and of any other separate
account which we may have established or may later establish.
The separate account has eighteen sub-accounts. Each sub-account invests in
shares of a corresponding Portfolio of the Funds. Not all of the Portfolios of
the Funds may be available for investment by the separate account.
The separate account currently invests in the Advantus Series Fund, Inc.,
Fidelity's Variable Insurance Products Fund, and Fidelity's Variable Insurance
Products Fund II.
ADVANTUS SERIES FUND, INC.
The Series Fund is a mutual fund of the series type which is registered
with the Securities and Exchange Commission as a diversified, open-end
management investment company (except for the Global Bond Portfolio which is
operated as a non-diversified open-end management investment company). Such
registration does not signify that the Commission supervises the management, or
the investment practices or policies, of the Series Fund. Currently, the Series
Fund issues its shares, continually and without sales charge, only to us and
certain of our separate accounts, including the Variable Universal Life Account,
and to our parent, Minnesota Life, and certain of its separate accounts. Shares
of the Series Fund are sold and redeemed at net asset value.
The Series Fund's investment adviser is Advantus Capital Management, Inc.
("Advantus Capital"). It acts as an investment adviser to the Series Fund
pursuant to an advisory agreement. Advantus Capital is a wholly-owned subsidiary
of Minnesota Life.
While Advantus Capital acts as investment adviser for the Series Fund and
its Portfolios, Winslow Capital Management, Inc., a Minnesota corporation with
principal offices in Minneapolis, Minnesota, has been retained under an
investment sub-advisory agreement to provide investment advice to the Capital
Appreciation Portfolio. Similarly, Templeton Investment Counsel, Inc., a Florida
corporation with principal offices in Fort Lauderdale, Florida, has been
retained under an investment sub-advisory agreement to provide investment advice
to the International Stock Portfolio. Advantus Capital has entered into a
sub-advisory agreement with Julius Baer Investment Management Inc. ("Julius
Baer"), a Delaware corporation with primary offices in New York, New York, under
which Julius Baer provides advisory services to the Global Bond Portfolio.
Advantus Capital has entered into a sub-advisory agreement with J.P. Morgan
Investment Management Inc. ("Morgan Investment"), a Delaware corporation with
primary offices in New York, New York, under which Morgan Investment provides
advisory services to the Macro-Cap Value Portfolio. Advantus Capital has entered
into a sub-advisory agreement with Wall Street Associates ("Wall Street"), a
California corporation with primary offices in La Jolla, California, under which
Wall Street provides advisory services to the Micro-Cap Growth Portfolio.
The Series Fund currently has sixteen investment Portfolios, fifteen of
which are available to policy owners for the allocation of premiums or for
transfers. A series of the Series Fund's common stock is issued for each
Portfolio. The assets of each Portfolio are separate from the others and each
has different investment objectives and policies. Therefore, each Portfolio
operates as a separate investment fund and the investment performance of one has
no affect on the investment performance of any other Portfolio.
All dividends and capital gains distributions from each Portfolio are
automatically reinvested in shares of that Portfolio at net asset value.
For more information about the Series Fund and its Portfolios, see the
attached Advantus Series Fund, Inc. prospectus.
FIDELITY VARIABLE INSURANCE PRODUCTS FUNDS
The policy also provides for sub-accounts of the Variable Universal Life
Account which invest in shares of other registered investment companies. VIP has
two Portfolios which are available to the
8
<PAGE> 15
Variable Universal Life Account. They are the High Income Portfolio and the
Equity-Income Portfolio. VIP II has one Portfolio which is available to the
Variable Universal Life Account. It is the Contrafund Portfolio. Both VIP and
VIP II issue their shares, continually and without sales charge, only to us and
to separate accounts of other insurance companies, both affiliated and
unaffiliated with the investment adviser of VIP and VIP II.
The investment adviser of VIP and VIP II is Fidelity Management & Research
Company ("FMR"), 82 Devonshire Street, Boston, Massachusetts. FMR handles the
business affairs and, with the assistance of affiliates for certain Portfolios,
chooses the investments for VIP and VIP II. Fidelity Management & Research
(U.K.) Inc., in London, England, and Fidelity Management & Research (Far East)
Inc., in Tokyo, Japan, both serve as sub-advisers for the VIP High Income and
VIP II Contrafund Portfolios. The parent company of these entities is FMR Corp.
The assets of each Portfolio are separate from the others and each has
different investment objectives and policies. Therefore, each Portfolio operates
as a separate investment fund and the investment performance of one has no
affect on the investment performance of any other Portfolio. All dividends and
capital gains distributions from each Portfolio are automatically reinvested in
shares of that Portfolio at net asset value.
For more information about VIP and VIP II and the Portfolios, see the
prospectus for Fidelity's Variable Insurance Products Fund and Variable
Insurance Products Fund II.
ADDITIONS, DELETIONS OR SUBSTITUTIONS
We reserve the right to add, combine or remove any sub-accounts of the
Variable Universal Life Account when permitted by law. Each additional
sub-account will purchase shares in a new portfolio or mutual fund. New
sub-accounts may be established when, in our sole discretion, marketing, tax,
investment or other conditions warrant such action. We will use similar
considerations should there be a determination to eliminate one or more of the
sub-accounts of the separate account. Any new investment option will be made
available to existing owners on whatever basis we may determine.
We retain the right, subject to any applicable law, to make substitutions
with respect to the investments of the sub-accounts of the separate account. If
investment in a Portfolio of the Funds should no longer be possible or if we
determine it becomes inappropriate for policies of this class, we may substitute
another mutual fund or portfolio for a sub-account. Substitution may be made
with respect to existing account values and future premium payments. A
substitution may be made only with any necessary approval of the Securities and
Exchange Commission.
We reserve the right to transfer assets of the separate account as
determined by us to be associated with the policies to another separate account.
A transfer of this kind may require the approval of state regulatory authorities
and of the Securities and Exchange Commission.
We also reserve the right, when permitted by law, to restrict or eliminate
any voting right of owners or other persons who have voting rights as to the
separate account, and to combine the separate account with one or more other
separate accounts, and to de-register the separate account under the Investment
Company Act of 1940.
Shares of the Portfolios of the Series Fund are also sold to other of our
separate accounts and to separate accounts of Minnesota Life, which are used to
receive and invest premiums paid under other variable annuity contracts and
variable life policies issued by us or by Minnesota Life. Similarly, shares of
VIP and VIP II are sold to other life insurance companies' separate accounts,
including separate accounts of Minnesota Life, for the purpose of funding other
variable annuity and variable life insurance contracts. It is conceivable that
in the future it may be disadvantageous for variable life insurance separate
accounts and variable annuity separate accounts to invest in the Funds
simultaneously.
THE GUARANTEED ACCOUNT
The owner may allocate net premiums and may transfer net cash values in the
policy, subject to the limitations in the policy and this prospectus, to our
guaranteed account.
Because of exemptive and exclusionary provisions, interests in Northstar
Life's guaranteed account have not been registered
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<PAGE> 16
under the Securities Act of 1933, and the guaranteed account has not been
registered as an investment company under the Investment Company Act of 1940.
Therefore, neither the guaranteed account nor any interest therein is subject to
the provisions of these Acts, and Northstar Life has been advised that the staff
of the SEC does not review disclosures relating to it. Disclosures regarding the
guaranteed account may, however, be subject to certain generally applicable
provisions of the federal securities laws relating to the accuracy and
completeness of statements made in prospectuses.
This prospectus describes a Variable Universal Life Insurance Policy and is
generally intended to serve as a disclosure document only for the aspects of the
policy relating to the sub-accounts of the separate account. For more
information about the guaranteed account, please see the policy and the summary
information provided immediately below.
GENERAL DESCRIPTION Northstar Life's general account consists of all assets
owned by Northstar Life other than those in the separate account and any other
separate accounts which we may establish. The guaranteed account is that portion
of the general assets of Northstar Life, exclusive of loans, which is
attributable to the policy described herein and others of its class. The
description is for accounting purposes only and does not represent a division of
the general account assets for the specific benefit of policies of this class.
Allocations to the guaranteed account become part of the general assets of
Northstar Life and are used to support insurance and annuity obligations and are
subject to the claims of our creditors. Subject to applicable law, we have sole
discretion over the investment of assets of the guaranteed account. Owners do
not share in the actual investment experience of the assets in the guaranteed
account.
A portion or all the net premiums may be allocated or transferred to
accumulate at a fixed rate of interest in the guaranteed account, though we
reserve the right to restrict the allocation of premium into the guaranteed
account. Transfers from the guaranteed account to the sub-accounts of the
separate account are subject to certain limitations with respect to timing and
amount. These restrictions are described under the heading "Transfers." Amounts
allocated or transferred to the guaranteed account are guaranteed by us as to
principal and a minimum rate of interest.
GUARANTEED ACCOUNT VALUE Northstar Life bears the full investment risk for
amounts allocated to the guaranteed account and guarantees that interest
credited to each owner's account value in the guaranteed account will be at a
rate of not less than 3 percent per year, compounded annually, without regard to
the actual investment experience of the guaranteed account. We may, at our sole
discretion, credit a higher rate of interest ("excess interest") although we are
not obligated to do so. Any interest credited on the policy's account value in
the guaranteed account in excess of the guaranteed minimum rate per year will be
determined at our sole discretion. The owner assumes the risk that interest
credited may not exceed the guaranteed minimum rate.
Even if excess interest is credited to the guaranteed account value, no
excess interest will be credited to the loan principal. However, the loan
principal will be credited interest at a rate which is not less than 6 percent
per year.
INFORMATION ABOUT THE POLICY
APPLICATIONS AND POLICY ISSUE
We will generally issue a group contract to a group, as defined and
permitted by state law. For example, a group contract may be issued to an
employer, whose employees and/or their spouses may become insured thereunder so
long as the person is within a class of members eligible to be included in the
group contract. The class(es) of members eligible to be insured by a policy
under the group contract are set forth in that group contract's specifications
page. The group contract will be issued upon receipt of a signed application for
the group contract signed by a duly authorized officer of the group wishing to
enter into a group contract
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<PAGE> 17
and the acceptance of that signed application by a duly authorized officer of
Northstar Life at its home office. Individuals wishing to purchase a policy
insuring an eligible member under a group-sponsored insurance program must
complete the appropriate application for life insurance and submit it to our
home office. If the policy is approved, we will issue to the group sponsor
either a certificate or an individual policy to give to the owner. The issue of
a group contract or individual policy and their associated forms is always
subject to the approval of those documents for use by state insurance regulatory
authorities.
Individuals who satisfy the eligibility requirements under a particular
group contract may be required to submit to an underwriting procedure which
requires satisfactory responses to certain health questions in the application
and to provide, in some cases, medical information. Acceptance of an application
is subject to our underwriting rules, and we reserve the right to reject an
application for any reason.
A policy will not take effect until the owner signs the appropriate
application for insurance, the initial premium has been paid prior to the
insured's death, the insured is eligible, and we approve the completed signed
application. The date on which the last event occurs shall be the effective date
of coverage ("issue date").
POLICY PREMIUMS
A premium must be paid to put a policy in force, and may be remitted to us
by the group sponsor on behalf of the owner. The initial premium for a policy
must cover the premium expense charges and the first month's deductions.
Premiums paid after the initial premium may be in any amount. A premium must be
paid when there is insufficient net cash value to pay the monthly deduction
necessary to keep the policy in force.
When the policy is established, the policy's specifications page may show
premium payments scheduled and the amounts of those payments. However, under the
policy, the owner may elect to omit making those premium payments. Failure to
pay one or more premium payments will not cause the policy to lapse until such
time as the net cash value is insufficient to cover the next monthly deduction.
The owner may also skip premium payments scheduled. Therefore, unlike
traditional insurance policies, a policy does not obligate the owner to pay
premiums in accordance with a rigid and inflexible premium schedule.
Failure of a group sponsor to remit the authorized premium payments may
cause the group contract to terminate. Nonetheless, provided that there is
sufficient net cash value to prevent the policy from lapsing, the owner's
insurance can be converted to an individual policy of life insurance in the
event of such termination. (See "Conversion Privilege to an Individual Policy.")
The owner's insurance can continue if the insured's eligibility under the
group-sponsored insurance program terminates because the insured is no longer a
part of the group or otherwise fails to satisfy the eligibility requirements set
forth in the specifications page to the group contract or policy. (See
"Continuation of Group Coverage.")
PREMIUM LIMITATIONS After the payment of the initial premium, premiums may be
paid at any time in any amount while the insurance is in force under the policy.
Since the policy permits flexible premium payments, it may become a modified
endowment contract. (See "Federal Tax Status.") When we receive the signed
application, our systems will test the owner's elected premium schedule to
determine, if it is paid as scheduled and if there is no change made to the
policy, whether it will result in the policy being classified as a modified
endowment contract for federal income tax purposes. Our systems will continue to
test the policy with each premium payment to determine whether the policy has
attained this tax status. If we determine that the policy has attained the
status of a modified endowment contract, we will mail the owner a notice. The
owner will be given a limited amount of time, subject to the restrictions under
the Code, to request that the policy maintain the modified endowment contract
status. If the owner does not request to have this tax status maintained, the
excess premium amounts paid that caused this tax status will be returned with
interest at the end of the policy year to avoid the policy being classified as a
modified endowment contract. The owner may request an immediate refund if it is
desired earlier.
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<PAGE> 18
ALLOCATION OF NET PREMIUMS AND ACCOUNT VALUE Net premiums, which are premiums
after the deduction of the charges assessed against premiums, are allocated to
the guaranteed account and/or sub-accounts of the separate account which, in
turn, invest in shares of the Funds.
The owner makes the selection of the sub-accounts and/or the guaranteed
account on the signed application for the policy. The owner may change the
allocation instructions for future premiums by giving us a request in writing or
through any other method made available by us under the group-sponsored
insurance program. The allocation to the guaranteed account or to any
sub-account of the separate account must be at least 10 percent of the net
premium.
For group-sponsored insurance programs where the contractholder owns all
the policies and in certain other circumstances (for example, for split-dollar
insurance programs), we will delay the allocation of net premiums to
sub-accounts or the guaranteed account for a period of 10 days after policy
issue or policy change to reduce market risk during this "free look" period. Net
premiums will be allocated to the Money Market Sub-Account until the end of the
period. We reserve the right to similarly delay the allocation of net premiums
to sub-accounts for other group-sponsored insurance programs for a period of 10
days after policy issue or policy change. This right will be exercised by us
only when we believe economic conditions make it necessary to reduce market risk
during the "free look" period. If we exercise this right, net premiums will be
allocated to the Money Market Sub-Account until the end of the period.
We reserve the right to restrict the allocation of net premiums to the
guaranteed account for policies under some group-sponsored insurance programs.
For these policies, the maximum allocation of net premiums to the guaranteed
account will range from 0 percent to 50 percent.
LAPSE Unlike traditional life insurance policies, the failure to make a premium
payment following the payment of the premium which puts the policy into force
will not itself cause a policy to lapse. Lapse will occur only when the net cash
value is insufficient to cover the monthly deduction, and the subsequent grace
period expires without sufficient payment being made.
The grace period is 61 days. The grace period will start on the day we mail
the owner a notice that the policy will lapse if the premium amount specified in
the notice is not paid by the end of the grace period. We will mail this notice
on any policy's monthly anniversary when the net cash value is insufficient to
pay for the monthly deduction for the insured. The notice will specify the
amount of premium required to keep the policy in force and the date the premium
is due. If we do not receive the required amount within the grace period, the
policy will lapse and terminate. The grace period does not apply to the first
premium payment.
REINSTATEMENT A lapsed policy may be reinstated, any time within three years
from the date of lapse, provided the insured is living and subject to the
limitations described below. Reinstatement is made by payment of an amount that,
after the deduction of premium expense charges, is large enough to cover all
monthly deductions which have accrued on the policy up to the effective date of
reinstatement, plus the monthly deductions for the two months following the
effective date of reinstatement. If any loans and loan interest charges are not
repaid, this indebtedness will be reinstated along with the insurance. No
evidence of the insured's insurability will be required during the first 31 days
following lapse, but will be required from the 32nd day to three years from the
date of lapse.
The amount of account value on the date of reinstatement will be equal to
the amount of any loans and loan interest charges reinstated increased by the
net premiums paid at the time of reinstatement.
The effective date of reinstatement will be the date we approve the signed
application for reinstatement. There will be a full monthly deduction for the
policy month that includes that date.
DEATH BENEFIT
If the policy is in force at the time of the insured's death, upon receipt
of due proof of death, we will pay the death benefit proceeds of the policy
based on the death benefit option elected for the policy.
There is a level death benefit ("Option A") and a variable death benefit
("Option B"). The death benefit under either option will
12
<PAGE> 19
never be less than the current face amount of the policy as long as the policy
remains in force and there are no loans. The face amount elected must be at
least the minimum stated on the specifications page of the policy.
OPTION A Under Option A, the death benefit will be determined as follows:
(1) The face amount of insurance on the insured's date of death while the policy
is in force; plus
(2) the amount of the cost of insurance for the portion of the policy month from
the date of death to the end of the policy month; plus
(3) any accrued loan interest credits; less
(4) any outstanding loan principal and accrued loan interest charges; less
(5) any unpaid monthly deductions determined as of the date of the insured's
death.
OPTION B Under Option B, the death benefit will be determined as follows:
(1) The face amount of insurance on the insured's date of death while the policy
is in force; plus
(2) the amount of the account value as of the date we receive due proof of death
satisfactory to us; plus
(3) the amount of the cost of insurance for the portion of the policy month from
the date of death to the end of the policy month; plus
(4) any monthly deductions taken under the policy since the date of death; plus
(5) any accrued loan interest credits; less
(6) any outstanding loan principal and accrued loan interest charges; less
(7) any unpaid monthly deductions determined as of the date of the insured's
death.
The death benefit option for all policies issued under a group-sponsored
insurance program will initially be the death benefit option selected by the
group sponsor. For policies under some group-sponsored insurance programs, we
will allow the owner to request a change in the death benefit option once,
during the lifetime of the insured. For policies under group-sponsored insurance
programs where we do not allow the owner to request a change in the death
benefit option, the death benefit option will remain unchanged from the group
sponsor's initial selection. The current death benefit option will be shown on
the specifications page of the policy.
If an owner elects to change the death benefit option from Option A to
Option B, the face amount under Option B will be equal to the face amount under
Option A less the policy account value on the effective date of the change.
If an owner elects to change the death benefit option from Option B to
Option A, the face amount under Option A will be equal to the face amount under
Option B plus the policy account value on the effective date of the change.
At issue, the group sponsor may choose between two tests that may be used
to determine if a policy qualifies as life insurance as defined by Section 7702
of the Code. Once a test is selected for a policy, it shall remain unchanged for
that policy. The two tests are the Guideline Premium Test and the Cash Value
Accumulation Test. The test selected will determine how the death benefit is
calculated in the event the account value or the premiums paid exceed certain
limits established under Section 7702.
The Cash Value Accumulation Test requires that the death benefit must be
greater than the account value times a specified percentage. The Guideline
Premium/Cash Value Corridor Test limits the amount of premiums which may be paid
given the current death benefit of the policy in addition to requiring that the
death benefit must be greater than the account value times a specified
percentage. Each policy will be tested at the end of each month for compliance
to the test chosen for that policy. Under either test, if the death benefit is
not greater than the applicable percentage of the account value, or for the
Guideline Premium/ Cash Value Corridor Test, the premiums paid exceed the limit
for the current death benefit, we will increase the face amount or return
premium with interest to maintain compliance with IRC Section 7702.
For the Cash Value Accumulation Test, the applicable percentage by which to
multiply the account value to determine the minimum death benefit requirement
varies by the age and underwriting class of the insured. The following table
contains illustrative
13
<PAGE> 20
applicable percentages for this test for the non-tobacco underwriting class:
<TABLE>
<CAPTION>
ATTAINED APPLICABLE
AGE PERCENTAGE
- -------- ----------
<S> <C>
35 441%
45 316
55 231
65 175
75 140
</TABLE>
For the Guideline Premium/Cash Value Corridor Test, the applicable
percentage by which to multiply the account value to determine the minimum death
benefit requirement varies only by the age of the insured. The following table
contains the applicable percentages for the account value portion of this test:
<TABLE>
<CAPTION>
APPLI- APPLI- APPLI-
CABLE CABLE CABLE
ATTAINED PERCENT- ATTAINED PERCENT- ATTAINED PERCENT-
AGE AGE AGE AGE AGE AGE
- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
40 & below 250% 54 157% 68 117%
41 243 55 150 69 116
42 236 56 146 70 115
43 229 57 142 71 113
44 222 58 138 72 111
45 215 59 134 73 109
46 209 60 130 74 107
47 203 61 128 75-90 105
48 197 62 126 91 104
49 191 63 124 92 103
50 185 64 122 93 102
51 178 65 120 94 101
52 171 66 119 95 0
53 164 67 118
</TABLE>
The premium limit under the Guideline Premium/Cash Value Corridor Test
varies by the amount of the death benefit, the policy year, age and underwriting
class of the insured as well as the charges under policy. You may call us at
(XXX) XXX-XXXX, during our normal business hours of 8:00 a.m. to 4:45 p.m.,
Eastern Time, if you would like us to calculate the maximum premium you may pay
under your policy for this test. If you pay up to the maximum premium amount
your policy may be qualified as a modified endowment contract. (See "Federal Tax
Status.")
CHANGE IN FACE AMOUNT
Subject to certain limitations set forth below, an owner may increase or
decrease the face amount of a policy. A written request must be sent directly to
us for a change in the face amount. The face amount may also change due to a
change in death benefit option. (See "Death Benefit.") A change in the face
amount will affect the net amount at risk which affects the cost of insurance
charge. (See "Charges.") In addition, a change in the face amount of a policy
may result in a material change in the policy that may cause it to become a
modified endowment contract. More information on this subject and possible
federal income tax consequences of this result is provided under the heading
"Federal Tax Status."
INCREASES If an increase in the current face amount is applied for, we reserve
the right to require evidence of insurability from the insured. The increase
will become effective on the monthly anniversary on or following approval of the
change or on any other date mutually agreed upon between the owner and us.
Although an increase need not necessarily be accompanied by an additional
premium (unless it is required to meet the next monthly deduction), the net cash
value in effect immediately after the increase must be sufficient to cover the
next monthly deduction.
With respect to premiums allocated to an increase, the owner will have the
same "free look," conversion, and refund rights with respect to an increase as
with the initial purchase of the owner's policy. (See "Free Look.")
DECREASES Any decrease in the face amount will become effective on the monthly
anniversary on or following our receipt of the written request. However, the
amount of insurance on any insured may not be reduced to less than the minimum
face amount indicated on the specifications page which is attached to the
owner's policy. Generally, this amount will be at least $10,000. If, following a
decrease in face amount, the policy would not comply with the maximum premium
limitations required by federal tax law (see "Federal Tax Status"), the decrease
may be limited or the account value may be returned to the owner (at the owner's
election), to the extent necessary to meet these requirements.
CHANGES IN FACE AMOUNT DUE TO A CHANGE IN DEATH BENEFIT OPTION Changes in the
face amount of insurance due to a change in death benefit option are effective
on the monthly policy anniversary on or following our receipt of the written
request or on any other date mutually agreed upon between the owner and us.
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<PAGE> 21
PAYMENT OF DEATH BENEFIT PROCEEDS
The amount payable as death proceeds upon the insured's death will be the
death benefit under the option elected for the policy. The death benefit
proceeds will also include any amounts payable under any riders.
If a rider permitting the accelerated payment of death benefit proceeds has
been added to the policy, the death benefit may be paid in a single lump sum
prior to the death of the insured and may be less than otherwise would be paid
upon the death of the insured. (See "Additional Benefits.")
Death benefit proceeds will ordinarily be paid within seven days after we
receive all information required for such payment, including due proof of the
insured's death. Payment may, however, be postponed in certain circumstances.
(See "Postponement of Payments.") Under the Option A death benefit, interest
will be paid on the death benefit from the date of the insured's death until the
date of payment. Under the Option B death benefit, interest will be paid on the
face amount of insurance from the date of the insured's death until the date of
payment. The account value will remain as invested in the guaranteed account
and/or separate account until the date of payment; therefore, the account value
may increase or decrease in value from the date of the insured's death to the
date of the payment of death benefit proceeds. Interest will also be paid on any
charges taken under the policy since the date of death, from the date the charge
was taken until the date of payment. Interest will be at an annual rate
determined by us, but never less than 3 percent per year, compounded annually,
or the minimum rate required by state law.
Death benefit proceeds will be paid to the surviving beneficiary specified
on the signed application or as subsequently changed. The owner may arrange for
death benefit proceeds to be paid in a single lump sum or under one of the
optional methods of settlement described below.
When no election for an optional method of settlement is in force at the
death of the insured, the beneficiary may select one or more of the optional
methods of settlement at any time before death benefit proceeds are paid. (See
"Settlement Options.")
An election or change of method of settlement must be in writing. A change
in beneficiary revokes any previous settlement election.
ACCOUNT VALUES
The policy provides the owner certain account value benefits. Subject to
certain limitations, the owner may obtain access to the net cash value portion
of the account value of the policy. The owner may borrow against the policy's
net cash value and may surrender the policy in whole or in part. The owner may
also transfer the net cash value between the guaranteed account and the
sub-accounts of the separate account or among the sub-accounts of the separate
account.
We will send the owner a report each year as of the policy anniversary
advising the owner of the policy's account value, the face amount and the death
benefit as of the date of the report. It will also summarize policy transactions
during the year, including premiums paid and their allocation, policy charges,
loan activity and the net cash value. It will be as of a date within two months
of its mailing. We will also, upon the owner's request, send the owner an
additional statement of past transactions at any time for a $15 fee, which will
be deducted from the portion of account value that the owner specifies.
Also, upon request made to us at our home office, we will provide
information on the account value of a policy to the owner. Such requests may be
in writing, by telephone, by facsimile transmission or any other method made
available by us under the group-sponsored insurance program. More information on
the procedures to make requests by telephone call or other electronic means is
provided under the heading "Transfers."
DETERMINATION OF THE GUARANTEED ACCOUNT VALUE The guaranteed account value is
the sum of all net premium payments allocated to the guaranteed account. This
amount will be increased by any interest, experience credits (see "General
Matters Relating to the Policy" for a detailed discussion), loan repayments,
loan interest credits and transfers into the guaranteed account. This amount
will be reduced by any loans, loan interest charges, withdrawals, transfers into
the sub-accounts of the separate account and charges
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assessed against the owner's guaranteed account value. Interest is credited on
the guaranteed account value of the policy at a rate of not less than 3 percent
per year, compounded annually. We guarantee this rate for the life of the policy
without regard to the actual experience of the guaranteed account. As conditions
permit, we may credit additional amounts of interest to the guaranteed account
value. The owner's guaranteed account value is guaranteed by us. It cannot be
reduced by any investment experience of the separate account.
Upon termination of a group contract, we reserve the right to complete the
distribution of account values attributable to the guaranteed account over a
period of time determined by us, but not more than five years. This delayed
distribution does not in any way continue or extend any insurance that has
otherwise terminated due to termination of a group contract.
DETERMINATION OF THE SEPARATE ACCOUNT VALUE The policy's separate account value
is determined separately. The separate account value is not guaranteed. The
determination of the separate account value is made by multiplying the current
number of sub-account units credited to a policy by the current sub-account unit
value. A unit is a measure of a policy's interest in a sub-account. The number
of units credited with respect to each net premium payment is determined by
dividing the portion of the net premium payment allocated to each sub-account by
the then current unit value for that sub-account. The number of units so
credited is determined as of the end of the valuation period during which we
receive the owner's premium at our home office.
Once determined, the number of units credited to the owner's policy will
not be affected by changes in the unit value. However, the number of units will
be increased by the allocation of subsequent net premiums, lump sum net
premiums, experience credits and transfers to that sub-account. The number of
additional units credited is determined by dividing the net premiums, experience
credits and transfers to that sub-account by the then current unit value for
that sub-account. The number of units of each sub-account credited to the
owner's policy will be decreased by policy charges to the sub-account, loans and
loan interest charges, transfers from that sub-account and withdrawals from that
sub-account. The reduction in the number of units credited is determined by
dividing the deductions to that sub-account, loans and loan interest charges,
transfers from that sub-account and withdrawals from that sub-account by the
then current unit value for that sub-account. The number of sub-account units
will decrease to zero on a policy surrender.
UNIT VALUE The unit value of a sub-account will be determined on each valuation
date. The amount of any increase or decrease will depend on the net investment
experience of that sub-account. The value of a unit for each sub-account was
originally set at $1.00 on the first valuation date. For any subsequent
valuation date, its value is equal to its value on the preceding valuation date
multiplied by the net investment factor for that sub-account for the valuation
period ending on the subsequent valuation date.
NET INVESTMENT FACTOR The net investment factor for a valuation period is the
gross investment rate for such valuation period, less a deduction for the
mortality and expense risk charge under this policy which is assessed at the
annual rate stated on the specifications page of the policy against the average
daily net assets of each sub-account of the separate account. The gross
investment rate is equal to:
(1) the net asset value per share of a Fund share held in the sub-account of the
separate account determined at the end of the current valuation period; plus
(2) the per share amount of any dividend or capital gains distribution by that
Fund if the "ex-dividend" date occurs during the current valuation period;
with the sum divided by
(3) the net asset value per share of that Fund held in the sub-account
determined at the end of the preceding valuation period.
We reserve the right to deduct a charge against the separate account
assets, or make other provisions for, any additional tax liability we may incur
with respect to the separate account or the policies, to the extent that those
liabilities exceed the amounts recovered through the deduction from premiums for
premium taxes and federal taxes.
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DAILY VALUES We determine the value of the units in each sub-account on each
day on which the Portfolios of the Funds are valued. The net asset value of the
Funds' shares is computed once daily, and, in the case of the Money Market
Portfolio, after the declaration of the daily dividend, as of the primary
closing time for business on the New York Stock Exchange (as of the date hereof
the primary close of trading is 4:00 p.m. Eastern Time, but this time may be
changed) on each day, Monday through Friday, except (i) days on which changes in
the value of a Fund's Portfolio securities will not materially affect the
current net asset value of such Fund's shares, (ii) days during which no shares
of a Fund are tendered for redemption and no order to purchase or sell such
Fund's shares is received by such Fund and (iii) customary national business
holidays on which the New York Stock Exchange is closed for trading.
Although the account value for each policy is determinable on a daily
basis, we update our records to reflect that value on each monthly anniversary.
We also make policy value determinations as of the date of the insured's death
and on a policy adjustment, surrender, or lapse. When the policy value is
determined, we will assess and update to the date of the transaction those
charges made against the owner's account value, namely the administration charge
and the cost of insurance charge. Increases or decreases in policy values will
not be uniform for all policies but will be affected by policy transaction
activity, cost of insurance charges and the existence of policy loans.
To illustrate the operation of the policy under various assumptions, we
have prepared several tables, along with additional explanatory text, that may
be of assistance. For these tables, please see Appendix I, "Illustrations of
Account Values and Death Benefits."
LOANS
The owner may borrow from us using only the policy as the security for the
loan. The owner may borrow up to an amount equal to (a) less (b), where (a) is
90 percent of the owner's account value and (b) is the loan principal plus
accrued loan interest charges. A loan taken from or secured by a policy may have
federal income tax consequences. (See "Federal Tax Status.") The maximum loan
amount is determined as of the date we receive the owner's request for a loan.
Any loan paid to the owner in cash must be in an amount of at least $100.
We will charge interest on the loan principal in arrears. At the owner's
request, we will send the owner a loan request form for his or her signature.
The owner may also obtain a loan by telephone during our normal business hours
of 8:00 a.m. to 4:45 p.m., Eastern Time. Should the owner make a request by
telephone call or other electronic means, he or she will be asked for personal
identification and policy number. More information on the procedures to make
requests by telephone call or other electronic means is provided under the
heading "Transfers."
When the owner takes a loan, we will reduce the net cash value by the
amount borrowed. This determination will be made as of the end of the valuation
period during which the loan request is received at our home office. Unless the
owner directs us otherwise, the loan will be taken from the guaranteed account
value and separate account value in the same proportion that those values bear
to each other and, as to the separate account value, from each sub-account in
the proportion that the sub-account value of each such sub-account bears to the
owner's separate account value. The number of units to be canceled will be based
upon the value of the units as of the end of the valuation period during which
we receive the owner's loan request at our home office. The amount borrowed
continues to be part of the account value, as the amount borrowed becomes part
of the loan principal where it will accrue loan interest credits and will be
held in our general account. A loan has no immediate effect on the owner's
account value since at the time of the loan the account value is the sum of the
guaranteed account value, separate account value and the loan principal. When a
loan is to come from the guaranteed account value, we have the right to postpone
a loan payment for up to six months.
If a policy enters a grace period and if the net cash value is insufficient
to cover the monthly deduction and the loan repayment, the owner will have to
make a loan repayment to keep the policy in force. We will give the owner notice
of our intent to terminate the policy and the loan repayment
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required to keep it in force. The time for repayment will be within 31 days
after our mailing of the notice.
LOAN INTEREST The interest rate charged on the loan principal will be 8 percent
per year. Interest charged will be based on a daily rate which if compounded for
the number of calendar days in the year will equal 8 percent annually, and
compounded for the number of days since loan interest charges were last updated.
Loan interest charges are due at the end of the policy month. If the owner
does not pay in cash the accrued loan interest charges at the end of the policy
month, this unpaid interest will be deducted from the account value and added to
the loan principal. The new loan principal will be subject to the same rate of
interest as the loan principal in effect.
Interest is also credited on the loan principal. Interest credits on the
loan principal shall be at a rate which is not less than 6 percent per year.
Interest credited will be based on a daily rate which if compounded for the
number of calendar days in the year will be at least 6 percent annually, and
compounded for the number of days since loan interest charges were last updated.
Loan interest charges and loan interest credits are allocated monthly, at
loan repayment, at policy surrender and at death. Loan interest charges and loan
interest credits are allocated to a policy's guaranteed account value and
separate account value in the same proportion that those values bear to each
other and, as to the separate account value, to each sub-account in the
proportion that the sub-account value of each such sub-account bears to the
separate account value.
LOAN REPAYMENTS If the policy is in force, the loan principal and accrued loan
interest charges can be repaid in part or in full at any time before the
insured's death. The loan principal may also be repaid within 60 days after the
date of the insured's death, if we have not paid any of the benefits under the
policy. Any loan repayment must be at least $100 unless the balance due is less
than $100.
Loan repayments are allocated to the guaranteed account. The owner may
reallocate amounts in the guaranteed account among the sub-accounts of the
separate accounts, subject to the limitations in this prospectus and the policy
on such transfers. Loan repayments will be applied first to reduce the amount of
accrued loan interest charges. Any remaining portion of the repayment will then
be used to reduce the loan principal. The net cash value will increase by the
amount of the loan repayment.
A loan, whether or not it is repaid, will have a permanent effect on the
account value because the investment results of the sub-accounts will apply only
to the amount remaining in the sub-accounts. The effect could be either positive
or negative. If net investment results of the sub-accounts are greater than the
rate credited on the loan, the account value will not increase as rapidly as it
would have if no loan had been made. If investment results of the sub-accounts
are less than the rate credited on the loan, the account value will be greater
than if no loan had been made. For an example of the effect of a loan on a
policy and its death benefit, please see Appendix II, "Loan Example."
SURRENDER AND WITHDRAWAL
The owner may also request a surrender of or a withdrawal from the policy
at any time while the insured is living. To make a surrender, the owner sends us
a written request for its surrender. The owner is then paid the net cash value
of the policy, computed as of the end of the valuation period during which we
receive the surrender request at our home office. That payment can be in cash
or, at the option of the owner, can be applied on a settlement option. A
surrender or withdrawal may have federal income tax consequences. (See "Federal
Tax Status.")
A withdrawal of the net cash value of the policy is permitted in any amount
equal to at least the minimum established for policies under the group-sponsored
insurance program. The minimum will never exceed $500. The maximum withdrawal is
equal to an amount that would cause the net cash value after the withdrawal to
be 10 percent of the account value immediately prior to the withdrawal. We
reserve the right to limit the number of withdrawals to one per policy month,
change the minimum amount for withdrawals, limit the frequency of withdrawals,
or restrict or prohibit withdrawals from the guaranteed account. A withdrawal
will cause a decrease in the face amount equal to the amount surrendered if the
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current death benefit option for the policy is Option A (level death benefit). A
withdrawal has no effect on the face amount if the current death benefit option
for a the policy is Option B (variable death benefit). However, since the
account value is reduced by the amount of the withdrawal, the death benefit is
reduced by the same amount, as the account value represents a portion of the
death benefit proceeds.
On a withdrawal, the owner may designate the sub-accounts of the separate
account from which a withdrawal is to be taken or whether it is to be taken in
whole or in part from the guaranteed account. Otherwise, withdrawals will be
deducted from the guaranteed account value and separate account value in the
same proportion that those values bear to each other and, as to the separate
account value, from each sub-account in the proportion that the sub-account
value of each such sub-account bears to the separate account value. We reserve
the right to restrict or prohibit withdrawals from the guaranteed account. We
will tell the owner, on request, what amounts are available for a withdrawal
under the policy.
A transaction charge will be deducted from the net cash value in connection
with a withdrawal for policies under some group-sponsored insurance programs.
The amount of the charge will never exceed the lesser of $25 or 2 percent of the
amount withdrawn. The charge will be allocated to the guaranteed account value
and the separate account value in the same proportion as those values bear to
each other and, as to the separate account value, from each sub-account in the
same proportion that the sub-account value of each such sub-account bears to the
separate account value.
Payment of a surrender or withdrawal will be made as soon as possible, but
not later than seven days after our receipt of the owner's written request for
surrender or withdrawal. However, if any portion of the net cash value to be
surrendered is attributable to a premium payment made by non-guaranteed funds
such as a personal check, we will delay mailing that portion of the surrender
proceeds until we have reasonable assurance that the payment has cleared and
that good payment has been collected. The amount the owner receives on surrender
may be more or less than the total premiums paid under the policy.
TRANSFERS
Transfers from a sub-account of the separate account or from the guaranteed
account may be made in writing, by telephone or through any other method made
available by us under the group-sponsored insurance program.
There are restrictions to such transfers. Only one transfer may be made
each policy month for each policy issued hereunder. The amount to be transferred
to or from a sub-account of the separate account or the guaranteed account must
be at least $250. If the balance in the guaranteed account or in the sub-account
from which the transfer is to be made is less than $250, the entire account
value attributable to that sub-account or the guaranteed account must be
transferred. If a transfer would reduce the account value in the sub-account
from which the transfer is to be made to less than $250, we reserve the right to
include that remaining amount in the sub-account with the amount transferred.
The maximum amount of net cash value to be transferred out of the
guaranteed account to the sub-accounts of the separate account is limited to
twenty percent (or $250 if greater) of the guaranteed account value. Transfers
to or from the guaranteed account are limited to one such transfer per policy
year. We may further restrict transfers by requiring that the request is
received by us or postmarked in the 30-day period before or after the last day
of the policy anniversary. Requests for transfers which meet these conditions
would be effective after we approve and record them at our home office.
For transfers out of the separate account or among the sub-accounts of the
separate account, we will credit and cancel units based on the sub-account unit
values as of the end of the valuation period during which the owner's request is
received at our home office. Transfers from the guaranteed account will be
dollar amounts deducted at the end of the day on which the transfer request is
received at our home office.
From time to time the separate account may receive a transfer request that
Northstar Life regards as disruptive to the efficient management of the
sub-accounts of the separate account. This could be because of
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<PAGE> 26
the timing of the request and the availability of settlement proceeds in federal
funds in the underlying portfolio of the fund, the size of the transfer amount
involved or the trading history of the investor.
A transfer or exchange from one sub-account to another is generally treated
as a simultaneous sale of units currently held and the purchase of units where a
new investment is desired. In the event that cumulative redemptions from a
sub-account on a given day equal or exceed $5,000,000, or if the investment
adviser of the underlying portfolio of the fund determines that selling
securities to satisfy the redemptions could be harmful to the fund, some
requested transfers or exchanges may be denied. In addition, any transfer
request or requests affecting a particular sub-account which, individually or
collectively with other transfer requests submitted by the owner of multiple
individual policies or by the owners of certificates under a single group
contract for that sub-account on a given day, equal or exceed $5,000,000 may be
denied unless all such transfer requests are received by 1:00 p.m. Eastern Time.
In these events, the order of such redemptions from the fund will be as follows:
all automatic exchanges (for example, dollar cost averaging), written transfer
and exchange requests, faxed transfer and exchange requests, and electronic
transfer and exchange requests (including telephone and internet transaction
site requests). Transfer and exchange requests will be processed in the order of
receipt within their respective category. In no event will there be any
limitation on redemptions in connection with surrenders, withdrawals or loans.
The owner will be notified when these limitations are imposed on a transfer
request.
In the event of disruptive circumstances which don't result in the denial
of a request as outlined above, the size or timing of the transfer may make it
impossible for the exchange to occur on the same day. In that event, the request
for exchange will be treated as a request for a transfer of units on the date of
the receipt of the request. The price of the new units will also be calculated
on that day and that determination will be used as the basis for determining the
number of units outstanding in the sub-account. However, the transfer of the
redemption proceeds and the purchase of units, and shares in the new portfolio,
will be accomplished only when federal funds are received from the sale to allow
the purchase and sale without disruption. Should the transfer not be completed
because of non-payment, Northstar Life will reimburse the separate account for
any decline in the price of the units to the time of the cancellation.
Similarly, any fees or disbursements resulting from any legal action because of
the non-payment will similarly be the liability of Northstar Life. The owner
will be notified when this limitation is imposed on a transfer request.
A transfer is subject to a transaction charge. Currently, no such charge is
imposed on a transfer, but a charge, up to a maximum of $10, may be imposed in
the future.
The owner's instructions for transfer may be made in writing or the owner,
or a person authorized by the owner, may make such changes by telephone. To do
so, the owner may call us at (XXX) XXX-XXXX during our normal business hours of
8:00 a.m. to 4:45 p.m., Eastern Time. Owners may also submit their requests for
transfer, surrender or other transactions to us by facsimile (FAX) transmission.
Our FAX number is (XXX) XXX-XXXX. We will make this telephone transfer service
available to all policy owners.
We may make other electronic transfer capabilities available to policy
owners under some group-sponsored insurance programs. We will employ reasonable
procedures to satisfy ourselves that instructions received from policy owners
are genuine and, to the extent that we do not, we may be liable for any losses
due to unauthorized or fraudulent instructions. We require policy owners to
identify themselves in electronic transactions through policy numbers or such
other information as we may deem to be reasonable. We record electronic transfer
instructions and we provide the policy owners with a written confirmation of the
electronic transfers.
Transfers made pursuant to a telephone call or other electronic means are
subject to the same conditions and procedures as would apply to written transfer
requests. During periods of marked economic or market changes, owners may
experience difficulty in implementing a telephone or other electronic transfer
due to a heavy volume of network usage. In such a circumstance, owners should
consider submitting a written transfer request while continuing to attempt
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<PAGE> 27
an electronic redemption. We reserve the right to restrict the frequency of--or
otherwise modify, condition, terminate or impose charges upon--electronic
transfer privileges. For more information on electronic transfers, contact us.
Although we currently intend to continue to permit transfers in the
foreseeable future, the policy provides that we may modify the transfer
privilege by changing the minimum amount transferable, by altering the frequency
of transfers, by imposing a transfer charge, by prohibiting transfers, or in
such other manner as we may determine at our discretion.
DOLLAR COST AVERAGING
We currently offer a dollar cost averaging option enabling the owner to
preauthorize automatic monthly or quarterly transfers from the Money Market
Sub-Account to any of the other sub-accounts. There is no charge for this
option. The transfers will occur on monthly anniversaries. Dollar cost averaging
is a systematic method of investing in which securities are purchased at regular
intervals in fixed dollar amounts so that the cost of the securities is averaged
over time and possibly over various market values. Since the value of the units
will vary over time, the amounts allocated to a sub-account will result in the
crediting of a greater number of units when the unit value is low and a lesser
number of units when the unit value is high. Dollar cost averaging does not
guarantee profits, nor does it assure that a policy will not have losses.
To elect dollar cost averaging the owner must have at least $3,000 in the
Money Market Sub-Account. The automatic transfer amount from the Money Market
Sub-Account must be at least $250. The minimum amount that may be transferred to
any one of the other sub-accounts is $50. We reserve the right to discontinue,
modify or suspend the dollar cost averaging program at any time.
A dollar cost averaging request form is available to the owner upon
request. On the form the owner will designate the specific dollar amount to be
transferred, the sub-accounts to which the transfer is to be made, the desired
frequency of the transfer and the total number of transfers to be made. If at
any time while the dollar cost averaging option is in effect, the amount in the
Money Market Sub-Account is insufficient to cover the amount designated to be
transferred the current election in effect will terminate.
An owner may instruct us at any time to terminate the dollar cost averaging
election by giving us a request in writing or through any other method made
available by us under the group-sponsored insurance program. The amount from
which transfers were being made will remain in the Money Market Sub-Account
unless a transfer request is made.
FREE LOOK
It is important to us that the owner is satisfied with the policy after it
is issued. If the owner is not satisfied with it, the owner may return the
policy to us within 10 days after the owner receives it. If the policy is
returned, the owner will receive within seven days of the date we receive the
notice of cancellation a full refund of the premiums paid.
A request for an increase in face amount also may be canceled. The request
for cancellation must be made within the 10 days, or that period required by
applicable state law, after the owner receives the new policy specifications
page for the increase.
Upon cancellation of an increase, the owner may request that we refund the
amount of the additional charges deducted in connection with the increase. This
will equal the amount by which the monthly deductions since the increase went
into effect exceeded the monthly deductions which would have been made without
the increase. If no request is made, we will increase the policy's account value
by the amount of these additional charges. This amount will be allocated among
the sub-accounts of the separate account and guaranteed account in the same
manner as it was deducted.
CONVERSION PRIVILEGE TO AN INDIVIDUAL POLICY
If the group contract is terminated or if the insured's insurance under the
group contract ends due to the termination of his or her employment or
membership in the class or classes eligible for coverage under the group
contract or his or her insurance is reduced on or after the attainment of age
sixty in any increment or series of increments totaling twenty percent or more
of the amount of insurance in force under the policy prior to the first
reduction at age sixty, the owner shall be entitled to convert such insurance to
21
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a policy of permanent individual life insurance within thirty one days of such
termination or reduction, without providing evidence of insurability, subject to
the following:
(1) the owner's written application to convert to an individual policy and the
first premium for the individual policy must be received in our home office
within 31 days of the date the insurance terminates under the group
contract; and
(2) the owner may convert all or part of the amount of insurance under the group
contract at the time of termination or, if insurance is reduced due to age,
the amount of insurance equal to the amount which was reduced. However, if
an insured's insurance terminates because the group contract is terminated,
the insured is eligible to convert an amount up to the amount of insurance
he or she had just prior to the termination, less any amount he or she may
become eligible for under any group contract within 45 days of the
termination. The owner may convert said amounts to any policy of permanent
individual life insurance then customarily issued by us for purposes of
conversion. The premium charge for this insurance will be based upon the
insured's age as of his or her nearest birthday; and
(3) if the insured should die within 31 days of the date that insurance
terminated under the group contract, the full amount of insurance that could
have been converted under the policy will be paid.
If the insured's insurance ends due to the termination of his or her
employment or of membership in the class or classes eligible for coverage under
the group contract as a result of his or her total and permanent disability, the
owner shall be entitled to convert such insurance to any policy of permanent
individual life insurance then customarily issued by us for purposes of
conversion.
The insured may convert up to the full amount of terminated insurance if
termination occurs because an insured spouse's coverage terminates due to
divorce or annulment of marriage to the insured employee.
The owner must be notified within 15 days before or after the event that
results in termination or reduction of the insured's group life coverage. If the
notice is given more than 15 days but less than 90 days after the event, the
time allowed for the exercise of the conversion privilege shall be extended to
45 days after such notice is sent. If the notice is not given within 90 days
after the event, the time allowed for the exercise of the conversion privilege
expires 90 days after such notice is sent. Such notice shall be mailed by us to
the owner's last address furnished to us by the group contractholder.
CONTINUATION OF GROUP COVERAGE
If the insured's eligibility under the group contract ends, the current
group coverage may continue unless:
(1) the policy is no longer in force; or
(2) the group contract has terminated, although we may allow continuation for
policies under some group-sponsored insurance programs if there is no
successor plan; or
(3) there is less than the required minimum in the policy's net cash value after
deduction of charges for the month in which eligibility ends. The required
minimum will vary based on the group-sponsored insurance program under which
the policy is issued. The minimum will never be higher than $250.
If any of these limitations apply, the owner may still elect to continue
the current group coverage, but only for a period not to exceed one year. At the
end of this continuation period, he or she may convert such insurance to an
individual policy of permanent insurance with Northstar Life. Such conversion
shall be subject to the rest of the Conversion Privilege section in the policy
and this prospectus.
Successor plan shall mean another insurer's insurance policy(ies) with a
cash accumulation feature or an annuity contract(s) that replaces the insurance
provided under the group contract.
The face amount of insurance will not change unless the owner requests a
change. We reserve the right to alter all charges not to exceed the maximums.
These charges may be higher than those applicable to policies under the group
contract that have not been continued under this provision.
Termination of the group contract by the contractholder or us will not
terminate the insurance then in force under the terms of the continuation
provision. The group contract
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will be deemed to remain in force solely for the purpose of continuing such
insurance, but without further obligation of the contractholder.
CHARGES
Charges will be deducted in connection with the policies to compensate us
for providing the insurance benefits set forth in the policies, administering
the policies, incurring expenses in distributing the policies and assuming
certain risks in connection with the policies. Charges will vary based on the
group-sponsored insurance program under which the policy is issued. We will
determine charges pursuant to our established actuarial procedures, and in doing
so we will not discriminate unreasonably or unfairly against any person or class
of persons. The charges for policies under a group-sponsored insurance program
are shown on the specifications page of the policy. There are also advisory fees
and expenses which are assessed against the asset value of each of the
portfolios of the Funds.
PREMIUM EXPENSE CHARGES
The premium expense charges described below will be deducted from each
premium payment we receive. The remaining amount, or net premium, will be
allocated to the guaranteed account and/or sub-accounts of the separate account,
as directed by the owner, and become part of the policy's net cash value.
SALES CHARGE We may deduct a sales charge from each premium paid under the
policy. Sales charges vary based on the group-sponsored insurance program under
which the policy is issued. The charge will never exceed 5 percent of each
premium paid. The sales charge will be determined based on a variety of factors,
including enrollment procedures, the size and type of the group, the total
amount of premium payments to be received, any prior existing relationship with
the group sponsor, the level of commissions paid to agents and brokers and their
affiliated broker-dealers, and other circumstances of which we are not presently
aware. We may waive the sales charge for premiums received as a result of
Internal Revenue Code section 1035 exchanges from another policy. In addition,
we may waive the sales charge for premiums paid by designated payors under a
group-sponsored insurance program (for example, insureds versus the group
sponsor).
The amount of the sales charge in any policy year cannot be specifically
related to sales expenses for that year. To the extent that sales expenses are
not recovered from the sales charge, we will recover them from our other assets
or surplus, which may include profits from the mortality and expense risk charge
or the cost of insurance charge.
PREMIUM TAX CHARGE We will deduct a percentage of premium charge, not to exceed
4 percent of each premium received, for premium taxes. Premium tax charges vary
based on the group-sponsored insurance program under which the policy is issued.
This charge is to compensate us for our payment of premium taxes that are
imposed by state and local jurisdictions, and such other charges or expenses as
we may incur with respect to the policies, including guaranty fund assessments.
We may waive the premium tax charge for premiums received as a result of
Internal Revenue Code section 1035 exchanges from another policy.
FEDERAL TAX CHARGE Due to a 1990 federal tax law change under the Omnibus
Budget Reconciliation Act of 1990 ("OBRA"), as amended, insurance companies are
generally required to capitalize and amortize certain policy acquisition
expenses rather than currently deducting such expenses. This has resulted in an
additional corporate income tax liability for insurance companies. For policies
deemed to be group policies for purposes of OBRA, we make a charge of up to 0.35
percent of each premium payment to compensate us for the additional corporate
taxes we pay for these policies. OBRA imposes a higher policy acquisition
expense to be capitalized on policies deemed to be individual contracts under
OBRA which results in significantly higher corporate income tax liability for
those deemed individual contracts. Thus, under policies deemed to be individual
contracts under OBRA, we make a charge of up to 1.25 percent of each premium
payment. This additional charge is treated as a sales load for purposes of
determining compliance with the limitations on sales loads imposed by the
Investment Company Act of 1940 and applicable regulations thereunder. We may
waive the federal tax charge for premiums
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received as a result of Internal Revenue Code section 1035 exchanges from
another policy.
ACCOUNT VALUE CHARGES
The premium expense charges described above will be deducted from each
premium payment we receive. The remaining amount, or net premium, will be
allocated to the guaranteed account and/or sub-accounts of the separate account,
as directed by the owner, and become part of the policy's net cash value. The
account value charges described below will be deducted from the net cash value.
If the net cash value is insufficient to cover the account value charges, the
policy will lapse unless sufficient payment is received within the grace period.
MONTHLY DEDUCTION The charges deducted as part of the monthly deduction vary
based on the group-sponsored insurance program under which the policy is issued.
As of the policy date and each subsequent monthly anniversary, we will deduct an
amount from the net cash value of the owner's policy to cover certain charges
and expenses incurred in connection with the policy. The monthly deduction will
be the sum of the following applicable items: (1) an administration charge; (2)
a cost of insurance charge; and (3) the cost of any additional insurance
benefits provided by rider. The monthly deduction will be deducted from the
guaranteed account value and the separate account value in the same proportion
that those values bear to each other and, as to the separate account, from each
sub-account in the proportion that the sub-account value in such sub-account
bears to the separate account value of the policy.
We may deduct an ADMINISTRATION CHARGE from the net cash value of the
policy each month. The administration charge will never exceed $4 per month.
This charge is to compensate us for expenses incurred in the administration of
the policies. These expenses include the costs of processing enrollments,
determining insurability, and establishing and maintaining policy records.
Differences in the administration charge applicable to specific group-sponsored
insurance programs will be determined based on expected differences in the
administrative costs for the policies or in the amount of revenues that we
expect to derive from the charge. Such differences may result, for example, from
the number of eligible members in the group, the type and scope of
administrative support provided by the group sponsor, the expected average
policy size, and the features to be included in policies under the
group-sponsored insurance program. This charge is not designed to produce a
profit.
The monthly COST OF INSURANCE will be calculated by multiplying the
applicable cost of insurance rate based on the insured's attained age and rate
class by the net amount at risk for each policy month. The net amount at risk
for a policy month is the difference between the death benefit and the account
value. The net amount at risk may be affected by changes in the face amount of
the policy or by changes in the account value.
The cost of insurance rates are generally determined at the beginning of
each policy year, although changes may be made at other times if warranted due
to a change in the underlying characteristics of the group, changes in benefits
included in policies under the group-sponsored insurance program, experience of
the group, changes in the expense structure, or a combination of these factors.
Cost of insurance rates for each group-sponsored insurance program are
determined based on a variety of factors related to group mortality including
gender mix, average amount of insurance, age distribution, occupations,
industry, geographic location, participation, level of medical underwriting
required, degree of stability in the charges sought by the group sponsor, prior
mortality experience of the group, number of actual or anticipated owners
electing the continuation option, and other factors which may affect expected
mortality experience. In addition, cost of insurance rates may be intended to
cover expenses to the extent they are not covered by the other policy charges.
Changes in the current cost of insurance rates may be made based on any factor
which affects the actual or expected mortality or expenses of the group.
Any changes in the current cost of insurance rates will apply to all
persons of the same attained age and rate class under the group-sponsored
insurance program. We and the group sponsor will agree to the number of classes
and characteristics of each rate class. The classes may vary by
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tobacco users and non-tobacco users, active and retired status, owners of
coverage continued under the continuation provision and other owners, and/or any
other nondiscriminatory classes agreed to by the group sponsor.
The current cost of insurance rates will not be greater than the guaranteed
cost of insurance rates set forth in the policy. These guaranteed rates are 125
percent of the maximum rates that could be charged based on 1980 Commissioners
Standard Ordinary Mortality Tables ("1980 CSO Table"). The guaranteed rates are
higher than 100 percent of the 1980 CSO Table because we may use a simplified
underwriting approach and may issue policies that do not require medical
evidence of insurability. The current cost of insurance rates are generally
lower than 100 percent of the 1980 CSO Table. (For purposes of premiums under
Section 7702 of the Internal Revenue Code of 1986, as amended, we will use 100
percent of the 1980 CSO Table.)
WITHDRAWAL TRANSACTION CHARGE For policies under some group-sponsored insurance
programs, a transaction charge will be assessed against the net cash value for
each withdrawal to cover the administrative costs incurred in processing the
withdrawal. The charge will not exceed the lesser of $25 or 2 percent of the
amount withdrawn. This charge will be assessed in the same manner as the monthly
deduction. This charge is not designed to produce a profit.
TRANSFER CHARGE There is currently no charge assessed on transfers of net cash
value between the guaranteed account and the separate account or among the sub-
accounts of the separate account. A charge, not to exceed $10 per transfer, may
be imposed in the future.
SEPARATE ACCOUNT CHARGES
We assess a MORTALITY AND EXPENSE RISK CHARGE directly against the separate
account assets. This charge will vary based on the group-sponsored insurance
program under which the policy is issued. The annual rate will not exceed .50
percent of the average daily assets of the separate account. The mortality and
expense risk charge compensates us for assuming the risk that the cost of
insurance and other charges will be insufficient to cover the actual mortality
experience and other costs in connection with the policies.
Differences in the mortality and expense risk charge rates applicable to
different group-sponsored insurance programs will be determined by us based on
differences in the levels of mortality and expense risk under those contracts.
Differences in mortality and expense risk arise principally from the fact that:
(1) the factors used to determine cost of insurance and administration charges
are more uncertain for some group-sponsored insurance programs than for others;
and (2) our ability to recover any unexpected mortality and administration costs
will also vary from group-sponsored insurance program to group-sponsored
insurance program, depending on the charges established for policies issued
under the group-sponsored insurance program, and on other financial factors.
We reserve the right to deduct a charge against the separate account
assets, or make other provisions for, any additional tax liability we may incur
with respect to the separate account or the policies, to the extent that those
liabilities exceed the amounts recovered through the deduction from premiums for
premium taxes and federal taxes. No such charge or provision is made at the
present time.
FUND CHARGES
Shares of the Funds are purchased for the separate account at their net
asset value, which reflects advisory fees and portfolio expense fees which are
assessed against the net asset value of each of the Portfolios of the Funds.
Advantus Capital Management, Inc. ("Advantus Capital"), acts as the
investment adviser to the Series Fund. Advantus Capital is a wholly-owned
subsidiary of Minnesota Life. For more information about the Series Fund, see
the prospectus of Advantus Series Fund, Inc. which is attached to this
prospectus.
The Fidelity Management and Research Company ("FMR"), a subsidiary of FMR
Corp., is adviser to each of the VIP High Income Portfolio, VIP Equity-Income
Portfolio and VIP II Contrafund Portfolio. For more information about the Funds,
see the prospectus of the Variable Insurance Products Funds which is attached to
this prospectus.
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GUARANTEE OF CERTAIN CHARGES
We guarantee and will not increase the following charges for policies under
a group-sponsored insurance program: (1) the maximum sales charge; (2) the
maximum premium tax charge; (3) the maximum federal tax charge (unless there is
a change in the law regarding the federal income tax treatment of deferred
acquisition costs); (4) the maximum cost of insurance charge; (5) the maximum
administration charge; (6) the maximum withdrawal transaction charge; (7) the
maximum transfer charge; and (8) the maximum separate account charge for
mortality and expense risk.
ADDITIONAL BENEFITS
Subject to certain requirements, one or more of the following additional
insurance benefits may be added to the policy by rider. However, some group
contracts may not offer each of the additional benefits described below. Certain
riders may not be available in all states. The descriptions below are intended
to be general; the terms of the policy riders providing the additional benefits
may vary from state to state, and the policy should be consulted. New benefit
riders which are subsequently developed may also be offered under some
group-sponsored insurance programs, and the terms of the riders will be
identified in the policy. The cost of any additional insurance benefits will be
deducted as part of the monthly deduction.
ACCELERATED BENEFITS RIDER Provides for the accelerated payment of all or a
portion of the death benefit proceeds if the insured is terminally ill, subject
to the minimums and maximums specified in the rider. Eligibility requirements
and conditions for payment of accelerated benefits are also described in the
rider. The amount of accelerated benefit payable is calculated by multiplying
the death benefit by an accelerated benefit factor defined in the rider.
Accelerated benefits will be paid to the owner unless the owner validly assigns
them otherwise. The receipt of benefits under the rider may have tax
consequences and the owner should seek assistance from a qualified tax adviser.
WAIVER RIDER Provides for the waiver of the monthly deductions while the
insured is totally disabled, subject to certain limitations described in the
rider. The insured must have become disabled before the age specified in the
rider.
ACCIDENTAL DEATH AND DISMEMBERMENT RIDER Provides additional insurance if the
insured dies or becomes dismembered as a result of an accidental bodily injury,
as defined in the rider. Under the terms of the rider, the additional benefits
provided in the policy will be paid upon receipt of proof by us that the death
or dismemberment resulted directly from accidental injury and independently of
all other causes. The death or dismemberment must occur within the timeframes
specified in the rider.
CHILDREN'S RIDER Provides for term insurance on the insured's children, as
specified in the rider. To be eligible for the insurance, the child must be of
eligible age as indicated in the rider and be dependent upon the insured for
financial support. Under terms of the rider, the death benefit will be payable
to the owner of the policy to which the rider is attached.
SPOUSE AND CHILD RIDER Provides for term insurance on the insured's spouse and
children, as specified in the rider. To be eligible for the insurance, spouse
and children must meet the eligibility requirements indicated in the rider.
Under terms of the rider, the death benefit will be payable to the owner of the
policy to which the rider is attached.
POLICYHOLDER CONTRIBUTION RIDER Allows the contractholder to pay for all or a
portion of the monthly charges under the policy without affecting the account
value which may accumulate due to employee-paid net premiums. The portion of the
net premium paid by the contractholder will be allocated to the guaranteed
account. On the same day such premium is allocated, the charges the
contractholder intends to cover will be deducted from the guaranteed account
value.
GENERAL MATTERS RELATING TO THE POLICY
POSTPONEMENT OF PAYMENTS Normally, we will pay any policy proceeds within seven
days after our receipt of all the documents required for such a payment. Other
than the death proceeds for a policy with a current Option B death benefit, for
which the account value portion of the death benefit is determined as of the
date of payment, the
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amount of payment will be determined as of the end of the valuation period
during which a request is received at our home office. However, we reserve the
right to defer policy payments, including loans, for up to six months from the
date of the owner's request, if such payments are based upon policy values which
do not depend on the investment performance of the separate account. In that
case, if we postpone a payment other than a loan payment for more than 31 days,
we will pay the owner interest at the greater of 3 percent per year or the
minimum rate required by state law for the period beyond that time that payment
is postponed. For payments based on policy values which do depend on the
investment performance of the separate account, we may defer payment only: (a)
for any period during which the New York Stock Exchange is closed for trading
(except for normal holiday closing); or (b) when the Securities and Exchange
Commission has determined that a state of emergency exists which may make such
payment impractical.
THE POLICY The policy, the attached signed application, endorsements, any
signed application for an increase in face amount and any signed application for
reinstatement constitute the entire contract between the owner and us. Apart
from the rights and benefits described in the policy and incorporated by
reference into the group contract, the owner has no rights under the group
contract. All statements made by the owner or insured in the signed application
are considered representations and not warranties, except in the case of fraud.
No statement made by the insured will be used to contest his or her coverage
unless a copy of the signed statement is or has been furnished to the insured or
to the insured's beneficiary. Any change to the policy must be approved in
writing by the President, a Vice President, Secretary or an Assistant Secretary
of Northstar Life. No agent has the authority to alter or modify any of the
terms, conditions or agreements of the policy or to waive any of its provisions.
CONTROL OF POLICY The insured will be considered the owner of the policy unless
another person is shown as the owner in the signed application. Ownership may be
changed, however, by assigning the policy as described below. The owner is
entitled to all rights provided by the policy, prior to its maturity date. After
the maturity date, the owner cannot change the payee nor the mode of payment,
unless otherwise provided in the policy. Any person whose rights of ownership
depend upon some future event will not possess any present rights of ownership.
If there is more than one owner at a given time, all must exercise the rights of
ownership. If the owner should die, and the owner is not the insured, the
owner's interest will go to his or her estate unless otherwise provided.
BENEFICIARY The owner may name one or more beneficiaries on the signed
application to receive the death benefit. The owner may choose to name a
beneficiary that the owner cannot change without the beneficiary's consent. This
is called an irrevocable beneficiary. If the owner has not named an irrevocable
beneficiary, the owner has reserved the right to change the beneficiary by
filing a subsequent written request with us. In that event, we will pay the
death benefit to the beneficiary named in the most recent change of beneficiary
request as provided for in the policy.
If a beneficiary dies before the insured, that beneficiary's interest in
the 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 according to the following order
of priority:
(1) The insured's lawful spouse, if living; otherwise
(2) The personal representative of the insured's estate.
CHANGE OF BENEFICIARY If the owner has reserved the right to change the
beneficiary, the owner can file a written request with us to change the
beneficiary. If the owner has named an irrevocable beneficiary, the written
consent of the irrevocable beneficiary will be required. The owner's 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 the owner
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 the
owner's request was so recorded.
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SETTLEMENT OPTIONS The death benefit proceeds of a policy will be payable if we
receive due proof satisfactory to us of the insured's death while it is in
force. The proceeds will be paid in a single sum unless a settlement option has
been selected.
We will pay interest on the face amount of single sum death proceeds from
the date of the insured's death until the date of payment. Interest will be at
an annual rate determined by us, but never less than 3 percent per year,
compounded annually, or the minimum rate required by state law. Death benefits
proceeds arising from the account value, as under Option B, will continue to
reflect the separate account experience until the time of payment of those
amounts.
The proceeds of a policy may be paid in other than a single sum and the
owner may, during the lifetime of the insured, request that we pay the proceeds
under one of the policy's settlement options. We may also use any other method
of payment acceptable to both the owner and us. Unless the owner elects
otherwise, a beneficiary may select a settlement option after the insured's
death. A settlement option may be selected only if the payments are to be made
to a natural person in that person's own right.
Each settlement option is payable in fixed amounts as described below. A
person electing a settlement option will be asked to sign an agreement covering
the election which will state the terms and conditions of the payments. The
payments do not vary with the investment performance of the separate account.
(1) INTEREST PAYMENTS This option will provide payment of interest on the
proceeds at such times and for a period that is agreeable to the person
electing the settlement option and us. Withdrawal of proceeds may be made in
amounts of at least $500. At the end of the period, any remaining proceeds
will be paid in either a single sum or under any other method we approve.
(2) FIXED PERIOD ANNUITY This is an annuity payable in monthly installments for
a specified number of years, from one to twenty years. The amount of
guaranteed payments for each $1,000 of proceeds applied would be shown on
the settlement option agreement.
(3) LIFE ANNUITY This is an annuity payable monthly during the lifetime of the
person who is to receive the income and terminating with the last monthly
payment immediately preceding that person's death. We may require proof of
the age and gender of the annuitant. The amount of guaranteed payments for
each $1,000 of proceeds applied would be shown in the settlement option
agreement. It would be possible under this option for the annuitant to
receive only one annuity payment if he or she died prior to the due date of
the second annuity payment, two if he or she died before the due date of the
third annuity payment, etc.
(4) PAYMENTS OF A SPECIFIED AMOUNT This is an annuity payable in a specified
amount until the proceeds and interest are fully paid.
The minimum amount of interest we will pay under any settlement option will
be at a rate of not less than 3 percent per year, compounded annually, or the
minimum rate required by state law. Additional interest earnings, if any, on
deposits under a settlement option will be payable as determined by us.
POLICY CHANGES We reserve the right to limit the number of policy changes to
one per policy year and to restrict such changes in the first policy year. For
this purpose, changes include increases or decreases in face amount. No change
will be permitted that would result in the death benefit under a policy being
included in gross income due to not satisfying the requirements of Section 7702
of the Internal Revenue Code or any applicable successor provision.
CONFORMITY WITH STATUTES If any provision in a policy is in conflict with the
laws of the state governing the policy, the provision will be deemed to be
amended to conform to such laws.
CLAIMS OF CREDITORS Except as provided by law, neither the policy nor any
payment thereunder will be subject to the claims of creditors or to any legal
process.
INCONTESTABILITY After a policy has been in force during the insured's lifetime
for two years from the policy date, we cannot contest the insurance for any loss
that is incurred more than two years after the policy date, unless the net cash
value has dropped below
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<PAGE> 35
the amount necessary to pay the insured's cost of insurance on the insured's
life. However, if there has been an increase in the amount of insurance for
which we required evidence of insurability, then, to the extent of the increase,
any loss which occurs within two years of the effective date of the increase
will be contestable. We may elect to waive our right to contest the insurance
for any loss that is incurred within two years after the policy issue date where
the policy replaces existing coverage.
ASSIGNMENT The policy may be assigned. However, we will not be bound by any
assignment unless it is in writing and filed at our home office in Amherst, New
York, and we send the owner an acknowledged copy. We assume no responsibility
for the validity or effect of any assignment of the policy or of any interest in
it. Any claim made by an assignee will be subject to proof of the assignee's
interest and the extent of the assignment. A valid assignment will take
precedence over any claim of a beneficiary.
SUICIDE If the insured, whether sane or insane, dies by suicide, within two
years of the original policy date, our liability will be limited to an amount
equal to the premiums paid for the policy. If there has been a face amount
increase for which we required evidence of insurability, and if the insured dies
by suicide within two years from the effective date of the increase, our
liability with respect to the increase will be limited to an amount equal to the
premiums paid for that increase.
MISSTATEMENT OF AGE If the age of the insured has been misstated, the death
benefit and account value will be adjusted. The adjustment will be the
difference between two amounts accumulated with interest. These two amounts are:
(1) the monthly cost of insurance charges that were paid; and
(2) the monthly cost of insurance charges that should have been paid based on
the insured's correct age.
The interest rates used are the rates that were used in accumulating
guaranteed account values for that time period.
EXPERIENCE CREDITS Each year we will determine if this class of policies and
this policy will receive an experience credit. Experience credits, if received,
may be added to the owner's account value or, if the owner elects, they may be
paid in cash.
An experience credit applied to the account value will be allocated to the
guaranteed account or to the sub-accounts of the separate account in accordance
with the owner's current instructions for the allocation of net premiums. In the
absence of such instructions, experience credits will be allocated to the
guaranteed account value and separate account value in the same proportion that
those account values bear to each other and, as to the account value in the
separate account, to each sub-account in the proportion that the sub-account
value bears to the separate account value.
REPORTS Each year we will send the owner a report. This report will show the
policy's status on the policy anniversary. It will include the account value,
the face amount and the death benefit as of the date of the report. It will also
show the premiums paid during the year, loan activity and the policy value. The
report will be sent to the owner without cost. The report will be as of a date
within two months of its mailing.
GENERAL PROVISIONS OF THE GROUP CONTRACT
ISSUANCE The group contract will be issued upon receipt of an application for
group insurance signed by a duly authorized officer of the group sponsor and
acceptance by a duly authorized officer of Northstar Life at our home office.
TERMINATION The contractholder may terminate a group contract by giving us 31
days prior written notice of the intent to terminate. In addition, we may
terminate a group contract or any of its provisions on 61 days' notice. We may
elect to limit the situations in which we may exercise our right to terminate
the group contract to situations where, in the absence of fraud or the
non-payment of premiums, during any twelve month period, the aggregate specified
face amount for all policies under the group contract or the number of policies
under a group contract decrease by certain amounts or below the minimum
permissible levels we establish for the group contract. No individual may become
insured under the group contract after the effective date of a notice of
termination. However, if the group contract terminates, policies may be
converted to
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individual coverage as described under the heading "Conversion Privilege to an
Individual Policy."
Upon termination of a group contract, we reserve the right to complete the
distribution of account values attributable to the guaranteed account over a
period of time determined by us, but not more than five years. This delayed
distribution does not in any way continue or extend any insurance that has
otherwise terminated due to termination of a group contract.
Termination of the group contract by the contractholder or us will not
terminate the insurance then in force under the terms of the continuation
provision. The group contract will be deemed to remain in force solely for the
purpose of continuing such insurance, but without further obligation of the
contractholder.
RIGHT TO EXAMINE GROUP CONTRACT The contractholder may terminate the group
contract within 10 days, or that period required by law, after receiving it. To
cancel the group contract, the contractholder should mail or deliver the group
contract to us.
ENTIRE GROUP CONTRACT The group contract, the attached copy of the
contractholder's signed application and any additional agreements constitute the
entire contract between the contractholder and us. All statements made by the
contractholder, any owner or any insured will be deemed representations and not
warranties. A misstatement will not be used in any contest or to reduce claim
under the group contract, unless it is in writing. A copy of the signed
application containing such misstatement must have been given to the
contractholder or to the insured or to his or her beneficiary, if any.
OWNERSHIP OF GROUP CONTRACT The contractholder owns the group contract. The
group contract may be changed or amended by agreement between us and the
contractholder without the consent of, or notice to, any person claiming rights
or benefits under the group contract. However, unless the contractholder owns
all of the certificates issued under the group contract, the contractholder does
not have any ownership interest in the certificates issued under the group
contract. The rights and benefits under the certificates of the owners, insureds
and beneficiaries are as set forth in this prospectus and in the certificates.
OTHER MATTERS
FEDERAL TAX STATUS
The discussion contained herein is general in nature and is not intended as
tax advice. Each person concerned should consult a competent tax adviser. No
attempt is made to consider any applicable state or other tax laws. In addition,
this discussion is based on our understanding of federal income tax laws as they
are currently interpreted. No representation is made regarding the likelihood of
continuation of current income tax laws or the current interpretations of the
Internal Revenue Service.
We are taxed as a "life insurance company" under the Internal Revenue Code.
The operations of the separate account form a part of, and are taxed with, our
other business activities. Currently, no federal income tax is payable by us on
income dividends received by the separate account or on capital gains arising
from the separate account's activities. The separate account is not taxed as a
"regulated investment company" under the Code and it does not anticipate any
change in that tax status.
Under Section 7702 of the Code, life insurance contracts such as the
policies will be treated as life insurance under the Code if certain tests are
met. Guidance on how these tests are to be applied is limited.
However, the Internal Revenue Service has issued proposed regulations that
would specify what will be considered reasonable mortality charges under Section
7702. In light of these proposed regulations and the other available guidance on
the application of the tests under Section 7702, we generally believe that a
policy issued in respect of a standard risk should meet the statutory definition
of a life insurance contract under Section 7702. With respect to a policy issued
on a substandard basis (i.e., a premium class involving higher than standard
mortality risk),
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there is insufficient guidance to determine if such a policy would satisfy the
Section 7702 definition of a life insurance contract. If it is subsequently
determined that a policy does not satisfy Section 7702, we may take whatever
steps are appropriate and necessary to attempt to cause such a policy to comply
with Section 7702.
Section 817(h) of the Code authorizes the Treasury to set standards by
regulation or otherwise for the investments of the separate account to be
"adequately diversified" in order for the policy to be treated as a life
insurance contract for federal tax purposes. The separate account, through the
Funds, intends to comply with the diversification requirements prescribed in
Regulations Section 1.817-5, which affect how the Funds' assets may be invested.
Although the investment adviser of the Series Fund is an affiliate of Northstar
Life, we do not have control over the Fund or its investments. Nonetheless, we
believe that each Portfolio of the Series Fund in which the separate account
owns shares will be operated in compliance with the requirements prescribed by
the Treasury.
In certain circumstances, owners of variable life policies may be
considered the owners, for federal income tax purposes, of the assets of a
separate account used to support their policies. In those circumstances, income
and gains from the separate account assets would be includable in the variable
life owner's gross income. The IRS has stated in published rulings that a
variable policy owner will be considered the owner of separate account assets if
the policy owner possesses incidents of ownership in those assets, such as the
ability to exercise the investment control over the assets. The Treasury
Department has also announced, in connection with the issuance of regulations
concerning investment diversification, that those regulations "do not provide
guidance concerning the circumstances in which investor control of the
investments of a segregated asset account may cause the investor (i.e., the
contract owner), rather than the insurance company, to be treated as the owner
of the assets in the account." This announcement also states that guidance would
be issued by way of regulations or rulings on the "extent to which policyholders
may direct their investments to particular sub-accounts without being treated as
owners of the underlying assets."
The ownership rights under the policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that policy owners were not owners of separate account assets. For
example, the owner of a policy has the choice of one or more sub-accounts in
which to allocate net purchase payments and policy values, and may be able to
transfer among sub-accounts more frequently than in such rulings. We do not
believe that the ownership rights of an owner of a policy would result in any
contract owner being treated as the owner of the assets of the separate account.
In addition, we do not know what standards would be applied if the Treasury
Department should proceed to issue regulations or rulings on this issue. We
therefore reserve the right to modify the policy as necessary to attempt to
prevent a policy owner from being considered the owner of a pro rata share of
the assets of the separate account.
The following discussion assumes that the policy will qualify as a life
insurance contract for federal income tax purposes.
On the death of the insured, the death benefit provided by the policies
will be excludable from the gross income of the beneficiary under Section 101(a)
of the Internal Revenue Code. The owner is not currently taxed on any part of
his or her interest until the owner actually receives cash from the policy.
However, taxability may also be determined by the individual's contributions to
the policy and prior policy activity. We also believe that loans will be treated
as indebtedness and will not be currently taxable as income to the policy owner.
However, a surrender or withdrawal may have tax consequences. On surrender, an
owner will generally not be taxed on values received except to the extent that
they exceed the gross premiums paid under the policy. An exception to this
general rule occurs in the case of a withdrawal, a decrease in the face amount,
or any other change that reduces benefits under the policy in the first 15 years
after the policy is issued and that results in a cash distribution to the owner
in order for the policy to continue complying with the Section 7702 definitional
limits. In that case, such distribution may be taxed in whole or in part as
ordinary income (to the extent of any gain in the policy) under
31
<PAGE> 38
rules prescribed in Section 7702. Premiums for additional benefits are not used
in the calculation for computing the tax on account values.
It should be noted, however, that the tax treatment described above is
available only for policies not characterized as a modified endowment contract.
In general, the tests to make such a determination will have an impact on
policies which have a high premium in relation to the death benefit. Thus, under
these tests, generally the cumulative premiums paid on a life insurance policy
during the first seven contract years cannot exceed the sum of the net level
premiums which would be paid under a seven-pay life policy. If the cumulative
premiums during the first seven contract years exceed the seven-pay life
premiums, the policy is a modified endowment contract.
Modified endowment contracts would still be treated as life insurance with
respect to the tax treatment of death proceeds and to the extent that the inside
build-up of account value would not be taxed on a yearly basis. However, any
amounts received by the owner, such as loans and amounts received from partial
or total surrender of the contract would be subject to the same tax treatment as
the same amounts received under an annuity (i.e., such distributions are
generally treated as taxable income to the extent that the account value
immediately before the distribution exceeds the investment in the policy). This
annuity tax treatment includes the 10 percent additional income tax which would
be imposed on the portion of any distribution that is included in income except
where the distribution or loan is made on or after the owner attains age 59 1/2,
or is attributable to the policy owner becoming disabled, or as part of a series
of substantially equal periodic payments for the life of the policy owner or the
joint lives of the policy owner and beneficiary.
The modified endowment contract rules apply to all policies entered into on
or after June 21, 1988. It should be noted, in addition, that a policy which is
subject to a "material change" shall be treated as newly entered into on the
date on which such material change takes effect. Appropriate adjustment shall be
made in determining whether such a policy meets the seven-pay test by taking
into account the previously existing cash surrender value. While certain
adjustments described herein may result in a material change, the law provides
that any cost of living increase described in the regulations and based upon an
established broad-based index will not be treated as a material change if any
increase is funded ratably over the remaining period during which premiums are
required to be paid under the policy. To date, no regulations under this
provision have been issued. Certain reductions in benefits may also cause a
policy to become a modified endowment contract.
Due to the policy's flexibility, classification of a policy as a modified
endowment contract will depend upon the circumstances of each policy.
Accordingly, a prospective policy owner should contact a competent tax adviser
before purchasing a policy to determine the circumstances under which the policy
would be a modified endowment contract. In addition, an owner should contact a
competent tax adviser before paying any lump sum premiums or making any other
change to, including an exchange of, a policy to determine whether that premium
or change would cause the policy (or the new policy in the case of an exchange)
to be treated as a modified endowment contract.
All modified endowment contracts issued by us (or an affiliated company) to
the same owner during any calendar year will be treated as one modified
endowment contract for purposes of determining the amount includable in gross
income under Section 72(e) of the Code. Additional rules may be promulgated
under this provision to prevent avoidance of its effects through serial
contracts or otherwise. A life insurance policy received in exchange for a
modified endowment contract will also be treated as a modified endowment
contract.
Generally, interest paid on any loan under a life insurance contract is not
deductible. An owner should consult a competent tax adviser before deducting any
loan interest. In addition, default of any loan under the policy may result in
taxable income and/or tax penalties.
The policy may be used in various arrangements, including non-qualified
deferred compensation or salary continuance plans, split dollar insurance plans,
executive bonus plans, retiree medical benefit plans and others. The tax
consequences of such
32
<PAGE> 39
plans may vary depending on the particular facts and circumstances of each
individual arrangement. Therefore, if you are contemplating the use of a policy
in any arrangement the value of which depends in part on its tax consequences,
you should be sure to consult a qualified tax adviser regarding the tax
attributes of the particular arrangement. Moreover, in recent years, Congress
has adopted new rules relating to corporate owned life insurance. Any business
contemplating the purchase of a new life insurance contract or a change in an
existing contract should consult a tax adviser.
Federal estate and state and local estate, inheritance, and other tax
consequences of ownership or receipt of policy proceeds depend upon the
circumstances of each policy owner or beneficiary. A competent tax adviser
should be consulted for further information.
It should be understood that the foregoing description of the federal
income tax consequences under the policies is not exhaustive and that special
rules are provided with respect to situations not discussed. Statutory changes
in the Internal Revenue Code, with varying effective dates, and regulations
adopted thereunder may also alter the tax consequences of specific factual
situations. Due to the complexity of the applicable laws, any person
contemplating the purchase of a variable life insurance policy or exercising
elections under such a policy may want to consult a qualified tax adviser.
At the present time, we make no charge to the separate account or from
premium payments for any federal, state or local taxes (other than state premium
taxes and federal taxes under OBRA) that we incur that may be attributable to
such account or to the policies. We, however, reserve the right in the future to
make a charge for any such tax or other economic burden resulting from the
application of the tax laws that we determine to be properly attributable to the
separate account or the policies.
DIRECTORS AND PRINCIPAL OFFICERS OF NORTHSTAR LIFE
<TABLE>
<CAPTION>
Position with
Name Northstar Life Principal Occupation
---- -------------- --------------------
<S> <C> <C>
Paul W. Anderson Vice President Second Vice President,
400 Robert Street North Minnesota Life Insurance
St. Paul, MN 55101 Company
John F. Bruder Director and Vice President Senior Vice President,
400 Robert Street North Minnesota Life Insurance
St. Paul, MN 55101 Company
Keith M. Campbell Director Senior Vice President,
400 Robert Street North Minnesota Life Insurance
St. Paul, MN 55101 Company
Susan L. Ebertz Director and Vice President of Second Vice President,
400 Robert Street North Operations Minnesota Life Insurance
St. Paul, MN 55101 Company, February 1998 to
present, prior thereto,
Director, Group Insurance
Services, Minnesota Life
Insurance Company, from
September 1994 to January 1998
Frederick P. Feuerherm Treasurer Vice President, Minnesota Life
400 Robert Street North Insurance Company, February
St. Paul, MN 55101 1998 to present, prior
thereto, Second Vice
President, Minnesota Life
Insurance Company, from August
1986 to February 1998
</TABLE>
33
<PAGE> 40
<TABLE>
<CAPTION>
Position with
Name Northstar Life Principal Occupation
---- -------------- --------------------
<S> <C> <C>
John M. Gibbons, III Director Managing Director, Deutsche
130 Liberty Street Bank
New York, NY 10006
Kathleen A. Hagen Director Senior Vice President, P & L
23 Ackerman Street Business Services, Inc.,
Staten Island, NY 10308 January 1997 to present, prior
thereto, Vice President,
Bankers Trust Company, New
York, New York from 1992 to
1996
Robert E. Hunstad Director, President and Chief Executive Vice President,
400 Robert Street North Executive Officer Minnesota Life Insurance
St. Paul, MN 55101 Company
James E. Johnson Director and Vice President Senior Vice President and
400 Robert Street North Actuary, Minnesota Life
St. Paul, MN 55101 Insurance Company
Helen W. Leslie Director, Vice President and Assistant General Counsel,
400 Robert Street North Assistant Secretary Minnesota Life Insurance
St. Paul, MN 55101 Company
Marc J. Lifset Director Principal, McNamee, Lochner,
75 State Street Titus & Williams
Albany, NY 12201
Harry P. Meislahn Director Principal, McNamee, Lochner,
75 State Street Titus & Williams
Albany, NY 12201
Dennis E. Prohofsky Director, Vice President and Senior Vice President, General
400 Robert Street North Secretary Counsel and Secretary,
St. Paul, MN 55101 Minnesota Life Insurance
Company
Joseph W. Sarbinowski Director Vice President, Deutsche Bank
130 Liberty Street
New York, NY 10006
Robert L. Senkler Director Chairman of the Board,
400 Robert Street North President and Chief Executive
St. Paul, MN 55101 Officer, Minnesota Life
Insurance Company, August 1995
to present, prior thereto for
more than five years Vice
President and Actuary,
Minnesota Life Insurance
Company
</TABLE>
VOTING RIGHTS
We will vote the shares of the Funds held in the various sub-accounts of
the Variable Universal Life Account at regular and special shareholder meetings
of the Funds in accordance with the owner's instructions. If, however, the
Investment Company Act of 1940, as amended, or any regulation thereunder should
change and we determine that it is permissible to vote the shares of the Funds
in our own right, we may elect to do so. The number of votes as to which the
owner has the right to instruct will be determined by dividing his or her
sub-account
34
<PAGE> 41
value by the net asset value per share of the corresponding Portfolio of the
Funds. Fractional shares will be counted. The number of votes as to which the
owner has the right to instruct will be determined as of the date coincident
with the date established by the Funds for determining shareholders eligible to
vote at the meeting of the Funds. Voting instructions will be solicited in
writing prior to the meeting in accordance with procedures established by the
Funds. We will vote shares of the Funds held by the separate account as to which
no instructions are received in proportion to the voting instructions which are
received from policy owners with respect to all policies participating in the
separate account. Each owner having a voting interest will receive proxy
material, reports and other material relating to the Funds.
We may, when required by state insurance regulatory authorities, disregard
voting instructions if the instructions require that shares be voted so as to
cause a change in sub-classification or investment policies of the Funds or
approve or disapprove an investment advisory contract of the Funds. In addition,
we may disregard voting instructions in favor of changes in the investment
policies or the investment adviser of one or more of the Funds if we reasonably
disapprove of such changes. A change would be disapproved only if the proposed
change is contrary to state law or disapproved by state regulatory authorities
on a determination that the change would be detrimental to the interests of
policy owners or if we determine that the change would be inconsistent with the
investment objectives of the Funds or would result in the purchase of securities
for the Funds which vary from the general quality and nature of investments and
investment techniques utilized by other separate accounts created by us or any
of our affiliates which have similar investment objectives. In the event that we
disregard voting instructions, a summary of that action and the reason for such
action will be included in the owner's next semi-annual report.
DISTRIBUTION OF POLICIES
The policies will be sold by state licensed life insurance producers who
are also registered representatives of Ascend Financial Services, Inc. ("Ascend
Financial") or of other broker-dealers who have entered into selling agreements
with Ascend Financial. Ascend Financial acts as principal underwriter for the
policies. Ascend Financial is a wholly-owned subsidiary of Advantus Capital
Management, Inc. Advantus Capital Management, Inc. is a registered investment
adviser.
Ascend Financial Services, Inc., whose address is 400 Robert Street North,
St. Paul, Minnesota 55101-2098, is a registered broker-dealer under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc. Ascend Financial was incorporated in 1984 under the
laws of the State of Minnesota. The policies are sold in the states where their
sale is lawful. The insurance underwriting and the determination of a proposed
insured's risk classification and whether to accept or reject an application for
a policy is done in accordance with our rules and standards.
Commissions to registered representatives on the sale of policies will be
premium-based, asset-based or a fixed amount. Commissions for policies under a
group-sponsored insurance program will not exceed the equivalent of 50 percent
of the portion of all premiums paid in the initial year to cover the cost of
insurance, 7 percent of all premiums paid in the initial year in excess of the
amount to cover the cost of insurance, and 7 percent of all premiums paid after
the initial year.
The commission schedule for a group-sponsored insurance program will be
determined based on a variety of factors, including enrollment procedures, the
size and type of the group, the total amount of premium payments to be received,
any prior existing relationship with the group sponsor, the sophistication of
the group sponsor, and other circumstances of which we are not presently aware.
In addition, Ascend Financial or Northstar Life will pay, based uniformly
on the sales of the policies by registered representatives, credits which allow
registered representatives (agents) who are responsible for sales of the
policies to attend conventions and other meetings sponsored by Northstar Life or
its affiliates for the purpose of promoting the sale of insurance and/or
investment products offered by Northstar Life and its affiliates. Such credits
may cover the registered representatives' transportation,
35
<PAGE> 42
hotel accommodations, meals, registration fees, etc.
LEGAL MATTERS
Legal matters in connection with federal securities laws applicable to the
issue and sale of the policies have been passed upon by Jones & Blouch L.L.P.,
1025 Thomas Jefferson Street, N.W., Suite 410 East, Washington, D.C. 20007. All
other legal matters, including the right to issue such policies under New York
law and applicable regulations thereunder, have been passed upon by Helen W.
Leslie, Vice President and Assistant Secretary of Northstar Life.
LEGAL PROCEEDINGS
As an insurance company, we are ordinarily involved in litigation.
Northstar Life is of the opinion that such litigation is not material with
respect to the policies or the separate account.
EXPERTS
The consolidated financial statements of Northstar Life included in this
prospectus have been audited by KPMG LLP, independent auditors, 4200 Norwest
Center, 90 South Seventh Street, Minneapolis, Minnesota 55402, whose reports
thereon appear elsewhere herein, and have been so included in reliance upon the
authority of said firm as experts in accounting and auditing.
Actuarial matters included in this prospectus have been examined by Robert
M. Olafson, F.S.A., Vice President of Minnesota Life, as stated in his opinion
filed as an exhibit to the Registration Statement.
REGISTRATION STATEMENT
We have filed a Registration Statement under the Securities Act of 1933, as
amended, with the Securities and Exchange Commission with respect to the
policies offered hereby. This prospectus does not contain all the information
set forth in the registration statement and amendments thereto and the exhibits
filed as a part thereof, to all of which reference is hereby made for further
information concerning the separate account, Northstar Life, and the policies.
Statements contained in this prospectus as to the contents of policies and other
legal instruments are summaries, and reference is made to such instruments as
filed.
36
<PAGE> 43
APPENDIX I
ILLUSTRATIONS OF ACCOUNT VALUES AND DEATH BENEFITS
The following tables illustrate how the account value and death benefit of
a policy change with the investment experience of the sub-accounts of the
separate account. The tables show how the account values and death benefit of a
policy issued to an insured of a given age and at a given premium would vary
over time if the investment return on the assets held in each sub-account of the
separate account were a uniform, gross, after-tax rate of 0 percent, 6 percent
or 12 percent. In addition, the account values and death benefits would be
different from those shown if the gross annual investment rates of return
averaged 0 percent, 6 percent and 12 percent over a period of years, but
fluctuated above and below those averages for individual policy years.
The tables illustrate both a policy issued to an insured, age 45 and to an
insured, age 55, in a group-sponsored insurance program issued a group contract.
This assumes a $4.00 monthly administration charge, a 3 percent sales load
charge, a 2 percent premium tax charge, and a .25 percent federal tax charge.
Cost of insurance charges used in the tables are either the guaranteed maximums
or assumed levels as described in the following paragraph. If a particular
policy has different administration, sales, tax, or cost of insurance charges,
the account values and death benefits would vary from those shown in the tables.
The illustrations of death benefits also vary between tables depending upon
whether the level or variable type death benefits are illustrated.
The account value column in the tables with the heading "Using Maximum
Mortality Charges" shows the accumulated value of premiums paid reflecting
deduction of the charges described above and monthly charges for the cost of
insurance based on the guaranteed maximum rate when there has been simplified
underwriting, which is 125 percent of the maximum allowed under the 1980
Commissioners Standard Ordinary ("CSO") Mortality Table. The account value
column in the tables with the heading "Using Assumed Mortality Charges" shows
the accumulated value of premiums paid reflecting deduction of the charges
described above and monthly charges for the cost of insurance at an assumed
level which is substantially less than the guaranteed rate. Actual cost of
insurance charges for a policy depend on a variety of factors as described in
"Account Value Charges."
The amounts shown for the hypothetical account value and death benefit as
of each policy year reflect the fact that the net investment return on the
assets held in the sub-accounts is lower than the gross, after-tax return. This
is because expenses of the Funds and a daily mortality and expense risk charge
assessed against the net assets of the Variable Universal Life Account are
deducted from the gross return. The mortality and expense risk charge reflected
in the illustrations is at an annual rate of .50 percent. The investment
expenses illustrated represent an average of the investment advisory fees
charged for all eighteen Portfolios of the Funds. The investment advisory fee
for each Portfolio for the last fiscal year is shown under the heading "Fund
Charges" in this prospectus. In addition to the deduction for the investment
advisory fee, the illustrations also reflect a deduction for Portfolio costs and
expenses for the last fiscal year, as illustrated under the heading "What
charges are associated with the policy?--Fund Charges" in this prospectus. The
illustration reflects certain fees and expenses that were waived or voluntarily
absorbed, as detailed in the footnote to the expense table. We do not expect any
changes to the voluntary absorption of expenses policy in the current year.
Therefore, gross annual rates of return of 0 percent, 6 percent and 12 percent
correspond to approximate net annual rates of return of -1.25 percent, 4.75
percent and 10.75 percent.
The tables reflect the fact that no charges for federal, state or local
income taxes are currently made against the Variable Universal Life Account. If
such a charge is made in the future, it will take a higher gross rate of return
to produce after-tax returns of 0 percent, 6 percent and 12 percent than it does
now which produce the account values and death benefits illustrated.
Additionally, the hypothetical values shown in the tables assume that the policy
for which values are illustrated is not deemed an individual policy under OBRA,
and therefore the values do not reflect the additional 1 percent of premium
expense charge to cover Northstar Life's increased federal tax expense in that
situation.
The tables illustrate the policy values that would result based upon the
investment rates of return if the premiums are paid on a monthly basis, and if
no loans have been made. The tables are also based on the assumptions that no
withdrawals have been made, that no transfer charges were incurred and that no
optional riders have been requested. The policy values in the tables also may
reflect an increase in the face amount of insurance to the minimum amount
necessary to maintain the policy's qualification as life insurance under Section
7702 of the Code. Further, the tables may show a decrease in the face amount to
a level that the account value immediately prior to the decrease plus the
additional illustrated premiums with interest can provide.
Upon request, we will provide a comparable illustration based on the
proposed insured's age, the face amount of insurance, premium amount and
frequency of payment, the group size and gender mix among other characteristics
of the group and the insurance program.
37
<PAGE> 44
VARIABLE UNIVERSAL LIFE
DEATH BENEFIT OPTION A
ISSUE AGE 45
FACE AMOUNT OF INSURANCE--$100,000
ANNUAL PREMIUM--$1,800
(MONTHLY PREMIUM--$150)(1)
USING ASSUMED MORTALITY CHARGES*
<TABLE>
<CAPTION>
--ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF--
-------------------------------------------------------------
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.21% NET) (4.79% NET) (10.79% NET)
------------------ ------------------ -------------------
END OF ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
POL YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 $1,800 $ $ $ $ $ $
2 47 $1,800 $ $ $ $ $ $
3 48 $1,800 $ $ $ $ $ $
4 49 $1,800 $ $ $ $ $ $
5 50 $1,800 $ $ $ $ $ $
6 51 $1,800 $ $ $ $ $ $
7 52 $1,800 $ $ $ $ $ $
8 53 $1,800 $ $ $ $ $ $
9 54 $1,800 $ $ $ $ $ $
10 55 $1,800 $ $ $ $ $ $
15 60 $1,800 $ $ $ $ $ $
20 65 $1,800 $ $ $ $ $ $
25 70 $1,800 $ $ $ $ $ $
30 75 $1,800 $ $ $ $ $ $
40 85 $1,800 $ $ $ $ $ $
45 90 $1,800 $ $ $ $ $ $
</TABLE>
- ------------
(1) A premium payment of $150 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no loan has been made.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus 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 prevailing interest rates. The
death benefits and account values for a policy would be different from those
shown if the actual rates of return average 0%, 6%, and 12% over a period of
years but also fluctuated above or below those averages for individual policy
years. No representations can be made by Northstar Life or the Funds that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
* This illustration uses assumed mortality charges for a group-sponsored program
issued a group contract. Actual cost of insurance charges for a policy depend
on a variety of factors as described in "Account Value Charges."
38
<PAGE> 45
VARIABLE UNIVERSAL LIFE (CONTINUED)
DEATH BENEFIT OPTION A
ISSUE AGE 45
FACE AMOUNT OF INSURANCE--$100,000
ANNUAL PREMIUM--$1,800
(MONTHLY PREMIUM--$150)(1)
USING ASSUMED MORTALITY CHARGES
<TABLE>
<CAPTION>
--ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF--
-------------------------------------------------------------
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.21% NET) (4.79% NET) (10.79% NET)
------------------ ------------------ -------------------
END OF ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
POL YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 $1,800 $ $ $ $ $ $
2 47 $1,800 $ $ $ $ $ $
3 48 $1,800 $ $ $ $ $ $
4 49 $1,800 $ $ $ $ $ $
5 50 $1,800 $ $ $ $ $ $
6 51 $1,800 $ $ $ $ $ $
7 52 $1,800 $ $ $ $ $ $
8 53 $1,800 $ $ $ $ $ $
9 54 $1,800 $ $ $ $ $ $
10 55 $1,800 $ $ $ $ $ $
15 60 $1,800 $ $ $ $ $ $
20 65 $1,800 $ $ $ $ $ $
25 70 $1,800 $ $ $ $ $ $
30 75 $1,800 $ $ $ $ $ $
40 85 $1,800 $ $ $ $ $ $
45 90 $1,800 $ $ $ $ $ $
</TABLE>
- ------------
(1) A premium payment of $150 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no loan has been made.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus 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 prevailing interest rates. The
death benefits and account values for a policy would be different from those
shown if the actual rates of return average 0%, 6%, and 12% over a period of
years but also fluctuated above or below those averages for individual policy
years. No representations can be made by Northstar Life or the Funds that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
39
<PAGE> 46
VARIABLE UNIVERSAL LIFE (CONTINUED)
DEATH BENEFIT OPTION B
ISSUE AGE 45
FACE AMOUNT OF INSURANCE--$50,000
ANNUAL PREMIUM--$1,800
(MONTHLY PREMIUM--$150)(1)
USING ASSUMED MORTALITY CHARGES*
<TABLE>
<CAPTION>
--ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF--
---------------------------------------------------------
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.21% NET) (4.79% NET) (10.79% NET)
----------------- ----------------- -----------------
END OF ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
POL YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 $1,800 $ $ $ $ $ $
2 47 $1,800 $ $ $ $ $ $
3 48 $1,800 $ $ $ $ $ $
4 49 $1,800 $ $ $ $ $ $
5 50 $1,800 $ $ $ $ $ $
6 51 $1,800 $ $ $ $ $ $
7 52 $1,800 $ $ $ $ $ $
8 53 $1,800 $ $ $ $ $ $
9 54 $1,800 $ $ $ $ $ $
10 55 $1,800 $ $ $ $ $ $
15 60 $1,800 $ $ $ $ $ $
20 65 $1,800 $ $ $ $ $ $
25 70 $1,800 $ $ $ $ $ $
30 75 $1,800 $ $ $ $ $ $
40 85 $1,800 $ $ $ $ $ $
45 90 $1,800 $ $ $ $ $ $
</TABLE>
- ------------
(1) A premium payment of $150 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no loan has been made.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus 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 prevailing interest rates. The
death benefits and account values for a policy would be different from those
shown if the actual rates of return average 0%, 6%, and 12% over a period of
years but also fluctuated above or below those averages for individual policy
years. No representations can be made by Northstar Life or the Funds that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
* This illustration uses assumed mortality charges for a group-sponsored program
issued a group contract. Actual cost of insurance charges for a policy depend
on a variety of factors as described in "Account Value Charges."
40
<PAGE> 47
VARIABLE UNIVERSAL LIFE (CONTINUED)
DEATH BENEFIT OPTION B
ISSUE AGE 45
FACE AMOUNT OF INSURANCE--$50,000
ANNUAL PREMIUM--$1,800
(MONTHLY PREMIUM--$150)(1)
USING MAXIMUM MORTALITY CHARGES
<TABLE>
<CAPTION>
--ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF--
---------------------------------------------------------
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.21% NET) (4.79% NET) 10.79% NET)
----------------- ----------------- -----------------
END OF ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
POL YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 $1,800 $ $ $ $ $ $
2 47 $1,800 $ $ $ $ $ $
3 48 $1,800 $ $ $ $ $ $
4 49 $1,800 $ $ $ $ $ $
5 50 $1,800 $ $ $ $ $ $
6 51 $1,800 $ $ $ $ $ $
7 52 $1,800 $ $ $ $ $ $
8 53 $1,800 $ $ $ $ $ $
9 54 $1,800 $ $ $ $ $ $
10 55 $1,800 $ $ $ $ $ $
15 60 $1,800 $ $ $ $ $ $
20 65 $1,800 $ $ $ $ $ $
25 70 $1,800 $ $ $ $ $ $
30 75 $1,800 $ $ $ $ $ $
40 85 $1,800 $ $ $ $ $ $
45 90 $1,800 $ $ $ $ $ $
</TABLE>
- ------------
(1) A premium payment of $150 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no loan has been made.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus 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 prevailing interest rates. The
death benefits and account values for a policy would be different from those
shown if the actual rates of return average 0%, 6%, and 12% over a period of
years but also fluctuated above or below those averages for individual policy
years. No representations can be made by Northstar Life or the Funds that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
41
<PAGE> 48
VARIABLE UNIVERSAL LIFE (CONTINUED)
DEATH BENEFIT OPTION A
ISSUE AGE 55
FACE AMOUNT OF INSURANCE--$100,000
ANNUAL PREMIUM--$3,000
(MONTHLY PREMIUM--$250)(1)
USING ASSUMED MORTALITY CHARGES*
<TABLE>
<CAPTION>
--ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF--
-----------------------------------------------------------
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.21% NET) (4.79% NET) (10.79% NET)
----------------- ----------------- -------------------
END OF ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
POL YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 56 $3,000 $ $ $ $ $ $
2 57 $3,000 $ $ $ $ $ $
3 58 $3,000 $ $ $ $ $ $
4 59 $3,000 $ $ $ $ $ $
5 60 $3,000 $ $ $ $ $ $
6 61 $3,000 $ $ $ $ $ $
7 62 $3,000 $ $ $ $ $ $
8 63 $3,000 $ $ $ $ $ $
9 64 $3,000 $ $ $ $ $ $
10 65 $3,000 $ $ $ $ $ $
15 70 $3,000 $ $ $ $ $ $
20 75 $3,000 $ $ $ $ $ $
25 80 $3,000 $ $ $ $ $ $
30 85 $3,000 $ $ $ $ $ $
35 90 $3,000 $ $ $ $ $ $
</TABLE>
- ------------
(1) A premium payment of $250 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no loan has been made.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus 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 prevailing interest rates. The
death benefits and account values for a policy would be different from those
shown if the actual rates of return average 0%, 6%, and 12% over a period of
years but also fluctuated above or below those averages for individual policy
years. No representations can be made by Northstar Life or the Funds that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
* This illustration uses assumed mortality charges for a group-sponsored program
issued a group contract. Actual cost of insurance charges for a policy depend
on a variety of factors as described in "Account Value Charges."
42
<PAGE> 49
VARIABLE UNIVERSAL LIFE (CONTINUED)
DEATH BENEFIT OPTION A
ISSUE AGE 55
FACE AMOUNT OF INSURANCE--$100,000
ANNUAL PREMIUM--$3,000
(MONTHLY PREMIUM--$250)(1)
USING ASSUMED MORTALITY CHARGES
<TABLE>
<CAPTION>
--ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF--
--------------------------------------------------------------
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.21% NET) (4.79% NET) (10.79% NET)
------------------ ------------------- -------------------
END OF ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
POL YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
------ --- ------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 56 $3,000 $ $ $ $ $ $
2 57 $3,000 $ $ $ $ $ $
3 58 $3,000 $ $ $ $ $ $
4 59 $3,000 $ $ $ $ $ $
5 60 $3,000 $ $ $ $ $ $
6 61 $3,000 $ $ $ $ $ $
7 62 $3,000 $ $ $ $ $ $
8 63 $3,000 $ $ $ $ $ $
9 64 $3,000 $ $ $ $ $ $
10 65 $3,000 $ $ $ $ $ $
15 70 $3,000 $ $ $ $ $ $
20 75 $3,000 $ $ $ $ $ $
25 80 $3,000 $ $ $ $ $ $
30 85 $3,000 $ $ $ $ $ $
35 90 $3,000 $ $ $ $ $ $
</TABLE>
- ------------
(1) A premium payment of $250 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no loan has been made.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus 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 prevailing interest rates. The
death benefits and account values for a policy would be different from those
shown if the actual rates of return average 0%, 6%, and 12% over a period of
years but also fluctuated above or below those averages for individual policy
years. No representations can be made by Northstar Life or the Funds that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
43
<PAGE> 50
VARIABLE UNIVERSAL LIFE (CONTINUED)
DEATH BENEFIT OPTION B
ISSUE AGE 55
FACE AMOUNT OF INSURANCE--$50,000
ANNUAL PREMIUM--$3,000
(MONTHLY PREMIUM--$250)(1)
USING ASSUMED MORTALITY CHARGES*
<TABLE>
<CAPTION>
--ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF--
--------------------------------------------------------------
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.21% NET) (4.79% NET) 10.79% NET)
------------------ ------------------- -------------------
END OF ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
POL YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
------ --- ------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 56 $3,000 $ $ $ $ $ $
2 57 $3,000 $ $ $ $ $ $
3 58 $3,000 $ $ $ $ $ $
4 59 $3,000 $ $ $ $ $ $
5 60 $3,000 $ $ $ $ $ $
6 61 $3,000 $ $ $ $ $ $
7 62 $3,000 $ $ $ $ $ $
8 63 $3,000 $ $ $ $ $ $
9 64 $3,000 $ $ $ $ $ $
10 65 $3,000 $ $ $ $ $ $
15 70 $3,000 $ $ $ $ $ $
20 75 $3,000 $ $ $ $ $ $
25 80 $3,000 $ $ $ $ $ $
30 85 $3,000 $ $ $ $ $ $
35 90 $3,000 $ $ $ $ $ $
</TABLE>
- -------------------------
(1) A premium payment of $250 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no loan has been made.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus 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 prevailing interest rates. The
death benefits and account values for a policy would be different from those
shown if the actual rates of return average 0%, 6%, and 12% over a period of
years but also fluctuated above or below those averages for individual policy
years. No representations can be made by Northstar Life or the Funds that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
* This illustration uses assumed mortality charges for a group-sponsored program
issued a group contract. Actual cost of insurance charges for a policy depend
on a variety of factors as described in "Account Value Charges."
44
<PAGE> 51
VARIABLE UNIVERSAL LIFE (CONTINUED)
DEATH BENEFIT OPTION B
ISSUE AGE 55
FACE AMOUNT OF INSURANCE--$50,000
ANNUAL PREMIUM--$3,000
(MONTHLY PREMIUM--$250)(1)
USING ASSUMED MORTALITY CHARGES
<TABLE>
<CAPTION>
--ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF--
------------------------------------------------------------
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.21% NET) (4.79% NET) (10.79% NET)
----------------- ------------------ -------------------
END OF ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
POL YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 56 $3,000 $ $ $ $ $ $
2 57 $3,000 $ $ $ $ $ $
3 58 $3,000 $ $ $ $ $ $
4 59 $3,000 $ $ $ $ $ $
5 60 $3,000 $ $ $ $ $ $
6 61 $3,000 $ $ $ $ $ $
7 62 $3,000 $ $ $ $ $ $
8 63 $3,000 $ $ $ $ $ $
9 64 $3,000 $ $ $ $ $ $
10 65 $3,000 $ $ $ $ $ $
15 70 $3,000 $ $ $ $ $ $
20 75 $3,000 $ $ $ $ $ $
25 80 $3,000 $ $ $ $ $ $
30 85 $3,000 $ $ $ $ $ $
35 90 $3,000 $ $ $ $ $ $
</TABLE>
- ------------
(1) A premium payment of $250 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no loan has been made.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus 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 prevailing interest rates. The
death benefits and account values for a policy would be different from those
shown if the actual rates of return average 0%, 6%, and 12% over a period of
years but also fluctuated above or below those averages for individual policy
years. No representations can be made by Northstar Life or the Funds that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
45
<PAGE> 52
VARIABLE UNIVERSAL LIFE (CONTINUED)
DEATH BENEFIT OPTION B
ISSUE AGE 55
FACE AMOUNT OF INSURANCE--$50,000
ANNUAL PREMIUM--$3,000
(MONTHLY PREMIUM--$250)(1)
USING MAXIMUM MORTALITY CHARGES
<TABLE>
<CAPTION>
--ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF--
------------------------------------------------------------
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.21% NET) (4.79% NET) (10.79% NET)
----------------- ------------------ -------------------
END OF ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
POL YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 56 $3,000 $ $ $ $ $ $
2 57 $3,000 $ $ $ $ $ $
3 58 $3,000 $ $ $ $ $ $
4 59 $3,000 $ $ $ $ $ $
5 60 $3,000 $ $ $ $ $ $
6 61 $3,000 $ $ $ $ $ $
7 62 $3,000 $ $ $ $ $ $
8 63 $3,000 $ $ $ $ $ $
9 64 $3,000 $ $ $ $ $ $
10 65 $3,000 $ $ $ $ $ $
15 70 $3,000 $ $ $ $ $ $
20 75 $3,000 $ $ $ $ $ $
25 80 $3,000 $ $ $ $ $ $
30 85 $3,000 $ $ $ $ $ $
35 90 $3,000 $ $ $ $ $ $
</TABLE>
- ------------
(1) A premium payment of $250 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no loan has been made.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus 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 prevailing interest rates. The
death benefits and account values for a policy would be different from those
shown if the actual rates of return average 0%, 6%, and 12% over a period of
years but also fluctuated above or below those averages for individual policy
years. No representations can be made by Northstar Life or the Funds that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
46
<PAGE> 53
APPENDIX II
LOAN EXAMPLE
As an example of the effect of a loan upon the policy account value and the
death benefit, assume a policy of an insured age 45 with the following
characteristics: The Variable Universal Life Policy has an Option B death
benefit with a level face amount of $50,000. Further, assume that 100 percent of
net premiums are invested in the sub-accounts of the Variable Universal Life
Account, that the gross investment rate in the Variable Universal Life Account
was 12 percent each year and that Northstar Life deducted assumed mortality
charges. This situation is shown in Appendix I, "Illustrations of Account Values
and Death Benefits."
Now assume that the insured, who is also the owner of the policy, takes a
loan in the amount of $5,000 at the end of the fourth policy year.
When a loan is taken, the net cash value is reduced by the amount borrowed
and any accrued interest subsequently charged. The amount borrowed continues to
be a part of the account value, as the amount borrowed becomes part of the loan
principal where it will accrue loan interest credits and will be held in our
general account. Interest is charged on the loan principal at an interest rate
of 8 percent per year. Interest is also credited to the loan principal when
there is a loan. Interest credits on the loan principal are at a rate which is
not less than the loan interest rate less 2 percent per year. Assume the
interest credits in this example will be at 6 percent per year.
The following table shows the effect on the end of fifth year account value
and death benefit, if a loan of $5,000 is made at the end of the fourth year.
<TABLE>
<CAPTION>
End of Year End of Year
Account Value Death Benefit
With Loan Without Loan With Loan Without Loan
--------- ------------ --------- ------------
<S> <C> <C> <C>
$9,914 $10,155 $59,914 $60,155
</TABLE>
Note that the difference in the account values here represents the
difference between the actual policy performance in the sub-accounts of the
Variable Universal Life Account and the interest credited on the principal
amount of the loan. If interest credited on the loan principal exceeds the
policy performance, then a policy with a loan will have a greater value than a
policy with no loan activity. Where policy performance exceeds the interest
credited on the loan principal, the resulting policy value will be lower than it
would have been if the loan were not made.
Now consider an identical situation to that above except that the death
benefit is under Option A with a face amount of insurance of $100,000. This
situation is also shown in Appendix I, "Illustrations of Account Values and
Death Benefits." The following table shows the effect on the same fifth year
values if a loan of $5,000 is made at the end of the fourth year.
<TABLE>
<CAPTION>
End of Year End of Year
Account Value Death Benefit
With Loan Without Loan With Loan Without Loan
--------- ------------ --------- ------------
<S> <C> <C> <C>
$9,259 $9,501 $100,000 $100,000
</TABLE>
The account values above under the "With Loan" headings include the loan
principal, and reflect the monthly deductions for loan interest charges and the
monthly credits for loan interest credits. If the insured were to surrender the
policy at the end of the fifth year, he or she would receive only the net cash
value in the sub-accounts of the Variable Universal Life Account. The net cash
value equals the account value less the loan principal since there are no
charges due.
Similarly, if the insured were to die at the end of the fifth year we would
pay out the death benefit listed under the "With Loan" heading less the loan
principal.
47
<PAGE> 54
PART II
OTHER INFORMATION
<PAGE> 55
RULE 26(E) REPRESENTATION
Northstar Life Insurance Company hereby represents that, as to the variable life
insurance policies which are the subject of this Registration Statement, File
No. _____________, the fees and charges deducted under the contract, in the
aggregate, are reasonable in relation to the services rendered, the expenses
expected to be incurred and the risks assumed by Northstar Life Insurance
Company.
<PAGE> 56
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and documents:
The Facing Sheet.
Cross Reference Sheet.
Part I
The prospectus consisting of 47 pages.
Part II
Undertakings and Representations
The Signatures.
Written consents of the following persons:
Helen W. Leslie, Esq.
KPMG LLP
Robert M. Olafson, F.S.A.
Jones & Blouch L.L.P.
The following Exhibits:
A. Exhibits described in Part IX(A) of Form N-8B-2.
(1) The indenture or agreement under the terms of which the trust
was organized or issued securities.
Resolution of the Board of Directors of The Northstar
Life Insurance Company dated May 1, 1996.
(2) The indenture or agreement pursuant to which the proceeds of
payments of securities are held by the custodian or trustee,
if such indenture or agreement is not the same as the
indenture or agreement referred to immediately above.
None.
(3) Distributing Policies:
(a) Agreements between the trust and principal
underwriter or between the depositor and principal
underwriter.
Distribution Agreement.
(b) Specimen of typical agreements between principal
underwriter and dealers, managers, sales supervisors
and salesmen.
Agent Sales Agreement.
(c) Schedules of sales commissions referred to in Item
38(c).
Sales Commission Schedule.
(4) Any agreement between the depositor, principal underwriter and
the custodian or trustee other than indentures or agreements
set forth above as paragraphs (1), (2) and (3) with respect to
the trust or its securities.
None.
<PAGE> 57
(5) The form of each type of security.
(a) Group Variable Universal Life Policy, form 96-19974.
(b) Group Variable Universal Life Employee Certificate
Of Insurance, form 96-19976.
(c) Group Variable Universal Life Spouse Certificate
Of Insurance, form 96-19978.
(d) Policy Rider - Spouse Coverage for use with Group
Policy, form 96-19979.
(e) Waiver of Premium Rider, Certificate Supplement, for
use with Group Policy, form 96-19987.
(f) Children's Rider, Certificate Supplement, for use
with Group Policy, form 96-19983.
(g) Accidental Death and Dismemberment Rider,
Certificate Supplement, for use with Group Policy,
form 96-19985.
(h) Policy Rider - Accelerated Benefits, for use with
Group Policy, form 96-19980.
(i) Accelerated Benefits, Certificate Supplement, for
use with Group Policy, form 96-19981.
(j) Policy Rider - Children's Benefit, for use with
Group Policy, form 96-19982.
(k) Policy Rider - Accidental Death and Dismemberment,
for use with Group Policy, form 96-19984.
(l) Policy Rider - Waiver of Premium, for use with Group
Policy, form 96-19986.
(m) Policyholder Contribution Rider, for use with the
Group Policy, form 96-19988.
(n) Policyholder Contribution Certificate Supplement,
for use with the Group Policy, form 96-19989.
(o) Spouse and Child Term Life Insurance Policy Rider,
for use with the Group Policy, form 96-19990.
(p) Spouse and Child Term Life Insurance Certificate
Supplement, for use with the Group Policy, form
96-19991.
(6) The certificate of incorporation or other instrument of
organization and bylaws of the depositor.
(a) Charter of the Depositor.
(b) Bylaws of the Depositor.
<PAGE> 58
(7) Any insurance policy under a contract between the trust and
the insurance company or between the depositor and the
insurance company, together with the table of insurance
premiums.
None.
(8) Any agreement between the trust or the depositor concerning
the trust with the issuer, depositor, principal underwriter
or investment adviser of any underlying investment company or
any affiliated person of such persons.
None.
(9) All other material not entered into in the ordinary course of
business of the trust or of the depositor concerning the
trust.
None.
(10) Form of application for a periodic payment plan certificate.
(a) Group Variable Universal Life Policy.
(i) Group Variable Universal Life Policy
Application, form 96-19992.
(ii) Group Variable Universal Life Policy,
Individual enrollment, form 96-19993,
employer/employee paid.
(iii) Group Variable Universal Life Policy,
Individual enrollment, form 96-19994,
employee paid.
(iv) Group Variable Universal Life Policy,
Individual enrollment, form 96-19995,
employer paid.
(v) Group Variable Universal Life Policy,
Evidence of Insurability form, form
96-19997.
(vi) Group Variable Universal Life Policy,
Spouse Enrollment, form 96-19996.
(11) Code of Ethics.
B. A specimen copy of each security being registered.
See Exhibits listed under A.(5) above.
C. An opinion of counsel as to the legality of the securities being
registered.
Opinion and Consent of Helen W. Leslie, Esq.
D. Consent of KPMG LLP, to be filed by subsequent amendment.
E. Opinion and Consent of Mr. Robert M. Olafson, F.S.A.
F. Consent of Jones & Blouch L.L.P.
<PAGE> 59
G. Memorandum on Administrative Procedures with Respect to Issuance,
Transfer and Redemption, Required by Rule 6e-2(b)(12)(ii).
H. Northstar Life Insurance Company - Power of Attorney to Sign
Registration Statements.
<PAGE> 60
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Northstar Life Variable Universal Life Account, has duly caused this
Registration Statement to be signed on its behalf by the Undersigned, thereunto
duly authorized, in the City of St. Paul, and State of Minnesota, on the 1st
day of February, 2000.
NORTHSTAR LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
(Registrant)
By: NORTHSTAR LIFE INSURANCE COMPANY
(Depositor)
By /s/ Robert E. Hunstad
------------------------------------------
Robert E. Hunstad
President
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Northstar Life Variable Universal Life Account, has duly caused this
Registration Statement to be signed on its behalf by the Undersigned, thereunto
duly authorized, in the City of St. Paul, and State of Minnesota, on the 1st
day of February, 2000.
NORTHSTAR LIFE INSURANCE COMPANY
By /s/ Robert E. Hunstad
------------------------------------------
Robert E. Hunstad
President
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed below by the following persons in their capacities
with the Depositor and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Robert E. Hunstad
- ----------------------------- President and Director February 1, 2000
Robert E. Hunstad
- ----------------------------- Director
Paul W. Anderson
* Director
- -----------------------------
John F. Bruder
* Director
- -----------------------------
Keith M. Campbell
<PAGE> 61
Signature Title Date
--------- ----- ----
* Director
- ------------------------------
Susan L. Ebertz
- ------------------------------ Director
Frederick P. Feuerherm
* Director
- ------------------------------
John M. Gibbons, III
* Director
- ------------------------------
Kathleen A. Hagen
* Director
- ------------------------------
James E. Johnson
* Director
- ------------------------------
Helen W. Leslie
* Director
- ------------------------------
Marc J. Lifset
* Director
- ------------------------------
Harry P. Meislahn
* Director
- ------------------------------
Dennis E. Prohofsky
* Director
- ------------------------------
Joseph W. Sarbinowski
* Director
- ------------------------------
Robert L. Senkler
/s/ Frederick P. Feuerherm
- ------------------------------ Treasurer February 1, 2000
Frederick P. Feuerherm (chief financial officer)
/s/ Frederick P. Feuerherm
- ------------------------------ Treasurer February 1, 2000
Frederick P. Feuerherm (chief accounting officer)
/s/ Dennis E. Prohofsky
- ------------------------------ Attorney-in-Fact February 1, 2000
Dennis E. Prohofsky
* Pursuant to power of attorney dated November 12, 1999, filed as Exhibit H to
this Registration Statement.
<PAGE> 62
EXHIBIT INDEX
Exhibit Number Description of Exhibit
- -------------- ----------------------
A.(1) Resolution of the Board of Directors of The Northstar
Life Insurance Company dated May 1, 1996.
A.(3)(a) Distribution Agreement.
A.(3)(b) Agent Sales Agreement.
A.(3)(c) Sales Commission Schedule.
A.(5)(a) Group Variable Universal Life Policy, form 96-19974.
A.(5)(b) Group Variable Universal Life Employee Certificate Of
Insurance, form 96-19976.
A.(5)(c) Group Variable Universal Life Spouse Certificate Of
Insurance, form 96-19978.
A.(5)(d) Policy Rider - Spouse Coverage for use with Group
Policy, form 96-19979.
A.(5)(e) Waiver of Premium Rider, Certificate Supplement, for
use with Group Policy, form 96-19987.
A.(5)(f) Children's Rider, Certificate Supplement, for use with
Group Policy, form 96-19983.
A.(5)(g) Accidental Death and Dismemberment Rider, Certificate
Supplement, for use with Group Policy, form 96-19985.
A.(5)(h) Policy Rider - Accelerated Benefits, for use with Group
Policy, form 96-19980.
A.(5)(i) Accelerated Benefits, Certificate Supplement, for use
with Group Policy, form 96-19981.
A.(5)(j) Policy Rider - Children's Benefit, for use with Group
Policy, form 96-19982.
A.(5)(k) Policy Rider - Accidental Death and Dismemberment, for
use with Group Policy, form 96-19984.
A.(5)(l) Policy Rider - Waiver of Premium, for use with Group
Policy, form 96-19986.
A.(5)(m) Policyholder Contribution Rider, for use with the Group
Policy, form 96-19988.
A.(5)(n) Policyholder Contribution Certificate Supplement, for
use with the Group Policy, form 96-19989.
<PAGE> 63
A.(5)(o) Spouse and Child Term Life Insurance Policy Rider, for
use with the Group Policy, form 96-19990.
A.(5)(p) Spouse and Child Term Life Insurance Certificate
Supplement, for use with the Group Policy, form
96-19991.
A.(6)(a) Charter of the Depositor.
A.(6)(b) Bylaws of the Depositor.
A.(10)(a)(i) Group Variable Universal Life Policy Application, form
96-19992.
A.(10)(a)(ii) Group Variable Universal Life Policy, Individual
enrollment, form 96-19993, employer/employee paid.
A.(10)(a)(iii) Group Variable Universal Life Policy, Individual
enrollment, form 96-19994, employee paid.
A.(10)(a)(iv) Group Variable Universal Life Policy, Individual
enrollment, form 96-19995, employer paid.
A.(10)(a)(v) Group Variable Universal Life Policy, Evidence of
Insurability form, form 96-19997.
A.(10)(a)(vi) Group Variable Universal Life Policy, Spouse
Enrollment, form 96-19996.
A.(11) Code of Ethics.
C. Opinion and Consent of Helen W. Leslie, Esq.
E. Opinion and Consent of Mr. Robert M. Olafson, F.S.A.
F. Consent of Jones & Blouch L.L.P.
G. Memorandum on Administrative Procedures with Respect to
Issuance, Transfer and Redemption, Required by Rule
6e-2(b)(12)(ii).
H. Northstar Life Insurance Company - Power of Attorney to
Sign Registration Statements.
<PAGE> 1
EXHIBIT A.(1)
CERTIFICATE OF SECRETARY
THE UNDERSIGNED, Helen W. Leslie, hereby certifies that she is the duly
elected, qualified and acting Assistant Secretary of Northstar Life Insurance
Company, that in such capacity she has custody of the corporate records of said
Company, and that the following is a true, correct and complete copy of a
resolution adopted by the Board of Directors of said Company on May 1, 1996, by
unanimous written consent; such resolution does not in any manner contravene the
Articles of Incorporation or Bylaws of said Company; and such resolution is in
full force and effect on the date hereof and has not been amended, modified,
rescinded or revoked:
It is further proposed that the Northstar Life Insurance Company
establish a separate account which shall be known as the "Northstar
Life Variable Universal Life Account," (hereinafter "Variable Universal
Life Account"), or such other name as the Chief Executive Officer of
the Company shall designate, in accordance with Section 4240 of the
Insurance Law, as amended, for the purpose of issuing group and
individual life insurance policies on a variable basis.
MIMLIC Sales Corporation (hereinafter "MIMLIC Sales") of St. Paul,
Minnesota, will be the principal underwriter of the variable life
insurance policies funded through the Variable Universal Life Account,
and the variable life insurance policies will be sold by licensed life
insurance agents of the Company who are registered representatives of
Northstar Life Insurance Company and MIMLIC Sales or other
broker-dealers who have entered into selling agreements with MIMLIC
Sales.
The separate account is to be registered as a unit investment trust
pursuant to the provisions of the Investment Company Act of 1940, as
amended, and that application will be made for such exemptions from
that Act as may be necessary or desirable.
Registration statements and any amendments thereto, relating to such
policies on a variable basis as may be offered to the public, will be
prepared and filed with the Securities and Exchange Commission in
accordance with the provisions of the Securities Act of 1933, as
amended.
The Chief Executive Officer of the Company or such officer or officers
as he or she may designate be, and they hereby are, authorized and
directed to take such further action as may in their judgment be
necessary or desirable to implement the foregoing resolutions.
IN WITNESS WHEREOF, I have hereunto set my hand on behalf of NORTHSTAR LIFE
INSURANCE COMPANY, this 22nd day of October, 1999.
/s/Helen W. Leslie
-------------------------------------
Assistant Secretary
<PAGE> 1
EXHIBIT A. (3)(a)
DISTRIBUTION AGREEMENT
AGREEMENT made this ____ day of __________, ____, between and among
Northstar Life Insurance Company, a New York corporation ("Northstar Life"), and
Ascend Financial Services, Inc., a Minnesota corporation ("Distributor").
WITNESSETH:
WHEREAS, Northstar Life, a wholly-owned subsidiary of Minnesota Life
Insurance Company, is the depositor of Northstar Life Variable Universal Life
Account (the "Account"); and
WHEREAS, Northstar Life proposes to offer for sale certain variable
life insurance contracts (the "contracts") which may be deemed to be securities
under the Securities Act of 1933 ("1933 Act") and the laws of some states; and
WHEREAS, the Distributor, a wholly-owned subsidiary of Advantus Capital
Management, Inc., which is in turn a wholly-owned subsidiary of Minnesota Life
Insurance Company, is registered as a broker-dealer with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934 ("1934
Act") and is a member of the National Association of Securities Dealers, Inc.
("NASD"); and
WHEREAS, the parties desire to have the Distributor act as principal
underwriter of the contracts and assume full responsibility for the securities
activities of each "person associated" (as that term is defined in Section
3(a)(18) of the 1934 Act) with the Distributor and engaged directly or
indirectly in the sale of the contracts (the "associated persons"); and
WHEREAS, the parties desire to have Northstar Life perform certain
services in connection with the sale of the contracts;
NOW, THEREFORE, in consideration of the covenants and mutual promises
of the parties made to each other, it is hereby covenanted and agreed as
follows:
1. The Distributor will act as the exclusive principal underwriter of
the contracts and as such will assume full responsibility for the securities
activities of its associated persons. The Distributor will train its associated
persons, use its best efforts to prepare them to complete satisfactorily the
applicable NASD and state examinations so that they may be qualified, register
the associated persons as its registered representatives before they engage in
securities activities, and supervise and control them in the performance of such
activities. Unless otherwise permitted by applicable state law, all persons
engaged in the sale of the contracts must also be agents of Northstar Life.
2. The Distributor will assume full responsibility for the continued
compliance by itself and its associated persons with the NASD Rules of Fair
Practice and Federal and state laws, to the extent applicable, in connection
with the sale of the contracts. The Distributor will make
<PAGE> 2
timely filings with the SEC, NASD, and any other regulatory authorities of all
reports and any sales literature relating to the contracts required by law to be
filed by the Distributor. Northstar Life will make available to the Distributor
copies of any agreements or plans intended for use in connection with the sale
of contracts in sufficient number and in adequate time for clearance by the
appropriate regulatory authorities before they are used, and it is agreed that
the parties will use their best efforts to obtain such clearance as
expeditiously as is reasonably possible.
3. With the consent of Northstar Life, Distributor may enter into
agreements with other broker-dealers duly licensed under applicable Federal and
state laws for the sale and distribution of the contracts and may perform such
duties as may be provided for in such agreements.
4. Northstar Life, with respect to the contracts, will prepare and
file all registration statements and prospectuses (including amendments) and all
reports required by law to be filed with Federal and state regulatory
authorities. Northstar Life will bear the cost of printing and mailing all
notices, proxies, proxy statements, and periodic reports that are to be
transmitted to persons having voting rights under the contracts. Northstar Life
will make prompt and reasonable efforts to effect and keep in effect, at its
expense, the registration or qualification of its contracts in such
jurisdictions as may be required by federal and state regulatory authorities.
5. Northstar Life will (a) maintain and preserve in accordance with
Rules 17a-3 and 17a-4 under the 1934 Act all books and records required to be
maintained by it in connection with the offer and sale of the contracts, which
books and records shall be and remain the property of the Distributor and shall
at all times be subject to inspection by the SEC in accordance with Section
17(a) of the 1934 Act and by all other regulatory bodies having jurisdiction,
and (b) upon or prior to completion of each "transaction" as that term is used
in Rule 10b-10 of the 1934 Act, send a written confirmation for each such
transaction reflecting the facts of the transaction and showing that it is being
sent by Northstar Life acting in the capacity of agent for the Distributor.
6. All purchase payments and any other monies payable upon the sale,
distribution, renewal or other transaction involving the contracts shall be paid
or remitted directly to, and all checks shall be drawn to the order of,
Northstar Life, and the Distributor shall not have or be deemed to have any
interest in such payments or monies. All such payments and monies received by
the Distributor shall be remitted daily by the Distributor to Northstar Life for
allocation to the Account in accordance with the contracts and any prospectus
with respect to the contracts.
7. Northstar Life will, in connection with the sale of the contracts,
pay on behalf of the Distributor all amounts (including sales commissions) due
to the sales representatives of the Distributor or to broker-dealers who have
entered into sales agreements with the Distributor. The records in respect of
such payments shall be properly reflected on the books and records maintained by
Northstar Life.
8. As compensation for the Distributor's assuming the expenses and
performing the services to be assumed and performed by it pursuant to this
Agreement, the Distributor shall receive from Northstar Life the following
amounts:
2
<PAGE> 3
(a) Upon receipt of proper evidence of expenditures, an amount
sufficient to reimburse the Distributor for its expenses
incurred in carrying out the terms of this Agreement, and
(b) such other amounts as may from time to time be agreed upon by
the Distributor and Northstar Life.
9. As compensation for its services performed and expenses incurred
under this Agreement, Northstar Life will receive all amounts deducted as
administrative, sales, mortality and expense risk charges under the contracts,
as specified in the contracts and in the prospectus or prospectuses forming a
part of any registration statement with respect to the contracts filed with the
SEC under the 1933 Act. It is understood that Northstar Life assumes the risk
that the above compensation for its services under the contracts may not prove
sufficient to cover its actual expenses in connection therewith and that its
compensation for assuming such risk shall be included in and limited to the
foregoing charges described in said prospectus(es).
10. Northstar Life will, except as otherwise provided in this
Agreement, bear the cost of all services and expenses, including legal services
and expenses and registration, filing and other fees, in connection with (a)
registering and qualifying the contracts and (to the extent requested by the
Distributor) the associated persons with Federal and state regulatory
authorities and the NASD and (b) printing and distributing all contracts and all
registration statements and prospectuses (including amendments), notices,
periodic reports, sales literature and advertising prepared, filed or
distributed with respect to the contracts.
11. Each party hereto shall advise the others promptly of (a) any
action of the SEC or any authorities of any state or territory, of which it has
knowledge, affecting registration or qualification of the contracts, or the
right to offer the contracts for sale, and (b) the happening of any event which
makes untrue any statement, or which requires the making of any change, in the
registration statement or prospectus in order to make the statements therein not
misleading.
12. The services of the Distributor and Northstar Life under this
Agreement are not deemed to be exclusive and the Distributor and Northstar Life
shall be free to render similar services to others, including, without implied
limitation, such other separate accounts as are now or hereafter established by
Northstar Life, so long as the services of the Distributor and Northstar Life
hereunder are not impaired or interfered with thereby.
13. This Agreement shall upon execution become effective as of the
date first above written, and shall continue in effect indefinitely unless
terminated by either party on 60 days' written notice to the other.
14. This Agreement may be amended at any time by mutual consent of the
parties.
15. This Agreement shall be governed by and construed in accordance
with the laws of Minnesota.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
3
<PAGE> 4
NORTHSTAR LIFE
INSURANCE COMPANY
Witness: By:
-------------------------- -------------------------------------
Dennis E. Prohofsky Robert E. Hunstad
Secretary President and Chief Executive Officer
ASCEND FINANCIAL SERVICES, INC.
Witness: By:
--------------------------- -------------------------------------
Margaret P. Milosevich George I. Connolly
Vice President President
4
<PAGE> 1
EXHIBIT A.(3)(b)
VARIABLE CONTRACT SUPPLEMENT - AGENT
(a) GENERAL. This supplement is a part of your Agent's Contract and is
subject to all its terms, definition and conditions. This supplement
describes both the compensation we will provide on your variable
contract business and your responsibilities with respect to the
solicitation, sale or distribution of these contracts for us.
(b) DEFINITIONS. Whenever we use the following words this is what we mean.
VARIABLE GROUP UNIVERSAL LIFE BUSINESS. The Variable Group Universal Life
insurance policies which we may issue on applications you obtain.
VARIABLE CONTRACTS. Variable group universal life business.
COST OF INSURANCE (COI). The portion of Earned Premium used to cover the cost
of providing insurance coverage only. The portion of the premium allocated to
pay the COI does not build cash value.
EARNED PREMIUM. Money which we have received in our home office and applied to
pay the premiums due on variable contract business.
FIRST-YEAR PREMIUM. Premiums due on a policy in the first year.
FIRST-YEAR COMMISSIONS. Commissions on earned first-year premiums.
RENEWAL PREMIUMS. Premiums due on a policy after the first policy year.
RENEWAL COMMISSIONS. Commissions on earned renewal premiums during the second
through the tenth policy year.
SIDE FUND CONTRIBUTIONS. That portion of earned premium which is credited to
the cash value of a policy owner. Side fund contributions do not include loan
repayments or interest which accrues on side fund contributions.
(c) LICENSES. You will do all things necessary to get, and to keep in good
standing, all licenses which you will need to solicit and sell variable
contracts as a life insurance salesman for us in the jurisdictions in which you
do business.
(d) BROKER-DEALER. You will do all things necessary to get, and to keep in
good standing, all licenses which you will need to solicit and sell variable
contracts for us and which are required because of your status as a registered
representative of the broker-dealer authorized to distribute the variable
contracts as our agent. You will also contract with the broker-dealer, such
contract to govern your conduct and undertakings with respect to the sale of our
variable contracts.
(e) THIS AGREEMENT. For all purposes under this supplement, we will consider
the variable contracts to be our products.
<PAGE> 2
(f) COMMISSIONS ON VARIABLE CONTRACTS. In general, you will receive the
following commissions on the Variable Group Universal Life Business that you
sell:
<TABLE>
<CAPTION>
"Cost of Insurance" Commission Side Fund Contribution
(COI) Commission
-----------------------------------------------------------------------------------------------
<S> <C> <C>
FIRST YEAR:
40% of the COI component of PLUS 4% of side fund
the First-Year Premium contributions
SECOND AND SUBSEQUENT YEARS:
4% of the COI component of PLUS 4% of side fund
Renewal Premiums contributions
</TABLE>
However, there will be a reduction in the amount of commissions paid for some
group contracts and group situations. A reduction in the commissions will be
determined by us be weighing the following elements:
(1) The size and type of group to which the sale of the Variable Group
Universal Life Policy is made. Generally, commissions for a larger
group of Insureds will be lower than for a smaller group.
(2) The total amount of premium payments to be received will be
considered as affecting per dollar sales expenses. Per dollar sales
expenses are likely to be less than larger premium amounts received
on small premium amounts.
(3) Any prior existing relationship with us may affect commissions.
Generally, sales expenses are likely to be less where a relationship
currently exists.
(4) Any reduction in commissions are made by agreement between you and
us.
(5) Other circumstances, of which we are not presently aware.
(g) COMMISSION ADJUSTMENT. We reserve the right to refund any purchase
payments credited to our General Account under a variable contract. If we do
make such a refund, we will charge you with the amount of any commission
previously paid on the refunded payment. All charges thus made will be a debt
which you owe us and will become a first lien against any and all amounts due
you; we may offset this debt against any amount which we would otherwise credit
to you under the Agent's contract.
(h) All provisions of Sections 6-10 of the Agent's contract will apply where
applicable to any compensation payable under this supplement.
(i) TERMINATION OF THIS SUPPLEMENT. We reserve the right to modify or
terminate this supplement at any time; however, any such modification or
termination will be made uniformly among all of our agencies
of the same class or as required by law or other competent authority.
<PAGE> 3
(j) EFFECTIVE DATE. This supplement shall become effective as of the date
shown below.
Executed this _______ day of _______, 19____.
_______________________________________
Agent's Signature
_______________________________________
General Agent's Signature
Northstar Life Insurance Company
By_____________________________________
Authorized Officer
<PAGE> 1
EXHIBIT A.(3)(c)
COMMISSIONS ON VARIABLE CONTRACTS. In general, you will receive the following
commissions on the Variable Group Universal Life Business that you sell:
<TABLE>
<CAPTION>
"Cost of Insurance" Commission Side Fund Contribution
(COI) Commission
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FIRST YEAR:
40% of the COI component of PLUS 4% of side fund
the First-Year Premium contributions
SECOND AND
SUBSEQUENT YEARS:
4% of the COI component of PLUS 4% of side fund
Renewal Premiums contributions
</TABLE>
However, there will be a reduction in the amount of commissions paid for some
group contracts and group situations. A reduction in the commissions will be
determined by us be weighing the following elements:
(1) The size and type of group to which the sale of the Variable Group
Universal Life Policy is made. Generally, commissions for a larger
group of Insureds will be lower than for a smaller group.
(2) The total amount of premium payments to be received will be considered
as affecting per dollar sales expenses. Per dollar sales expenses are
likely to be less than larger premium amounts received on small
premium amounts.
(3) Any prior existing relationship with us may affect commissions.
Generally, sales expenses are likely to be less where a relationship
currently exists.
(4) Any reduction in commissions are made by agreement between you and us.
(5) Other circumstances, of which we are not presently aware.
<PAGE> 1
EXHIBIT A(5)(a)
================================================================================
NORTHSTAR LIFE 1 GROUP INSURANCE POLICY
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
READ YOUR POLICY CAREFULLY
This policy was issued to the policyholder on the issue date shown on the
specifications page attached to this policy. We promise to pay the benefits
provided by this policy, subject to the conditions, limitations and exceptions
of this policy. We make this promise and issue this policy in consideration of
the application for this policy and the payment of the premiums.
RIGHT TO CANCEL
It is important to us that the policyholder is satisfied with this policy after
it is issued. If the policyholder is not satisfied with it the policyholder may
return the policy to us or our agent within 10 days after, the policyholder
receives it. The policyholder may also cancel this policy by delivering or
mailing a written notice or sending a telegram to Northstar Life Insurance
Company (Northstar Life), University Corporate Centre at Amherst, Suite 424, 100
Corporate Parkway, Amherst, New York 14226 and returning the policy before
midnight of the 10th day after the policyholder received the policy. Notice
given by mail and return of the policy by mail are effective on being
postmarked, properly addressed and postage prepaid. If the policyholder returns
the policy, the policyholder will receive, within 7 days of the date we receive
a notice of cancellation, a full refund of any premiums the policyholder has
paid.
Signed for Northstar Life Insurance Company at Amherst, New York on the issue
date.
Dennis E. Prohofsky Robert E. Hunstad
Secretary President
FOR OPTION A, THE INITIAL DEATH BENEFIT FOR PERSONS INSURED UNDER THIS POLICY
WILL EQUAL THE FACE AMOUNT SHOWN ON EACH CERTIFICATE. FOR OPTION B, THE INITIAL
DEATH BENEFIT FOR PERSONS INSURED UNDER THIS POLICY WILL EQUAL THE FACE AMOUNT
SHOWN ON EACH CERTIFICATE PLUS THE INITIAL ACCOUNT VALUE, IF ANY. FOR OPTION B,
THEREAFTER, THE DEATH BENEFIT MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE
ACCOUNT INVESTMENT EXPERIENCE.
THE ACCOUNT VALUES OF THE CERTIFICATES ISSUED UNDER THIS POLICY WILL VARY FROM
DAY TO DAY. THEY MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT
INVESTMENT EXPERIENCE. THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE.
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
Definitions................................................2 Account Values...................................................8
General Information........................................3 Surrenders and Withdrawals.......................................9
Death Benefit..............................................3 Loans............................................................9
Payment of Proceeds........................................5 Termination.....................................................10
Premiums...................................................5 Conversion Privilege............................................11
Policy Charges.............................................6 Additional Information..........................................12
Separate Account...........................................6
</TABLE>
VARIABLE GROUP UNIVERSAL LIFE INSURANCE - NONPARTICIPATING
<PAGE> 2
NORTHSTAR LIFE SPECIFICATIONS PAGE
GROUP POLICY
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
GENERAL INFORMATION
POLICYHOLDER: [ABC COMPANY] POLICY NUMBER: [96-19974]
ELIGIBLE GROUP MEMBER
[An eligible group member is a person who is actively working at his or her
employer's normal place of business at least [20] hours per week on the date he
or she signs an application for coverage, and for [20] hours per week for each
of the 4 week(s) immediately prior to the date his or her application for
coverage (except retirees or other persons as designated) is approved by
Northstar Life.]
INSURANCE INFORMATION
Issue Date: [05-01-98]
First Policy Anniversary: [05-01-99]
Minimum Face Amount: [$ 50,000] [Planned Monthly Premium: $20.00]
Maximum Face Amount: [$1,000,000]
Maximum Guaranteed Issue:* [$ 100,000]
*See details in this policy's application for qualifications.
Death Benefit Option: You have chosen the death benefit option as the initial
death benefit [B] for all certificates issued under this policy. Option [B] is
the [variable] death benefit option plan.
IRC Section 7702 Test applied is: [Cash Value Accumulation Test]
OTHER BENEFITS AVAILABLE
[Accidental Death & Dismemberment]
[Waiver of Premium]
[Spouse Variable Group Universal Life]
[Spouse/Child Term Rider]
[Policyholder Contribution Rider]
[Child Term Rider]
[Amounts available for this rider are: $ 4,000 with a monthly cost of $1.00]
<TABLE>
<S> <C> <C>
CHARGES
Premium Tax Charge: 2.00% Administration Charge: $4.00
Sales Charge: 5.00% Withdrawal Fee: $25.00 or 2% of amount withdrawn, whichever is less.
Federal Tax Charge: 0.25%
</TABLE>
<TABLE>
<S> <C>
SEPARATE ACCOUNT SEPARATE ACCOUNT CHARGE
Northstar Life Variable Universal Life Account. Mortality and Expense Risk Charge: [0.5%]
</TABLE>
PLEASE SEE THE REVERSE SIDE OF THIS SPECIFICATIONS PAGE FOR ACCOUNT AND
SUB-ACCOUNT OPTIONS. F. NS-47708 7-96
<PAGE> 3
ACCOUNT OPTIONS
Guaranteed Account
SUB-ACCOUNT OPTIONS:
<TABLE>
<CAPTION>
[FIXED] [BALANCED] [EQUITY]
<S> <C> <C>
[Bond] [Asset Allocation] [Capital Appreciation]
[Maturing Government Bond 2010] [Growth]
[Money Market] [Index 500]
[Mortgage Securities] [International Stock]
[VIP High Income] [Small Company]
[Global Bond] [Value Stock]
[VIP Equity-Income]
[VIP II Contrafund]
[Small Company Value]
[Index 400 Mid-Cap]
[Micro-Cap Growth]
[Macro-Cap Value]
</TABLE>
<PAGE> 4
DEFINITIONS
- --------------------------------------------------------------------------------
ACCOUNT VALUE
The sum of the values under the separate account, the guaranteed account and the
loan principal of a certificate. They are identified as the separate account
value, the guaranteed account value, and the loan principal, respectively.
ACTIVELY AT WORK
To be actively at work for the purposes of this policy, the eligible person must
be currently working at the employer's normal place of business at least 20
hours a week. A person is not considered actively at work if not at work due to
illness or injury.
AGE
Age at last birthday.
ASSOCIATED COMPANY
Any company which is a subsidiary or affiliate of the policyholder which is
designated by the policyholder and agreed to by us to participate under this
policy.
CERTIFICATE ANNIVERSARY
The same day in each succeeding year as the certificate date.
CERTIFICATE DATE
The first day of the calendar month on or following a certificate's effective
date of coverage. This is the date from which we determine certificate monthly
anniversaries, certificate months and certificate years.
CERTIFICATE MONTH
A calendar month in which insurance is provided under a certificate of this
policy.
CERTIFICATE YEAR
A period of twelve consecutive months, measured from the certificate date and
each successive certificate anniversary, during which coverage is provided under
a certificate of this policy.
ELIGIBLE INSURED
A person who meets the requirements on the specifications page attached to this
policy.
FACE AMOUNT
The face amount of insurance on the life of the insured as shown on the
specifications page of the owner's certificate.
FUND
The mutual fund or separate investment portfolio within a series mutual fund
which we designate as an eligible investment for the separate account and its
sub-accounts.
GENERAL ACCOUNT
All assets of Northstar Life other than those in the separate account or in
other separate accounts established by us.
GUARANTEED ACCOUNT
Assets other than the loan principal that are held in our general account and
attributable to a certificate issued under this policy, and others of its class.
GUARANTEED ACCOUNT VALUE
The sum of all net premiums and transfers allocated to the guaranteed account
and interest and experience credits declared thereon, minus amounts transferred
to the separate account or removed in connection with a withdrawal or loan and
minus charges assessed against the guaranteed account value.
INSURED
An eligible insured who becomes insured under a certificate issued under this
policy.
ISSUE DATE
The date coverage under this policy may become effective. The issue date is
shown on the policy specifications page attached to this policy.
LAPSE
Termination of insurance coverage under a certificate due to non-payment of a
premium during its grace period in an amount that, after the deduction of
premium expense charges, is sufficient to cover the monthly deduction due at the
time the notice was sent.
LOAN PRINCIPAL
The portion of the general account which is attributable to loans under
certificates issued under this policy and others of its class.
MATURITY DATE
The 95th birthday of the insured.
MONTHLY ANNIVERSARY
The same day of each succeeding month as the certificate date.
NET CASH VALUE
The account value under a certificate issued under this policy, less any
outstanding loan principal and accrued loan interest charges and any charges
over due, plus accrued loan interest credits. It is the amount an owner may
obtain through surrender of that certificate.
NET PREMIUM
The premium less premium expense charges deducted from the premium. The net
premium is the amount or amounts which are allocated to the guaranteed account
and/or the separate account on behalf of an owner.
<PAGE> 5
OWNER
An owner of a certificate issued under this policy.
POLICY ANNIVERSARY
The same day and month in each succeeding year as the policy date.
POLICY DATE
The first day of the calendar month on or following the issue date of the
policy.
POLICYHOLDER
The owner of this group policy as specified and identified on the specifications
page attached to this policy.
SEPARATE ACCOUNT
The separate investment account created by us to receive and invest net premiums
received for a certificate issued under this policy. The particular Separate
Account for this policy is the Northstar Life Variable Universal Life Account.
We established this separate account for this class of policies under New York
Law. The separate account is composed of several sub-accounts. We own the assets
of the separate account. However, those assets not in excess of separate account
liabilities are not subject to claims arising out of any other business in which
we engage.
SEPARATE ACCOUNT VALUE
The sum of all sub-account values.
SUB-ACCOUNT
One or more sub-accounts constituting the separate account.
SUB-ACCOUNT VALUE
The current number of sub-account units credited to a certificate issued under
this policy multiplied by the current sub-account unit value.
UNIT
A measure of the owner's interest in a sub-account of the separate account.
VALUATION DATE
Any date on which a fund is valued.
VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.
WE, OUR, US
Northstar Life Insurance Company.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
WHAT IS THE POLICYHOLDER'S AGREEMENT WITH US?
This policy and the policyholder's signed application contain the entire
contract between the policyholder and us. Any statements the policyholder makes
in the signed application or an insured makes in his or her signed application
will be considered representations and not warranties. Also, any statement the
policyholder makes will not be used to void this policy nor defend against a
claim under this policy unless the signed statement is contained in the
policyholder's signed application. Any statement an insured makes will not be
used to void the insured's insurance unless the signed statement is contained in
the signed application attached to the insured's certificate.
No statement made by the insured will be used to contest his or her coverage
unless a copy of the signed statement is or has been furnished to the insured or
to the insured's beneficiary.
No change or waiver of any of the provisions of this policy, or of any
certificate issued under it, will be valid unless made in writing by us. It must
be signed by our president, a vice president, secretary or an assistant
secretary. No agent or other person has the authority to change or waive any
provision of this policy or of any certificate issued under it.
WHAT IS THE EFFECTIVE DATE OF AN ELIGIBLE INSURED'S INSURANCE?
[Upon receipt of an application for insurance under this policy from an eligible
insured, the effective date of the insured person's insurance will be the later
of:
(1) the date on which we approve that person's application; and
(2) the date on which the first premium contribution is paid for that
person.
This effective date is shown on the specifications page of the owner's
certificate.]
MAY THIS POLICY BE AMENDED?
This policy may be amended at any time the policyholder and we agree to amend
it. The consent of the insureds is not required to amend this policy or any
certificates issued under it. Any amendment will be without prejudice to any
claim in connection with a loss sustained prior to the effective date of the
amendment.
DEATH BENEFIT
- --------------------------------------------------------------------------------
WHAT IS THE AMOUNT OF THE DEATH BENEFIT?
[The amount of the death benefit depends on whether Option A or Option B is
selected by the policyholder as the death benefit option under this policy. The
death
<PAGE> 6
benefit option selected by the policyholder will be the death benefit option for
all certificates issued under this policy. Once elected, the death benefit
option shall remain unchanged.]
The amount of the death benefit for Option A will be determined as follows:
(1) the face amount of insurance on the insured's date of death while the
certificate is in force; plus
(2) the amount of the cost of insurance for the portion of the certificate
month from the date of death to the end of the certificate month; plus
(3) any accrued loan interest credits; less
(4) any outstanding loan principal and accrued loan interest charges; less
(5) any unpaid monthly deductions determined as of the date of the insured's
death.
The amount of the death benefit for Option B will be determined as follows:
(1) the face amount of insurance on the insured's date of death while the
certificate is in force; plus
(2) the amount of the owner's account value as of the date we receive due
proof of death satisfactory to us; plus
(3) the amount of the cost of insurance for the portion of the certificate
month from the date of death to the end of the certificate month; plus
(4) any monthly deductions taken under the certificate since the date of
death; plus
(5) any accrued loan interest credits; less
(6) any outstanding loan principal and accrued loan interest charges; less
(7) any unpaid monthly deductions determined as of the date of the insured's
death.
Payment of the death benefit will extinguish our liability under the certificate
for which the death benefit has been paid.
We intend that each certificate under this policy qualify as a life insurance
policy as defined by Section 7702 of the Internal Revenue Code, as amended. We
reserve the right to either increase the face amount of insurance on the life of
the insured for which a certificate has been issued hereunder, return any excess
net cash value or limit the amount of premium contributions we will accept on
behalf of any certificate issued hereunder in order to maintain such
qualification.
CAN THE OWNER CHANGE THE DEATH BENEFIT OPTION?
[No.]
WHAT IS THE FACE AMOUNT OF INSURANCE ON THE LIFE OF AN INSURED?
The face amount of insurance on the life of the insured is as shown on the
specifications page of the owner's certificate.
MAY THE FACE AMOUNT OF INSURANCE CHANGE?
[Yes. The owner may apply at any time for a change through a written request in
compliance with the limitations on the specifications pages attached to the
policy and to the certificate. If an increase in the current face amount is
applied for, we reserve the right to require evidence of insurability from the
insured.
If a decrease in the current face amount is requested, we will grant the
request. However, the amount of insurance on any insured may not be reduced to
less than the amount shown on the specifications page attached to this policy.
If following a decrease in face amount, the certificate would not comply with
the maximum premium limitations required by federal law, the decrease may be
limited or net cash value may be returned to the owner (at the owner's
election), to the extent necessary to meet these requirements.]
WHEN WILL CHANGES IN THE FACE AMOUNT OF INSURANCE BECOME EFFECTIVE?
Increases are effective on the monthly anniversary on or following the date we
approve the change, or any other date mutually agreed upon between the
policyholder and us.
[Decreases in the face amount of insurance are effective on the monthly
certificate anniversary on or following receipt of the written request by us.
However, if the owner requests that the decrease become effective on a specified
future date, we will make the decrease effective on the certificate monthly
anniversary on or next following the date requested.
WHEN WILL THE DEATH BENEFIT BE PAID?
We will pay the death benefit upon due proof satisfactory to us that the insured
died while insured under a certificate issued hereunder.
Under Option A, we will pay interest on the death benefit from the date of the
insured's death until the date of payment.
Under Option B, we will pay interest on the face amount of insurance from the
date of the insured's death until the date of payment. We will pay interest on
any charges taken under the certificate since the date of death from the date
the charge was taken until the date of payment.
Interest will be at an annual rate determined by us, but never less than the
greater of three percent per year compounded annually, or the rate required by
law.
Death benefit proceeds will ordinarily be paid within seven days after we
receive all information required for such payment, including due proof of the
insured's death.
<PAGE> 7
PAYMENT OF PROCEEDS
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TO WHOM WILL WE PAY THE DEATH BENEFIT?
We will pay the death benefit proceeds to the surviving beneficiary specified on
the certificate owner's application or as subsequently changed.
WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE BEFORE THE INSURED?
If a beneficiary dies before the insured, that beneficiary's interest in the
certificate 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 or if a beneficiary is not named, we will pay the proceeds
according to the following order of priority:
[(1) the insured's lawful spouse, if living; otherwise,
(2) the personal representative of the insured's estate.]
MAY THE OWNER CHANGE THE BENEFICIARY?
Yes. If the owner has reserved the right to change the beneficiary, the owner
may file a written request with us to change the beneficiary. If the owner has
not reserved the right to change the beneficiary, the written consent of the
irrevocable beneficiary will be required. The owner's 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 the owner 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 the
owner's request was so recorded.
CAN DEATH BENEFIT PROCEEDS BE PAID IN OTHER THAN A SINGLE SUM?
Yes. An owner may request that we pay the death benefit proceeds under one of
the following settlement options. We may also use any other method of payment
that is agreeable to the owner and us. A settlement option may be selected only
if the payments are to be made to a natural person in that person's own right.
WHAT ARE THE SETTLEMENT OPTIONS AVAILABLE?
Each settlement option is paid in fixed amounts as described below. If the owner
of the certificate requests a settlement option, he or she will be asked to sign
an agreement covering the election which will state the terms and conditions of
the payments. The payments do not vary with the performance of the separate
account.
(1) INTEREST PAYMENTS: Payment of interest on the proceeds at such times
and for a period as may be agreed upon between the owner of a
certificate and us. Withdrawal of proceeds may be made in amounts of
at least [$500.] At the end of the period, any remaining proceeds
will be paid in either a single sum or under any other method we
approve.
(2) FIXED PERIOD ANNUITY: An annuity payable in monthly installments for
a specified number of years, from one to twenty years.
(3) LIFE ANNUITY: An annuity payable monthly for the lifetime of the
annuitant and ending with the last monthly payment due prior to the
annuitant's death.
(4) PAYMENTS OF A SPECIFIED AMOUNT: Monthly payments of a specified
amount until the proceeds and interest are fully paid.
CAN A BENEFICIARY REQUEST A PAYMENT UNDER A SETTLEMENT OPTION?
Yes. A beneficiary may select a settlement option, but only after the insured's
death. However, an owner or insured may provide that the beneficiary will not be
permitted to change the elected settlement option.
Illustrations for the four available settlement options are shown as part of
this group policy. The settlement option illustrations attached to this group
policy are intended as generic examples of the available options and are not
intended to be specific to the owner's coverage.
PREMIUMS
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WHEN AND HOW OFTEN ARE PREMIUMS DUE?
A premium must be paid to put a certificate in force. This initial premium must
be of an amount that, after the deduction of premium expense charges, will cover
the first month's deductions. Premiums paid after the initial premium may be in
any amount. A premium must be paid at such time when there is insufficient net
cash value to pay the monthly deduction necessary to keep the certificate in
force.
IS THERE A GRACE PERIOD FOR THE PAYMENT OF PREMIUMS?
Certificates issued under this policy have a [61-day] grace period. The grace
period will start on the day we mail the owner a notice of lapse. This will
notify the owner that the certificate will lapse if the premium amount specified
in the notice is not paid by the end of the grace period and the net cash value
is insufficient to cover the monthly deduction. We will mail this notice on any
certificate monthly anniversary date when the net cash value for the insured
under the certificate is insufficient to cover the monthly deduction for that
insured. The certificate of insurance will remain in effect during the [61-day]
grace period. If sufficient premium is not paid by the end of the grace period,
the insured's coverage with insufficient net cash value will lapse at the end of
that [61-day] period. The grace period does not apply to the first premium
payment.
WHAT IS THE AMOUNT OF THE DEATH BENEFIT DURING THE GRACE PERIOD?
The death benefit amount under the death benefit option in effect for a
certificate at the time of the insured's death will be paid if death occurs
during the grace period.
<PAGE> 8
POLICY CHARGES
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WHAT TYPE OF CHARGES ARE THERE UNDER THIS POLICY?
Charges under this policy are those which we deduct from premium payments
(premium expense charges), those which we deduct from the account value of each
certificate (account value charges), and those we assess against the separate
account assets attributable to the policy (separate account charges).
WHAT CHARGES ARE DEDUCTED FROM PREMIUM PAYMENTS?
From premiums paid, we will deduct the following premium expense charges: (1) a
sales charge; (2) a premium tax charge; and (3) a federal tax charge. The
remaining amount, or net premium, will be allocated to the guaranteed account
and/or sub-accounts of the separate account, as directed by the owner, and
become part of the certificate's net cash value.
(1) The sales charge is for distribution expenses. This sales charge
shall not exceed five percent of each premium paid.
(2) The premium tax charge is to compensate us for the premium tax we pay
to state and local governments, and such other charges or expenses as
we may incur with respect to this policy, including guaranty fund
assessments. This charge is currently two percent. The charge is not
guaranteed and may be increased in the future, but only as necessary
to cover our premium taxes and other charges or expenses.
(3) The federal tax charge is to compensate us for the corporate federal
income taxes that result from a sale of this policy. The federal tax
charge is 1.25 percent of each premium paid if the policy is deemed
to be an individual contract under the Omnibus Budget Reconciliation
Act of 1990, as amended, and 0.25 percent if deemed a group contract
under that Act.
WHAT CHARGES ARE DEDUCTED FROM THE ACCOUNT VALUE OF EACH CERTIFICATE?
From the net cash value of each certificate issued under this policy, we will
deduct a monthly deduction and any applicable transaction charges as account
value charges. If the net cash value is insufficient to cover the account value
charges, the certificate will lapse unless sufficient payment is received within
the grace period.
The monthly deduction will be the sum of: (1) the administration charge; (2) the
cost of insurance charge; and (3) the charge for any additional benefits
provided by rider. The monthly deduction will be deducted on the certificate
date and on each succeeding certificate monthly anniversary.
(1) The administration charge is for administrative expenses, including
those attributable to the records we create and maintain for the
policy. The maximum administration charge is [$4] per month.
(2) The cost of insurance charge is for providing the death benefit under
each certificate under this policy. The charge is calculated by
multiplying the net amount at risk under each certificate by a cost
of insurance rate which varies with the insured's age and rate class.
The rate is guaranteed not to exceed rates determined on the basis of
[125] percent of the 1980 Commissioners Standard Ordinary Mortality
Table. The policy charges described as Table A attached herein are
maximum cost of insurance rates. The net amount at risk for each
certificate is the difference between the death benefit and the
account value.
(3) The charge for any additional benefits, if any, is for providing the
coverages offered by rider(s).
Transaction charges are to compensate us for the administrative costs
incurred in processing a transaction. Currently, a transaction charge
applies to each withdrawal. The amount of the charge is the lesser of [$25]
or two percent of the amount withdrawn. We may also deduct a charge for any
transfer of funds between the guaranteed account and the separate account or
among the sub-accounts of the separate account. The amount charged will not
exceed [$10.] Transaction charges will be deducted at the end of the day on
which the transaction occurs.
Account value charges will be deducted from the guaranteed account value and the
separate account value in the same proportion that those values bear to each
other and, as to the separate account value, from each sub-account in the
proportion that the sub-account value of each such sub-account bears to the
separate account value.
WHAT CHARGES ARE ASSESSED AGAINST THE SEPARATE ACCOUNT ASSETS?
We assess a mortality and expense risk charge against the separate account
assets of any certificate issued under this policy. We also reserve the right to
charge or make provision for income taxes payable by us based on separate
account assets.
WHAT IS THE MORTALITY AND EXPENSE RISK CHARGE?
This charge is for assuming the risk that the cost of insurance charge will be
insufficient to cover actual mortality experience and that the other charges
will not cover our expenses in connection with the policy. The mortality and
expense risk charge is deducted from the separate account assets daily at an
annual rate not to exceed 0.50 percent of the separate account assets.
SEPARATE ACCOUNT
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HOW WAS THE SEPARATE ACCOUNT ESTABLISHED?
We established the separate account in accordance with certain provisions of New
York insurance law.
<PAGE> 9
WHAT IS THE PURPOSE OF THE SEPARATE ACCOUNT?
The purpose of the separate account is to hold assets attributable to the
variable portion of this policy and others of its class.
WHAT SEPARATE ACCOUNT OPTIONS ARE AVAILABLE?
The separate account is divided into sub-accounts. Those available to this
policy are listed on the specifications page attached to this policy. Net
premiums will be allocated to the various sub-accounts of the separate account
or any other sub-account which we may add in the future, as elected by the owner
of each certificate issued under the policy. We reserve the right to add,
combine or remove any sub-accounts of the separate account.
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
For each sub-account, there is a fund for the investment of that sub-account's
assets. The assets of the sub-accounts are invested in the funds at net asset
value. If investment in a fund should no longer be possible or if we determine
it becomes inappropriate for the policies of this class, we may substitute
another fund. Substitution may be with respect to both existing policy values
and future premiums. The investment policy of the separate account may not be
changed, however, without the approval of the regulatory authorities of the
State of New York. If required, that approval process will be on file with the
regulatory authorities of the state in which this policy is delivered.
WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT?
We reserve the right to transfer assets of the separate account which we
determine to be associated with the class of policies to which this policy
belongs, to another separate account. If such a transfer is made, the term
"separate account" as used in this policy, shall then mean the separate account
to which the assets are transferred. A transfer of this kind may require the
advance approval of state regulatory authorities.
We reserve the right to, when permitted by law:
(1) restrict or eliminate any voting right of owners or other persons who
have voting rights as to the separate account; and
(2) combine the separate account with one or more other separate
accounts; and
(3) to de-register the separate account under the Investment Company Act
of 1940.
HOW ARE NET PREMIUMS ALLOCATED?
Net premiums are allocated to the guaranteed account and/or to the sub-accounts
of the separate account. Initially, the allocation elected is indicated in the
application for a certificate of insurance issued hereunder. Allocations may be
changed for future premiums. The owner may do this by giving us a written
request or through any other method made available by us under this policy. A
change will not take effect until it is recorded by us in our home office.
Allocations must be expressed in whole percentages. The allocation to the
guaranteed account or to any sub-account of the separate account must be at
least [ten] percent of the net premium. We reserve the right to restrict the
allocation of premium to the guaranteed account. If we do so, no more than fifty
percent of the net premium may be allocated to the guaranteed account.
We reserve the right to delay the allocation of net premiums to named
sub-accounts. Such a delay will be for a period of 30 days after issuance of a
certificate under this policy. This right will be exercised by us only when we
believe economic conditions make such a delay necessary to reduce market risk
during the free look period of the certificate. If we exercise this right, net
premiums will be allocated to the money market sub-account until the end of that
period.
WHAT IS A TRANSFER?
A transfer is a reallocation of the net cash value between the guaranteed
account and the separate account or among the sub-accounts of the separate
account for a given owner.
MAY THE OWNER MAKE TRANSFERS OF AMOUNTS UNDER THE CERTIFICATE?
Yes. Transfers from a sub-account of the separate account or from the guaranteed
account may be made in writing, by telephone, or through any other method made
available by us under this policy. For transfers out of the separate account or
among the sub-accounts of the separate account, we will credit and cancel units
based on the sub-account unit values as of the end of the valuation period
during which the owner's request is received at our home office. For transfers
out of the guaranteed account, a dollar amount will be transferred based on the
owner's guaranteed account value at the time of transfer.
ARE THERE LIMITATIONS ON TRANSFERS?
Yes. Only one transfer may be made each certificate month for each certificate
issued hereunder. The amount to be transferred to or from a sub-account of the
separate account or the guaranteed account must be at least [$250.] If the
balance in the guaranteed account or in the sub-account from which the transfer
is to be made is less than [$250], the entire account value attributable to that
sub-account or the guaranteed account must be transferred. If a transfer would
reduce the account value in the sub-account from which the transfer is to be
made to less than [$250], we reserve the right to include that remaining amount
in the sub-account with the amount transferred.
The maximum amount of net cash value to be transferred out of the guaranteed
account to the sub-accounts of the separate account is limited to twenty percent
(or [$250] if greater) of the guaranteed account value. Transfers to or from the
guaranteed account are limited to [one] such transfer per certificate year. We
may further restrict
<PAGE> 10
transfers by requiring that the request is received by us or postmarked in the
30-day period before or after the last day of the certificate anniversary.
Requests for transfers which meet these conditions would be effective after we
approve and record them at our home office.
We may modify the transfer privilege in the future by changing the minimum
amount transferable, by altering the frequency of transfers, by imposing a
transfer charge, by prohibiting transfers, or in such other manner as we may
determine at our discretion.
HOW ARE UNITS DETERMINED?
The number of units credited with respect to each net premium payment is
determined by dividing the portion of the net premium payment allocated to each
sub-account by the then current unit value for that sub-account. This
determination is made as of the end of the valuation period during which the
premium is received at our home office. Once determined, the number of units
will not be affected by changes in the unit value.
HOW ARE UNITS INCREASED OR DECREASED?
The number of units credited to a sub-account under an owner's certificate will
be increased by the allocation of subsequent net premiums, policy experience
credits, loan repayments, loan interest credits and transfers to that
sub-account. The number of units credited to a sub-account under an owner's
certificate will be decreased by deductions to that sub-account, loans and loan
interest charges, transfers from that sub-account and withdrawals from that
sub-account. The number of sub-account units will decrease to zero on
certificate termination.
HOW IS A UNIT VALUED?
The unit value will increase or decrease on each valuation date. The amount of
any increase or decrease will depend on the net investment experience of the
sub-accounts of the separate account. The value of a unit for each sub-account
was originally set at $1.00 on the first valuation date. For any subsequent
valuation date, its value is equal to its value on the preceding valuation date
multiplied by the net investment factor for that sub-account for the valuation
period ending on the subsequent valuation date.
WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT?
The net investment factor is a measure of the net investment experience of a
sub-account during the valuation period.
The net investment factor for a valuation period is the gross investment rate
for such valuation period, less a deduction for the charges under this policy
which are assessed against separate account assets. The gross investment rate is
equal to:
(1) the net asset value per share of a fund share held in the
sub-account of the separate account determined at the end of the
current valuation period; plus
(2) the per-share amount of any dividend or capital gain distributions
by the fund if the "ex-dividend" date occurs during the current
valuation period, divided by
(3) the net asset value per share of that fund share held in the sub-
account determined at the end of the preceding valuation period.
We reserve the right to deduct a charge against the separate account assets, or
make other provisions for, any additional tax liability we may incur with
respect to the separate account or the policies, to the extent that those
liabilities exceed the amounts recovered through the deduction from premiums for
premium taxes and federal taxes.
ACCOUNT VALUES
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WILL THE OWNER HAVE ACCESS TO THE NET CASH VALUE?
Yes. The owner has access to the certificate's net cash value. The net cash
value is the account value of the certificate issued under this policy, less the
loan principal and accrued loan interest charges and any charges overdue, plus
accrued loan interest credits.
HOW IS THE ACCOUNT VALUE DETERMINED?
The account value is determined separately for each certificate. It is the sum
of the values under the separate account, the guaranteed account and the loan
principal of a certificate.
The separate account value is the sum of units of each sub-account, credited to
the certificate, multiplied by the accumulation unit value for that sub-account.
Once determined, the number of units credited to a sub-account under an owner's
certificate will not be affected by changes in the unit value. However, the
number of units will be increased by the allocation of subsequent net premiums,
policy experience credits, loan repayments, loan interest credits and transfers
to that sub-account. The number of units credited to a sub-account under an
owner's certificate will be decreased by deductions to that sub-account, loans
and loan interest charges, transfers from that sub-account and withdrawals from
that sub-account. The number of sub-account units will decrease to zero on a
certificate termination.
IS THE SEPARATE ACCOUNT VALUE GUARANTEED?
No. The separate account value of each certificate is not guaranteed.
IS THE GUARANTEED ACCOUNT VALUE GUARANTEED?
Yes. The guaranteed account value of each certificate is guaranteed by us. It
cannot be reduced by the investment experience of the guaranteed account.
<PAGE> 11
IS INTEREST CREDITED ON THE GUARANTEED ACCOUNT VALUE?
Yes. Interest is credited on the guaranteed account value of each certificate
under this policy. Interest is credited daily at a rate of not less than three
percent per year, compounded annually. We guarantee this minimum rate for the
life of the policy.
MAY ADDITIONAL INTEREST BE CREDITED ON THE GUARANTEED ACCOUNT?
Yes. As conditions permit, we may credit additional amounts of interest to the
guaranteed account value.
SURRENDERS AND WITHDRAWALS
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MAY A CERTIFICATE BE SURRENDERED?
Yes. The owner of a certificate may request the surrender of a certificate at
any time while the insured under that certificate is living.
WHAT IS THE SURRENDER VALUE OF THE CERTIFICATE?
The surrender value of a certificate is the net cash value.
The determination of the surrender value is made as of the end of the valuation
period during which we receive the surrender request at our home office.
IS A WITHDRAWAL PERMITTED?
Yes. The owner may make a withdrawal of the net cash value of a certificate. The
amount of a withdrawal must be $500 or more and it cannot exceed the amount
available as a loan. A withdrawal will cause a decrease in the face amount equal
to the amount surrendered under those certificates if the current death benefit
option is Option A. A withdrawal has no effect on the face amount if the current
death benefit option is Option B. However, since the account value is reduced by
the amount of the withdrawal, the death benefit, if the current death benefit is
Option B, will be reduced by this same amount at the time of the withdrawal. We
reserve the right to change the minimum amount for withdrawals, limit the
frequency of withdrawals, or restrict or prohibit withdrawals from the
guaranteed account.
MAY THE OWNER DIRECT US AS TO HOW WITHDRAWALS WILL BE TAKEN FROM THE NET CASH
VALUE?
Yes. The owner may tell us the sub-accounts from which a withdrawal is to be
taken or whether it is to be taken in whole or in part from the guaranteed
account. If the owner does not direct us as to how withdrawals will be taken,
they will be deducted from the guaranteed account value and separate account
value in the same proportion that those values bear to each other and, as to the
separate account value, from each sub-account in the proportion that the
sub-account value of each such sub-account bears to the separate account value.
We reserve the right to restrict or prohibit withdrawals from the guaranteed
account.
HOW WILL THE OWNER KNOW THE STATUS OF A CERTIFICATE?
Each year we will send the owner of each certificate a report. This report will
show the status of the certificate. It will include the account value, the face
amount as of the date of the report, the premiums paid during the year and their
allocation, policy charges, loan activity and the net cash value. The report
will be sent without cost to the owner. If the policyholder owns all of the
certificates, a consolidated report will be sent. The report will be as of a
date within two months of its mailing.
LOANS
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CAN THE OWNER BORROW AGAINST THE NET CASH VALUE?
Yes. The owner may borrow an amount of at least $100 and up to the maximum loan
amount. This amount is determined as of the date we receive the policyholder's
request for a loan. Requests may be made in writing, by telephone, or through
any other method made available by us under this policy. The certificate will be
the only security required for a loan. We will charge interest on the loan
principal in arrears.
When a loan is to come from the guaranteed account value, we have the right to
postpone payment of a loan for up to six months.
WHAT IS THE MAXIMUM LOAN AMOUNT AVAILABLE FOR A LOAN ON ANY CERTIFICATE?
The total amount available for a loan under any certificate is (a) minus (b),
where (a) is ninety percent of the account value and (b) is the loan principal
plus accrued loan interest charges. The maximum loan amount will be determined
as of the date we receive the policyholder's request for a loan at our home
office.
WHAT IS THE EFFECT OF A LOAN?
When a loan is taken on a certificate, we will reduce the net cash value of the
certificate by the amount borrowed. This determination will be made as of the
end of the valuation period during which the loan request is received at our
home office. The amount borrowed continues to be a part of the account value, as
the amount borrowed becomes part of the loan principal where it will accrue loan
interest credits, and will be held in our general account.
HOW DOES A LOAN REDUCE NET CASH VALUE ON A CERTIFICATE?
Unless the owner directs us otherwise, the loan will be taken from a
certificate's guaranteed account value and separate account value in the same
proportion that those values bear to each other and, as to the separate account
value, from each sub-account in the proportion that the sub-account value of
each such sub-account bears to the separate account value. The number of units
to be canceled will be based upon the value of the units as of the end of the
valuation period during which the loan request is received at our home office.
<PAGE> 12
The net cash value of any certificate may decrease from day to day. The net cash
value will decrease by the same amount of any decrease in account value or
increase in the amount borrowed or increase in the difference between the
accrued loan interest charges and the accrued loan interest credits. If a
certificate has a loan principal and no net cash value, the certificate will
lapse.
WHAT IS THE INTEREST RATE CHARGED ON THE LOAN PRINCIPAL?
The interest rate charged on the loan principal will be [eight] percent per
year.
The accrued loan interest charges on the loan principal will reduce the net cash
value. Loan interest charges are due at the end of the certificate month. If the
accrued loan interest charges are not paid at the end of the certificate month,
this interest will be deducted from the account value and added to the loan
principal and charged the same rate of interest as the loan principal in effect.
WHAT IS THE INTEREST RATE CREDITED TO A CERTIFICATE AS A RESULT OF A LOAN?
Interest credits which accrue on the loan principal shall be at a rate which is
not less than six percent per year.
WHEN ARE LOAN INTEREST CREDITS AND LOAN INTEREST CHARGES ALLOCATED TO A
CERTIFICATE?
Loan interest charges and loan interest credits are allocated monthly, at loan
repayment, at certificate surrender and at death. Loan interest charges and loan
interest credits are allocated to a certificate's guaranteed account value and
separate account value in the same proportion that those values bear to each
other and, as to the separate account value, to each sub-account in the
proportion that the sub-account value of each such sub-account bears to the
separate account value.
WHEN AND IN WHAT AMOUNT SHOULD LOAN REPAYMENTS BE MADE?
The loan principal and the accrued loan interest charges may be repaid in full
or in part at any time before the insured's death so long as the insurance
coverage under the certificate is in force. The loan may also be repaid within
60 days after the date of the insured's death, if we have not paid any of the
death benefits under that certificate. Any loan repayment must be at least
[$100] unless the balance due is less than [$100.]
HOW DO LOAN REPAYMENTS AFFECT THE LOAN PRINCIPAL AND THE GUARANTEED ACCOUNT
VALUE?
Loan repayments are allocated to the guaranteed account value and increase the
net cash value of a certificate by the amount of the loan repayment. The loan
repayment will be applied first to reduce the amount of accrued loan interest
charges. Any remaining portion of the repayment will then be used to reduce the
loan principal.
WHAT HAPPENS IF A LOAN ON A CERTIFICATE IS NOT REPAID?
If a certificate has a loan principal, the certificate will remain in force so
long as it has net cash value. If it does not have sufficient net cash value, it
will lapse.
In this event, to keep a certificate in force, the owner will have to make a
loan repayment. We will give the owner notice of our intent to terminate a
certificate and the loan repayment required to keep it in force. The time for
repayment will be within 61 days after our mailing of the warning notice of
lapse.
TERMINATION
- --------------------------------------------------------------------------------
WHEN DOES THIS GROUP POLICY TERMINATE?
The policyholder may terminate this group policy by giving us 31 days prior
written notice. We reserve the right to terminate this policy on the earliest of
the following to occur:
(1) the aggregate specified face amount for all certificates under this
policy decreases by certain amounts or below the minimum permissible
levels we establish for the policy in any 12 month period; or
(2) the number of certificates under this policy decreases by certain
amounts or below the minimum permissible levels we establish for the
policy in any 12 month period; or
(3) 61 days after we provide notice of our intent to terminate the policy.
No individual may become insured under this group policy after the effective
date of such a notice of termination. After termination of the policy, the
certificates issued there under, may be allowed to convert to individual
coverage as described below under the "Conversion Privilege" section.
WHEN DOES A CERTIFICATE OF INSURANCE UNDER THIS GROUP POLICY TERMINATE?
The insurance on the life of an insured will terminate on the earliest of:
(1) [61 days after we mail a warning notice of lapse on a certificate
monthly anniversary in which the net cash value is insufficient to pay
for the monthly deduction and no premium is paid during the grace
period; or
(2) the date the group policy terminates, unless continuation has
previously been made effective; or
(3) the date an owner surrenders the certificate or requests that we
terminate the insurance; or]
(4) the 95th birthday of the insured.
<PAGE> 13
WILL THE OWNER OF A CERTIFICATE RECEIVE NOTICE PRIOR TO THE TERMINATION OF
INSURANCE?
If the owner's insurance will be terminated because the net cash value is less
than that required to pay the monthly deduction, we will give the owner at least
[61] days prior written notice of lapse before terminating the insurance.
WHAT HAPPENS TO ACCOUNT VALUES AT POLICY TERMINATION?
Account values attributable to the separate account will be valued as of the
close of business on the distribution date or dates mutually agreed upon by the
policyholder and us. For account values attributable to the guaranteed account,
we reserve the right to complete the distribution over a period of time
determined by us, but not more than five years. This delayed distribution does
not in any way continue or extend any insurance that has otherwise terminated
due to policy termination.
CAN INSURANCE ON THE LIFE ON AN INSURED BE REINSTATED AFTER TERMINATION?
Insurance terminated due to the insufficiency of the net cash value to pay the
monthly deduction may be reinstated. Reinstatement must occur while the insured
is living and any time within three years from the date of lapse. Reinstatement
is made by payment of an amount that, after the deduction of
percentage-of-premium charges, is large enough to cover all monthly deductions
which have accrued on that certificate up to the effective date of reinstatement
plus the monthly deductions for the two months following the effective date of
reinstatement. If any loans and loan interest charges are not repaid, this
indebtedness will be reinstated along with the insurance. No evidence of the
insured's insurability will be required during the first 31 days following
lapse, but will be required from the 32nd day to 3 years from the date of lapse.
CONVERSION PRIVILEGE
- --------------------------------------------------------------------------------
IS THERE A CONVERSION PRIVILEGE TO AN INDIVIDUAL POLICY?
Yes. If the group policy is terminated or if the insured's insurance under the
group policy ends due to the termination of his or her employment or membership
in the class or classes eligible for coverage under this policy or his or her
insurance is reduced on or after the attainment of age sixty in any increment or
series of increments totaling twenty percent or more of the amount of insurance
in force under the group policy prior to the first reduction at age sixty, the
owner shall be entitled to convert such insurance to a policy of permanent
individual life insurance within thirty one days of such termination or
reduction, without providing evidence of insurability, subject to the following:
(1) the owner's written application to convert to an individual policy
and the first premium for the individual policy must be received in
our home office within 31 days of the date the insurance terminates
under the group policy; and
(2) the owner may convert all or part of the amount of insurance under
the group policy at the time of termination or, if insurance is
reduced due to age, the amount of insurance equal to the amount which
was reduced. However, if an insured's insurance terminates because
the group policy is terminated, the insured is eligible to convert an
amount up to the amount of insurance he or she had just prior to the
termination, less any amount he or she may become eligible for under
any group policy within 45 days of the termination. The owner may
convert said amounts to any policy of permanent individual life
insurance then customarily issued by us for purposes of conversion.
The premium charge for this insurance will be based upon the
insured's age as of his or her nearest birthday; and
(3) if the insured should die within 31 days of the date that insurance
terminated under the group policy, the full amount of insurance that
could have been converted under this policy will be paid.
[If the insured employee's insurance ends due to the termination of his or her
employment or of membership in the class or classes eligible for coverage under
this policy as a result of his or her total and permanent disability, the owner
shall be entitled to convert such insurance to any policy of permanent
individual life insurance then customarily issued by us for purposes of
conversion.]
The owner must be notified within 15 days before or after the event that results
in termination or reduction of the insured's group life coverage. If the notice
is given more than 15 days but less than 90 days after the event, the time
allowed for the exercise of the conversion privilege shall be extended to 45
days after such notice is sent. If the notice is not given within 90 days after
the event, the time allowed for the exercise of the conversion privilege expires
90 days after such notice is sent. Such notice shall be mailed by us to the
insured's last address furnished to us by the group policyholder.
CAN GROUP INSURANCE COVERAGE BE CONTINUED ONCE THE OWNER'S ELIGIBILITY ENDS?
If the owner's eligibility under this policy ends, the current group coverage
may continue unless:
(1) the certificate is no longer in force; or
[(2) the group policy has terminated; or]
<PAGE> 14
(3) there is less than [$250] in the certificate's net cash value after
deduction of charges for the month in which eligibility ends.
If any of these limitations apply, the owner may still elect to continue the
current group coverage, but only for a period not to exceed one year. At the end
of this continuation period, he or she may convert such insurance to an
individual policy of permanent insurance with Northstar Life. Such conversion
shall be subject to the rest of the Conversion Privilege section.
The face amount of insurance will not change unless the owner requests a change.
We reserve the right to alter the administration charge not to exceed $4 per
month and the monthly cost of insurance up to the maximum in Table A if the
insurance is continued.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
WILL THIS POLICY RECEIVE EXPERIENCE CREDITS?
Each year we will determine if this policy will receive an experience credit.
Experience credits, if received, will be added to the account value of a
certificate issued under this policy or, if elected by the owner may be paid in
cash. An experience credit applied to the account value will be allocated to the
guaranteed account value or the sub-accounts of the separate account in
accordance with the owner's current instructions for the allocation of net
premiums. In the absence of such instructions, experience credits will be
allocated to the guaranteed account and the separate account in the same
proportion as those values bear to each other and, as to the separate account
value, to each sub-account in the proportion that the sub-account value of each
such sub-account bears to the separate account value.
MAY AN OWNER ASSIGN ANY INTEREST UNDER THE CERTIFICATE ISSUED UNDER THIS POLICY?
[Yes. However, we will not be bound by an assignment of the certificate or of
any interest in it unless:
(1) it is made as a written instrument; and
(2) the owner files the original instrument or a certified copy with us at
our home office; and
(3) we send the owner an acknowledged copy.
We are not responsible for the validity of any assignment. If a claim is based
on an assignment, we may require proof of interest of the claimant. A valid
assignment will take precedence over any claim of a beneficiary.
WHAT IF AN INSURED'S AGE IS MISSTATED?
If the age of the insured has been misstated, the death benefit and account
value will be adjusted. The adjustment will be the difference between two
amounts accumulated with interest. These two amounts are:
(1) the monthly cost of insurance charges that were paid; and
(2) the monthly cost of insurance charges that should have been paid based
on the insured's correct age.
The interest rates used are the rates that were used in accumulating the
guaranteed account values.
WHEN DOES AN INSURED'S INSURANCE BECOME INCONTESTABLE?
After the insurance has been in force during the insured's lifetime for a two
year period from the certificate date, we cannot contest the insurance for any
loss that is incurred more than two years after the certificate date, unless the
net cash value has dropped below the amount necessary to pay the insured's cost
of insurance on the insured's life. However, if there has been an increase in
the amount of insurance for which we required evidence of insurability, then, to
the extent of the increase, any loss which occurs within two years of the
effective date of the increase will be contestable.
IS THERE A SUICIDE EXCLUSION?
[If an insured dies by suicide within two years of the certificate date, our
liability will be limited to an amount equal to the premiums paid for that
insured. If there has been an increase in the face amount of insurance for which
we required evidence of insurability, and if the insured dies by suicide within
two years of the effective date of the increase, our liability with respect to
that increase will be limited to the cost of insurance charge attributable to
such increase.]
ARE INSURANCE AND RELATED RECORDS OF THE POLICYHOLDER'S POLICY OPEN FOR
INSPECTION?
Yes. The policyholder's records shall be open to inspection by us, at all
reasonable times, for any purposes relating to the provisions of this policy.
WILL THE INSURED RECEIVE A CERTIFICATE OF PARTICIPATION?
Yes. Within 30 days of the effective date of an owner's insurance, we will
furnish the policyholder with a certificate of insurance for delivery to the
owner.
DOES THE OWNER HAVE ANY ADDITIONAL VOTING RIGHTS?
Yes. If the owner has separate account units under this policy, the owner may
direct us with respect to the voting rights of fund shares held by us and
attributable to this policy.
COULD THE PAYMENT OF PROCEEDS BE POSTPONED?
Normally, we will pay any proceeds within seven days after our receipt of all
the documents required for such a payment. Other than the death proceeds, which
are determined as of the date of death of the insured, the amount of payment
will be determined as of the end of the valuation period during which a request
is received at our home office. If such payments are based upon values which do
not depend on the investment performance of the separate account, however, we
<PAGE> 15
reserve the right to defer payments, including loans, for up to six months from
the date of the owner's request. In that case, if we postpone a payment other
than a loan payment for more than 31 days, we will pay the owner interest at the
greater of three percent per year or the rate required by law for the period
beyond that time that payment is postponed. For payments based on account values
which do depend on the investment performance of the separate account, we may
defer payment only: (a) for any period during which the New York Stock Exchange
is closed for trading (except for normal holiday closing); or (b) when the
Securities and Exchange Commission has determined that a state of emergency
exists which may make such payment impractical.
WILL THE PROVISIONS OF THIS POLICY CONFORM WITH STATE LAW?
Yes. If any provision in this policy, or in the certificates issued under this
policy, is in conflict with the laws of the state governing the policy or the
certificates, the provision will be deemed to be amended to conform to such
laws.
COULD ANY PAYMENTS MADE UNDER THIS POLICY BE SUBJECT TO CLAIMS OF CREDITORS?
To the extent permitted by law, neither this policy, certificates issued under
this policy, nor any payment thereunder will be subject to the claims of
creditors or to any legal process.
WHEN WILL THE POLICY BE ISSUED?
The policy will be issued upon receipt of a signed policy application signed by
a duly authorized officer of the group policyholder and acceptance by a duly
authorized officer of Northstar Life at our home office.
WHO HAS OWNERSHIP OF THE POLICY?
The policyholder shown on the specifications page attached to this policy owns
the group policy. The group policy may be changed or ended by agreement between
us and the policyholder without the consent of, or notice to, any person
claiming rights or benefits under the policy. However, unless the policyholder
is the owner of all the certificates issued under the group policy, the
policyholder does not have any ownership interest in the certificates issued
under the group policy. The rights and benefits under the certificates are that
of the owners of the certificates and of the insureds and beneficiaries as set
forth in this policy and in the certificates.
ARE POLICY CHANGES LIMITED?
We reserve the right to limit the number of changes to one per certificate year
and to restrict such changes in the first certificate year. For this purpose,
changes include increases or decreases in the face amount of insurance.
<PAGE> 16
TABLE A
NORTHSTAR LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A TOBACCO DISTINCT BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
-------- ------- -------- ------- -------- --------
NON-TOBACCO TOBACCO NON-TOBACCO TOBACCO NON-TOBACCO TOBACCO
----------- ------- ----------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
[0 0.254 0.254 35 0.174 0.265 70 3.427 5.191
1 0.102 0.102 36 0.184 0.285 71 3.797 5.648
2 0.098 0.098 37 0.197 0.310 72 4.230 6.171
3 0.096 0.096 38 0.210 0.338 73 4.724 6.757
4 0.093 0.093 39 0.225 0.369 74 5.273 7.405
5 0.088 0.088 40 0.243 0.406 75 5.864 8.100
6 0.084 0.084 41 0.261 0.445 76 6.491 8.815
7 0.079 0.079 42 0.281 0.488 77 7.149 9.540
8 0.077 0.077 43 0.302 0.534 78 7.845 10.278
9 0.076 0.076 44 0.324 0.584 79 8.600 11.058
10 0.076 0.076 45 0.350 0.636 80 9.439 11.904
11 0.082 0.082 46 0.377 0.691 81 10.384 12.841
12 0.091 0.091 47 0.407 0.749 82 11.456 13.886
13 0.104 0.104 48 0.439 0.813 83 12.649 15.034
14 0.118 0.118 49 0.474 0.882 84 13.943 16.241
15 0.129 0.163 50 0.514 0.958 85 15.311 17.473
16 0.139 0.179 51 0.559 1.043 86 16.737 18.705
17 0.147 0.192 52 0.611 1.140 87 18.205 19.973
18 0.152 0.202 53 0.671 1.249 88 19.710 21.295
19 0.156 0.208 54 0.736 1.367 89 21.271 22.625
20 0.158 0.212 55 0.808 1.492 90 22.908 24.006
21 0.157 0.212 56 0.885 1.624 91 24.659 25.457
22 0.154 0.210 57 0.967 1.760 92 26.588 27.118
23 0.152 0.208 58 1.056 1.903 93 28.870 29.192
24 0.149 0.204 59 1.156 2.056 94 31.894 32.006
25 0.146 0.199 60 1.268 2.228
26 0.144 0.197 61 1.395 2.424
27 0.143 0.197 62 1.544 2.650
28 0.143 0.198 63 1.714 2.904
29 0.144 0.202 64 1.903 3.184
30 0.146 0.208 65 2.110 3.480
31 0.149 0.215 66 2.332 3.788
32 0.153 0.223 67 2.568 4.104
33 0.159 0.235 68 2.823 4.434
34 0.166 0.249 69 3.105 4.792
</TABLE>
* This is the insured's attained age as of the last certificate anniversary.
<PAGE> 17
TABLE A
NORTHSTAR LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A UNI-TOBACCO BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
- -------- -------- -------- ------- -------- -------
UNI-TOBACCO UNI-TOBACCO UNI-TOBACCO
----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
[0 0.254 35 0.214 70 3.835
1 0.102 36 0.229 71 4.214
2 0.098 37 0.246 72 4.654
3 0.096 38 0.265 73 5.157
4 0.093 39 0.287 74 5.712
5 0.088 40 0.312 75 6.310
6 0.084 41 0.339 76 6.941
7 0.079 42 0.368 77 7.599
8 0.077 43 0.398 78 8.289
9 0.076 44 0.431 79 9.033
10 0.076 45 0.465 80 9.857
11 0.082 46 0.502 81 10.784
12 0.091 47 0.541 82 11.835
13 0.104 48 0.583 83 13.006
14 0.118 49 0.629 84 14.270
15 0.134 50 0.681 85 15.605
16 0.148 51 0.739 86 16.991
17 0.159 52 0.805 87 18.421
18 0.168 53 0.879 88 19.895
19 0.174 54 0.960 89 21.422
20 0.176 55 1.047 90 23.024
21 0.177 56 1.138 91 24.740
22 0.176 57 1.234 92 26.640
23 0.173 58 1.334 93 28.901
24 0.171 59 1.444 94 31.905
25 0.167 60 1.568
26 0.166 61 1.709
27 0.166 62 1.871
28 0.166 63 2.055
29 0.169 64 2.259
30 0.172 65 2.478
31 0.178 66 2.711
32 0.184 67 2.956
33 0.193 68 3.217
34 0.202 69 3.507
</TABLE>
* This is the insured's attained age as of the last certificate anniversary.
<PAGE> 18
INTEREST PAYMENT SETTLEMENT OPTIONS ILLUSTRATION
VARIABLE GROUP UNIVERSAL LIFE
[The beneficiary is entitled to receive payment of the insurance in a lump sum
payment or in any one of the available settlement options. The guaranteed
interest rate is based on 3%. The current rate is subject to change at any time
but never less than the guaranteed rate.
Payment of interest on the proceeds at such times and for a period as may be
agreed upon between the owner of a certificate and us. Withdrawal of proceeds
may be made in amounts of at least $500. At the end of the period, any remaining
proceeds will be paid in either a single sum or under any other method we
approve.
(1) Principal Held At Interest (Withdrawable): Principal will be held
by the Company at interest for 2 years, 5 years or for your
lifetime, with interest payable monthly, quarterly, semi-annually
or annually. Or the interest could be added to the principal sum
and bear interest at the same rate. Interest would be considered
"withdrawable". Withdrawable would mean that any accruing interest
would be reportable for tax purposes. You would, also, have the
option of withdrawing the funds at any time without any interest
penalty.
(2) Principal Held At Interest (Non-Withdrawable): Principal held by
the Company at interest for 2 years, 5 years or for your lifetime,
with interest added to the principal sum and bearing interest at
the same rate. Interest would be considered "non-withdrawable".
Non-withdrawable would mean that we would defer reporting the
taxable gain on the accumulating interest until the date specified.
If funds are withdrawn prior to the specified period there would be
an interest penalty of 1/4 of 1 % for the period the proceeds were
held, up to a maximum of 5 years.]
THIS SETTLEMENT OPTION ILLUSTRATION IS INTENDED AS A GENERIC EXAMPLE OF THIS
SETTLEMENT OPTION AND IS NOT INTENDED TO BE SPECIFIC TO THE OWNER'S COVERAGE.
<PAGE> 19
FIXED PERIOD ANNUITY SETTLEMENT OPTIONS ILLUSTRATION
VARIABLE GROUP UNIVERSAL LIFE
[The beneficiary is entitled to receive payment of the insurance in a lump sum
payment or in any one of the available settlement options. The guaranteed
interest rate is based on 3%. The current rate is subject to change at any time
but never less than the guaranteed rate.
An annuity payable in monthly installments for a specified number of years, from
one to twenty years.
(1) Principal & Interest Paid In Monthly Payments (Specific Number of
Years): Principal and interest would be held by the Company to be
paid in monthly installments for a specific number of years. The
following is based on the guaranteed rate. (Benefits may be higher
based on the rates currently offered by the company.) The monthly
payment for each $1,000 of insurance would be:
<TABLE>
<CAPTION>
Years Payable Monthly Payment per $1,000
<S> <C>
1 $85.15
2 43.42
3 29.52
4 22.58
5 18.42
10 10.12
15 7.40
20 6.06]
</TABLE>
THIS SETTLEMENT OPTION ILLUSTRATION IS INTENDED AS A GENERIC EXAMPLE OF THIS
SETTLEMENT OPTION AND IS NOT INTENDED TO BE SPECIFIC TO THE OWNER'S COVERAGE.
<PAGE> 20
LIFE ANNUITY SETTLEMENT OPTIONS ILLUSTRATION
VARIABLE GROUP UNIVERSAL LIFE
[The beneficiary is entitled to receive payment of the insurance in a lump sum
payment or in any one of the available settlement options. The guaranteed
interest rate is based on 3%. The current rate is subject to change at any time
but never less than the guaranteed rate.
An annuity payable monthly for the lifetime of the annuitant and ending with the
last monthly payment due prior to the annuitant's death.
(1) Annuity: Principal would be used to purchase an annuity. Monthly
installments would be payable to you for as long as you live. You
may choose varying periods certain. In which case, if you should
die prior to the period certain, the commuted value of the
remaining payments certain would be payable to your beneficiary.
Monthly payments are dependent upon your date of birth.
Example:
If the insured elects an annuity as his/her settlement option, the
monthly benefit would be calculated in the following manner:
The principal amount is multiplied by the factor found on the
attached table and divided by 1,000. For example, assume a male,
age 55 with $20,000 of principal who elects:
(a) a life only annuity
($20,000 * 6.63)/l,000 = $132.60 monthly income
(b) ten year certain and life annuity
($20,000 * 6.51)/l,000 = $130.20 monthly income
The interest rates used to calculate the annuity factors are
adjusted as market interest rates fluctuate. The table provided was
calculated assuming an interest rate of 5.95%.
<TABLE>
<S> <C>
Issue Age 35
Minimum Issue Amount $50,000
Minimum Guaranteed Interest Rate* 3.00%
Maximum Guaranteed Charges
Premium Tax Charge 2.00%
Sales Charge 5.00%
Federal Tax Charge 0.25%
Administration Charge $4.00
</TABLE>
*only for funds invested in the General Account
<TABLE>
<CAPTION>
Monthly
Monthly Monthly Monthly Monthly Contribution
Minimum Risk Administrative Percent Of To The
Age Premium Charge Charge Premium Charge Account Value
--- ------- ------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
35 $ 15.84 $ 10.69 $ 4.00 $ 1.15 $ 0.00
36 16.64 11.43 4.00 1.21 0.00
37 17.55 12.28 4.00 1.27 0.00
38 18.59 13.24 4.00 1.35 0.00
39 19.78 14.35 4.00 1.43 0.00
40 21.13 15.60 4.00 1.53 0.00
41 22.58 16.94 4.00 1.64 0.00
42 24.12 18.37 4.00 1.75 0.00
43 25.78 19.91 4.00 1.87 0.00
44 27.55 21.55 4.00 2.00 0.00
45 29.40 23.27 4.00 2.13 0.00
46 31.38 25.10 4.00 2.27 0.00
47 33.48 27.06 4.00 2.43 0.00
48 35.75 29.16 4.00 2.59 0.00
49 38.25 31.47 4.00 2.77 0.00
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
Monthly
Monthly Monthly Monthly Monthly Contribution
Minimum Risk Administrative Percent Of To The
Age Premium Charge Charge Premium Charge Account Value
--- ------- ------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
50 $41.00 $34.03 $4.00 $2.97 $0.00
51 44.17 36.97 4.00 3.20 0.00
52 47.71 40.25 4.00 3.46 0.00
53 51.72 43.97 4.00 3.75 0.00
54 56.09 48.02 4.00 4.07 0.00
55 60.76 52.36 4.00 4.41 0.00
56 65.68 56.92 4.00 4.76 0.00
57 70.82 61.68 4.00 5.13 0.00
58 76.25 66.72 4.00 5.53 0.00
59 82.17 72.21 4.00 5.96 0.00
60 88.83 78.39 4.00 6.44 0.00
61 96.43 85.44 4.00 6.99 0.00
62 105.18 93.56 4.00 7.63 0.00
63 115.08 102.73 4.00 8.34 0.00
64 126.07 112.93 4.00 9.14 0.00
65 137.89 123.90 4.00 10.00 0.00
66 150.45 135.55 4.00 10.91 0.00
67 163.65 147.79 4.00 11.86 0.00
68 177.75 160.86 4.00 12.89 0.00
69 193.36 175.34 4.00 14.02 0.00
70 211.06 191.76 4.00 15.30 0.00
71 231.49 210.70 4.00 16.78 0.00
72 255.20 232.70 4.00 18.50 0.00
73 282.29 257.83 4.00 20.47 0.00
74 312.25 285.61 4.00 22.64 0.00
75 344.49 315.51 4.00 24.98 0.00
76 378.52 347.07 4.00 27.44 0.00
77 413.95 379.94 4.00 30.01 0.00
78 451.13 414.43 4.00 32.71 0.00
79 491.25 451.63 4.00 35.62 0.00
80 535.66 492.83 4.00 38.84 0.00
81 585.65 539.19 4.00 42.46 0.00
82 642.34 591.77 4.00 46.57 0.00
83 705.43 650.29 4.00 51.14 0.00
84 773.60 713.52 4.00 56.09 0.00
85 845.55 780.25 4.00 61.30 0.00
86 920.27 849.55 4.00 66.72 0.00
87 997.37 921.06 4.00 72.31 0.00
88 1,076.83 994.76 4.00 78.07 0.00
89 1,159.15 1,071.11 4.00 84.04 0.00
90 1,245.52 1,151.22 4.00 90.30 0.00
91 1,338.00 1,236.99 4.00 97.00 0.00
92 1,440.44 1,332.01 4.00 104.43 0.00
93 1,562.32 1,445.05 4.00 113.27 0.00
94 1,724.24 1,595.23 4.00 125.01 0.00
</TABLE>
THIS SETTLEMENT OPTION ILLUSTRATION IS INTENDED AS A GENERIC EXAMPLE OF THIS
SETTLEMENT OPTION AND IS NOT INTENDED TO BE SPECIFIC TO THE OWNER'S COVERAGE.
<PAGE> 22
PAYMENTS OF A SPECIFIED AMOUNT SETTLEMENT OPTIONS ILLUSTRATION
VARIABLE GROUP UNIVERSAL LIFE
[The beneficiary is entitled to receive payment of the insurance in a lump sum
payment or in any one of the available settlement options. The guaranteed
interest rate is based on 3%. The current rate is subject to change at any time
but never less than the guaranteed rate.
Monthly payments of a specified amount until the proceeds and interest are fully
paid.]
THIS SETTLEMENT OPTION ILLUSTRATION IS INTENDED AS A GENERIC EXAMPLE OF THIS
SETTLEMENT OPTION AND IS NOT INTENDED TO BE SPECIFIC TO THE OWNER'S COVERAGE.
<PAGE> 23
NORTHSTAR LIFE
University Corporate Centre at Amherst - Suite 424 - 100 Corporate Parkway -
Amherst, New York 14226
VARIABLE GROUP UNIVERSAL LIFE INSURANCE - NONPARTICIPATING
<PAGE> 1
EXHIBIT A.(5)(b)
================================================================================
NORTHSTAR LIFE CERTIFICATE OF INSURANCE
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
RIGHT TO CANCEL
- --------------------------------------------------------------------------------
It is important to us that you are satisfied with this certificate after it is
issued. If you are not satisfied with it, you may return this certificate to us
or our agent within 10 days after you receive it. You may also cancel this
certificate by delivering or mailing a written notice or sending a telegram to
Northstar Life Insurance Company (Northstar Life), University Corporate Centre
at Amherst, Suite 424, 100 Corporate Parkway, Amherst, New York 14226 and
returning this certificate before midnight of the 10th day after you received
this certificate. Notice given by mail and return of this certificate by mail
are effective on being postmarked, properly addressed and postage prepaid. If
you return this certificate, you will receive, within 7 days of the date we
receive a notice of cancellation, a full refund of any premiums you have paid.
Upon cancellation of this certificate, it will be void from the beginning as if
it never had been issued.
/s/Dennis E. Prohofsky /s/Robert E. Hunstad
Secretary President
FOR OPTION A, THE INITIAL DEATH BENEFIT WILL EQUAL THE FACE AMOUNT SHOWN ON THE
SPECIFICATIONS PAGE ATTACHED TO THIS CERTIFICATE. FOR OPTION B, THE INITIAL
DEATH BENEFIT WILL EQUAL THE FACE AMOUNT SHOWN ON THE SPECIFICATIONS PAGE
ATTACHED TO THIS CERTIFICATE PLUS THE INITIAL ACCOUNT VALUE, IF ANY. FOR OPTION
B, THEREAFTER, THE DEATH BENEFIT MAY INCREASE OR DECREASE DEPENDING UPON
SEPARATE ACCOUNT INVESTMENT EXPERIENCE.
THE ACCOUNT VALUE UNDER THIS CERTIFICATE WILL VARY FROM DAY TO DAY. IT MAY
INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE,
THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE.
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
Definition.................................................2 Account Values.................................8
General Information........................................3 Surrenders and Withdrawals.....................9
Death Benefit..............................................3 Loans..........................................9
Payment of Proceeds........................................4 Termination...................................10
Premiums...................................................5 Conversion Privilege..........................11
Policy Charges.............................................5 Additional Information........................12
Separate Account...........................................6
</TABLE>
VARIABLE GROUP UNIVERSAL LIFE INSURANCE
<PAGE> 2
- --------------------------------------------------------------------------------
NORTHSTAR LIFE SPECIFICATIONS
- --------------------------------------------------------------------------------
Northstar Life Insurance Company
University Corporate Centre at Amherst
Suite 424
100 Corporate Parkway
Amherst, New York 14226
- --------------------------------------------------------------------------------
POLICYHOLDER: [ABC COMPANY] POLICY ID: [96-19974]
SPONSOR: [ABC COMPANY]
INSURED: [Jane A. Doe]
<TABLE>
<CAPTION>
INSURANCE INFORMATION
- ---------------------
DEATH BENEFIT OPTION: OPTION B-Variable Death Benefit
<S> <C> <C> <C>
Face Amount: [$ 25,000] Effective Date: 05-01-98
First Certificate Anniversary Date: 05-01-97
Minimum Face Amount Available: [$ 25,000]
Maximum Face Amount Available: [$ 500,000]
Planned Premium: [$ 20.00]
Rate Class: [Non-Smoker]
Age at Issue: [35]
Identification Number: [###-##-####]
<CAPTION>
CHARGES AGAINST PREMIUM FIXED MONTHLY CHARGES
- ----------------------- ---------------------
<S> <C> <C> <C>
Premium Tax Charge 2.00% Administration Charge: $ 4.00
Sales Charge 5.00%
Federal Tax Charge 0.25%
SEPARATE ACCOUNT CHARGE
------------------------
Mortality and Expense Risk Charge: 0.5%
</TABLE>
If a withdrawal is made, we will assess a charge of $25 or two percent of the
amount withdrawn, whichever is less.
ELECTED RIDERS ADDITIONAL AGREEMENTS
- -------------- ----------------------
Accidental Death & Dismemberment Policyholder Contribution Rider
Accelerated Death Benefit
Waiver of Premium
These agreements are included in the
planned monthly premium.
Please see the reverse side of this specifications page for Account and
Sub-Account Options and Elections.
<PAGE> 3
ACCOUNT OPTIONS AND ELECTIONS
Guaranteed Account 20%
SUB-ACCOUNT OPTIONS AND ELECTIONS
<TABLE>
<CAPTION>
FIXED BALANCED EQUITY
<S> <C> <C>
Bond 20% Asset Allocation 20% Capital Appreciation 20%
Maturing Government Bond 2010 Growth 20%
Money Market Index 500
Mortgage Securities International Stock
VIP High Income Small Company
Global Bond Value Stock
VIP Equity-Income
VIP II Contrafund
Small Company Value
Index 400 Mid-Cap
Micro-Cap Growth
Macro-Cap Value
</TABLE>
IRC SECTION 7702 TEST APPLIED IS:
Cash Value Accumulation Test
<PAGE> 4
DEFINITIONS
- --------------------------------------------------------------------------------
ACCOUNT VALUE
The sum of the values under the separate account, the guaranteed account and the
loan principal of this certificate. They are identified as the separate account
value, the guaranteed account value, and the loan principal, respectively.
ACTIVELY AT WORK
To be actively at work for the purposes of this policy, you must be currently
working at your employer's normal place of business at least 20 hours a week. A
person is not considered actively-at-work if not at work due to illness or
injury.
AGE
Your age at last birthday.
ASSOCIATED COMPANY
Any company which is a subsidiary or affiliate of the policyholder which is
designated by the policyholder and agreed to by us to participate under the
group policy.
CERTIFICATE ANNIVERSARY
The same day in each succeeding year as the certificate date.
CERTIFICATE DATE
The first day of the calendar month on or following a certificate's effective
date of coverage. This is the date from which we determine monthly
anniversaries, certificate months and certificate years.
CERTIFICATE MONTH
A calendar month in which insurance is provided under this certificate.
CERTIFICATE YEAR
A period of twelve consecutive certificate months, measured from the certificate
date and each successive certificate anniversary, during which coverage is
provided under this certificate.
ELIGIBLE INSURED
You are an eligible insured if you:
(1) are under age 70; and
(2) were actively at work for each of the 4 weeks immediately prior to
the date your application for coverage under the group policy is
approved by us; and
(3) are identified by the policyholder as a person eligible to be
insured under the Policyholder's policy.
FACE AMOUNT
The minimum death benefit under this certificate so long as the insurance
coverage under this certificate remains in force.
FUND
The mutual fund or separate investment portfolio within a series mutual fund
which we designate as an eligible investment for the separate account and its
sub-accounts.
GENERAL ACCOUNT
All assets of Northstar Life other than those in the separate account or in
other separate accounts established by us.
GUARANTEED ACCOUNT
Assets other than the loan principal that are held in our general account and
attributable to certificates issued under the group policy, and others of its
class.
GUARANTEED ACCOUNT VALUE
The sum of all net premiums and transfers allocated to the guaranteed account
and interest and experience credits declared thereon, minus amounts transferred
to the separate account or removed in connection with a withdrawal or loan and
minus charges assessed against the guaranteed account value.
INSURED
An eligible insured who becomes insured under this certificate.
LAPSE
Termination of insurance coverage under this certificate due to non-payment of a
premium during its grace period in an amount that, after the deduction of
premium expense charges, is sufficient to cover the monthly deductions due at
the time we provide notice of the lapse.
LOAN PRINCIPAL
The portion of the general account which is attributable to loans under this
certificate.
MATURITY DATE
The 95th birthday of the insured.
MONTHLY ANNIVERSARY
The same date in each succeeding month as the certificate date.
NET CASH VALUE
The account value under this certificate, less any outstanding loan principal
and accrued loan interest charges and any charges over due, plus accrued loan
interest credits. It is the amount you may obtain through surrender of this
certificate.
<PAGE> 5
NET PREMIUM
The premium less premium expense charges deducted from the premium. The net
premium is the amount or amounts which are allocated to the guaranteed account
and/or the separate account on your behalf.
OWNER
An owner of a certificate issued under the group policy.
POLICYHOLDER
The owner of the group policy, as identified on the specifications page attached
to this certificate.
SEPARATE ACCOUNT
The separate investment account created by us to receive and invest net premiums
received for this certificate. The particular separate account for this
certificate is the Northstar Life Variable Universal Life Account. We
established this separate account for this class of policies under New York Law.
The separate account is composed of several sub-accounts. We own the assets of
the separate account. However, those assets not in excess of separate account
liabilities are not subject to claims arising out of any other business in which
we engage.
SEPARATE ACCOUNT VALUE
The sum of all sub-account values.
SUB-ACCOUNT
One or more sub-accounts constituting the separate account.
SUB-ACCOUNT VALUE
The current number of sub-account units credited to your certificate multiplied
by the current sub-account unit value.
UNIT
A measure of the owner's interest in a sub-account of the separate account.
VALUATION DATE
Any date on which a fund is valued.
VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.
WE, OUR, US
Northstar Life Insurance Company.
YOU, YOUR
The owner of this certificate.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
WHAT IS YOUR AGREEMENT WITH US?
You are insured under the group policy identified on the signed application
attached to this certificate. The attached signed application is a part of this
certificate. Your certificate, application, and any subsequent application,
contain the entire contract between you and us. This certificate summarizes the
principal provisions of the group policy that affect your life insurance
coverage. The provisions summarized in this certificate are subject in every
respect to the group policy. You may examine the group policy at the principal
office of the policyholder during regular working hours.
We retain the right to amend this certificate at any time without your consent.
Any amendment will be without prejudice to any claim incurred for benefits prior
to the date of the amendment.
Any statement made in your signed application will be considered representations
and not warranties. Also, any statement made will not be used to void this
certificate nor defend against a claim unless the signed statement is contained
in your signed application.
No statement you make will be used to contest your coverage unless a copy of the
signed statement is or has been furnished to you or to your beneficiary.
This certificate is issued in consideration of your application and the payment
of the required premium contributions.
WHAT IS THE EFFECTIVE DATE OF YOUR INSURANCE?
Upon receipt of your application for insurance, the effective date of your
insurance will be the later of:
(1) the date on which we approve your application; and
(2) the date on which the first premium contribution is paid.
This effective date is shown on the specifications page attached to this
certificate.
DEATH BENEFIT
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WHAT IS THE AMOUNT OF THE DEATH BENEFIT?
The amount of the death benefit depends on whether Option A or Option B is
selected by the policyholder as the death benefit option under the policy. The
death benefit option selected by the policyholder will be the death benefit
option for all certificates issued under the policy. Once elected, the death
benefit option shall remain unchanged.
The amount of the death benefit for Option A will be determined as follows:
(1) the face amount of insurance on the insured's date of death while this
certificate is in force; plus
(2) the amount of the cost of insurance for the portion of the certificate
month from the date of death to the end of the certificate month; plus
<PAGE> 6
(3) any accrued loan interest credits; less
(4) any outstanding loan principal and accrued loan interest charges; less
(5) any unpaid monthly deductions determined as of the date of the insured's
death.
The amount of the death benefit for Option B will be determined as follows:
(1) the face amount of insurance on the insured's date of death while this
certificate is in force; plus
(2) the amount of the owner's account value as of the date we receive due
proof of death satisfactory to us; plus
(3) the amount of the cost of insurance for the portion of the certificate
month from the date of death to the end of the certificate month; plus
(4) any monthly deductions taken under the certificate since the date of
death; plus
(5) any accrued loan interest credits; less
(6) any outstanding loan principal and accrued loan interest charges; less
(7) any unpaid monthly deductions determined as of the date of the insured's
death.
Payment of the death benefit will extinguish our liability under this
certificate for which the death benefit has been paid.
We intend that this certificate qualify as a life insurance policy as defined by
Section 7702 of the Internal Revenue Code, as amended. We reserve the right to
either increase the face amount of insurance on the life of the insured, return
any excess net cash value or limit the amount of premium contributions we will
accept under this certificate in order to maintain such qualification.
CAN THE OWNER CHANGE THE DEATH BENEFIT OPTION?
No.
WHAT IS THE FACE AMOUNT OF INSURANCE ON THE LIFE OF THE INSURED?
The face amount of insurance on the life of the insured is as shown on the
specifications page attached to this certificate.
MAY THE FACE AMOUNT OF INSURANCE CHANGE?
Yes. The owner may apply at any time for a change through a written request in
compliance with the limitations on the specifications page attached to this
certificate. If an increase in the current face amount is applied for, we
reserve the right to require evidence of insurability from the insured.
If a decrease in the current face amount is requested, we will grant the
request. However, the amount of insurance on the insured may not be reduced to
less than the amount shown on the specifications page attached to this
certificate. If following a decrease in face amount, this certificate would not
comply with the maximum premium limitations required by federal law, the
decrease may be limited or net cash value may be returned to the owner (at the
owner's election), to the extent necessary to meet these requirements.
WHEN WILL CHANGES IN THE FACE AMOUNT OF INSURANCE BECOME EFFECTIVE?
Increases are effective on the monthly anniversary on or following the date we
approve the change, or any other date mutually agreed upon between the
policyholder and us.
Decreases in the face amount of insurance are effective on the monthly
certificate anniversary on or following receipt by us of your written request.
However, if the owner requests that the decrease become effective on a specified
future date, we will make the decrease effective on the monthly anniversary or
next following the date requested.
WHEN WILL THE DEATH BENEFIT BE PAID?
We will pay the death benefit upon due proof satisfactory to us that the insured
died while insured under this certificate.
If the current death benefit option is Option A, we will pay interest on the
death benefit from the date of the insured's death until the date of payment.
If the current death benefit option is Option B, we will pay interest on the
face amount of insurance from the date of the insured's death until the date of
payment. We will pay interest on any charges taken under this certificate since
the date of death from the date the charge was taken until the date of payment.
Interest will be at an annual rate determined by us, but never less than the
greater of three percent per year compounded annually, or the rate required by
law.
Death benefit proceeds will ordinarily be paid within seven days after we
receive all information required for such payment, including due proof of the
insured's death.
PAYMENT OF PROCEEDS
- --------------------------------------------------------------------------------
TO WHOM WILL WE PAY THE DEATH BENEFIT?
We will pay the death benefit proceeds to the surviving beneficiary specified on
the application or as subsequently changed.
WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE BEFORE THE INSURED?
If a beneficiary dies before the insured, that beneficiary's interest in this
certificate 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 or if a beneficiary is not named, we will pay the proceeds
according to the following order of priority:
<PAGE> 7
(1) the insured's lawful spouse, if living; otherwise
(2) the personal representative of the insured's estate.
MAY THE OWNER CHANGE THE BENEFICIARY?
If the owner has reserved the right to change the
beneficiary, the owner may file a written request with us to change the
beneficiary. If the owner has not reserved the right to change the beneficiary,
the written consent of the irrevocable beneficiary will be required. The owner's
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 the
owner 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 the
owner's request was so recorded.
CAN DEATH BENEFIT PROCEEDS BE PAID IN OTHER THAN A SINGLE SUM?
Yes. An owner may request that we pay the death benefit proceeds under one of
the following settlement options. We may also use any other method of payment
that is agreeable to the owner and us. A settlement option may be selected only
if the payments are to be made to a natural person in that person's own right.
WHAT ARE THE SETTLEMENT OPTIONS AVAILABLE?
Each settlement option is paid in fixed amounts as described below. If the owner
of this certificate requests a settlement option, he or she will be asked to
sign an agreement covering the election which will state the terms and
conditions of the payments. The payments do not vary with the performance of the
separate account.
(1) Interest Payments: Payment of interest on the proceeds at such
times and for a period as may be agreed upon between the owner of
this certificate and us. Withdrawal of proceeds may be made in
amounts of at least $500. At the end of the period, any remaining
proceeds will be paid in either a single sum or under any other
method we approve.
(2) Fixed Period Annuity: An annuity payable in monthly installments
for a specified number of years, from one to twenty years.
(3) Life Annuity: An annuity payable monthly for the lifetime of the
annuitant and ending with the last monthly payment due prior to the
annuitant's death.
(4) Payments of a Specified Amount: Monthly payments of a specified
amount until the proceeds and interest are fully paid.
CAN A BENEFICIARY REQUEST A PAYMENT UNDER A SETTLEMENT OPTION?
Yes. A beneficiary may select a settlement option, but only after the insured's
death. However, an owner or insured may provide that the beneficiary will not be
permitted to change the elected settlement option. Illustrations for the four
available settlement options are shown as part of this certificate. The
settlement option illustrations attached to this certificate are intended as
generic examples of the available options and are not intended to be specific to
the owner's coverage.
PREMIUMS
- --------------------------------------------------------------------------------
WHEN AND HOW OFTEN ARE PREMIUMS DUE?
A premium must be paid to put this certificate in force. This initial premium
must be of an amount that, after the deduction of premium expense charges, will
cover the first month's deductions. Premiums paid after the initial premium may
be in any amount. A premium must be paid at such time when there is insufficient
net cash value to pay the monthly deductions necessary to keep this certificate
in force.
IS THERE A GRACE PERIOD FOR THE PAYMENT OF PREMIUMS?
Yes. This certificate has a 61-day grace period. The grace period will start on
the day we mail the owner a notice of lapse. This certificate will lapse if the
premium amount specified in the notice is not paid by the end of the grace
period and the net cash value is insufficient to cover the monthly deduction. We
will mail this notice on any certificate monthly anniversary date when the net
cash value for the insured under this certificate is insufficient to cover the
monthly deduction. This certificate of insurance will remain in effect during
the 61-day grace period. If sufficient premium is not paid by the end of the
grace period, the insured's coverage will lapse. The grace period does not apply
to the first premium payment.
WHAT IS THE AMOUNT OF THE DEATH BENEFIT DURING THE GRACE PERIOD?
The death benefit amount under the death benefit option in effect for this
certificate at the time of the insured's death will be paid if death occurs
during the grace period.
POLICY CHARGES
- --------------------------------------------------------------------------------
WHAT TYPE OF CHARGES ARE THERE UNDER THIS CERTIFICATE?
Charges under this certificate are those which we deduct from premium payments,
(premium expense charges), those which we deduct from the account value under
this certificate, (account value charges), and those we assess against the
separate account assets attributable to this certificate, (separate account
charges).
WHAT CHARGES ARE DEDUCTED FROM PREMIUM PAYMENTS?
From premiums paid, we will deduct the following premium expense charges:
(1) a sales charge; (2) a premium tax charge; and (3) a federal tax charge.
The remaining amount, or net premium,
will be allocated to
<PAGE> 8
the guaranteed account and/or sub-accounts of the separate
account, as directed by the owner, and become part of this certificate's net
cash value.
(1) The sales charge is for distribution expenses. This sales charge
shall not exceed five percent of each premium paid.
(2) The premium tax charge is to compensate us for the premium tax we pay
to state and local governments, and such other charges or expenses as
we may incur, including guaranty fund assessments. This charge is
currently two percent. The charge is not guaranteed and may be
increased in the future, but only as necessary to cover our premium
taxes and other charges or expenses.
(3) The federal tax charge is to compensate us for the corporate federal
income taxes that result from a sale of this certificate. The federal
tax charge is 1.25 percent of each premium paid if the policy is
deemed to be an individual contract under the Omnibus Budget
Reconciliation Act of 1990, as amended, and 0.25 percent if deemed a
group contract under that Act.
WHAT CHARGES ARE DEDUCTED FROM THE ACCOUNT VALUE OF THIS CERTIFICATE?
From the net cash value of this certificate, we will deduct a monthly deduction
and any applicable transaction charges as account value charges. If the net cash
value is insufficient to cover the account value charges, this certificate will
lapse unless sufficient payment is received within the grace period.
The monthly deduction will be the sum of: (1) the administration charge; (2) the
cost of insurance charge; and (3) the charge for any additional benefits
provided by certificate supplement. The monthly deduction will be deducted on
the certificate date and on each succeeding certificate monthly anniversary.
(1) The administration charge is for administrative expenses, including
those attributable to the records we create and maintain for this
certificate. The maximum administration charge is $4 per month.
(2) The cost of insurance charge is for providing the death benefit under
this certificate. The charge is calculated by multiplying the net
amount at risk under this certificate by a cost of insurance rate which
varies with the insured's age and rate class. The rate is guaranteed
not to exceed rates determined on the basis of 125 percent of the 1980
Commissioners Standard Ordinary Mortality Table. The charges described
as Table A attached herein are maximum cost of insurance rates. The net
amount at risk for this certificate is the difference between the death
benefit and the account value.
(3) The charge for any additional benefits, if any, is for providing the
coverages offered by certificate supplement.
Transaction charges are to compensate us for the administrative costs incurred
in processing a transaction. Currently, a transaction charge applies to each
withdrawal. The amount of the charge is the lesser of $25 or two percent of the
amount withdrawn. We may also deduct a charge for any transfer of funds between
the guaranteed account and the separate account or among the sub-accounts of the
separate account. The amount charged will not exceed $10. Transaction charges
will be deducted at the end of the day on which the transaction occurs.
Account value charges will be deducted from the guaranteed account value and the
separate account value in the same proportion that those values bear to each
other and, as to the separate account value, from each sub-account in the
proportion that the sub-account value of each such sub-account bears to the
separate account value.
WHAT CHARGES ARE ASSESSED AGAINST THE SEPARATE ACCOUNT ASSETS?
We assess a mortality and expense risk charge against the separate account
assets of this certificate. We also reserve the right to charge or make
provision for income taxes payable by us based on separate account assets.
WHAT IS THE MORTALITY AND EXPENSE RISK CHARGE?
This charge is for assuming the risks that the cost of insurance charge will be
insufficient to cover actual mortality experience and that the other charges
will not cover our expenses in connection with the group policy. The mortality
and expense risk charge is deducted from the separate account assets daily at an
annual rate not to exceed 0.50 percent of the separate account assets.
SEPARATE ACCOUNT
- --------------------------------------------------------------------------------
HOW WAS THE SEPARATE ACCOUNT ESTABLISHED?
We established the separate account in accordance with certain provisions of New
York insurance law.
WHAT IS THE PURPOSE OF THE SEPARATE ACCOUNT?
The purpose of the separate account is to hold assets attributable to the
variable portion of the group policy and others of its class.
WHAT SEPARATE ACCOUNT OPTIONS ARE AVAILABLE?
The separate account is divided into sub-accounts. Those available to this
certificate are listed on the specifications page attached to this certificate.
Net premiums will be allocated to the various sub-accounts of the separate
account or any other sub-accounts which we may add in the future, as elected by
the owner of this certificate. We reserve the right to add, combine or remove
any sub-accounts of the separate account.
<PAGE> 9
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
For each sub-account, there is a fund for the investment of that sub-account's
assets. The assets of the sub-accounts are invested in the funds at net asset
value. If investment in a fund should no longer be possible or if we determine
it becomes inappropriate for the certificates of this class, we may substitute
another fund. Substitution may be with respect to both existing certificate
values and future premiums. The investment policy of the separate account may
not be changed, however, without the approval of the regulatory authorities of
the State of New York. If required, that approval process will be on file with
the regulatory authorities of the state in which this policy is delivered.
WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT?
We reserve the right to transfer assets of the separate account which we
determine to be associated with the class of policies to which the group policy
belongs, to another separate account. If such a transfer is made, the term
"separate account" as used in this certificate, shall then mean the separate
account to which the assets are transferred. A transfer of this kind may require
the advance approval of state regulatory authorities.
We reserve the right to, when permitted by law:
(1) restrict or eliminate any voting right of owners or other persons
who have voting rights as to the separate account; and
(2) combine the separate account with one or more other separate
accounts; and
(3) to de-register the separate account under the Investment Company
Act of 1940.
HOW ARE NET PREMIUMS ALLOCATED?
Net premiums are allocated to the guaranteed account and/or to the sub-accounts
of the separate account. Initially, the allocation elected is indicated in the
application for this certificate. Allocations may be changed for future
premiums. The owner may do this by giving us a written request or through any
other method made available by us under this policy. A change will not take
effect until it is recorded by us in our home office.
Allocations must be expressed in whole percentages. The allocation to the
guaranteed account or to any sub-account of the separate account must be at
least ten percent of the net premium. We reserve the right to restrict the
allocation of premium to the guaranteed account. If we do so, no more than fifty
percent of the net premium may be allocated to the guaranteed account.
We reserve the right to delay the allocation of net premiums to named
sub-accounts. Such a delay will be for a period of 30 days after issuance of
this certificate. This right will be exercised by us only when we believe
economic conditions make such a delay necessary to reduce market risk during
this period. If we exercise this right, net premiums will be allocated to the
money market sub-account until the end of that period.
WHAT IS A TRANSFER?
A transfer is a reallocation of the net cash value between the guaranteed
account and the separate account or among the sub-accounts of the separate
account for a given owner.
MAY THE OWNER MAKE TRANSFERS OF AMOUNTS UNDER THIS CERTIFICATE?
Yes. Transfers from a sub-account of the separate account or from the guaranteed
account may be made in writing, by telephone, or through any other method made
available by us under the policy. For transfers out of the separate account or
among the sub-accounts of the separate account, we will credit and cancel units
based on the sub-account unit values as of the end of the valuation period
during which the owner's request is received at our home office. For transfers
out of the guaranteed account, a dollar amount will be transferred based on the
owner's guaranteed account value at the time of transfer.
ARE THERE OTHER LIMITATIONS ON TRANSFERS?
Yes. Only one transfer may be made under this certificate each month. The amount
to be transferred to or from a sub-account of the separate account or the
guaranteed account must be at least $250. If the balance in the guaranteed
account or in the sub-account from which the transfer is to be made is less than
$250, the entire account value attributable to that sub-account or the
guaranteed account must be transferred. If a transfer would reduce the account
value in the sub-account from which the transfer is to be made to less than
$250, we reserve the right to include that remaining amount in the sub-account
with the amount transferred.
The maximum amount of net cash value to be transferred out of the guaranteed
account to the sub-accounts of the separate account is limited to twenty percent
(or $250 if greater) of the guaranteed account value. Transfers to or from the
guaranteed account are limited to one such transfer per certificate year. We may
further restrict transfers by requiring that the request is received by us or
postmarked in the 30-day period before or after the last day of the certificate
anniversary. Requests for transfers which meet these conditions would be
effective after we approve and record them at our home office.
We may modify the transfer privilege in the future by changing the minimum
amount transferable, by altering the frequency of transfers, by imposing a
transfer charge, by prohibiting transfers, or in such other manner as we may
determine at our discretion.
HOW ARE UNITS DETERMINED?
The number of units credited with respect to each net premium payment is
determined by dividing the portion of the net premium payment allocated to each
sub-account by the then current unit value for that sub-account. This
determination is made as of the end of
<PAGE> 10
the valuation period during which the premium is received at our home office.
Once determined, the number of units will not be affected by changes in the unit
value.
HOW ARE UNITS INCREASED OR DECREASED?
The number of units of each sub-account credited to this certificate will be
increased by the allocation of subsequent net premiums, policy experience
credits, loan repayments, interest credits and transfers to that sub-account.
The number of units credited to a sub-account under this certificate will be
decreased by deductions to the sub-account, loans and loan interest charges,
transfers from that sub-account and withdrawals from that sub-account. The
number of sub-account units will decrease to zero on certificate termination.
HOW IS A UNIT VALUED?
The unit value will increase or decrease on each valuation date. The amount of
any increase or decrease will depend on the net investment experience of the
sub-accounts of the separate account. The value of a unit for each sub-account
was originally set at $1.00 on the first valuation date. For any subsequent
valuation date, its value is equal to its value on the preceding valuation date
multiplied by the net investment factor for that sub-account for the valuation
period ending on the subsequent valuation date.
WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT?
The net investment factor is a measure of the net investment experience of a
sub-account during the valuation period.
The net investment factor for a valuation period is: the gross investment rate
for such valuation period, less a deduction for the charges under this
certificate which are assessed against separate account assets. The gross
investment rate is equal to:
(1) the net asset value per share of a fund share held in the sub-account
of the separate account determined at the end of the current
valuation period; plus
(2) the per-share amount of any dividend or capital gain distributions by
the fund if the "ex-dividend" date occurs during the current
valuation period, divided by
(3) the net asset value per share of that fund share held in the
sub-account determined at the end of the preceding valuation period,
We reserve the right to deduct a charge against the separate account assets, or
make other provisions for, any additional tax liability we may incur with
respect to the separate account or the policies, to the extent that those
liabilities exceed the amounts recovered through the deduction from premiums for
premium taxes and federal taxes.
ACCOUNT VALUES
- --------------------------------------------------------------------------------
WILL THE OWNER HAVE ACCESS TO THE NET CASH VALUE?
Yes. The owner has access to this certificate's net cash value. The net cash
value is the account value of this certificate, less the loan principal and
accrued loan interest charges and any charges overdue, plus accrued loan
interest credits.
HOW IS THE ACCOUNT VALUE DETERMINED?
The account value is determined separately for this certificate. It is the sum
of the values under the separate account, the guaranteed account and the loan
principal of this certificate.
The separate account value is the sum of units of each sub-account, credited to
this certificate, multiplied by the accumulation unit value for that
sub-account. Once determined, the number of units credited to a sub-account
under an owner's certificate will not be affected by changes in the unit value.
However, the number of units will be increased by the allocation of subsequent
net premiums, policy experience credits, loan repayments, loan interest credits
and transfers to that sub-account. The number of units credited to a sub-account
under an owner's certificate will be decreased by deductions to that
sub-account, loans and loan interest charges, transfers from that sub-account
and withdrawals from that sub-account. The number of sub-account units will
decrease to zero on a certificate termination.
IS THE SEPARATE ACCOUNT VALUE GUARANTEED?
No. The separate account value of this certificate is not guaranteed.
IS THE GUARANTEED ACCOUNT VALUE GUARANTEED?
Yes. The guaranteed account value of this certificate is guaranteed by us. It
cannot be reduced by the investment experience of the guaranteed account.
IS INTEREST CREDITED ON THE GUARANTEED ACCOUNT VALUE?
Yes. Interest is credited on the guaranteed account value of this certificate.
Interest is credited daily at a rate of not less than three percent per year,
compounded annually. We guarantee this minimum rate for the life of the group
policy.
MAY ADDITIONAL INTEREST BE CREDITED ON THE GUARANTEED ACCOUNT?
Yes. As conditions permit, we may credit additional amounts of interest to the
guaranteed account value.
<PAGE> 11
SURRENDERS AND WITHDRAWALS
- --------------------------------------------------------------------------------
MAY THIS CERTIFICATE BE SURRENDERED?
Yes. The owner of this certificate may request the surrender of this certificate
at any time while the insured under this certificate is living.
WHAT IS THE SURRENDER VALUE OF THIS CERTIFICATE?
The surrender value of this certificate is the net cash value.
The determination of the surrender value is made as of the end of the valuation
period during which we receive the surrender request at our home office.
IS A WITHDRAWAL PERMITTED?
Yes. The owner may make a withdrawal of the net cash value under this
certificate. The amount of a withdrawal must be $500 or more and it cannot
exceed the amount available as a loan. A withdrawal will cause a decrease in the
face amount equal to the amount surrendered under this certificate if the
current death benefit option is Option A. A withdrawal has no effect on the face
amount of insurance under this certificate if the current death benefit option
is Option B. However, since the account value is reduced by the amount of the
withdrawal, the death benefit under this certificate, if the current death
benefit option is Option B, will be reduced by this same amount at the time of
the withdrawal. We reserve the right to change the minimum amount for
withdrawals, limit the frequency of withdrawals, or restrict or prohibit
withdrawals from the guaranteed account.
MAY THE OWNER DIRECT US AS TO HOW WITHDRAWALS WILL BE TAKEN FROM THE NET CASH
VALUE?
Yes. The owner may tell us the sub-accounts from which a withdrawal is to be
taken or whether it is to be taken in whole or in part from the guaranteed
account. If the owner does not direct us as to how withdrawals will be taken,
they will be deducted from the guaranteed account value and separate account
value in the same proportion that those values bear to each other and, as to the
separate account value from each sub-account in the proportion that the
sub-account value of each such sub-account bears to the separate account value.
We reserve the right to restrict or prohibit withdrawals from the guaranteed
account.
HOW WILL THE OWNER KNOW THE STATUS OF A CERTIFICATE?
Each year we will send the owner of this certificate a report. This report will
show the status of this certificate. It will include the account value, the face
amount as of the date of the report, the premiums paid during the year and their
allocation, certificate charges, loan activity and the net cash value. The
report will be sent without cost to the owner. If the policyholder owns all of
the certificates, a consolidated report will be sent. The report will be as of a
date within two months of its mailing.
LOANS
- --------------------------------------------------------------------------------
CAN THE OWNER BORROW AGAINST THE NET CASH VALUE?
Yes. The owner may borrow an amount of at least $100 and up to the maximum loan
amount. This amount is determined as of the date we receive the request for a
loan. Requests may be made in writing, by telephone, or through any other method
made available by us under this policy. This certificate will be the only
security required for a loan. We will charge interest on the loan principal in
arrears.
When a loan is to come from the guaranteed account value, we have the right to
postpone a loan for up to six months.
WHAT IS THE MAXIMUM LOAN AMOUNT AVAILABLE FOR A LOAN ON THIS CERTIFICATE?
The total amount available for a loan under any certificate is (a) minus (b),
where (a) is ninety percent of the account value and (b) is the loan principal
plus accrued loan interest charges. The maximum loan amount will be determined
as of the date we receive the owner's request for a loan at our home office.
WHAT IS THE EFFECT OF A LOAN?
When a loan is taken on this certificate, we will reduce the net cash value of
this certificate by the amount borrowed. This determination will be made as of
the end of the valuation period during which the loan request is received at our
home office. The amount borrowed continues to be a part of the account value, as
the amount borrowed becomes part of the loan principal where it will accrue loan
interest credit, and will be held in our general account.
HOW DOES A LOAN REDUCE NET CASH VALUE ON THIS CERTIFICATE?
Unless the owner directs us otherwise, the loan will be taken from this
certificate's guaranteed account value and separate account value in the same
proportion that those values bear to each other and, as to the separate account
value, from each sub-account in the proportion that the sub-account value of
each such sub-account bears to the separate account value. The number of units
to be cancelled will be based upon the value of the units as of the end of the
valuation period during which the loan request is received at our home office.
The net cash value of this certificate may decrease from day to day. The net
cash value will decrease by the same amount of any decrease in account value or
increase in the amount borrowed or increase in the difference between the
accrued loan interest charges and the accrued loan interest credits. If this
certificate has a loan principal and no net cash value, this certificate will
lapse.
<PAGE> 12
WHAT IS THE INTEREST RATE CHARGED ON THE LOAN PRINCIPAL?
The interest rate charged on the loan principal will be eight percent per year.
The accrued loan interest charges on the loan principal will reduce the net cash
value. Loan interest charges are due at the end of the certificate month. If the
accrued loan interest charges are not paid at the end of the certificate month,
this interest will be deducted from the account value and added to the loan
principal and charged the same rate of interest as the loan principal in effect.
WHAT IS THE INTEREST RATE CREDITED TO THIS CERTIFICATE AS A RESULT OF A LOAN?
Interest credits which accrue on the loan principal shall be at a rate not less
than six percent per year.
WHEN ARE LOAN INTEREST CREDITS AND LOAN INTEREST CHARGES ALLOCATED TO THIS
CERTIFICATE?
Loan interest charges and loan interest credits are allocated monthly, at loan
repayment, at certificate surrender and at death. Loan interest charges and loan
interest credits are allocated to this certificate's guaranteed account value
and separate account value in the same proportion that those values bear to each
other and, as to the separate account value, to each sub-account in the
proportion that the sub-account value of each such sub-account bears to the
separate account value.
WHEN AND IN WHAT AMOUNT SHOULD LOAN REPAYMENTS BE MADE?
The principal and the accrued loan interest charges may be repaid in full or in
part at any time before the insured's death so long as the insurance coverage
under this certificate is in force. The loan may also be repaid within 60 days
after the date of the insured's death, if we have not paid any of the death
benefits under this certificate. Any loan repayment must be at least $100 unless
the balance due is less than $100.
HOW DO LOAN REPAYMENTS AFFECT THE LOAN PRINCIPAL AND THE GUARANTEED ACCOUNT
VALUE?
Loan repayments are allocated to the guaranteed account value and increase the
net cash value of a certificate by the amount of the loan repayment. The loan
repayment will be applied first to reduce the amount of accrued loan interest
charges. Any remaining portion of the repayment will then be used to reduce the
loan principal.
WHAT HAPPENS IF A LOAN ON THIS CERTIFICATE IS NOT REPAID?
If this certificate has a loan principal, this certificate will remain in force
so long as it has net cash value. If it does not have sufficient net cash value,
it will lapse.
In this event, to keep this certificate in force, the owner will have to make a
loan repayment. We will give the owner notice of our intent to terminate this
certificate and the loan repayment required to keep it in force. The time for
repayment will be within 61 days after our mailing of the warning notice of
lapse.
TERMINATION
- --------------------------------------------------------------------------------
WHEN DOES THE GROUP POLICY TERMINATE?
The policyholder may terminate the group policy by giving us 31 days prior
written notice. We reserve the right to terminate the group policy on the
earliest of the following to occur:
(1) the aggregate specified face amount for all certificates under the
policy decreases by certain amounts or below the minimum
permissible levels we establish for the group policy in any 12
month period; or
(2) the number of certificates under the group policy decreases by
certain amounts or below the minimum permissible levels we
establish for the group policy in any 12 month period; or
(3) 61 days after we provide notice of our intent to terminate the
group policy
No individual may become insured under the group policy after the effective date
of such a notice of termination. After termination of the group policy, the
certificates issued thereunder, may be allowed to convert to individual coverage
as described below under the "Conversion Privilege" section.
WHEN DOES A CERTIFICATE OF INSURANCE UNDER THE GROUP POLICY TERMINATE?
The insurance on the life of an insured will terminate on the earliest of:
(1) 61 days after we mail a warning notice of lapse on a certificate
monthly anniversary in which the net cash value is insufficient to
pay for the monthly deduction and no premium is paid during the
grace period; or
(2) the date the group policy terminates, unless continuation has
previously been made effective; or
(3) the date the owner surrenders this certificate or requests that we
terminate the insurance; or
(4) the 95th birthday of the insured.
WILL THE OWNER OF THIS CERTIFICATE RECEIVE NOTICE PRIOR TO THE TERMINATION OF
INSURANCE?
If the owner's insurance will be terminated because the net cash value is less
than that required to pay the monthly deductions, we will give the owner at
least 61 days prior written notice before terminating the insurance.
<PAGE> 13
WHAT HAPPENS TO ACCOUNT VALUES AT GROUP POLICY TERMINATION?
Account values attributable to the separate account will be valued as of the
close of business on the distribution date or dates mutually agreed upon by the
policyholder and us. For account values attributable to the guaranteed account,
we reserve the right to complete the distribution over a period of time
determined by us, but not more than five years. This delayed distribution does
not in any way continue or extend any insurance that has otherwise terminated
due to group policy termination.
CAN INSURANCE ON THE LIFE ON AN INSURED BE REINSTATED AFTER TERMINATION?
Insurance terminated due to the insufficiency of the net cash value to pay the
monthly deduction may be reinstated. Reinstatement must occur while the insured
is living and any time within three years from the date of lapse. Reinstatement
is made by payment of an amount that, after the deduction of
percentage-of-premium charges, is large enough to cover all monthly deductions
which have accrued on this certificate up to the effective date of reinstatement
plus the monthly deductions for the two months following the effective date of
reinstatement. If any loans and loan interest charges are not repaid, this
indebtedness will be reinstated along with the insurance. No evidence of the
insured's insurability will be required during the first 31 days following
lapse, but will be required from the 32nd day to 3 years from the date of lapse.
CONVERSION PRIVILEGE
- --------------------------------------------------------------------------------
IS THERE A CONVERSION PRIVILEGE TO AN INDIVIDUAL POLICY?
Yes. If the group policy is terminated or if the insured's insurance provided by
this certificate ends due to the termination of his or her employment or
membership in the class or classes eligible for coverage under the group policy
or his or her insurance is reduced on or after the attainment of age sixty in
any increment or series of increments totaling twenty percent or more of the
amount of insurance in force under the group policy prior to the first reduction
at age sixty, the owner shall be entitled to convert such insurance to a policy
of permanent individual life insurance within thirty one days of such
termination or reduction, without providing evidence of insurability, subject to
the following:
(1) the owner's written application to convert to an individual policy
and the first premium for the individual policy must be received in
our home office within 31 days of the date the insurance terminates
under the group policy; and
(2) the owner may convert all or part of the amount of insurance under
the group policy at the time of termination or, if insurance is
reduced due to age, the amount of insurance equal to the amount which
was reduced. However, if an insured's insurance terminates because
the group policy is terminated, the insured is eligible to convert an
amount up to the amount of insurance he or she had just prior to the
termination, less any amount he or she may become eligible for under
any group policy within 45 days of the termination. The owner may
convert said amounts to any policy of permanent individual life
insurance then customarily issued by us for purposes of conversion.
The premium charge for this insurance will be based upon the
insured's age as of his or her nearest birthday; and
(3) if the insured should die within 31 days of the date that insurance
terminated under the group policy, the full amount of insurance that
could have been converted under the group policy will be paid.
If the insured employee's insurance ends due to the termination of his or her
employment or of membership in the class or classes eligible for coverage under
the group policy as a result of his or her total and permanent disability, the
owner shall be entitled to convert such insurance to any policy of permanent
individual life insurance then customarily issued by us for purposes of
conversion.
The owner must be notified within 15 days before or after the event that results
in termination or reduction of the insured's group life coverage. If the notice
is given more than 15 days but less than 90 days after the event, the time
allowed for the exercise of the conversion privilege shall be extended to 45
days after such notice is sent. If the notice is not given within 90 days after
the event, the time allowed for the exercise of the conversion privilege expires
90 days after such notice is sent. Such notice shall be mailed by us to your
last address furnished to us by the group policyholder.
CAN GROUP INSURANCE COVERAGE BE CONTINUED ONCE THE OWNER'S ELIGIBILITY ENDS?
If the owner's eligibility under the group policy ends, the current group
coverage may continue unless:
(1) this certificate is no longer in force; or
(2) the group policy has terminated; or
(3) there is less than $250 in this certificate's net cash value after
deduction of charges for the month in which eligibility ends.
<PAGE> 14
If any of these limitations apply, the owner may still elect to continue the
current group coverage under this certificate, but only for a period not to
exceed one year. At the end of this continuation period, he or she may convert
such insurance to an individual policy of permanent insurance with Northstar
Life. Such conversion shall be subject to the rest of the Conversion Privilege
section.
The face amount of insurance will not change unless the owner requests a change.
We reserve the right to alter the administration fee not to exceed $4 per month
and the monthly cost of insurance up to the maximum in Table A if the insurance
is continued.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
MAY THE OWNER ASSIGN ANY INTEREST UNDER THIS CERTIFICATE?
Yes. However, we will not be bound by an assignment of this certificate or of
any interest in it unless:
(1) it is made as a written instrument; and
(2) the owner files the original instrument or a certified copy with us
at our home office; and
(3) we send the owner an acknowledged copy.
We are not responsible for the validity of any assignment. If a claim is based
on an assignment, we may require proof of interest of the claimant. A valid
assignment will take precedence over any claim of a beneficiary.
WHAT IF AN INSURED'S AGE IS MISSTATED?
If the age of the insured has been misstated, the death benefit and account
value will be adjusted. The adjustment will be the difference between two
amounts accumulated with interest. These two amounts are:
(1) the monthly cost of insurance charges that were paid; and
(2) the monthly cost of insurance charges that should have been paid
based on the insured's correct age.
The interest rates used are the rates that were used in accumulating the
guaranteed account values.
WHEN DOES AN INSURED'S INSURANCE BECOME INCONTESTABLE?
After the insurance has been in force during the insured's lifetime for a two
year period from the certificate date, we cannot contest the insurance for any
loss that is incurred more than two years after the certificate date, unless the
net cash value has dropped below the amount necessary to pay the insured's cost
of insurance on the insured's life. However, if there has been an increase in
the amount of insurance for which we required evidence of insurability, then, to
the extent of the increase, any loss which occurs within two years of the
effective date of the increase will be contestable.
IS THERE A SUICIDE EXCLUSION?
Yes. If an insured dies by suicide within two years of the certificate date, our
liability will be limited to an amount equal to the premiums paid for that
insured. If there has been an increase in the face amount of insurance for which
we required evidence of insurability, and if the insured dies by suicide within
two years of the effective date of the increase, our liability with respect to
that increase will be limited to the cost of insurance charge attributable to
such increase.
DOES THE OWNER HAVE ANY ADDITIONAL VOTING RIGHTS?
Yes. If the owner has separate account units under this certificate, the owner
may direct us with respect to the voting rights of fund shares held by us and
attributable to this certificate.
COULD THE PAYMENT OF CERTIFICATE PROCEEDS BE POSTPONED?
Normally, we will pay any proceeds within seven days after our receipt of all
the documents required for such a payment. Other than the death proceeds, which
are determined as of the date of death of the insured, the amount of payment
will be determined as of the end of the valuation period during which a request
is received at our home office. If such payments are based upon values which do
not depend on the investment performance of the separate account, however, we
reserve the right to defer payments, including loans, for up to six months from
the date of the owner's request. In that case, if we postpone a payment other
than a loan payment for more than 31 days, we will pay the owner interest at the
greater of three percent per year or the rate required by law for the period
beyond that time that payment is postponed. For payments based on account values
which do depend on the investment performance of the separate account, we may
defer payment only: (a) for any period during which the New York Stock Exchange
is closed for trading (except for normal holiday closing); or (b) when the
Securities and Exchange Commission has determined that a state of emergency
exists which may make such payment impractical.
WILL THE PROVISIONS OF THIS CERTIFICATE CONFORM WITH STATE LAW?
Yes. If any provision in this certificate is in conflict with the laws of the
state governing this certificate, the provision will be deemed to be amended to
conform to such laws.
<PAGE> 15
COULD ANY PAYMENTS MADE UNDER THIS CERTIFICATE BE SUBJECT TO CLAIMS OF
CREDITORS?
To the extent permitted by law, neither the group policy, certificates issued
under the group policy, nor any payment thereunder will be subject to the claims
of creditors or to any legal process.
WHO HAS OWNERSHIP OF THE GROUP POLICY?
The policyholder owns the group policy. The group policy may be changed or ended
by agreement between us and the policyholder without the consent of, or notice
to, any person claiming rights or benefits under the policy. However, unless the
policyholder is the owner of all the certificates issued under the group policy,
the policyholder does not have any ownership interest in the certificates issued
under the group policy. The rights and benefits under the certificates are that
of the owners of the certificates, and that of the insureds and beneficiaries as
set forth in this certificate.
ARE POLICY CHANGES LIMITED?
We reserve the right to limit the number of changes to one per certificate year
and to restrict such changes in the first certificate year. For this purpose,
changes include increases or decreases in the face amount of insurance.
<PAGE> 16
TABLE A
NORTHSTAR LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A TOBACCO DISTINCT BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
- -------- ------- -------- ------- -------- -------
NON-TOBACCO TOBACCO NON-TOBACCO TOBACCO NON-TOBACCO TOBACCO
----------- ------- ----------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.254 0.254 35 0.174 0.265 70 3.427 5.191
1 0.102 0.102 36 0.184 0.285 71 3.797 5.648
2 0.098 0.098 37 0.197 0.310 72 4.230 6.171
3 0.096 0.096 38 0.210 0.338 73 4.724 6.757
4 0.093 0.093 39 0.225 0.369 74 5.273 7.405
5 0.088 0.088 40 0.243 0.406 75 5.864 8.100
6 0.084 0.084 41 0.261 0.445 76 6.491 8.815
7 0.079 0.079 42 0.281 0.488 77 7.149 9.540
8 0.077 0.077 43 0.302 0.534 78 7.845 10.278
9 0.076 0.076 44 0.324 0.584 79 8.600 11.058
10 0.076 0.076 45 0.350 0.636 80 9.439 11.904
11 0.082 0.082 46 0.377 0.691 81 10.384 12.841
12 0.091 0.091 47 0.407 0.749 82 11.456 13.886
13 0.104 0.104 48 0.439 0.813 83 12.649 15.034
14 0.118 0.118 49 0.474 0.882 84 13.943 16.241
15 0.129 0.163 50 0.514 0.958 85 15.311 17.473
16 0.139 0.179 51 0.559 1.043 86 16.737 18.705
17 0.147 0.192 52 0.611 1.140 87 18.205 19.973
18 0.152 0.202 53 0.671 1.249 88 19.710 21.295
19 0.156 0.208 54 0.736 1.367 89 21.271 22.625
20 0.158 0.212 55 0.808 1.492 90 22.908 24.006
21 0.157 0.212 56 0.885 1.624 91 24.659 25.457
22 0.154 0.210 57 0.967 1.760 92 26.588 27.118
23 0.152 0.208 58 1.056 1.903 93 28.870 29.192
24 0.149 0.204 59 1.156 2.056 94 31.894 32.006
25 0.146 0.199 60 1.268 2.228
26 0.144 0.197 61 1.395 2.424
27 0.143 0.197 62 1.544 2.650
28 0.143 0.198 63 1.714 2.904
29 0.144 0.202 64 1.903 3.184
30 0.146 0.208 65 2.110 3.480
31 0.149 0.215 66 2.332 3.788
32 0.153 0.223 67 2.568 4.104
33 0.159 0.235 68 2.823 4.434
34 0.166 0.249 69 3.105 4.792
</TABLE>
*This is the insured's attained age as of the last certificate anniversary.
<PAGE> 17
TABLE A
NORTHSTAR LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A UNI-TOBACCO BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
-------- ------- -------- ------- -------- -------
UNI-TOBACCO UNI-TOBACCO UNI-TOBACCO
----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
0 0.254 35 0.214 70 3.835
1 0.102 36 0.229 71 4.214
2 0.098 37 0.246 72 4.654
3 0.096 38 0.265 73 5.157
4 0.093 39 0.287 74 5.712
5 0.088 40 0.312 75 6.310
6 0.084 41 0.339 76 6.941
7 0.079 42 0.368 77 7.599
8 0.077 43 0.398 78 8.289
9 0.076 44 0.431 79 9.033
10 0.076 45 0.465 80 9.857
11 0.082 46 0.502 81 10.784
12 0.091 47 0.541 82 11.835
13 0.104 48 0.583 83 13.006
14 0.118 49 0.629 84 14.270
15 0.134 50 0.681 85 15.605
16 0.148 51 0.739 86 16.991
17 0.159 52 0.805 87 18.421
18 0.168 53 0.879 88 19.895
19 0.174 54 0.960 89 21.422
20 0.176 55 1.047 90 23.024
21 0.177 56 1.138 91 24.740
22 0.176 57 1.234 92 26.640
23 0.173 58 1.334 93 28.901
24 0.171 59 1.444 94 31.905
25 0.167 60 1.568
26 0.166 61 1.709
27 0.166 62 1.871
28 0.166 63 2.055
29 0.169 64 2.259
30 0.172 65 2.478
31 0.178 66 2.711
32 0.184 67 2.956
33 0.193 68 3.217
34 0.202 69 3.507
</TABLE>
*This is the insured's attained age as of the last certificate anniversary.
<PAGE> 18
INTEREST PAYMENT SETTLEMENT OPTIONS ILLUSTRATION
VARIABLE GROUP UNIVERSAL LIFE
The beneficiary is entitled to receive payment of the insurance in a lump sum
payment or in any one of the available settlement options. The guaranteed
interest rate is based on 3%. The current rate is subject to change at any time
but never less than the guaranteed rate.
Payment of interest on the proceeds at such times and for a period as may be
agreed upon between the owner of a certificate and us. Withdrawal of proceeds
may be made in amounts of at least $500. At the end of the period, any remaining
proceeds will be paid in either a single sum or under any other method we
approve.
(1) Principal Held At Interest (Withdrawable): Principal will be held by
the Company at interest for 2 years, 5 years or for your lifetime,
with interest payable monthly, quarterly, semi-annually or annually.
Or the interest could be added to the principal sum and bear interest
at the same rate. Interest would be considered "withdrawable".
Withdrawable would mean that any accruing interest would be
reportable for tax purposes. You would, also, have the option of
withdrawing the funds at any time without any interest penalty.
(2) Principal Held At Interest (Non-Withdrawable): Principal held by the
Company at interest for 2 years, 5 years or for your lifetime, with
interest added to the principal sum and bearing interest at the same
rate. Interest would be considered "non-withdrawable".
Non-withdrawable would mean that we would defer reporting the taxable
gain on the accumulating interest until the date specified. If funds
are withdrawn prior to the specified period there would be an
interest penalty of 1/4 of 1% for the period the proceeds were held,
up to a maximum of 5 years.
THIS SETTLEMENT OPTION ILLUSTRATION IS INTENDED AS A GENERIC EXAMPLE OF THIS
SETTLEMENT OPTION AND IS NOT INTENDED TO BE SPECIFIC TO THE OWNER'S COVERAGE.
<PAGE> 19
FIXED PERIOD ANNUITY SETTLEMENT OPTIONS ILLUSTRATION
VARIABLE GROUP UNIVERSAL LIFE
The beneficiary is entitled to receive payment of the insurance in a lump sum
payment or in any one of the available settlement options. The guaranteed
interest rate is based on 3%. The current rate is subject to change at any time
but never less than the guaranteed rate.
An annuity payable in monthly installments for a specified number of years, from
one to twenty years.
(1) Principal & Interest Paid In Monthly Payments (Specific Number of
Years): Principal and interest would be held by the Company to be
paid in monthly installments for a specific number of years. The
following is based on the guaranteed rate. (Benefits may be higher
based on the rates currently offered by the company.) The monthly
payment for each $1,000 of insurance would be:
<TABLE>
<CAPTION>
Years Payable Monthly Payment per $1,000
<S> <C>
1 $85.15
2 43.42
3 29.52
4 22.58
5 18.42
10 10.12
15 7.40
20 6.06
</TABLE>
THIS SETTLEMENT OPTION ILLUSTRATION IS INTENDED AS A GENERIC EXAMPLE OF THIS
SETTLEMENT OPTION AND IS NOT INTENDED TO BE SPECIFIC TO THE OWNER'S COVERAGE.
<PAGE> 20
LIFE ANNUITY SETTLEMENT OPTIONS ILLUSTRATION
VARIABLE GROUP UNIVERSAL LIFE
The beneficiary is entitled to receive payment of the insurance in a lump sum
payment or in any one of the available settlement options. The guaranteed
interest rate is based on 3%. The current rate is subject to change at any time
but never less than the guaranteed rate.
An annuity payable monthly for the lifetime of the annuitant and ending with the
last monthly payment due prior to the annuitant's death.
(1) Annuity: Principal would be used to purchase an annuity. Monthly
installments would be payable to you for as long as you live. You may
choose varying periods certain. In which case, if you should die prior
to the period certain, the commuted value of the remaining payments
certain would be payable to your beneficiary. Monthly payments are
dependent upon your date of birth.
Example:
If the insured elects an annuity as his/her settlement option, the
monthly benefit would be calculated in the following manner:
The principal amount is multiplied by the factor found on the attached
table and divided by 1,000. For example, assume a male, age 55 with
$20,000 of principal who elects:
(a) a life only annuity
($20,000 * 6.63)/l,000 = $132.60 monthly income
(b) ten year certain and life annuity
($20,000 * 6.51)/l,000 = $130.20 monthly income
The interest rates used to calculate the annuity factors are adjusted as
market interest rates fluctuate. The table provided was calculated
assuming an interest rate of 5.95%.
<TABLE>
<S> <C>
Issue Age 35
Minimum Issue Amount $50,000
Minimum Guaranteed Interest Rate* 3.00%
Maximum Guaranteed Charges
Premium Tax Charge 2.00%
Sales Charge 5.00%
Federal Tax Charge 0.25%
Administration Charge $ 4.00
</TABLE>
*only for funds invested in the General Account
<TABLE>
<CAPTION>
Monthly
Monthly Monthly Monthly Monthly Contribution
Minimum Risk Administrative Percent Of To The
Age Premium Charge Charge Premium Charge Account Value
--- ------- ------ ------ -------------- -------------
<S> <C> <C> <C> <C> <C>
35 $15.84 $10.69 $4.00 $1.15 $0.00
36 16.64 11.43 4.00 1.21 0.00
37 17.55 12.28 4.00 1.27 0.00
38 18.59 13.24 4.00 1.35 0.00
39 19.78 14.35 4.00 1.43 0.00
40 21.13 15.60 4.00 1.53 0.00
41 22.58 16.94 4.00 1.64 0.00
42 24.12 18.37 4.00 1.75 0.00
43 25.78 19.91 4.00 1.87 0.00
44 27.55 21.55 4.00 2.00 0.00
45 29.40 23.27 4.00 2.13 0.00
46 31.38 25.10 4.00 2.27 0.00
47 33.48 27.06 4.00 2.43 0.00
48 35.75 29.16 4.00 2.59 0.00
49 38.25 31.47 4.00 2.77 0.00
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
Monthly
Monthly Monthly Monthly Monthly Contribution
Minimum Risk Administrative Percent Of To The
Age Premium Charge Charge Premium Charge Account Value
--- ------- ------ ------ -------------- -------------
<S> <C> <C> <C> <C> <C>
50 $41.00 $34.03 $4.00 $2.97 $0.00
51 44.17 36.97 4.00 3.20 0.00
52 47.71 40.25 4.00 3.46 0.00
53 51.72 43.97 4.00 3.75 0.00
54 56.09 48.02 4.00 4.07 0.00
55 60.76 52.36 4.00 4.41 0.00
56 65.68 56.92 4.00 4.76 0.00
57 70.82 61.68 4.00 5.13 0.00
58 76.25 66.72 4.00 5.53 0.00
59 82.17 72.21 4.00 5.96 0.00
60 88.83 78.39 4.00 6.44 0.00
61 96.43 85.44 4.00 6.99 0.00
62 105.18 93.56 4.00 7.63 0.00
63 115.08 102.73 4.00 8.34 0.00
64 126.07 112.93 4.00 9.14 0.00
65 137.89 123.90 4.00 10.00 0.00
66 150.45 135.55 4.00 10.91 0.00
67 163.65 147.79 4.00 11.86 0.00
68 177.75 160.86 4.00 12.89 0.00
69 193.36 175.34 4.00 14.02 0.00
70 211.06 191.76 4.00 15.30 0.00
71 231.49 210.70 4.00 16.78 0.00
72 255.20 232.70 4.00 18.50 0.00
73 282.29 257.83 4.00 20.47 0.00
74 312.25 285.61 4.00 22.64 0.00
75 344.49 315.51 4.00 24.98 0.00
76 378.52 347.07 4.00 27.44 0.00
77 413.95 379.94 4.00 30.01 0.00
78 451.13 414.43 4.00 32.71 0.00
79 491.25 451.63 4.00 35.62 0.00
80 535.66 492.83 4.00 38.84 0.00
81 585.65 539.19 4.00 42.46 0.00
82 642.34 591.77 4.00 46.57 0.00
83 705.43 650.29 4.00 51.14 0.00
84 773.60 713.52 4.00 56.09 0.00
85 845.55 780.25 4.00 61.30 0.00
86 920.27 849.55 4.00 66.72 0.00
87 997.37 921.06 4.00 72.31 0.00
88 1,076.83 994.76 4.00 78.07 0.00
89 1,159.15 1,071.11 4.00 84.04 0.00
90 1,245.52 1,151.22 4.00 90.30 0.00
91 1,338.00 1,236.99 4.00 97.00 0.00
92 1,440.44 1,332.01 4.00 104.43 0.00
93 1,562.32 1,445.05 4.00 113.27 0.00
94 1,724.24 1,595.23 4.00 125.01 0.00
</TABLE>
THIS SETTLEMENT OPTION ILLUSTRATION IS INTENDED AS A GENERIC EXAMPLE OF THIS
SETTLEMENT OPTION AND IS NOT INTENDED TO BE SPECIFIC TO THE OWNER'S COVERAGE.
<PAGE> 22
PAYMENTS OF A SPECIFIED AMOUNT SETTLEMENT OPTIONS ILLUSTRATION
VARIABLE GROUP UNIVERSAL LIFE
The beneficiary is entitled to receive payment of the insurance in a lump sum
payment or in any one of the available settlement options. The guaranteed
interest rate is based on 3%. The current rate is subject to change at any time
but never less than the guaranteed rate.
Monthly payments of a specified amount until the proceeds and interest are fully
paid.
THIS SETTLEMENT OPTION ILLUSTRATION IS INTENDED AS A GENERIC EXAMPLE OF THIS
SETTLEMENT OPTION AND IS NOT INTENDED TO BE SPECIFIC TO THE OWNER'S COVERAGE.
<PAGE> 23
NORTHSTAR LIFE
University Corporate Centre at Amhurst - Suite 424 - 100 Corporate Parkway -
Amherst, New York 14226
VARIABLE GROUP UNIVERSAL LIFE INSURANCE
<PAGE> 1
EXHIBIT A.(5)(c)
================================================================================
NORHTSTAR LIFE CERTIFICATE OF INSURANCE
SPOUSE COVERAGE
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
RIGHT TO CANCEL
- --------------------------------------------------------------------------------
It is important to us that you are satisfied with this certificate after it is
issued. If you are not satisfied with it, you may return this certificate to us
or our agent within 10 days after you receive it. You may also cancel this
certificate by delivering or mailing a written notice or sending a telegram to
the Northstar Life Insurance Company (Northstar Life), University Corporate
Centre at Amherst, Suite 424, 100 Corporate Parkway, Amherst, New York 14226 and
returning this certificate before midnight of the 10th day after you received
this certificate. Notice given by mail and return of this certificate by mail
are effective on being postmarked, properly addressed and postage prepaid. If
you return this certificate, you will receive, within 7 days of the date we
receive a notice of cancellation, a full refund of any premiums you have paid.
Upon cancellation of this certificate, it will be void from the beginning as if
it never had been issued.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
FOR OPTION A, THE INITIAL DEATH BENEFIT WILL EQUAL THE FACE AMOUNT SHOWN ON THE
SPECIFICATIONS PAGE ATTACHED TO THIS CERTIFICATE. FOR OPTION B, THE INITIAL
DEATH BENEFIT WILL EQUAL THE FACE AMOUNT SHOWN ON THE SPECIFICATIONS PAGE
ATTACHED TO THIS CERTIFICATE PLUS THE INITIAL ACCOUNT VALUE, IF ANY. FOR OPTION
B, THEREAFTER, THE DEATH BENEFIT MAY INCREASE OR DECREASE DEPENDING UPON
SEPARATE ACCOUNT INVESTMENT EXPERIENCE.
THE ACCOUNT VALUE UNDER THIS CERTIFICATE WILL VARY FROM DAY TO DAY. IT MAY
INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE.
THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Definitions...................................2
General Information...........................3
Death Benefit.................................3
Payment of Proceeds...........................5
Premiums......................................5
Policy Charges................................6
Separate Account..............................7
Account Values................................8
Surrenders and Withdrawals....................9
Loans.........................................9
Termination..................................10
Conversion Privilege.........................11
Additional Information.......................12
</TABLE>
VARIABLE GROUP UNIVERSAL LIFE INSURANCE
<PAGE> 2
================================================================================
NORTHSTAR LIFE SPECIFICATIONS
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
POLICYHOLDER: [ABC COMPANY] POLICY ID: [96-19974]
SPONSOR: [ABC COMPANY]
INSURED: [Jane A. Doe]
<TABLE>
<S><C>
INSURANCE INFORMATION
- ---------------------
Death Benefit Option: [Option B - Variable Death Benefit]
Face Amount: [$ 25,000] [Effective Date: 05-01-98]
Variable Death Benefit First Certificate Anniversary Date: [05-01-99]
Minimum Face Amount Available: [$ 25,000]
Maximum Face Amount Available: [$ 500,000]
Planned Premium: [ $20.00]
Rate Class: [Non-Smoker]
Age at Issue: [35]
Identification Number: [###-##-####]
CHARGES AGAINST PREMIUM FIXED MONTHLY CHARGES
- ----------------------- ---------------------
Premium Tax Charge 2.00% Administration Charge Fee: $4.00
----- -------------------------- -----
Sales Charge 5.00%
-----
Federal Tax Charge 0.25%
SEPARATE ACCOUNT CHARGE
-----------------------
Mortality and Expense Risk Charge: 0.5%
If a withdrawal is made, we will assess a charge of $25 or two percent of
the amount withdrawn, whichever is less.
ELECTED RIDERS ADDITIONAL AGREEMENTS
- -------------- ---------------------
Accidental Death & Dismemberment Policyholder Contribution Rider
Accelerated Death Benefit
Waiver of Premium
These agreements are included in
the planned monthly premium.
</TABLE>
PLEASE SEE THE REVERSE SIDE OF THIS SPECIFICATIONS PAGE FOR ACCOUNT AND
SUB-ACCOUNT OPTIONS AND ELECTIONS.
<PAGE> 3
ACCOUNT OPTIONS AND ELECTIONS
Guaranteed Account 20%
SUB-ACCOUNT OPTIONS AND ELECTIONS
<TABLE>
<CAPTION>
FIXED BALANCED EQUITY
<S> <C> <C>
Bond 20% Asset Allocation 20% Capital Appreciation 20%
Maturing Government Bond 2010 Growth 20%
Money Market Index 500
Mortgage Securities International Stock
VIP High Income Small Company Growth
Global Bond Value Stock
VIP Equity-Income
VIP II Contrafund
Small Company Value
Index 400 Mid-Cap
Micro-Cap Growth
Macro-Cap Value
</TABLE>
IRC SECTION 7702 TEST APPLIED IS:
Cash Value Accumulation Test
<PAGE> 4
DEFINITIONS
- --------------------------------------------------------------------------------
ACCOUNT VALUE
The sum of the values under the separate account, the guaranteed account and the
loan principal of this certificate. They are identified as the separate account
value, the guaranteed account value, and the loan principal, respectively.
ACTIVELY AT WORK
To be actively at work for the purposes of this policy, you must be currently
working at your employer's normal place of business at least 20 hours a week. A
person is not considered actively-at-work if not at work due to illness or
injury.
AGE
Your age at last birthday.
ASSOCIATED COMPANY
Any company which is a subsidiary or affiliate of the policyholder which is
designated by the policyholder and agreed to by us to participate under the
group policy.
CERTIFICATE ANNIVERSARY
The same day in each succeeding year as the certificate date.
CERTIFICATE DATE
The first day of the calendar month on or following a certificate's effective
date of coverage. This is the date from which we determine monthly
anniversaries, certificate months and certificate years.
CERTIFICATE MONTH
A calendar month in which insurance is provided under this certificate.
CERTIFICATE YEAR
A period of twelve consecutive certificate months, measured from the certificate
date and each successive certificate anniversary, during which coverage is
provided under this certificate.
ELIGIBLE INSURED
You are an eligible insured if you:
(1) are under age 70; and
(2) were actively at work for each of the 4 weeks immediately prior to the
date your application for coverage under the group policy is approved
by us; and
(3) are identified by the policyholder as a person eligible to be insured
under the Policyholder's policy.
FACE AMOUNT
The minimum death benefit under this certificate so long as the insurance
coverage under this certificate remains in force.
FUND
The mutual fund or separate investment portfolio within a series mutual fund
which we designate as an eligible investment for the separate account and its
sub-accounts.
GENERAL ACCOUNT
All assets of Northstar Life other than those in the separate account or in
other separate accounts established by us.
GUARANTEED ACCOUNT VALUE
Assets other than the loan account value that are held in our general account
and attributable to certificates issued under the group policy, and others of
its class.
INSURED
An eligible insured who becomes insured under this certificate.
LAPSE
A lapse of this certificate means the insurance coverage under this certificate
has terminated due to non-payment of a premium during its grace period in an
amount that, after the deduction of percentage of premium expense charges, is
sufficient to cover the monthly deductions due at the time we provide notice of
the lapse.
LOAN ACCOUNT
The portion of the general account which is attributable to loans under this
certificate.
LOAN ACCOUNT VALUE
The sum of all outstanding loans and accrued loan interest credited under this
certificate.
MATURITY DATE
The 95th birthday of the insured.
MONTHLY ANNIVERSARY
The same date in each succeeding month as the certificate date.
NET CASH VALUE
The account value under this certificate issued, less any outstanding loans
and accrued loan interest charged and any charges over due. It is the amount you
may obtain through surrender of this certificate.
<PAGE> 5
NET PREMIUM
The premium less charges assessed against deducted from the premium. The net
premium is the amount or amounts which are allocated to the guaranteed account
and/or the separate account on your behalf.
OWNER
An owner of a certificate issued under the group policy.
POLICYHOLDER
The owner of the group policy, as identified on the specifications page attached
to this certificate.
SEPARATE ACCOUNT
The separate investment account created by us to receive and invest net premiums
received for the certificate. The particular separate account for this
certificate is the Northstar Life Variable Universal Life Account. We
established this separate account for this class of policies under New York Law.
The separate account is composed of several sub-accounts. We own the assets of
the separate account. However, those assets not in excess of separate account
liabilities are not subject to claims arising out of any other business in which
we engage.
SEPARATE ACCOUNT VALUE
The sum of all sub-account values.
SUB-ACCOUNT
One or more sub-accounts constituting the separate account.
SUB-ACCOUNT VALUE
The current number of sub-account units credited to your certificate multiplied
by the current sub-account unit value.
UNIT
A measure of the owner's interest in a sub-account of the separate account.
VALUATION DATE
Any date on which a fund is valued.
VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.
WE, OUR, US
Northstar Life Insurance Company.
YOU, YOUR
The owner of this certificate.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
WHAT IS YOUR AGREEMENT WITH US?
You are insured under the group policy identified on the signed application
attached to this certificate. The attached signed application is a part of this
certificate. Your certificate, application, and any subsequent application,
contain the entire contract between you and us. This certificate summarizes the
principal provisions of the group policy that affect your life insurance
coverage. The provisions summarized in this certificate are subject in every
respect to the group policy. You may examine the group policy at the principal
office of the policyholder during regular working hours.
We retain the right to amend this certificate at any time without your consent.
Any amendment will be without prejudice to any claim incurred for benefits prior
to the date of the amendment.
Any statement made in your signed application will be considered representations
and not warranties. Also, any statement made will not be used to void this
certificate nor defend against a claim unless the signed statement is contained
in your signed application.
No statement you make will be used to contest your coverage unless a copy of the
signed statement is or has been furnished to you or to your beneficiary.
This certificate is issued in consideration of your application and the payment
of the required premium contributions.
WHAT IS THE EFFECTIVE DATE OF YOUR INSURANCE?
Upon receipt of your application for insurance, the effective date of your
insurance will be the later of:
(1) the date on which we approve your application; and
(2) the date on which the first premium contribution is paid.
This effective date is shown on the specifications page attached to this
certificate.
DEATH BENEFIT
- --------------------------------------------------------------------------------
WHAT IS THE AMOUNT OF THE DEATH BENEFIT?
The amount of the death benefit depends on whether Option A or Option B is
selected by the policyholder as the death benefit option under the policy. The
death benefit option selected by the policyholder will be the death benefit
option for all certificates issued under the policy. Once elected, the death
benefit option shall remain unchanged.
<PAGE> 6
The amount of the death benefit for Option A will be determined as follows:
(1) the face amount of insurance on the insured's date of death while this
certificate is in force; plus
(2) the amount of the cost of insurance for the portion of the certificate
month from the date of death to the end of the certificate month; plus
(3) any accrued loan interest credits; less
(4) any outstanding loan principal and accrued loan interest charges; less
(5) any unpaid monthly deductions determined as of the date of the
insured's death.
The amount of the death benefit for Option B will be determined as follows:
(1) the face amount of insurance on the insured's date of death while this
certificate is in force; plus
(2) the amount of the owner's account value as of the date we receive due
proof of death satisfactory to us; plus
(3) the amount of the cost of insurance for the portion of the certificate
month from the date of death to the end of the certificate month; plus
(4) any monthly deductions taken under the certificate since the date of
death; plus
(5) any accrued loan interest credits; less
(6) any outstanding loan principal and accrued loan interest charges; less
(7) any unpaid monthly deductions determined as of the date of the
insured's death.
Payment of the death benefit will extinguish our liability under this
certificate for which the death benefit has been paid.
We intend that this certificate qualify as a life insurance policy as defined by
Section 7702 of the Internal Revenue Code, as amended. We reserve the right to
either increase the face amount of insurance on the life of the insured, return
any excess net cash value or limit the amount of premium contributions we will
accept under this certificate in order to maintain such qualification.
CAN THE OWNER CHANGE THE DEATH BENEFIT OPTION?
No.
WHAT IS THE FACE AMOUNT OF INSURANCE ON THE LIFE OF THE INSURED?
The face amount of insurance on the life of the insured is as shown on the
specifications page attached to this certificate. The amount of insurance for
the insured spouse shall not exceed the insured employee's amount of insurance.
MAY THE FACE AMOUNT OF INSURANCE CHANGE?
Yes. The owner may apply at any time for a change through a written request in
compliance with the limitations on the specifications page attached to this
certificate. If an increase in the current face amount is applied for, we
reserve the right to require evidence of insurability from the insured.
If a decrease in the current face amount is requested, we will grant the
request. However, the amount of insurance on the insured may not be reduced to
less than the amount shown on the specifications page attached to this
certificate. If, following a decrease in face amount, this certificate would not
comply with the maximum premium limitations required by federal law, the
decrease may be limited or net cash value may be returned to the owner (at the
owner's election), to the extent necessary to meet these requirements.
WHEN WILL CHANGES IN THE FACE AMOUNT OF INSURANCE BECOME EFFECTIVE?
Increases are effective on the monthly anniversary on or following the date we
approve the change, or any other date mutually agreed upon between the
policyholder and us.
Decreases in the face amount of insurance are effective on the monthly
certificate anniversary on or following receipt by us of your written request.
However, if the owner requests that the decrease become effective on a specified
future date, we will make the decrease effective on the monthly anniversary or
next following the date requested.
WHEN WILL THE DEATH BENEFIT BE PAID?
We will pay the death benefit upon due proof satisfactory to us that the insured
died while insured under this certificate.
If the current death benefit option is Option A, we will pay interest on the
death benefit from the date of the insured's death until the date of payment.
If the current death benefit option is Option B, we will pay interest on the
face amount of insurance from the date of the insured's death until the date of
payment. We will pay interest on any charges taken under this certificate since
the date of death from the date the charge was taken until the date of payment.
Interest will be at an annual rate determined by us, but never less than the
greater of three percent per year compounded annually, or the rate required by
law.
Death benefit proceeds will ordinarily be paid within seven days after we
receive all information required for such payment, including due proof of the
insured's death.
<PAGE> 7
PAYMENT OF PROCEEDS
- --------------------------------------------------------------------------------
TO WHOM WILL WE PAY THE DEATH BENEFIT?
We will pay the death benefit proceeds to the surviving beneficiary specified on
the application or as subsequently changed.
WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE BEFORE THE INSURED?
If a beneficiary dies before the insured, that beneficiary's interest in this
certificate 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 or if a beneficiary is not named, we will pay the proceeds
according to the following order of priority:
(1) the insured's lawful spouse, if living; otherwise
(2) the personal representative of the insured's estate.
MAY THE OWNER CHANGE THE BENEFICIARY?
If the owner has reserved the right to change the
beneficiary, the owner may file a written request with us to change the
beneficiary. If the owner has not reserved the right to change the beneficiary,
the written consent of the irrevocable beneficiary will be required. The owner's
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 the
owner 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 the
owner's request was so recorded.
CAN DEATH BENEFIT PROCEEDS BE PAID IN OTHER THAN A SINGLE SUM?
Yes. An owner may request that we pay the death benefit proceeds under one of
the following settlement options. We may also use any other method of payment
that is agreeable to the owner and us. A settlement option may be selected only
if the payments are to be made to a natural person in that person's own right.
WHAT ARE THE SETTLEMENT OPTIONS AVAILABLE?
Each settlement option is paid in fixed amounts as described below. If the owner
of this certificate requests a settlement option, he or she will be asked to
sign an agreement covering the election which will state the terms and
conditions of the payments. The payments do not vary with the performance of the
separate account.
(1) INTEREST PAYMENTS: Payment of interest on the proceeds at such times
and for a period as may be agreed upon between the owner of this
certificate and us. Withdrawal of proceeds may be made in amounts of
at least $500. At the end of the period, any remaining proceeds will
be paid in either a single sum or under any other method we approve.
(2) FIXED PERIOD ANNUITY: An annuity payable in monthly installments for a
specified number of years, from one to twenty years.
(3) LIFE ANNUITY: An annuity payable monthly for the lifetime of the
annuitant and ending with the last monthly payment due prior to the
annuitant's death.
(4) PAYMENTS OF A SPECIFIED AMOUNT: Monthly payments of a specified amount
until the proceeds and interest are fully paid.
CAN A BENEFICIARY REQUEST A PAYMENT UNDER A SETTLEMENT OPTION?
Yes. A beneficiary may select a settlement option, but only after the insured's
death. However, an owner or insured may provide that the beneficiary will not be
permitted to change the elected settlement option. Illustrations for the four
available settlement options are shown as part of this certificate. The
settlement option illustrations attached to this certificate are intended as
generic examples of the available options and are not intended to be specific to
the owner's coverage.
PREMIUMS
- --------------------------------------------------------------------------------
WHEN AND HOW OFTEN ARE PREMIUMS DUE?
A premium must be paid to put this certificate in force. This initial premium
must be of an amount that, after the deduction of premium expense charges, will
cover the first month's deductions. Premiums paid after the initial premium may
be in any amount. A premium must be paid at such time when there is insufficient
net cash value to pay the monthly deductions necessary to keep this certificate
in force.
IS THERE A GRACE PERIOD FOR THE PAYMENT OF PREMIUMS?
Yes. This certificate has a 61-day grace period. The grace period will start on
the day we mail the owner a notice of lapse. This certificate will lapse if the
premium amount specified in the notice is not paid by the end of the grace
period and the net cash value is insufficient to cover the monthly deduction. We
will mail this notice on any certificate monthly anniversary date when the net
cash value for the insured under this certificate is insufficient to cover the
monthly deduction. This certificate of insurance will remain in effect during
the 61-day grace period. If sufficient premium is not paid by the end of the
grace period, the insured's coverage will lapse. The grace period does not apply
to the first premium payment.
<PAGE> 8
WHAT IS THE AMOUNT OF THE DEATH BENEFIT DURING THE GRACE PERIOD?
The death benefit amount under the death benefit option in effect for this
certificate at the time of the insured's death will be paid if death occurs
during the grace period.
POLICY CHARGES
- --------------------------------------------------------------------------------
WHAT TYPE OF CHARGES ARE THERE UNDER THIS CERTIFICATE?
Charges under this certificate are those which we deduct from premium payments,
(premium expense charges), those which we deduct from the account value under
this certificate, (account value charges), and those we assess against the
separate account assets attributable to this certificate, (separate account
charges).
WHAT CHARGES ARE DEDUCTED FROM PREMIUM PAYMENTS?
From premiums paid, we will deduct the following premium expense charges: (1) a
sales charge; (2) a premium tax charge; and (3) a federal tax charge. The
remaining amount, or net premium, will be allocated to the guaranteed account
and/or sub-accounts of the separate account, as directed by the owner, and
become part of this certificate's net cash value.
(1) The sales charge is for distribution expenses. This sales charge shall
not exceed five percent of each premium paid.
(2) The premium tax charge is to compensate us for the premium tax we pay
to state and local governments, and such other charges or expenses as
we may incur, including guaranty fund assessments. This charge is
currently two percent. The charge is not guaranteed and may be
increased in the future, but only as necessary to cover our premium
taxes and other charges or expenses.
(3) The federal tax charge is to compensate us for the corporate federal
income taxes that result from a sale of this certificate. The federal
tax charge is 1.25 percent of each premium paid if the policy is
deemed to be an individual contract under the Omnibus Budget
Reconciliation Act of 1990, as amended, and 0.25 percent if deemed a
group contract under that Act.
WHAT CHARGES ARE DEDUCTED FROM THE ACCOUNT VALUE OF THIS CERTIFICATE?
From the net cash value of this certificate, we will deduct a monthly deduction
and any applicable transaction charges as account value charges. If the net cash
value is insufficient to cover the account value charges, this certificate will
lapse unless sufficient payment is received within the grace period.
The monthly deduction will be the sum of: (1) the administration charge; (2) the
cost of insurance charge; and (3) the charge for any additional benefits
provided by certificate supplement. The monthly deduction will be deducted on
the certificate date and on each succeeding certificate monthly anniversary.
(1) The administration charge is for administrative expenses, including
those attributable to the records we create and maintain for this
certificate. The maximum administration charge is $4 per month.
(2) The cost of insurance charge is for providing the death benefit under
this certificate. The charge is calculated by multiplying the net
amount at risk under this certificate by a cost of insurance rate
which varies with the insured's age and rate class. The rate is
guaranteed not to exceed rates determined on the basis of 125 percent
of the 1980 Commissioners Standard Ordinary Mortality Table. The
charges described as Table A attached herein are maximum cost of
insurance rates. The net amount at risk for this certificate is the
difference between the death benefit and the account value.
(3) The charge for any additional benefits, if any, is for providing the
coverages offered by certificate supplement.
Transaction charges are to compensate us for the administrative costs incurred
in processing a transaction. Currently, a transaction charge applies to each
withdrawal. The amount of the charge is the lesser of $25 or two percent of the
amount withdrawn. We may also deduct a charge for any transfer of funds between
the guaranteed account and the separate account or among the sub-accounts of the
separate account. The amount charged will not exceed $10. Transaction charges
will be deducted at the end of the day on which the transaction occurs.
Account value charges will be deducted from the guaranteed account value and the
separate account value in the same proportion that those values bear to each
other and, as to the separate account value, from each sub-account in the
proportion that the sub-account value of each such sub-account bears to the
separate account value.
WHAT CHARGES ARE ASSESSED AGAINST THE SEPARATE ACCOUNT ASSETS?
We assess a mortality and expense risk charge against the separate account
assets of this certificate. We also reserve the right to charge or make
provision for income taxes payable by us based on separate account assets.
WHAT IS THE MORTALITY AND EXPENSE RISK CHARGE?
This charge is for assuming the risks that the cost of insurance charge will be
insufficient to cover actual mortality experience and that the other charges
will not
<PAGE> 9
cover our expenses in connection with the group policy. The mortality and
expense risk charge is deducted from the separate account assets daily at an
annual rate not to exceed 0.50 percent of the separate account assets.
SEPARATE ACCOUNT
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HOW WAS THE SEPARATE ACCOUNT ESTABLISHED?
We established the separate account in accordance with certain provisions of New
York insurance law.
WHAT IS THE PURPOSE OF THE SEPARATE ACCOUNT?
The purpose of the separate account is to hold assets attributable to the
variable portion of the group policy and others of its class.
WHAT SEPARATE ACCOUNT OPTIONS ARE AVAILABLE?
The separate account is divided into sub-accounts. Those available to this
certificate are listed on the specifications page attached to this certificate.
Net premiums will be allocated to the various sub-accounts of the separate
account or any other sub-accounts which we may add in the future, as elected by
the owner of this certificate. We reserve the right to add, combine or remove
any sub-accounts of the separate account.
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
For each sub-account, there is a fund for the investment of that sub-account's
assets. The assets of the sub-accounts are invested in the funds at net asset
value. If investment in a fund should no longer be possible or if we determine
it becomes inappropriate for the certificates of this class, we may substitute
another fund. Substitution may be with respect to both existing certificate
values and future premiums. The investment policy of the separate account may
not be changed, however, without the approval of the regulatory authorities of
the State of New York. If required, that approval process will be on file with
the regulatory authorities of the state in which this policy is delivered.
WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT?
We reserve the right to transfer assets of the separate account which we
determine to be associated with the class of policies to which the group policy
belongs, to another separate account. If such a transfer is made, the term
"separate account" as used in this certificate, shall then mean the separate
account to which the assets are transferred. A transfer of this kind may require
the advance approval of state regulatory authorities.
We reserve the right to, when permitted by law:
(1) restrict or eliminate any voting right of owners or other persons who
have voting rights as to the separate account; and
(2) combine the separate account with one or more other separate accounts;
and
(3) to de-register the separate account under the Investment Company Act
of 1940.
HOW ARE NET PREMIUMS ALLOCATED?
Net premiums are allocated to the guaranteed account and/or to the sub-accounts
of the separate account. Initially, the allocation elected is indicated in the
application for this certificate. Allocations may be changed for future
premiums. The owner may do this by giving us a written request or through any
other method made available by us under this policy. A change will not take
effect until it is recorded by us in our home office.
Allocations must be expressed in whole percentages. The allocation to the
guaranteed account or to any sub-account of the separate account must be at
least ten percent of the net premium. We reserve the right to restrict the
allocation of premium to the guaranteed account. If we do so, no more than fifty
percent of the net premium may be allocated to the guaranteed account.
We reserve the right to delay the allocation of net premiums to named
sub-accounts. Such a delay will be for a period of 30 days after issuance of
this certificate. This right will be exercised by us only when we believe
economic conditions make such a delay necessary to reduce market risk during
this period. If we exercise this right, net premiums will be allocated to the
money market sub-account until the end of that period.
WHAT IS A TRANSFER?
A transfer is a reallocation of the net cash value between the guaranteed
account and the separate account or among the sub-accounts of the separate
account for a given owner.
MAY THE OWNER MAKE TRANSFERS OF AMOUNTS UNDER THIS CERTIFICATE?
Yes. Transfers from a sub-account of the separate account or from the guaranteed
account may be made in writing, by telephone, or through any other method made
available by us under the policy. For transfers out of the separate account or
among the sub-accounts of the separate account, we will credit and cancel units
based on the sub-account unit values as of the end of the valuation period
during which the owner's request is received at our home office. For transfers
out of the guaranteed account, a dollar amount will be transferred based on the
owner's guaranteed account value at the time of transfer.
ARE THERE OTHER LIMITATIONS ON TRANSFERS?
Yes. Only one transfer may be made under this certificate each month. The amount
to be transferred to or from a sub-account of the separate account or the
guaranteed account must be at least $250. If the balance in the guaranteed
account or in the sub-account from which the transfer is to be made is less than
$250, the entire account value attributable to that sub-account or the
guaranteed account must be transferred. If a transfer
<PAGE> 10
would reduce the account value in the sub-account from which the transfer is to
be made to less than $250, we reserve the right to include that remaining amount
in the sub-account with the amount transferred.
The maximum amount of net cash value to be transferred out of the guaranteed
account to the sub-accounts of the separate account is limited to twenty percent
(or $250 if greater) of the guaranteed account value. Transfers to or from the
guaranteed account are limited to one such transfer per certificate year. We may
further restrict transfers by requiring that the request is received by us or
postmarked in the 30-day period before or after the last day of the certificate
anniversary. Requests for transfers which meet these conditions would be
effective after we approve and record them at our home office.
We may modify the transfer privilege in the future by changing the minimum
amount transferable, by altering the frequency of transfers, by imposing a
transfer charge, by prohibiting transfers, or in such other manner as we may
determine at our discretion.
HOW ARE UNITS DETERMINED?
The number of units credited with respect to each net premium payment is
determined by dividing the portion of the net premium payment allocated to each
sub-account by the then current unit value for that sub-account. This
determination is made as of the end of the valuation period during which the
premium is received at our home office. Once determined, the number of units
will not be affected by changes in the unit value.
HOW ARE UNITS INCREASED OR DECREASED?
The number of units of each sub-account credited to this certificate will be
increased by the allocation of subsequent net premiums, policy experience
credits, loan repayments, interest credits and transfers to that sub-account.
The number of units credited to a sub-account under this certificate will be
decreased by deductions to the sub-account, loans and loan interest charges,
transfers from that sub-account and withdrawals from that sub-account. The
number of sub-account units will decrease to zero on certificate termination.
HOW IS A UNIT VALUED?
The unit value will increase or decrease on each valuation date. The amount of
any increase or decrease will depend on the net investment experience of the
sub-accounts of the separate account. The value of a unit for each sub-account
was originally set at $1.00 on the first valuation date. For any subsequent
valuation date, its value is equal to its value on the preceding valuation date
multiplied by the net investment factor for that sub-account for the valuation
period ending on the subsequent valuation date.
WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT?
The net investment factor is a measure of the net investment experience of a
sub-account during the valuation period.
The net investment factor for a valuation period is: the gross investment rate
for such valuation period, less a deduction for the charges under this
certificate which are assessed against separate account assets. The gross
investment rate is equal to:
(1) the net asset value per share of a fund share held in the sub-account
of the separate account determined at the end of the current valuation
period; plus
(2) the per-share amount of any dividend or capital gain distributions by
the fund if the "ex-dividend" date occurs during the current valuation
period; divided by
(3) the net asset value per share of that fund share held in the
sub-account determined at the end of the preceding valuation period.
We reserve the right to deduct a charge against the separate account assets, or
make other provisions for, any additional tax liability we may incur with
respect to the separate account or the policies, to the extent that those
liabilities exceed the amounts recovered through the deduction from premiums for
state premium taxes and federal taxes.
ACCOUNT VALUES
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WILL THE OWNER HAVE ACCESS TO THE NET CASH VALUE?
Yes. The owner has access to this certificate's net cash value. The net cash
value is the account value of this certificate, less the loan principal and
accrued loan interest charges and any charges overdue, plus accrued loan
interest credits.
HOW IS THE ACCOUNT VALUE DETERMINED?
The account value is determined separately for this certificate. It is the sum
of the values under the separate account, the guaranteed account and the loan
principal of this certificate.
The separate account value is the sum of units of each sub-account, credited to
this certificate, multiplied by the accumulation unit value for that
sub-account. Once determined, the number of units credited to a sub-account
under an owner's certificate will not be affected by changes in the unit value.
However, the number of units will be increased by the allocation of subsequent
net premiums, policy experience credits, loan repayments, loan interest credits
and transfers to that sub-account. The number of units credited to a
<PAGE> 11
sub-account under an owner's certificate will be decreased by deductions to that
sub-account, loans and loan interest charges, transfers from that sub-account
and withdrawals from that sub-account. The number of sub-account units will
decrease to zero on a certificate termination.
IS THE SEPARATE ACCOUNT VALUE GUARANTEED?
No. The separate account value of this certificate is not
guaranteed.
IS THE GUARANTEED ACCOUNT VALUE GUARANTEED?
Yes. The guaranteed account value of this certificate is guaranteed by us. It
cannot be reduced by the investment experience of the guaranteed account.
IS INTEREST CREDITED ON THE GUARANTEED ACCOUNT VALUE?
Yes. Interest is credited on the guaranteed account value of this certificate.
Interest is credited daily at a rate of not less than three percent per year,
compounded annually. We guarantee this minimum rate for the life of the group
policy.
MAY ADDITIONAL INTEREST BE CREDITED ON THE GUARANTEED ACCOUNT?
Yes. As conditions permit, we may credit additional amounts of interest to the
guaranteed account value.
SURRENDERS AND WITHDRAWALS
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MAY THIS CERTIFICATE BE SURRENDERED?
Yes. The owner of this certificate may request the surrender of this certificate
at any time while the insured under this certificate is living.
WHAT IS THE SURRENDER VALUE OF THIS CERTIFICATE?
The surrender value of this certificate is the net cash value.
The determination of the surrender value is made as of the end of the valuation
period during which we receive the surrender request at our home office.
IS A WITHDRAWAL PERMITTED?
Yes. The owner may make a withdrawal of the net cash value under this
certificate. The amount of a withdrawal must be $500 or more and it cannot
exceed the amount available as a loan. A withdrawal will cause a decrease in the
face amount equal to the amount surrendered under this certificate if the
current death benefit option is Option A. A withdrawal has no effect on the face
amount of insurance under this certificate if the current death benefit option
is Option B. However, since the account value is reduced by the amount of the
withdrawal, the death benefit under this certificate, if the current death
benefit option is Option B, will be reduced by this same amount at the time of
the withdrawal. We reserve the right to change the minimum amount for
withdrawals, limit the frequency of withdrawals, or restrict or prohibit
withdrawals from the guaranteed account.
MAY THE OWNER DIRECT US AS TO HOW WITHDRAWALS WILL BE TAKEN FROM THE NET CASH
VALUE?
Yes. The owner may tell us the sub-accounts from which a withdrawal is to be
taken or whether it is to be taken in whole or in part from the guaranteed
account. If the owner does not direct us as to how withdrawals will be taken,
they will be deducted from the guaranteed account value and separate account
value in the same proportion that those values bear to each other and, as to the
separate account value from each sub-account in the proportion that the
sub-account value of each such sub-account bears to the separate account value.
We reserve the right to restrict or prohibit withdrawals from the guaranteed
account.
HOW WILL THE OWNER KNOW THE STATUS OF A CERTIFICATE?
Each year we will send the owner of this certificate a report. This report will
show the status of this certificate. It will include the account value, the face
amount as of the date of the report, the premiums paid during the year and their
allocation, certificate charges, loan activity and the net cash value. The
report will be sent without cost to the owner. If the policyholder owns all of
the certificates, a consolidated report will be sent. The report will be as of a
date within two months of its mailing.
LOANS
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CAN THE OWNER BORROW AGAINST THE NET CASH VALUE?
Yes. The owner may borrow an amount of at least $100 and up to the maximum loan
amount. This amount is determined as of the date we receive the request for a
loan. Requests may be made in writing, by telephone, or through any other method
made available by us under this policy. This certificate will be the only
security required for a loan. We will charge interest on the loan principal in
arrears.
When a loan is to come from the guaranteed account value, we have the right to
postpone a loan for up to six months.
WHAT IS THE MAXIMUM LOAN AMOUNT AVAILABLE FOR A LOAN ON THIS CERTIFICATE?
The total amount available for a loan under any certificate is (a) minus (b),
where (a) is ninety percent of the account value and (b) is the loan principal
plus accrued loan interest charges. The maximum loan amount will be determined
as of the date we receive the owner's request for a loan at our home office.
<PAGE> 12
WHAT IS THE EFFECT OF A LOAN?
When a loan is taken on this certificate, we will reduce the net cash value of
this certificate by the amount borrowed. This determination will be made as of
the end of the valuation period during which the loan request is received at our
home office. The amount borrowed continues to be a part of the account value, as
the amount borrowed becomes part of the loan principal where it will accrue loan
interest credit, and will be held in our general account.
HOW DOES A LOAN REDUCE NET CASH VALUE ON THIS CERTIFICATE?
Unless the owner directs us otherwise, the loan will be taken from this
certificate's guaranteed account value and separate account value in the same
proportion that those values bear to each other and, as to the separate account
value, from each sub-account in the proportion that the sub-account value of
each such sub-account bears to the separate account value. The number of units
to be cancelled will be based upon the value of the units as of the end of the
valuation period during which the loan request is received at our home office.
The net cash value of this certificate may decrease from day to day. The net
cash value will decrease by the same amount of any decrease in account value or
increase in the amount borrowed or increase in the difference between the
accrued loan interest charges and the accrued loan interest credits. If this
certificate has a loan principal and no net cash value, this certificate will
lapse.
WHAT IS THE INTEREST RATE CHARGED ON THE LOAN PRINCIPAL?
The interest rate charged on the loan principal will be eight percent per year.
The accrued loan interest charges on the loan principal will reduce the net cash
value. Loan interest charges are due at the end of the certificate month. If the
accrued loan interest charges are not paid at the end of the certificate month,
this interest will be deducted from the account value and added to the loan
principal and charged the same rate of interest as the loan principal in effect.
WHAT IS THE INTEREST RATE CREDITED TO THIS CERTIFICATE AS A RESULT OF A LOAN?
Interest credits which accrue on the loan principal shall be at a rate not less
than six percent per year.
WHEN ARE LOAN INTEREST CREDITS AND LOAN INTEREST CHARGES ALLOCATED TO THIS
CERTIFICATE?
Loan interest charges and loan interest credits are allocated monthly, at loan
repayment, at certificate surrender and at death. Loan interest charges and loan
interest credits are allocated to this certificate's guaranteed account value
and separate account value in the same proportion that those values bear to each
other and, as to the separate account value, to each sub-account in the
proportion that the sub-account value of each such sub-account bears to the
separate account value.
WHEN AND IN WHAT AMOUNT SHOULD LOAN REPAYMENTS BE MADE?
The principal and the accrued loan interest charges may be repaid in full or in
part at any time before the insured's death so long as the insurance coverage
under this certificate is in force. The loan may also be repaid within 60 days
after the date of the insured's death, if we have not paid any of the death
benefits under this certificate. Any loan repayment must be at least $100 unless
the balance due is less than $100.
HOW DO LOAN REPAYMENTS AFFECT THE LOAN PRINCIPAL AND THE GUARANTEED ACCOUNT
VALUE?
Loan repayments are allocated to the guaranteed account value and increase the
net cash value of a certificate by the amount of the loan repayment. The loan
repayment will be applied first to reduce the amount of accrued loan interest
charges. Any remaining portion of the repayment will then be used to reduce the
loan principal.
WHAT HAPPENS IF A LOAN ON THIS CERTIFICATE IS NOT REPAID?
If this certificate has a loan principal, this certificate will remain in force
so long as it has net cash value. If it does not have sufficient net cash value,
it will lapse.
In this event, to keep this certificate in force, the owner will have to make a
loan repayment. We will give the owner notice of our intent to terminate this
certificate and the loan repayment required to keep it in force. The time for
repayment will be within 61 days after our mailing of the warning notice of
lapse.
TERMINATION
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WHEN DOES THE GROUP POLICY TERMINATE?
The policyholder may terminate the group policy by giving us 31 days prior
written notice. We reserve the right to terminate the group policy on the
earliest of the following to occur:
(1) the aggregate specified face amount for all certificates under the
policy decreases by certain amounts or below the minimum permissible
levels we establish for the group policy in any 12 month period; or
(2) the number of certificates under the group policy decreases by certain
amounts or below the minimum permissible levels we establish for the
group policy in any 12 month period; or
(3) 61 days after we provide notice of our intent to terminate the group
policy.
<PAGE> 13
No individual may become insured under the group policy after the effective date
of such a notice of termination. After termination of the group policy, the
certificates issued thereunder, may be allowed to convert to individual coverage
as described below under the "Conversion Privilege" section.
WHEN DOES A CERTIFICATE OF INSURANCE UNDER THE GROUP POLICY TERMINATE?
The insurance on the life of an insured will terminate on the earliest of:
(1) 61 days after we mail a warning notice of lapse on a certificate
monthly anniversary in which the net cash value is insufficient to pay
for the monthly deduction and no premium is paid during the grace
period; or
(2) the date the group policy terminates, unless continuation has
previously been made effective; or
(3) the date the owner surrenders this certificate or requests that we
terminate the insurance; or
(4) the 95th birthday of the insured.
WILL THE OWNER OF THIS CERTIFICATE RECEIVE NOTICE PRIOR TO THE TERMINATION OF
INSURANCE?
If the owner's insurance will be terminated because the net cash value is less
than that required to pay the monthly deductions, we will give the owner at
least 61 days prior written notice before terminating the insurance.
WHAT HAPPENS TO ACCOUNT VALUES AT GROUP POLICY TERMINATION?
Account values attributable to the separate account will be valued as of the
close of business on the distribution date or dates mutually agreed upon by the
policyholder and us. For account values attributable to the guaranteed account,
we reserve the right to complete the distribution over a period of time
determined by us, but not more than five years. This delayed distribution does
not in any way continue or extend any insurance that has otherwise terminated
due to group policy termination.
CAN INSURANCE ON THE LIFE ON AN INSURED BE REINSTATED AFTER TERMINATION?
Insurance terminated due to the insufficiency of the net cash value to pay the
monthly deduction may be reinstated. Reinstatement must occur while the insured
is living and any time within three years from the date of lapse. Reinstatement
is made by payment of an amount that, after the deduction of
percentage-of-premium charges, is large enough to cover all monthly deductions
which have accrued on this certificate up to the effective date of reinstatement
plus the monthly deductions for the two months following the effective date of
reinstatement. If any loans and loan interest charges are not repaid, this
indebtedness will be reinstated along with the insurance. No evidence of the
insured's insurability will be required during the first 31 days following
lapse, but will be required from the 32nd day to 3 years from the date of lapse.
CONVERSION PRIVILEGE
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IS THERE A CONVERSION PRIVILEGE TO AN INDIVIDUAL POLICY?
Yes. If the group policy is terminated or if the insured's insurance provided by
this certificate ends due to the termination of his or her employment or
membership in the class or classes eligible for coverage under the group policy
or his or her insurance is reduced on or after the attainment of age sixty in
any increment or series of increments totaling twenty percent or more of the
amount of insurance in force under the group policy prior to the first reduction
at age sixty, the owner shall be entitled to convert such insurance to a policy
of permanent individual life insurance within thirty one days of such
termination or reduction, without providing evidence of insurability, subject to
the following:
(1) the owner's written application to convert to an individual policy
and the first premium for the individual policy must be received in
our home office within 31 days of the date the insurance terminates
under the group policy and;
(2) the owner may convert all or part of the amount of insurance under
the group policy at the time of termination or, if insurance is
reduced due to age, the amount of insurance equal to the amount which
was reduced. However, if an insured's insurance terminates because
the group policy is terminated, the insured is eligible to convert an
amount up to the amount of insurance he or she had just prior to the
termination, less any amount he or she may become eligible for under
any group policy within 45 days of the termination. The owner may
convert said amounts to any policy of permanent individual life
insurance then customarily issued by us for purposes of conversion.
The premium charge for this insurance will be based upon the
insured's age as of his or her nearest birthday; and
(3) if the insured should die within 31 days of the date that insurance
terminated under the group policy, the full amount of insurance that
could have been converted under the group policy will be paid.
If the insured's insurance ends due to the termination of his or her employment
or of membership in the class or classes eligible for coverage under the group
policy as a result of his or her total and permanent disability, the owner shall
be entitled to convert such insurance to any policy of permanent individual life
insurance then customarily issued by us for purposes of conversion.
<PAGE> 14
The owner may convert up to the full amount of terminated insurance if
termination occurs because the insured spouse's coverage terminates due to
divorce or annulment of marriage to the insured employee.
The owner must be notified within 15 days before or after the event that results
in termination or reduction of the insured's group life coverage. If the notice
is given more than 15 days but less than 90 days after the event, the time
allowed for the exercise of the conversion privilege shall be extended to 45
days after such notice is sent. If the notice is not given within 90 days after
the event, the time allowed for the exercise of the conversion privilege expires
90 days after such notice is sent. Such notice shall be mailed by us to your
last address furnished to us by the group policyholder.
CAN GROUP INSURANCE COVERAGE BE CONTINUED ONCE THE OWNER'S ELIGIBILITY ENDS?
If the owner's eligibility under the group policy ends, the current group
coverage may continue unless:
(1) this certificate is no longer in force; or
(2) the group policy has terminated; or
(3) there is less than $250 in this certificate's net cash value after
deduction of charges for the month in which eligibility ends.
If any of these limitations apply, the owner may still elect to continue the
current group coverage under this certificate, but only for a period not to
exceed one year. At the end of this continuation period, he or she may convert
such insurance to an individual policy of permanent insurance with Northstar
Life. Such conversion shall be subject to the rest of the Conversion Privilege
section.
The face amount of insurance will not change unless the owner requests a change.
We reserve the right to alter the administration fee not to exceed $4 per month
and the monthly cost of insurance up to the maximum in Table A if the insurance
is continued.
ADDITIONAL INFORMATION
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MAY THE OWNER ASSIGN ANY INTEREST UNDER THIS CERTIFICATE?
Yes. However, we will not be bound by an assignment of this certificate or of
any interest in it unless:
(1) it is made as a written instrument; and
(2) the owner files the original instrument or a certified copy with us at
our home office; and
(3) we send the owner an acknowledged copy.
We are not responsible for the validity of any assignment. If a claim is based
on an assignment, we may require proof of interest of the claimant. A valid
assignment will take precedence over any claim of a beneficiary.
WHAT IF AN INSURED'S AGE IS MISSTATED?
If the age of the insured has been misstated, the death benefit and account
value will be adjusted. The adjustment will be the difference between two
amounts accumulated with interest. These two amounts are:
(1) the monthly cost of insurance charges that were paid; and
(2) the monthly cost of insurance charges that should have been paid based
on the insured's correct age.
The interest rates used are the rates that were used in accumulating the
guaranteed account values.
WHEN DOES AN INSURED'S INSURANCE BECOME INCONTESTABLE?
After the insurance has been in force during the insured's lifetime for a two
year period from the certificate date, we cannot contest the insurance for any
loss that is incurred more than two years after the certificate date, unless the
net cash value has dropped below the amount necessary to pay the insured's cost
of insurance on the insured's life. However, if there has been an increase in
the amount of insurance for which we required evidence of insurability, then, to
the extent of the increase, any loss which occurs within two years of the
effective date of the increase will be contestable.
IS THERE A SUICIDE EXCLUSION?
Yes. If an insured dies by suicide within two years of the certificate date, our
liability will be limited to an amount equal to the premiums paid for that
insured. If there has been an increase in the face amount of insurance for which
we required evidence of insurability, and if the insured dies by suicide within
two years of the effective date of the increase, our liability with respect to
that increase will be limited to the cost of insurance charge attributable to
such increase.
DOES THE OWNER HAVE ANY ADDITIONAL VOTING RIGHTS?
Yes. If the owner has separate account units under this certificate, the owner
may direct us with respect to the voting rights of fund shares held by us and
attributable to this certificate.
COULD THE PAYMENT OF CERTIFICATE PROCEEDS BE POSTPONED?
Normally, we will pay any proceeds within seven days after our receipt of all
the documents required for such a payment. Other than the death proceeds, which
are determined as of the date of death of the insured, the amount of payment
will be determined as of the end of the valuation period during which a request
is received
<PAGE> 15
at our home office. If such payments are based upon values which do not depend
on the investment performance of the separate account, however, we reserve the
right to defer payments, including loans, for up to six months from the date of
the owner's request. In that case, if we postpone a payment other than a loan
payment for more than 31 days, we will pay the owner interest at the greater of
three percent per year or the rate required by law for the period beyond that
time that payment is postponed. For payments based on account values which do
depend on the investment performance of the separate account, we may defer
payment only: (a) for any period during which the New York Stock Exchange is
closed for trading (except for normal holiday closing); or (b) when the
Securities and Exchange Commission has determined that a state of emergency
exists which may make such payment impractical.
WILL THE PROVISIONS OF THIS CERTIFICATE CONFORM WITH STATE LAW?
Yes. If any provision in this certificate is in conflict with the laws of the
state governing this certificate, the provision will be deemed to be amended to
conform to such laws.
COULD ANY PAYMENTS MADE UNDER THIS CERTIFICATE BE SUBJECT TO CLAIMS OF
CREDITORS?
To the extent permitted by law, neither the group policy, certificates issued
under the group policy, nor any payment thereunder will be subject to the claims
of creditors or to any legal process.
WHO HAS OWNERSHIP OF THE GROUP POLICY?
The policyholder owns the group policy. The group policy may be changed or ended
by agreement between us and the policyholder without the consent of, or notice
to, any person claiming rights or benefits under the policy. However, unless the
policyholder is the owner of all the certificates issued under the group policy,
the policyholder does not have any ownership interest in the certificates issued
under the group policy. The rights and benefits under the certificates are that
of the owners of the certificates, and that of the insureds and beneficiaries as
set forth in this certificate.
ARE POLICY CHANGES LIMITED?
We reserve the right to limit the number of changes to one per certificate year
and to restrict such changes in the first certificate year. For this purpose,
changes include increases or decreases in the face amount of insurance.
<PAGE> 16
TABLE A
NORTHSTAR LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A TOBACCO DISTINCT BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
---- ---- ---- ---- ---- ----
NON-TOBACCO TOBACCO NON-TOBACCO TOBACCO NON-TOBACCO TOBACCO
----------- ------- ----------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.254 0.254 35 0.174 0.265 70 3.427 5.191
1 0.102 0.102 36 0.184 0.285 71 3.797 5.648
2 0.098 0.098 37 0.197 0.310 72 4.230 6.171
3 0.096 0.096 38 0.210 0.338 73 4.724 6.757
4 0.093 0.093 39 0.225 0.369 74 5.273 7.405
5 0.088 0.088 40 0.243 0.406 75 5.864 8.100
6 0.084 0.084 41 0.261 0.445 76 6.491 8.815
7 0.079 0.079 42 0.281 0.488 77 7.149 9.540
8 0.077 0.077 43 0.302 0.534 78 7.845 10.278
9 0.076 0.076 44 0.324 0.584 79 8.600 11.058
10 0.076 0.076 45 0.350 0.636 80 9.439 11.904
11 0.082 0.082 46 0.377 0.691 81 10.384 12.841
12 0.091 0.091 47 0.407 0.749 82 11.456 13.886
13 0.104 0.104 48 0.439 0.813 83 12.649 15.034
14 0.118 0.118 49 0.474 0.882 84 13.943 16.241
15 0.129 0.163 50 0.514 0.958 85 15.311 17.473
16 0.139 0.179 51 0.559 1.043 86 16.737 18.705
17 0.147 0.192 52 0.611 1.140 87 18.205 19.973
18 0.152 0.202 53 0.671 1.249 88 19.710 21.295
19 0.156 0.208 54 0.736 1.367 89 21.271 22.625
20 0.158 0.212 55 0.808 1.492 90 22.908 24.006
21 0.157 0.212 56 0.885 1.624 91 24.659 25.457
22 0.154 0.210 57 0.967 1.760 92 26.588 27.118
23 0.152 0.208 58 1.056 1.903 93 28.870 29.192
24 0.149 0.204 59 1.156 2.056 94 31.894 32.006
25 0.146 0.199 60 1.268 2.228
26 0.144 0.197 61 1.395 2.424
27 0.143 0.197 62 1.544 2.650
28 0.143 0.198 63 1.714 2.904
29 0.144 0.202 64 1.903 3.184
30 0.146 0.208 65 2.110 3.480
31 0.149 0.215 66 2.332 3.788
32 0.153 0.223 67 2.568 4.104
33 0.159 0.235 68 2.823 4.434
34 0.166 0.249 69 3.105 4.792
</TABLE>
*This is the insured's attained age as of the last certificate anniversary.
<PAGE> 17
TABLE A
NORTHSTAR LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A UNI-TOBACCO BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
---- ---- ---- ---- ---- ----
UNI-TOBACCO UNI-TOBACCO UNI-TOBACCO
----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
0 0.254 35 0.214 70 3.835
1 0.102 36 0.229 71 4.214
2 0.098 37 0.246 72 4.654
3 0.096 38 0.265 73 5.157
4 0.093 39 0.287 74 5.712
5 0.088 40 0.312 75 6.310
6 0.084 41 0.339 76 6.941
7 0.079 42 0.368 77 7.599
8 0.077 43 0.398 78 8.289
9 0.076 44 0.431 79 9.033
10 0.076 45 0.465 80 9.857
11 0.082 46 0.502 81 10.784
12 0.091 47 0.541 82 11.835
13 0.104 48 0.583 83 13.006
14 0.118 49 0.629 84 14.270
15 0.134 50 0.681 85 15.605
16 0.148 51 0.739 86 16.991
17 0.159 52 0.805 87 18.421
18 0.168 53 0.879 88 19.895
19 0.174 54 0.960 89 21.422
20 0.176 55 1.047 90 23.024
21 0.177 56 1.138 91 24.740
22 0.176 57 1.234 92 26.640
23 0.173 58 1.334 93 28.901
24 0.171 59 1.444 94 31.905
25 0.167 60 1.568
26 0.166 61 1.709
27 0.166 62 1.871
28 0.166 63 2.055
29 0.169 64 2.259
30 0.172 65 2.478
31 0.178 66 2.711
32 0.184 67 2.956
33 0.193 68 3.217
34 0.202 69 3.507
</TABLE>
*This is the insured's attained age as of the last certificate anniversary.
<PAGE> 18
INTEREST PAYMENT SETTLEMENT OPTIONS ILLUSTRATION
VARIABLE GROUP UNIVERSAL LIFE
The beneficiary is entitled to receive payment of the insurance in a lump sum
payment or in any one of the available settlement options. The guaranteed
interest rate is based on 3%. The current rate is subject to change at any time
but never less than the guaranteed rate.
Payment of interest on the proceeds at such times and for a period as may be
agreed upon between the owner of a certificate and us. Withdrawal of proceeds
may be made in amounts of at least $500. At the end of the period, any remaining
proceeds will be paid in either a single sum or under any other method we
approve.
(1) Principal Held At Interest (Withdrawable): Principal will be held by
the Company at interest for 2 years, 5 years or for your lifetime,
with interest payable monthly, quarterly, semi-annually or annually.
Or the interest could be added to the principal sum and bear interest
at the same rate. Interest would be considered "withdrawable".
Withdrawable would mean that any accruing interest would be
reportable for tax purposes. You would, also, have the option of
withdrawing the funds at any time without any interest penalty.
(2) Principal Held At Interest (Non-Withdrawable): Principal held by the
Company at interest for 2 years, 5 years or for your lifetime, with
interest added to the principal sum and bearing interest at the same
rate. Interest would be considered "non-withdrawable".
Non-withdrawable would mean that we would defer reporting the taxable
gain on the accumulating interest until the date specified. If funds
are withdrawn prior to the specified period there would be an
interest penalty of 1/4 of 1% for the period the proceeds were held,
up to a maximum of 5 years.
THIS SETTLEMENT OPTION ILLUSTRATION IS INTENDED AS A GENERIC EXAMPLE OF THIS
SETTLEMENT OPTION AND IS NOT INTENDED TO BE SPECIFIC TO THE OWNER'S COVERAGE.
<PAGE> 19
FIXED PERIOD ANNUITY SETTLEMENT OPTIONS ILLUSTRATION
VARIABLE GROUP UNIVERSAL LIFE
The beneficiary is entitled to receive payment of the insurance in a lump sum
payment or in any one of the available settlement options. The guaranteed
interest rate is based on 3%. The current rate is subject to change at any time
but never less than the guaranteed rate.
An annuity payable in monthly installments for a specified number of years, from
one to twenty years.
(1) Principal & Interest Paid In Monthly Payments (Specific Number of
Years): Principal and interest would be held by the Company to be
paid in monthly installments for a specific number of years. The
following is based on the guaranteed rate. (Benefits may be higher
based on the rates currently offered by the company.) The monthly
payment for each $1,000 of insurance would be:
<TABLE>
<CAPTION>
Years Payable Monthly Payment per $1,000
<S> <C>
1 $85.15
2 43.42
3 29.52
4 22.58
5 18.42
10 10.12
15 7.40
20 6.06
</TABLE>
THIS SETTLEMENT OPTION ILLUSTRATION IS INTENDED AS A GENERIC EXAMPLE OF THIS
SETTLEMENT OPTION AND IS NOT INTENDED TO BE SPECIFIC TO THE OWNER'S COVERAGE.
<PAGE> 20
LIFE ANNUITY SETTLEMENT OPTIONS ILLUSTRATION
VARIABLE GROUP UNIVERSAL LIFE
The beneficiary is entitled to receive payment of the insurance in a lump sum
payment or in any one of the available settlement options. The guaranteed
interest rate is based on 3%. The current rate is subject to change at any time
but never less than the guaranteed rate.
An annuity payable monthly for the lifetime of the annuitant and ending with the
last monthly payment due prior to the annuitant's death.
(1) Annuity: Principal would be used to purchase an annuity. Monthly
installments would be payable to you for as long as you live. You may
choose varying periods certain. In which case, if you should die prior
to the period certain, the commuted value of the remaining payments
certain would be payable to your beneficiary. Monthly payments are
dependent upon your date of birth.
Example:
If the insured elects an annuity as his/her settlement option, the
monthly benefit would be calculated in the following manner:
The principal amount is multiplied by the factor found on the attached
table and divided by 1,000. For example, assume a male, age 55 with
$20,000 of principal who elects:
(a) a life only annuity
($20,000 * 6.63)/l,000 = $132.60 monthly income
(b) ten year certain and life annuity
($20,000 * 6.51)/l,000 = $130.20 monthly income
The interest rates used to calculate the annuity factors are adjusted as
market interest rates fluctuate. The table provided was calculated
assuming an interest rate of 5.95%.
<TABLE>
<S> <C>
Issue Age 35
Minimum Issue Amount $50,000
Minimum Guaranteed Interest Rate* 3.00%
Maximum Guaranteed Charges
Premium Tax Charge 2.00%
Sales Charge 5.00%
Federal Tax Charge 0.25%
Administration Charge $4.00
</TABLE>
*only for funds invested in the General Account
<TABLE>
<CAPTION>
Monthly
Monthly Monthly Monthly Monthly Contribution
Minimum Risk Administrative Percent Of To The
Age Premium Charge Charge Premium Charge Account Value
--- ------- ------ ------ -------------- -------------
<S> <C> <C> <C> <C> <C>
35 $15.84 $10.69 $4.00 $1.15 $0.00
36 16.64 11.43 4.00 1.21 0.00
37 17.55 12.28 4.00 1.27 0.00
38 18.59 13.24 4.00 1.35 0.00
39 19.78 14.35 4.00 1.43 0.00
40 21.13 15.60 4.00 1.53 0.00
41 22.58 16.94 4.00 1.64 0.00
42 24.12 18.37 4.00 1.75 0.00
43 25.78 19.91 4.00 1.87 0.00
44 27.55 21.55 4.00 2.00 0.00
45 29.40 23.27 4.00 2.13 0.00
46 31.38 25.10 4.00 2.27 0.00
47 33.48 27.06 4.00 2.43 0.00
48 35.75 29.16 4.00 2.59 0.00
49 38.25 31.47 4.00 2.77 0.00
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
Monthly
Monthly Monthly Monthly Monthly Contribution
Minimum Risk Administrative Percent Of To The
Age Premium Charge Charge Premium Charge Account Value
--- ------- ------ ------ -------------- -------------
<S> <C> <C> <C> <C> <C>
50 $ 41.00 $ 34.03 $4.00 $ 2.97 $0.00
51 44.17 36.97 4.00 3.20 0.00
52 47.71 40.25 4.00 3.46 0.00
53 51.72 43.97 4.00 3.75 0.00
54 56.09 48.02 4.00 4.07 0.00
55 60.76 52.36 4.00 4.41 0.00
56 65.68 56.92 4.00 4.76 0.00
57 70.82 61.68 4.00 5.13 0.00
58 76.25 66.72 4.00 5.53 0.00
59 82.17 72.21 4.00 5.96 0.00
60 88.83 78.39 4.00 6.44 0.00
61 96.43 85.44 4.00 6.99 0.00
62 105.18 93.56 4.00 7.63 0.00
63 115.08 102.73 4.00 8.34 0.00
64 126.07 112.93 4.00 9.14 0.00
65 137.89 123.90 4.00 10.00 0.00
66 150.45 135.55 4.00 10.91 0.00
67 163.65 147.79 4.00 11.86 0.00
68 177.75 160.86 4.00 12.89 0.00
69 193.36 175.34 4.00 14.02 0.00
70 211.06 191.76 4.00 15.30 0.00
71 231.49 210.70 4.00 16.78 0.00
72 255.20 232.70 4.00 18.50 0.00
73 282.29 257.83 4.00 20.47 0.00
74 312.25 285.61 4.00 22.64 0.00
75 344.49 315.51 4.00 24.98 0.00
76 378.52 347.07 4.00 27.44 0.00
77 413.95 379.94 4.00 30.01 0.00
78 451.13 414.43 4.00 32.71 0.00
79 491.25 451.63 4.00 35.62 0.00
80 535.66 492.83 4.00 38.84 0.00
81 585.65 539.19 4.00 42.46 0.00
82 642.34 591.77 4.00 46.57 0.00
83 705.43 650.29 4.00 51.14 0.00
84 773.60 713.52 4.00 56.09 0.00
85 845.55 780.25 4.00 61.30 0.00
86 920.27 849.55 4.00 66.72 0.00
87 997.37 921.06 4.00 72.31 0.00
88 1,076.83 994.76 4.00 78.07 0.00
89 1,159.15 1,071.11 4.00 84.04 0.00
90 1,245.52 1,151.22 4.00 90.30 0.00
91 1,338.00 1,236.99 4.00 97.00 0.00
92 1,440.44 1,332.01 4.00 104.43 0.00
93 1,562.32 1,445.05 4.00 113.27 0.00
94 1,724.24 1,595.23 4.00 125.01 0.00
</TABLE>
THIS SETTLEMENT OPTION ILLUSTRATION IS INTENDED AS A GENERIC EXAMPLE OF THIS
SETTLEMENT OPTION AND IS NOT INTENDED TO BE SPECIFIC TO THE OWNER'S COVERAGE.
<PAGE> 22
PAYMENTS OF A SPECIFIED AMOUNT SETTLEMENT OPTIONS ILLUSTRATION
VARIABLE GROUP UNIVERSAL LIFE
The beneficiary is entitled to receive payment of the insurance in a lump sum
payment or in any one of the available settlement options. The guaranteed
interest rate is based on 3%. The current rate is subject to change at any time
but never less than the guaranteed rate.
Monthly payments of a specified amount until the proceeds and interest are fully
paid.
THIS SETTLEMENT OPTION ILLUSTRATION IS INTENDED AS A GENERIC EXAMPLE OF THIS
SETTLEMENT OPTION AND IS NOT INTENDED TO BE SPECIFIC TO THE OWNER'S COVERAGE.
<PAGE> 23
NORHTSTAR LIFE
University Corporate Centre at Amhurst - Suite 424 - 100 Corporate Parkway -
Amherst, New York 14226
VARIABLE GROUP UNIVERSAL LIFE INSURANCE
<PAGE> 1
EXHIBIT A.(5)(d)
================================================================================
NORTHSTAR LIFE SPOUSE'S COVERAGE RIDER
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
This agreement amends the group policy to which it is attached, and is issued in
consideration of the timely payment of the required premium. This agreement is
subject to every term, condition, limitation, and provision of the group policy
unless otherwise expressly provided herein.
WHAT IS THE PURPOSE OF THIS AGREEMENT?
This agreement makes available variable universal life insurance on the life of
the insured employee's eligible spouse. The amount of insurance for the insured
spouse shall not exceed the insured employee's amount of insurance.
DEFINITIONS
- --------------------------------------------------------------------------------
For purposes of construing the terms and conditions of coverage for spouses
under the terms of the group policy, the terms and definitions listed below are
used in place of the terms and definitions stated in the policy:
ACTIVELY AT WORK
To be actively at work for purposes of this policy, the eligible spouse must be
currently working at his or her normal place of business at least 20 hours a
week. A person is not considered actively at work if not at work due to illness
or injury.
ELIGIBLE INSURED
A spouse is an eligible insured if he or she:
(1) is under age 70; and
(2) was actively at work for each of the 4 weeks immediately prior to
the date his or her application for coverage under this policy is
approved by us; and
(3) is currently legally married to an individual defined as an insured
employee under the terms of the group policy to which this rider is
attached.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
WHAT IS THE CONVERSION PRIVILEGE UNDER THIS RIDER?
If an insured spouse's coverage under this rider terminates because he or she is
no longer eligible, or because of the death of the insured employee, or because
of termination or amendment of this rider, or because of divorce or annulment of
marriage to the insured employee, he or she may convert the insurance to a
policy of individual insurance with Northstar Life. All other conditions and
provisions of the conversion privilege section of the group policy to which this
rider is attached will apply.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(5)(e)
================================================================================
NORTHSTAR LIFE WAIVER OF PREMIUM CERTIFICATE SUPPLEMENT
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
This is issued in consideration of your application and the timely payment of
the additional required premium. The provisions summarized in this supplement
are subject in every respect to the group policy and amendments thereto.
WHAT DOES THE WAIVER OF DEDUCTION BENEFIT PROVIDE?
If you become totally and permanently disabled, as hereinafter defined, while
under age 60, upon receipt of due proof of such disability, your insurance
(including all applicable riders) under the group policy will be continued in
force, subject to the following provisions and without payment of premiums for
you during the uninterrupted continuance of such total and permanent disability.
WHAT IS "TOTAL" DISABILITY?
Total disability is a disability which occurs while your insurance is in force
and results from an accidental injury or a disease that continuously prevents
you from engaging in an occupation. You must be under the care of a licensed
physician other than yourself. During the first 24 months of total disability,
"occupation" means your regular occupation. After 24 months, it means any
occupation for which you are reasonably fitted by education, training or
experience.
Your total and irrevocable loss of the following shall be considered total
disability even if you engage in an occupation:
(1) the sight of both eyes; or
(2) the use of both hands; or
(3) the use of both feet; or
(4) the use of one hand and one foot.
WHAT IS "PERMANENT" DISABILITY?
Total disability will be considered permanent only after it has existed
continuously for at least six months.
HOW LONG WILL INSURANCE BE CONTINUED?
If you become totally and permanently disabled, insurance will be continued:
(1) until your 95th birthday; or
(2) until the date you are no longer totally and permanently disabled; or
(3) until the date you terminate or surrender your insurance;
whichever occurs first.
WHAT WILL BE CONSIDERED DUE PROOF OF DISABILITY?
You must furnish evidence satisfactory to us that your total disability:
(1) commenced while insurance on your life under the group policy was in force;
and
(2) commenced before your 60th birthday; and
(3) was continuous for six months or more.
We will, from time to time, also require additional proof satisfactory to us
that you continue to be totally and permanently disabled. We may also require
you to submit to one or more medical examinations at our expense. However, we
will not require a medical examination of you more frequently than once a year
if the total disability has continued for two years.
ARE THERE ANY LIMITATIONS?
This benefit will not be effective if your total disability results directly
from intentionally self-inflicted injuries or from an act of war while you are
serving in the military, naval or air forces of any country at war, declared or
undeclared.
WHEN MUST WE BE NOTIFIED?
We must receive written notice of your total disability at our home office:
(1) while you are living and totally disabled; and
(2) not later than one year after the termination of your insurance under the
group policy; and
(3) within one year of the date you request as the date for the commencement of
this benefit, except in the absence of legal incapacity.
However, the failure to give this notice within the time provided will not
invalidate the claim if it is shown that notice was given as soon as reasonably
possible.
WHAT IS YOUR COST FOR THIS BENEFIT?
Your cost for this benefit is shown on the specifications page attached to your
certificate.
WHAT IF YOUR INSURANCE UNDER THE GROUP POLICY LAPSES?
If your insurance lapses before notice of your total and permanent disability is
received at our home office, your insurance will be continued only if the notice
is received within one year after your insurance lapses. Also, the total
disability must have commenced prior to the date the net cash value became zero
or during the grace period allowed.
WHEN IS THE BENEFIT UNDER THIS AGREEMENT INCONTESTABLE?
This agreement is subject to the incontestability provision of the group policy
for each insured.
CAN INSURANCE THAT WAS CONTINUED UNDER THIS AGREEMENT BE CONVERTED?
Yes. Insurance under the group policy may be converted as set forth in your
certificate during the insured's
<PAGE> 2
lifetime and within 31 days after the insured ceases to be totally and
permanently disabled.
IS THIS BENEFIT RETROACTIVE?
Yes. The cost of insurance, cost of riders, and administration fees falling due
before we approve the insured's total disability claim will be deducted from
your account value. If the claim is approved, those charges which were deducted
after the insured became totally and permanently disabled will be credited to
your account value.
WILL YOUR ACCOUNT BE CREDITED WITH PREMIUM CONTRIBUTIONS AS A RESULT OF THIS
BENEFIT?
No. Except for interest which accrues on the account value, the account value
will not increase while insurance is being continued under this agreement.
Nothing contained herein will prohibit you from paying premiums.
This agreement is effective as of the policy date.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(5)(f)
================================================================================
NORTHSTAR LIFE CHILDREN'S BENEFIT CERTIFICATE SUPPLEMENT
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
This supplement is issued in consideration for your application for children's
coverage and for the payment of the additional monthly charge. The provisions
summarized in this supplement are subject to every term, condition, exclusion,
limitation and provision of the group policy as amended, unless otherwise
expressly provided for herein.
WHAT DOES THIS SUPPLEMENT PROVIDE?
This supplement provides life insurance on the lives of your eligible children.
WHAT MEMBERS OF YOUR FAMILY ARE ELIGIBLE FOR CHILDREN'S COVERAGE?
The following members of your family are eligible for insurance under this
supplement:
Your unmarried child or children, including stepchildren living in your
household and children legally adopted, who
(i) are between the ages of 14 days and 23 years; and
(ii) are dependent upon you for financial support.
Any child who, subsequent to your certificate effective date, meets the
requirements of this provision will become insured on the date he or she so
qualifies.
DEATH BENEFIT
- --------------------------------------------------------------------------------
WHAT IS THE AMOUNT OF LIFE INSURANCE ON EACH INSURED CHILD?
The amount of life insurance on each insured child is shown on the
specifications page attached to your certificate. The amount of insurance for
each insured child shall not exceed the lesser of your amount of insurance or
$4,000.
WHEN WILL THE DEATH BENEFIT BE PAYABLE?
We will pay the death benefit upon receipt of written proof satisfactory to us
that a child insured under this supplement died. All payments by us are payable
at our home office. Proof of any claim under this supplement must be submitted
in writing to our home office.
TO WHOM WILL WE PAY THE PROCEEDS?
All proceeds payable under this supplement will be paid to you.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
WHEN DOES INSURANCE ON YOUR ELIGIBLE CHILDREN BECOME EFFECTIVE?
Insurance on your eligible children becomes effective when your completed
application for children's coverage is approved by us; however, in no event will
insurance on your eligible children be effective before your insurance under the
group policy is effective.
WHAT IS THE MONTHLY COST TO YOU FOR INSURANCE UNDER THIS SUPPLEMENT?
The monthly cost to you for insurance under this supplement is shown on the
specifications page attached to your certificate.
WHEN WILL YOUR ACCOUNT BE CHARGED?
On the first day of each certificate month, the monthly cost for insurance under
this supplement will be charged to your account.
WHEN DOES INSURANCE ON AN INSURED CHILD TERMINATE?
Insurance on the life of a child insured under this supplement will terminate on
the earliest of:
(1) the date you request that insurance on your eligible children be
terminated;
(2) the date the child is no longer eligible for insurance under this
supplement;
(3) the date you are no longer insured under the group policy.
WHAT IS THE CONVERSION PRIVILEGE UNDER THIS SUPPLEMENT?
If an insured child's coverage under this supplement terminates because he or
she is no longer eligible, or because of your death, or because of termination
or amendment of this supplement, the insurance may be converted to a policy of
individual insurance with Northstar Life.
Conversion may be requested by you, if living, an insured spouse upon divorce or
annulment of marriage to you, an insured child of legal capacity, or an insured
child's guardian, if applicable. All other conditions and provisions of the
conversion privilege section of your certificate to which this supplement is
attached will apply.
WILL ACCOUNT VALUES ACCUMULATE FOR AN INSURED CHILD?
No. The insurance on an insured child will not accumulate account values.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(5)(g)
================================================================================
NORTHSTAR LIFE ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT
CERTIFICATE SUPPLEMENT
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
This supplement is issued in consideration for your application for accidental
death and dismemberment coverage and for the payment of the additional monthly
charge. The provisions summarized in this supplement are subject to every term,
condition, exclusion, limitation and provision of the group policy as amended,
unless otherwise expressly provided for herein.
WHAT DOES THIS SUPPLEMENT PROVIDE?
This supplement provides an accidental death and dismemberment benefit which is
subject to all of the provisions of the group policy and this supplement.
"You" as used in this supplement, means the insured person named on the
specifications page attached to your certificate who applied for accidental
death and dismemberment insurance.
ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT
- --------------------------------------------------------------------------------
WHEN WILL THE ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT BE PAYABLE?
We will pay the accidental death and dismemberment benefit upon receipt of
written proof satisfactory to us that you died or suffered dismemberment as a
result of an accidental injury. All payments by us are payable at our home
office. Proof of any claim under this supplement must be submitted in writing to
our home office.
The proceeds will be paid in a single sum. We will pay interest on the proceeds
from the date of your death or dismemberment until the date of payment. Interest
will be at an annual rate determined by us.
WHAT DOES DEATH OR DISMEMBERMENT BY ACCIDENTAL INJURY MEAN?
Death or dismemberment by accidental injury as used in this supplement means
that your death or dismemberment results, directly and independently of all
other causes, from an accidental drowning or from an accidental injury which was
unintended, unexpected, and unforeseen. The injury must occur while your
coverage under this supplement is in force. Your death or dismemberment must
occur within 180 days after the date of the injury. In no event will we pay the
accidental death or dismemberment benefit where your death or dismemberment
results from or is caused, directly or indirectly, by any of the following:
(1) suicide;
(2) your commission of a felony;
(3) bodily or mental infirmity, illness or disease;
(4) drugs, poisons, gases or fumes, voluntarily taken, administered,
absorbed, inhaled, ingested or injected, unless administered on the
advice of a physician;
(5) bacterial infection, other than infection occurring simultaneously
with, and as a result of, the accidental injury;
(6) travel or flight in or on, or descent from or with, any kind of
military aircraft;
(7) war or any act of war whether declared or undeclared.
WHAT IS THE AMOUNT OF THE ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT?
The amount of your benefit is as listed below.
FOR LOSS OF
Life................................Face Amount of Insurance
Both Hands or Both Feet or
Sight of Both Eyes..................Face Amount of Insurance
One Hand and One Foot...............Face Amount of Insurance
One Foot and
Sight of One Eye....................Face Amount of Insurance
One Hand and
Sight of One Eye....................Face Amount of Insurance
Sight of
One Eye.............................One-half of Face Amount of Insurance
One Hand or
One Foot............................One-half of Face Amount of Insurance
Your Face Amount of Insurance is shown on the specifications page attached to
your certificate. Loss of hands or feet means complete severance at or above the
wrists or ankle joints. Loss of sight means the entire and irrecoverable loss of
sight. Your dismemberment must result from a single accident. Benefits are not
cumulative over successive accidents.
TO WHOM WILL WE PAY THE PROCEEDS?
We will pay death proceeds to the beneficiary or beneficiaries who are named in
your application unless you subsequently change the beneficiary. In that event,
we will pay death proceeds to the beneficiary named in your last change of
beneficiary request. Proceeds for other losses shall be paid to you.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
WHEN DOES INSURANCE UNDER THIS SUPPLEMENT BECOME EFFECTIVE?
Insurance under this supplement becomes effective when your completed
application for accidental death and dismemberment coverage is approved by us
and the first premium is paid; however, in no event will insurance
<PAGE> 2
provided by this supplement be effective before your certificate effective date
as shown on the specifications page attached to your certificate.
WHAT IS THE MONTHLY COST TO YOU FOR INSURANCE UNDER THIS SUPPLEMENT?
The monthly cost to you for insurance under this supplement is shown on the
specifications page attached to your certificate.
WHEN WILL YOUR ACCOUNT BE CHARGED?
On the first day of each certificate month, the monthly cost for insurance under
this supplement will be charged to your account.
WHEN DOES INSURANCE UNDER THIS SUPPLEMENT TERMINATE?
Insurance under this supplement will automatically end on the earliest of the
following dates:
(1) when any premium remains unpaid after the end of the grace period; or
(2) when the group policy is surrendered, matures or ends; or
(3) on the last day for which premiums have been paid following your
notice of termination of coverage provided by this supplement; or
(4) on your 70th birthday; or
(5) when we pay a claim to you under this rider.
WHEN IS THE BENEFIT UNDER THIS SUPPLEMENT INCONTESTABLE?
Coverage provided by this supplement is subject to the incontestability
provision of the group policy.
WILL ACCOUNT VALUES ACCUMULATE UNDER THIS SUPPLEMENT?
No. Your insurance under this supplement will not accumulate account values.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(5)(h)
================================================================================
NORTHSTAR LIFE ACCELERATED BENEFITS RIDER
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
Benefits received under this Accelerated Benefits Policy Rider may be taxable
and may affect eligibility for public assistance programs. Certificate holders
should seek assistance from a personal tax advisor prior to requesting an
accelerated payment of death benefits.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
This agreement amends the group policy to which it is attached and is subject to
all its terms and conditions.
WHAT DOES THIS AGREEMENT PROVIDE?
This agreement provides for the accelerated payment of the death benefits
provided under the group policy.
If the insured has a terminal condition, as defined in this agreement, the
insured may request an accelerated benefit. If we agree to pay an accelerated
benefit, the cash values, loan values and the death benefit under the insured's
certificate will be reduced.
DEFINITIONS
- --------------------------------------------------------------------------------
When we use the following words, this is what we mean:
DEATH BENEFIT
The face amount of the insured's certificate less any existing loans or
indebtedness under the certificate and less any term insurance provided by an
additional benefit agreement.
ACCELERATED BENEFIT
The amount of the death benefit we will pay if the insured is eligible under
this agreement. We will calculate the accelerated benefit amount by multiplying
the death benefit by the accelerated benefit factor.
PHYSICIAN
An individual who is licensed to practice medicine or treat illness in the state
in which treatment is received. This does not include the insured, or a member
of the insured's immediate family.
IMMEDIATE FAMILY
The insured's spouse, child, parent, grandparent, grandchild, brothers and
sisters and their spouses.
TERMINAL CONDITION
- --------------------------------------------------------------------------------
WHAT IS A TERMINAL CONDITION?
A condition caused by sickness or accident which directly results in a life
expectancy of twelve months or less.
WHAT EVIDENCE DO WE REQUIRE OF THE INSURED'S TERMINAL CONDITION?
We must be given evidence that satisfies us that the insured's life expectancy,
because of sickness or accident, is twelve months or less. That evidence must
include certification by a licensed physician. We reserve the right to ask for
independent medical verification of a terminal condition.
PAYMENT OF ACCELERATED BENEFIT
- --------------------------------------------------------------------------------
HOW DO WE CALCULATE THE ACCELERATED BENEFIT FACTOR?
When we calculate this factor, we will consider the insured's age and the option
applied for. We will also base our calculation on certain assumptions, which we
may change from time to time, including but not limited to assumptions about:
(1) expected future premiums;
(2) the insured's life expectancy.
HOW DO WE CALCULATE THE ACCELERATED BENEFIT?
We will multiply the death benefit by the accelerated benefit factor to
determine the accelerated benefit available.
IS THERE A PROCESSING CHARGE?
Yes. We will subtract a processing charge of up to $150 from the accelerated
benefit before we pay that benefit.
WHAT ARE THE CONDITIONS FOR THE PAYMENT OF AN ACCELERATED BENEFIT?
We will consider the payment of an accelerated benefit, subject to all of the
following conditions:
(1) Coverage must be in force other than as extended term insurance and
all premiums due must be fully paid.
(2) Application must be made in writing and in a form which is
satisfactory to us. We will tell an applicant what form is
required.
(3) The certificate must not be assigned.
(4) The certificate must not have an irrevocable beneficiary.
IS THE REQUEST FOR AN ACCELERATED BENEFIT VOLUNTARY?
Yes. An accelerated benefit under this agreement is not intended to cause the
insured to involuntarily reduce the death proceeds ultimately payable to the
named beneficiary. An accelerated benefit will be made available on a voluntary
basis only. Therefore:
<PAGE> 2
(1) If an insured is required by law to use this option to meet the
claims of creditors, whether in bankruptcy or otherwise, the
insured is not eligible for this benefit.
(2) If an insured is required by a government agency to use this option
in order to apply for, obtain, or keep a government benefit or
entitlement, the insured is not eligible for this benefit.
HOW WILL WE PAY THE ACCELERATED BENEFIT?
We will pay the accelerated benefit in one lump sum or in any other mutually
agreeable manner.
IS THERE A MINIMUM OR MAXIMUM DEATH BENEFIT FOR AN ACCELERATED BENEFIT?
Yes. The minimum death benefit to be eligible for an accelerated benefit under
this rider may not be less than the lesser of 25% of the insured's amount of
insurance or $50,000, and may not be more than 50% of the insured's amount of
insurance. The maximum death benefit to be eligible for an accelerated benefit
is the lesser of $1,000,000 or 50% of the insured's death benefit.
WHAT IS THE EFFECT ON AN INSURED'S COVERAGE OF THE RECEIPT OF AN ACCELERATED
BENEFIT?
If an insured elects to receive accelerated benefits which total the entire
accelerated benefit available under this agreement, the insured's coverage and
all other benefits under the certificate based on the insured's life will end.
Any insurance under an insured's certificate on the life of someone other than
the insured will stay in effect; we will waive all future premiums for that
insurance, subject to all applicable provisions of the insured's coverage and of
any riders thereto.
DOES AN INSURED HAVE TO TAKE THE ENTIRE ACCELERATED BENEFIT?
No. The insured may choose to receive a partial accelerated benefit. If he or
she does so, the insured's remaining coverage will stay in force.
If the insured has elected to accelerate a partial amount of his or her face
amount of insurance, the remaining amount of his or her face amount of insurance
available for a subsequent request for accelerated benefits may not be less than
the lesser of 25% of his or her remaining face amount of insurance or $50,000.
The insured may reapply for the payment of the remaining accelerated benefit at
any time. However, we may ask for further satisfactory evidence that the insured
meets all requirements for the accelerated benefit. We reserve the right to
charge an additional processing charge.
If a partial accelerated benefit is chosen, coverage will remain in force and
premiums will be reduced. The face amount, cash values and outstanding loans
under the certificate will be reduced. The face amount, cash value and
outstanding loans under the certificate will be reduced in the same proportion
as the reduction in the death benefit resulting from receipt of accelerated
benefits, except any accidental death benefit which may by payable under the
terms of the group policy.
If an insured elects to receive only a part of the accelerated benefit amount
available under this agreement, the remaining death benefit under the
certificate must be at least $25,000.
TO WHOM WILL WE PAY ACCELERATED BENEFITS?
All accelerated benefits will be paid to the insured unless the insured validly
assign them otherwise. If the insured dies before all payments have been made,
we will pay the remainder to the beneficiary under the certificate in one lump
sum. The one sum we pay will be the present value of the payments that remain,
using the interest rate we use to determine the payments.
DO WE HAVE THE RIGHT TO OBTAIN INDEPENDENT MEDICAL VERIFICATION?
Yes. We retain the right to have the insured medically examined at our own
expense to verify the insured's medical condition. We may do this as often as
reasonably required while accelerated benefits are being considered or paid.
TERMINATION OF AGREEMENT
- --------------------------------------------------------------------------------
WHEN DOES THIS AGREEMENT TERMINATE?
This agreement will end at the earliest of:
(1) the date any premium due under the insured's certificate remains
unpaid at the end of the grace period; or
(2) the date we receive written request to cancel this agreement; or
(3) the date an insured's certificate matures, is surrendered,
terminated or continued in force as extended term or reduced
paid-up insurance; or
(4) the date of the insured's death; or
(5) when the group policy is surrendered, matures or ends.
This agreement is effective as of the effective date shown on the specifications
page attached to the insured's certificate.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(5)(i)
================================================================================
NORTHSTAR LIFE ACCELERATED BENEFITS
CERTIFICATE SUPPLEMENT
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
Benefits received under this Accelerated Benefits Certificate Supplement may be
taxable and may affect your eligibility for public assistance programs. You
should seek assistance from a personal tax advisor prior to requesting an
accelerated payment of death benefits.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
This certificate supplement amends the certificate to which it is attached and
is subject to all its terms and conditions.
WHAT DOES THIS CERTIFICATE SUPPLEMENT PROVIDE?
This certificate supplement provides for the accelerated payment of the death
benefits provided under the certificate to which it is attached.
If the insured has a terminal condition, as defined in this agreement, the
insured may request an accelerated benefit. If we agree to pay an accelerated
benefit, your cash values, loan values and the death benefit under your
certificate will be reduced.
DEFINITIONS
- --------------------------------------------------------------------------------
When we use the following words, this is what we mean:
DEATH BENEFIT
The face amount of the insured's certificate less any existing loans or
indebtedness under the certificate and less any term insurance provided by an
additional benefit agreement.
ACCELERATED BENEFIT
The amount of the death benefit we will pay if you are eligible under this
certificate supplement. We will calculate the accelerated benefit amount by
multiplying the death benefit by the accelerated benefit factor.
PHYSICIAN
An individual who is licensed to practice medicine or treat illness in the state
in which treatment is received. This does not include you, the insured, or a
member of your or the insured's immediate family.
IMMEDIATE FAMILY
The insured's or your spouse, child, parent, grandparent, grandchild, brothers
and sisters and their spouses.
TERMINAL CONDITION
- --------------------------------------------------------------------------------
WHAT IS A TERMINAL CONDITION?
A condition caused by sickness or accident which directly results in a life
expectancy of twelve months or less.
WHAT EVIDENCE DO WE REQUIRE OF THE INSURED'S TERMINAL CONDITION?
We must be given evidence that satisfies us that the insured's life expectancy,
because of sickness or accident, is twelve months or less. That evidence must
include certification by a licensed physician. We reserve the right to ask for
independent medical verification of a terminal condition.
PAYMENT OF ACCELERATED BENEFIT
- --------------------------------------------------------------------------------
HOW DO WE CALCULATE THE ACCELERATED BENEFIT FACTOR?
When we calculate this factor, we will consider the insured's age and the option
applied for. We will also base our calculation on certain assumptions, which we
may change from time to time, including but not limited to assumptions about:
(1) expected future premiums;
(2) the insured's life expectancy.
HOW DO WE CALCULATE THE ACCELERATED BENEFIT?
We will multiply the death benefit by the accelerated benefit factor to
determine the accelerated benefit available.
IS THERE A PROCESSING CHARGE?
Yes. We will subtract a processing charge of up to $150 from the accelerated
benefit before we pay that benefit to you.
WHAT ARE THE CONDITIONS FOR THE PAYMENT OF AN ACCELERATED BENEFIT?
We will consider the payment of an accelerated benefit, subject to all of the
following conditions:
(1) Your certificate must be in force other than as extended term insurance
and all premiums due must be fully paid.
(2) You must make application in writing and in a form which is satisfactory
to us. We will tell you what form is required.
(3) The certificate must not be assigned.
(4) The certificate must not have an irrevocable beneficiary.
IS THE REQUEST FOR AN ACCELERATED BENEFIT VOLUNTARY?
Yes. An accelerated benefit under this certificate supplement is not intended
to cause you to involuntarily reduce the death proceeds ultimately payable to
the named beneficiary. An accelerated benefit will be made available on a
voluntary basis only. Therefore:
<PAGE> 2
(1) If you are required by law to use this option to meet the claims of
creditors, whether in bankruptcy or otherwise, you are not eligible
for this benefit.
(2) If you are required by a government agency to use this option in
order to apply for, obtain, or keep a government benefit or
entitlement, you are not eligible for this benefit.
HOW WILL WE PAY THE ACCELERATED BENEFIT?
We will pay the accelerated benefit in one lump sum or in any other mutually
agreeable manner.
IS THERE A MINIMUM OR MAXIMUM DEATH BENEFIT FOR AN ACCELERATED BENEFIT?
Yes. The minimum death benefit to be eligible for an accelerated benefit under
this supplement may not be less than the lesser of 25% of the insured's amount
of insurance or $50,000, and may not be more than 50% of the insured's amount of
insurance. The maximum death benefit to be eligible for an accelerated benefit
is the lesser of $1,000,000 or 50% of the insured's death benefit.
WHAT IS THE EFFECT ON YOUR CERTIFICATE OF THE RECEIPT OF AN ACCELERATED BENEFIT?
If an insured elects to receive accelerated benefits which total the entire
accelerated benefit available under this certificate supplement, your
certificate and all other benefits under your certificate based on the insured's
life will end. Any insurance under your certificate on the life of someone other
than the insured will stay in effect; we will waive all future premiums for that
insurance, subject to the provisions of your certificate and of any riders
thereto.
DO YOU HAVE TO TAKE THE ENTIRE ACCELERATED BENEFIT?
No. You may choose to receive a partial accelerated benefit. If you do so, your
certificate will stay in force.
If you have elected to accelerate a partial amount of your face amount of
insurance, the remaining amount of your face amount of insurance available for a
subsequent request for accelerated benefits may not be less than the lesser of
25% of your remaining face amount of insurance or $50,000.
You may reapply for the payment of the remaining accelerated benefit at any
time. However, we may ask for further satisfactory evidence that the insured
meets all requirements for the accelerated benefit. We reserve the right to
charge an additional processing charge.
If you choose a partial accelerated benefit, your certificate will remain in
force and premiums will be reduced. The face amount, cash values and outstanding
loans of your certificate will be reduced in the same proportion as the
reduction in the death benefit resulting from your receipt of accelerated
benefits, except any accidental death benefit which may be payable under the
terms of the group policy.
If you elect to receive only a part of the accelerated benefit amount available
to you under this certificate supplement, the remaining death benefit under your
certificate must be at least $25,000.
TO WHOM WILL WE PAY ACCELERATED BENEFITS?
All accelerated benefits will be paid to you unless you validly assign them
otherwise. If the insured dies before all payments have been made, we will pay
the remainder to the beneficiary under the certificate in one lump sum. The one
sum we pay will be the present value of the payments that remain, using the
interest rate we use to determine the payments.
DO WE HAVE THE RIGHT TO OBTAIN INDEPENDENT MEDICAL VERIFICATION?
Yes. We retain the right to have the insured medically examined at our own
expense to verify the insured's medical condition. We may do this as often as
reasonably required while accelerated benefits are being considered or paid.
TERMINATION OF AGREEMENT
- --------------------------------------------------------------------------------
WHEN DOES THIS AGREEMENT TERMINATE?
This agreement will end at the earliest of:
(1) the date any premium due for your certificate remains unpaid at the
end of the grace period; or
(2) the date we receive written request to cancel this certificate
supplement; or
(3) the date your certificate matures, is surrendered, terminated or
continued in force as extended term or reduced paid-up insurance; or
(4) the date of the insured's death; or
(5) when the group policy is surrendered, matures or ends.
This certificate supplement is effective as of the effective date on the
specifications page attached to your certificate.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(5)(j)
================================================================================
NORTHSTAR LIFE CHILDREN'S BENEFIT POLICY RIDER
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
This rider amends the group policy to which it is attached, and is subject to
every term, condition, exclusion, limitation and provision of the group policy
unless otherwise expressly provided for herein.
WHAT IS THE PURPOSE OF THIS RIDER?
This rider provides life insurance on the lives of the insured's eligible
children. To obtain children's coverage under this rider, the insured must apply
for children's coverage and pay an additional monthly charge.
WHAT MEMBERS OF THE INSURED'S FAMILY ARE ELIGIBLE FOR CHILDREN'S COVERAGE?
The following members of the insured's family are eligible for insurance under
this rider:
The insured's unmarried child or children, including stepchildren living in his
or her household and children legally adopted, who
(i) are between the ages of 14 days and 23 years; and
(ii) are dependent upon the insured for financial support.
Any child who, subsequent to the insured's certificate effective date, meets the
requirements of this provision will become insured on the date he or she so
qualifies.
DEATH BENEFIT
- --------------------------------------------------------------------------------
WHAT IS THE AMOUNT OF LIFE INSURANCE ON EACH INSURED CHILD?
The amount of life insurance on each insured child is shown on the
specifications page attached to the insured's certificate. The amount of
insurance for each insured child shall not exceed the lesser of the insured's
amount of insurance or $4,000.
WHEN WILL THE DEATH BENEFIT BE PAYABLE?
We will pay the death benefit upon receipt of written proof satisfactory to us
that a child insured under the rider died. All payments by us are payable at our
home office. Proof of any claim under this rider must be submitted in writing to
our home office.
TO WHOM WILL WE PAY THE PROCEEDS?
All proceeds payable under this rider will be paid to the insured.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
WHEN DOES INSURANCE ON THE INSURED'S ELIGIBLE CHILDREN BECOME EFFECTIVE?
Insurance on the insured's eligible children becomes effective when the
insured's completed application for children's coverage is approved by us;
however, in no event will insurance on the insured's eligible children be
effective before the insured's insurance under the group policy is effective.
WHAT IS THE MONTHLY COST TO THE INSURED FOR INSURANCE UNDER THIS RIDER?
The monthly cost to the insured for insurance under this rider is shown on the
specifications page attached to the insured's certificate.
WHEN WILL THE INSURED'S ACCOUNT BE CHARGED?
On the first day of each certificate month, the monthly cost for insurance under
this rider will be charged to the insured's account.
WHEN DOES INSURANCE ON AN ELIGIBLE CHILD TERMINATE?
Insurance on the life of a child insured under this rider will terminate on the
earliest of:
(1) the date the insured requests that insurance on his or her eligible
children be terminated;
(2) the date the child is no longer eligible for insurance under this
rider;
(3) the date the insured is no longer insured under the group policy.
WHAT IS THE CONVERSION PRIVILEGE UNDER THIS RIDER?
If an insured child's coverage under this rider terminates because he or she is
no longer eligible, or because of the death of the insured employee, or because
of termination or amendment of this rider, the insurance may be converted to a
policy of individual insurance with Northstar Life.
Conversion may be requested by the insured employee, if living, an insured
spouse upon divorce or annulment of marriage to the insured employee, an insured
child of legal capacity, or an insured child's guardian, if applicable. All
other conditions and provisions of the conversion privilege section of the group
policy to which this rider is attached will apply.
WILL ACCOUNT VALUES ACCUMULATE FOR AN INSURED CHILD?
No. The insurance on an insured child will not accumulate account values.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(5)(k)
================================================================================
NORTHSTAR LIFE ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT
POLICY RIDER
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
This rider amends the group policy to which it is attached, and is subject to
every term, condition, exclusion, limitation and provision of the group policy
unless otherwise expressly provided for herein.
WHAT DOES THIS RIDER PROVIDE?
[This rider provides an accidental death and dismemberment benefit which is
subject to all of the provisions of the group policy and this rider.]
ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT
- --------------------------------------------------------------------------------
WHEN WILL THE ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT BE PAYABLE?
We will pay the accidental death and dismemberment benefit upon receipt of
written proof satisfactory to us that the insured died or suffered dismemberment
as a result of an accidental injury. All payments by us are payable at our home
office. Proof of any claim under this rider must be submitted in writing to our
home office.
The proceeds will be paid in a single sum. We will pay interest on the proceeds
from the date of the insured's death or dismemberment until the date of payment.
Interest will be at an annual rate determined by us.
WHAT DOES DEATH OR DISMEMBERMENT BY ACCIDENTAL INJURY MEAN?
Death or dismemberment by accidental injury as used in this rider means that the
insured's death or dismemberment results, directly and independently of all
other causes, from an accidental drowning or from an accidental injury which was
unintended, unexpected, and unforeseen. The injury must occur while the
insured's coverage under this rider is in force. The insured's death or
dismemberment must occur within [180] days after the date of the injury. In no
event will we pay the accidental death or dismemberment benefit where the
insured's death or dismemberment results from or is caused directly or
indirectly by any of the following:
(1) suicide;
(2) the insured's commission of a felony;
(3) bodily or mental infirmity, illness or disease;
(4) drugs, poisons, gases or fumes, voluntarily taken, administered,
absorbed, inhaled, ingested or injected, unless administered on the
advice of a physician;
(5) bacterial infection, other than infection occurring simultaneously
with, and as a result of, the accidental injury;
(6) travel or flight in or on, or descent from or with, any kind of military
aircraft;
(7) war or any act of war, whether declared or undeclared.
WHAT IS THE AMOUNT OF THE ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT?
The amount of the insured's benefit is as listed below.
FOR LOSS OF
[Life .............................. Face Amount of Insurance
Both Hands or Both Feet or
Sight of Both Eyes ................. Face Amount of Insurance
One Hand and One Foot .............. Face Amount of Insurance
One Foot and
Sight of One Eye ................... Face Amount of Insurance
One Hand and
Sight of One Eye ................... Face Amount of Insurance
Sight of
One Eye ................... One-half of Face Amount of Insurance
One Hand or
One Foot .................. One-half of Face Amount of Insurance]
[The insured's Face Amount of Insurance is shown on the specifications page
attached to the insured's certificate. Loss of hands or feet means complete
severance at or above the wrists or ankle joints. Loss of sight means the entire
and irrecoverable loss of sight. An insured's dismemberment must result from a
single accident. Benefits are not cumulative over successive accidents.]
TO WHOM WILL WE PAY THE PROCEEDS?
We will pay death proceeds to the beneficiary or beneficiaries who are named in
the insured's application unless the insured subsequently changes the
beneficiary. In that event, we will pay death proceeds to the beneficiary named
in the insured's last change of beneficiary request. Proceeds for other losses
shall be paid to the insured.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
WHEN DOES INSURANCE UNDER THIS RIDER BECOME EFFECTIVE?
Insurance under this rider becomes effective when the insured's completed
application for accidental death and dismemberment coverage is approved by us
and the first premium is paid; however, in no event will insurance provided by
this rider be effective before the insured's insurance under the group policy is
effective.
WHAT IS THE MONTHLY COST TO THE INSURED FOR INSURANCE UNDER THIS RIDER?
The cost of this benefit for each insured is shown on the specifications page
attached to the insured's certificate.
<PAGE> 2
WHEN WILL THE INSURED'S ACCOUNT BE CHARGED?
On the first day of each policy month the monthly cost for insurance under this
rider will be charged to the insured's account.
WHEN DOES INSURANCE UNDER THIS RIDER TERMINATE?
The insured's coverage under this rider will automatically end on the earliest
of the following dates:
(1) when any premium remains unpaid after the end of the grace period; or
(2) when the group policy is surrendered, matures or ends; or
(3) on the last day for which premiums have been paid following the
insured's notice of termination of coverage provided under this rider;
or
(4) on the insured's 70th birthday; or
(5) when we pay a claim to you under this rider.
WHEN IS THE BENEFIT UNDER THIS RIDER INCONTESTABLE?
Coverage provided by this rider is subject to the incontestability provision of
the group policy for each insured.
WILL ACCOUNT VALUES ACCUMULATE UNDER THIS RIDER?
No. The insured's insurance under this rider will not accumulate account values.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(5)(l)
================================================================================
NORTHSTAR LIFE WAIVER OF PREMIUM POLICY RIDER
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
This agreement amends the group policy to which it is attached, and is issued in
consideration of the required premium. This agreement provides a waiver of
charges for those insured employees whose employer selected the waiver of
premium benefit on its application. This agreement is subject to every term,
condition, exclusion, limitation, and provision of the group policy unless
otherwise expressly provided for herein.
WHAT DOES THE WAIVER OF PREMIUM BENEFIT PROVIDE?
If an insured employee becomes totally and permanently disabled, as hereinafter
defined, while under age 60, upon receipt of due proof of such disability, the
injured employee's insurance under the group policy (including applicable
riders) will be continued in force, subject to the following provisions and
without payment of premiums for such insured employee, during the uninterrupted
continuance of such total and permanent disability.
WHAT IS "TOTAL" DISABILITY?
Total disability is a disability which occurs while the insured employee's
insurance is in force and which results from an accidental injury or a disease
that continuously prevents the insured employee from engaging in an occupation.
The insured employee must be under the care of a licensed physician other than
the insured employee. During the first 24 months of total disability,
"occupation" means the insured employee's regular occupation. After 24 months,
it means any occupation for which the insured employee is reasonably fitted by
education, training or experience.
The insured employee's total and irrevocable loss of the following shall be
considered total disability even if the insured employee engages in an
occupation:
(1) the sight of both eyes; or
(2) the use of both hands; or
(3) the use of both feet; or
(4) the use of one hand and one foot.
WHAT IS "PERMANENT" DISABILITY?
Total disability will be considered permanent only after it has existed
continuously for at least six months.
HOW LONG WILL INSURANCE BE CONTINUED?
If the insured employee becomes totally and permanently disabled, insurance will
be continued:
(1) until the insured employee's 95th birthday; or
(2) until the date the insured employee is no longer totally and
permanently disabled; or
(3) until the date the insured employee terminates or surrenders his or
her insurance; or
(4) until the date the group policy terminates;
whichever occurs first.
However, the termination of the group policy shall have no effect on the claim
of any insured who is disabled, as set forth in this agreement, at the time the
group policy terminates.
WHAT WILL BE CONSIDERED DUE PROOF OF DISABILITY?
The insured employee must furnish evidence satisfactory to us that his or her
total disability:
(1) commenced while his or her insurance under the group policy was in
force; and
(2) commenced before the insured employee's 60th birthday; and
(3) was continuous for six months or more.
We will, from time to time, also require additional proof satisfactory to us
that the insured employee continues to be totally and permanently disabled. We
may also require the insured employee to submit to one or more medical
examinations at our expense. However, we will not require a medical examination
of the insured employee more frequently than once a year if the total disability
has continued for two years.
ARE THERE ANY LIMITATIONS?
Insurance will not be continued if the insured employee's total disability
results from intentionally self-inflicted injuries or from an act of war while
the insured employee is serving in the military, naval or air forces of any
country at war, declared or undeclared.
WHEN MUST WE BE NOTIFIED?
We must receive written notice of the insured employee's total disability at our
home office:
(1) while the insured employee is living and totally disabled; and
(2) not later than one year after the termination of the insured
employee's insurance under the group policy; and
(3) within one year of the date the insured employee requests as the date
for the commencement of this benefit, except in the absence of legal
incapacity.
However, the failure to give this notice within the time provided will not
invalidate the claim if it is shown that notice was given as soon as reasonably
possible.
WHAT IS THE INSURED EMPLOYEE'S COST FOR THIS BENEFIT?
The cost of this benefit is included in the planned monthly premium amount shown
on the specifications page attached to the insured's certificate.
<PAGE> 2
WHAT IF THE INSURED EMPLOYEE'S INSURANCE UNDER THE GROUP POLICY LAPSES?
If the insured employee's insurance lapses before notice of the insured
employee's total disability is received at our home office, the insured
employee's insurance will be continued only if the notice is received within one
year after his or her insurance lapses. Also, the total disability must have
commenced prior to the date the net cash value became zero or during the grace
period allowed.
WHEN IS THE BENEFIT UNDER THIS AGREEMENT INCONTESTABLE?
This agreement is subject to the incontestability provision for each insured
employee.
CAN INSURANCE THAT WAS CONTINUED UNDER THIS AGREEMENT BE CONVERTED?
Yes. Insurance under this group policy may be converted during the insured
employee's lifetime and within 31 days after he or she ceases to be totally and
permanently disabled.
IS THIS BENEFIT RETROACTIVE?
Yes. The cost of insurance, cost of riders, and administration fees falling due
before we approve the insured employee's total and permanent disability claim
will be deducted from his or her account value. If the insured employee's claim
for benefits under this agreement is approved, those charges which were deducted
after the total and permanent disability began will be credited to the insured
employee's account value.
WILL THE INSURED EMPLOYEE'S ACCOUNT BE CREDITED WITH PREMIUM CONTRIBUTIONS AS A
RESULT OF THIS BENEFIT?
No. Except for interest which accrues on the account value, the account value
will not increase while insurance is being continued under this agreement.
Nothing contained herein will prohibit an insured employee from making premium
contributions.
This agreement is effective as of the effective date shown on the insured
employee's profile page.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(5)(m)
================================================================================
NORTHSTAR LIFE POLICYHOLDER CONTRIBUTION RIDER
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
This rider amends the group policy to which it is attached. This rider is
subject to every term, condition, exclusion, limitation, and provision of the
group policy unless otherwise expressly provided for herein.
WHAT DOES THIS RIDER PROVIDE?
This rider allows a policyholder to pay for a portion or all of the monthly
charges under the policy without affecting the account value under the policy
which may accumulate due to employee paid net premiums.
PREMIUMS
- --------------------------------------------------------------------------------
HOW WILL PREMIUMS BE ALLOCATED?
The portion of the net premium paid by the policyholder which is to cover the
charges designated by the policyholder will be paid through the guaranteed
account. The remaining portion of the premium will be allocated to the
guaranteed account and/or to the sub-accounts of the separate account, according
to the allocation elected in the application for coverage, or as subsequently
changed by the owner.
HOW WILL CHARGES BE ASSESSED AGAINST THE ACCOUNT VALUE?
The charges which are to be paid by the policyholder will be deducted from the
guaranteed account value on the same day the policyholder paid premium
designated to cover those charges is received. Any remaining charges to be
assessed against the account value will be deducted on the certificate date and
on each succeeding certificate monthly anniversary according to the terms set
forth in the group policy to which this rider is attached.
TERMINATION
- --------------------------------------------------------------------------------
This rider will terminate on the earlier of:
(1) the date the policyholder requests termination of this rider; and
(2) the date the group policy terminates.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(5)(n)
===============================================================================
NORTHSTAR LIFE POLICYHOLDER CONTRIBUTION
CERTIFICATE SUPPLEMENT
- -------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- -------------------------------------------------------------------------------
GENERAL INFORMATION
- -------------------------------------------------------------------------------
This supplement is issued in consideration of your application, and timely
payment of the required premium. This supplement is subject to every term,
condition, exclusion, limitation, and provision of the group policy unless
otherwise expressly provided for herein. You may examine the group policy at the
principal office of the policyholder during regular working hours.
WHAT DOES THIS POLICYHOLDER CONTRIBUTION SUPPLEMENT PROVIDE?
This supplement allows a policyholder to pay for a portion or all of the monthly
charges under the policy without affecting your account value under the policy
which may accumulate due to net premiums paid by you.
PREMIUMS
- -------------------------------------------------------------------------------
HOW WILL PREMIUMS BE ALLOCATED?
The portion of the net premium paid by the policyholder which is to cover the
charges designated by the policyholder will be paid through the guaranteed
account. The remaining portion of the premium will be allocated to the
guaranteed account and/or to the sub-accounts of the separate account, according
to the allocation elected in your application for coverage, or as subsequently
changed by you.
HOW WILL CHARGES BE ASSESSED AGAINST THE ACCOUNT VALUE?
The charges which are to be paid by the policyholder will be deducted from the
guaranteed account value on the same day the policyholder paid premium
designated to cover those charges is received. Any remaining charges to be
assessed against the account value will be deducted on the certificate date and
on each succeeding certificate monthly anniversary according to the terms set
forth in the group policy.
TERMINATION
- -------------------------------------------------------------------------------
This supplement will terminate on the earlier of:
(1) the date the policyholder requests termination of this supplement, and
(2) the date the group policy terminates.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(5)(o)
================================================================================
NORTHSTAR LIFE SPOUSE AND CHILD TERM LIFE
INSURANCE POLICY RIDER
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
This rider amends the group policy to which it is attached, and is subject to
every term, condition, exclusion, limitation, and provision of the group policy
unless otherwise expressly provided for herein.
WHAT DOES THIS RIDER PROVIDE?
This rider provides term life insurance on the lives of the insured's eligible
spouse and children. To obtain coverage under this rider, the insured must apply
for spouse and child coverage and pay an additional monthly charge.
WHAT MEMBERS OF THE INSURED'S FAMILY ARE ELIGIBLE FOR COVERAGE?
The following members of the insured's family are eligible for coverage under
this rider:
(1) the insured's lawful spouse who is not legally separated from the
insured, and who is not eligible for insurance as an employee under
the policy to which this rider is attached; and
(2) the insured's unmarried child or children, stepchildren, and
legally adopted children, who are living at home, are between the
ages of 14 days and 23 years, and who are dependent on the insured
for financial support.
Any child who, subsequent to the effective date of the insured's certificate
supplement for Spouse and Child Term Life Insurance, meets the requirements of
this provision will become insured on the date he or she so qualifies.
DEATH BENEFIT
- --------------------------------------------------------------------------------
WHAT IS THE AMOUNT OF LIFE INSURANCE ON EACH INSURED FAMILY MEMBER?
The amount of life insurance on each insured family member is shown on the
specifications page attached to the group policy. The amount of insurance for
the insured spouse shall not exceed the insured employee's amount of insurance.
The amount of insurance for each insured child shall not exceed the lesser of
the insured employee's amount of insurance or $4,000.
WHEN WILL THE DEATH BENEFIT BE PAYABLE?
We will pay the death benefit upon receipt at our home office of written proof
satisfactory to us that a spouse or child insured under this rider has died. All
payments made by us are payable from our home office.
TO WHOM WILL WE PAY THE PROCEEDS?
All proceeds payable under this rider will be paid to the insured.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
WHEN DOES INSURANCE ON THE INSURED'S ELIGIBLE SPOUSE AND CHILDREN BECOME
EFFECTIVE?
Insurance on the insured's eligible spouse and children becomes effective when
the insured's completed application for spouse and child coverage is approved by
us; however, in no event will insurance on the insured's eligible spouse and
children be effective before the insured's insurance under the group policy is
effective.
WHAT IS THE MONTHLY COST TO THE INSURED FOR INSURANCE UNDER THIS RIDER?
The monthly cost to the insured for insurance under this rider is shown on the
specifications page attached to the group policy.
WHEN WILL THE INSURED'S ACCOUNT BE CHARGED?
On the first day of each certificate month, the monthly cost for insurance under
this rider will be charged to the insured's account.
WHEN DOES INSURANCE ON AN ELIGIBLE SPOUSE OR CHILD TERMINATE?
Insurance on the life of a spouse or child insured under this rider will
terminate on the earliest of:
(1) the date the insured requests that insurance on his or her eligible
spouse and children be terminated;
(2) the date the spouse or child is no longer eligible for insurance under
this rider;
(3) the date the insured is no longer insured under the group policy.
WHAT IS THE CONVERSION PRIVILEGE UNDER THIS RIDER?
If an insured spouse or child's coverage under this rider terminates because he
or she is no longer eligible, or because of the death of the insured employee,
or because of termination or amendment of this rider, the insurance may be
converted to a policy of individual insurance with Northstar Life.
<PAGE> 2
Conversion may be requested by the insured employee, if living, an insured
spouse upon divorce or annulment of marriage to the insured employee, an insured
child of legal capacity, or the insured child's guardian, if applicable. All
other conditions and provisions of the conversion privilege section of the group
policy to which this rider is attached will apply.
WILL ACCOUNT VALUES ACCUMULATE FOR AN INSURED SPOUSE OR CHILD?
No. The insurance on an insured spouse or child will not accumulate account
values.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(5)(p)
================================================================================
NORTHSTAR LIFE SPOUSE AND CHILD TERM LIFE
INSURANCE CERTIFICATE SUPPLEMENT
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
This supplement is issued in consideration for your application for spouse and
child coverage and for the payment of the additional monthly charge. The
provisions summarized in this supplement are subject to every term, condition,
exclusion, limitation, and provision of the group policy as amended, unless
otherwise expressly provided for herein.
WHAT DOES THIS SUPPLEMENT PROVIDE?
This supplement provides term life insurance on the lives of your eligible
spouse and children.
WHAT MEMBERS OF YOUR FAMILY ARE ELIGIBLE FOR COVERAGE?
The following members of your family are eligible for coverage under the Spouse
and Child Term Life Insurance Policy Rider attached to the group policy:
(1) your lawful spouse who is not legally separated from you, and who
is not eligible for insurance as an employee under the policy to
which the Spouse and Child Term Life Insurance Policy Rider is
attached; and
(2) your unmarried child or children, stepchildren, and legally adopted
children, who are living at home, are between the ages of 14 days
and 23 years, and who are dependent on you for financial support.
Any child who, subsequent to the effective date of your certificate supplement
for Spouse and Child Term Life Insurance, meets the requirements of this
provision will become insured on the date he or she so qualifies.
DEATH BENEFIT
- --------------------------------------------------------------------------------
WHAT IS THE AMOUNT OF LIFE INSURANCE ON EACH INSURED FAMILY MEMBER?
The amount of life insurance on each insured family member is shown on the
specifications page attached to your certificate. The amount of insurance for
the insured spouse shall not exceed your amount of insurance. The amount of
insurance for each insured child shall not exceed the lesser of your amount of
insurance or $4,000.
WHEN WILL THE DEATH BENEFIT BE PAYABLE?
We will pay the death benefit upon receipt at our home office of written proof
satisfactory to us that your spouse or child insured under this supplement has
died. All payments made by us are payable from our home office.
TO WHOM WILL WE PAY THE PROCEEDS?
All proceeds payable under this supplement will be paid to you.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
WHEN DOES INSURANCE ON YOUR ELIGIBLE SPOUSE AND CHILDREN BECOME EFFECTIVE?
Insurance on your eligible spouse and children becomes effective when your
completed application for spouse and child coverage is approved by us; however,
in no event will insurance on your eligible spouse and children be effective
before your insurance under the group policy is effective.
WHAT IS THE MONTHLY COST TO YOU FOR INSURANCE UNDER THIS SUPPLEMENT?
The monthly cost to you for insurance under this supplement is shown on the
specifications page attached to your certificate.
WHEN WILL YOUR ACCOUNT BE CHARGED?
On the first day of each certificate month, the monthly cost for insurance under
this supplement will be charged to your account.
WHEN DOES INSURANCE ON AN INSURED SPOUSE OR CHILD TERMINATE?
Insurance on the life of a spouse or child insured under this supplement will
terminate on the earliest of:
(1) the date you request that insurance on your eligible spouse and
children be terminated;
(2) the date the spouse or child is no longer eligible for insurance under
this supplement;
(3) the date you are no longer insured under the group policy.
WHAT IS THE CONVERSION PRIVILEGE UNDER THIS SUPPLEMENT?
If an insured spouse or child's coverage under this supplement terminates
because he or she is no longer eligible, or because of your death, or because of
termination or amendment of this supplement, the insurance may be converted to a
policy of individual insurance with Northstar Life.
Conversion may be requested by you, if living, an insured spouse upon divorce or
annulment of marriage to you, an insured child of legal capacity, or the insured
child's guardian, if applicable. All other conditions and provisions of the
conversion privilege section of your certificate to which this supplement is
attached will apply.
WILL ACCOUNT VALUES ACCUMULATE FOR AN INSURED SPOUSE OR CHILD?
No. The insurance on an insured spouse or child will not accumulate account
values.
/s/ Dennis E. Prohofsky /s/ Robert E. Hunstad
Secretary President
<PAGE> 1
EXHIBIT A.(6)(a)
CHARTER
ARTICLE I
The name of the Corporation shall be Northstar Life Insurance Company.
ARTICLE II
The principal office of the Corporation shall be located in the County
of Westchester in the State of New York.
ARTICLE III
The Corporation is formed for the purpose of transacting the following
kinds of insurance business as defined in paragraphs 1, 2 and 3 of (a) of
Section 1113 of the Insurance Law of the State of New York:
1. "Life insurance" means every insurance upon the lives of
human beings and every insurance appertaining thereto,
including the granting of endowment benefits, additional
benefits in the event of death by accident, additional
benefits to safeguard the contract from lapse, or provide a
special surrender value, upon total and permanent disability
of the insured, and optional modes of settlement of proceeds.
Amounts paid the insurer for life insurance and proceeds
applied under optional modes of settlement or under dividend
options may be allocated by the insurer to one or more
separate accounts pursuant to section four thousand two
hundred forty of this chapter.
2. "Annuities", meaning all agreements to make periodical
payments for a period certain or where the making or
continuance of all or some of a series of such payments, or
the amount of any such payment, depends upon the continuance
of human life, except payments made under the authority of
paragraph one hereof. Amounts paid the insurer to provide
annuities and proceeds applied under the optional modes of
settlement or dividend options may be allocated by the
insurer to one or more separate accounts
1
<PAGE> 2
pursuant to section four thousand two hundred forty of this
chapter.
3. "Accident and health insurance" means (i) insurance against
death or personal injury by accident or by any specified kind
or kinds of accident and insurance against sickness, ailment
or bodily injury, including insurance providing disability
benefits pursuant to article nine of the workers'
compensation law, except as specified in item (ii) hereof;
and (ii) non-cancellable disability insurance, meaning
insurance against disability resulting from sickness, ailment
or bodily injury (but excluding insurance solely against
accidental injury) under any contract which does not give
insurer the option to cancel or otherwise terminate the
contract at or after one year from its effective date or
renewal date.
ARTICLE IV
The amount of the capital shall be Two Million Dollars ($2,000,000.00)
to consist of Two Hundred Thousand (200,000) shares of Capital Stock of the par
value of Ten Dollars ($10.00) each.
ARTICLE V
Section 1. The corporate powers shall be exercised by a Board of not
less than thirteen nor more than twenty Directors.
Section 2. At all times, the majority of Directors shall be citizens
and residents of the United States and not less than three thereof shall be
residents of the State of New York, and none shall be less than eighteen years
of age. Directors need not be Stockholders.
ARTICLE VI
Section 1. The Directors shall be elected by Stockholders, as
prescribed by the laws of the State of New York or by by-laws not inconsistent
with this Charter or the laws of the State of New York. An election of Directors
shall be held annually on the first Tuesday in March at 3:00 p.m., if not a
legal holiday, and, if a legal holiday, then on the next succeeding
2
<PAGE> 3
business day not a legal holiday, at a place designated in the Notice of
Meeting. The Stockholders by a majority vote of outstanding shares at a meeting
may remove any Directors with or without cause. Any Director may be removed by
the Board of Directors for cause, at any time, or whenever such action is
requested by the Superintendent of Insurance of the State of New York.
Section 2. Whenever any vacancy or vacancies shall occur in the Board
of Directors by death, resignation, removal or otherwise, a majority of the
remaining members of the Board, at a meeting called for that purpose, or at any
regular meeting, shall elect a Director or Directors to fill the vacancy or
vacancies thus occasioned and each Director so elected shall serve until his or
her successor is selected and is qualified. If, because of any vacancy or
vacancies in the Board of Directors, the number of Directors shall be less than
thirteen, the Corporation shall not for that reason be dissolved, but every
Director shall continue to hold office and discharge his or her duties until his
or her successor shall have been elected and qualified.
Section 3. Vacancies in any office may be filled for the remainder of
the term in which the same shall occur by a majority vote of the Board of
Directors.
ARTICLE VII
Section 1. The Board of Directors may from time to time, by resolution
passed by a majority of the whole Board, designate one or more committees, each
committee to consist of five or more directors of the Corporation, and not less
than one-third of the members of each committee shall be persons who are not
officers or employees of the Corporation or of any entity controlling,
controlled by, or under common control with the Corporation and who are not
beneficial owners of a controlling interest in the voting stock of the
Corporation or any such
3
<PAGE> 4
entity ("disinterested directors"). The Board of Directors may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. The resolution of the
Board of Directors may, in addition or alternatively, provide that in the
absence or disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the Board of Directors, shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it, except as otherwise provided by law.
Unless the resolution of the Board of Directors expressly so provides, no such
committee shall have the authority to declare a dividend or to authorize the
issuance of stock. Any such committee may adopt rules governing the method of
calling and time and place of holding its meetings unless otherwise provided by
the Board of Directors, a majority of any such committee shall constitute a
quorum for the transaction of business, and the vote of the majority of the
members of such committee present at a meeting at which a quorum is present
shall be the act of such committee if at least one disinterested director is
included in such quorum. Each such committee shall keep a record of its acts and
proceedings and shall report thereon to the Board of Directors whenever
requested to do so. Any or all members of any such committee may be removed,
with or without cause, by resolution of the Board of Directors, passed by a
majority of the whole Board.
Section 2. The Board of Directors shall establish one or more
committees comprised solely of disinterested directors. Such committee or
committees shall have
4
<PAGE> 5
responsibility for recommending the selection of independent certified public
accountants, reviewing the Corporation's financial condition, the scope and
results of the independent audit and any internal audit, nominating candidates
for director for election by Shareholders, and evaluating the performance of
officers deemed by such committee or committees to be principal officers of the
Corporation and recommending to the Board of Directors the selection and
compensation of such principal officers.
ARTICLE VIII
Any action required by statute to be taken at any annual or special
meeting of the Stockholders of the Corporation, or any action which may be taken
at any annual or special meeting of the Stockholders, may be taken without a
meeting, without the unanimous consent of the Shareholders, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.
ARTICLE IX
The names and post office addresses of the Directors who shall serve
until the next annual meeting of Stockholders and until their successors are
duly elected are:
NAME ADDRESS
- ---- -------
Joseph Bird 676 Laura Court
Mendota Heights, MN 55118
Coleman Bloomfield 584 South Mississippi River Blvd.
St. Paul, MN 55116
John Bruder 710 Stanwich Lane
Mendota Heights, MN 55118
5
<PAGE> 6
Keith Campbell 735 Medora Court
Mendota Heights, MN 55118
Michael Clark 6801 Shore Road
Brooklyn, NY 11220
Richard Engen 3394 Glenarden Road
Arden Hills, MN 55112
Betty Good 7 Metropolitan Oval
Bronx, NY 10462
Robert Hasling 3327 Churchill Street
St. Paul, MN 55126
James Johnson 2367 Apache Court
Mendota Heights, MN 55120
Joel Mahle 2715 Fountain Lane
Plymouth, MN 55447
Paul Meyer 50 Birchwood Lane
Hartsdale, NY 10530
Fioravante Perrotta 20 Sutton Place South
New York, NY 10022
Averel Wilson 176 West 87th Street
New York, NY 10024
ARTICLE X
Section 1. The officers of the Corporation shall be a President and a
Secretary, and any other officer of officers as may be chosen by the Board of
Directors, as prescribed by by-laws not inconsistent with this Charter or the
laws of the State of New York. Each officer shall be elected annually by the
Board of Directors at its first regular meeting following the annual meeting of
Stockholders and shall hold office for a period of one year or until his or her
successor shall be elected and qualified.
6
<PAGE> 7
Section 2. In the event a vacancy occurs in the office of President or
Secretary, the Board of Directors shall, at the earliest practicable date, elect
a successor who shall hold office for the unexpired term of his or her
predecessor. Any vacancy in any other office may be filled for the unexpired
portion of the term by the Board of Directors at any regular or special meeting.
Section 3. Any officer may be removed at any time by the affirmative
vote of not less than a majority of the entire Board of Directors.
Section 4. Except for the offices of President and Secretary, any
number of offices may be held by the same person.
Section 5. The duties of the officers shall be those customarily
pertaining to their respective offices or positions, elective or appointive,
together with such other duties as may be prescribed by law or assigned by the
Board of Directors.
ARTICLE XI
Alterations, amendments or restatements of this Charter may be
made upon the approval of a majority of the entire Board of Directors and upon
the consent of the holders of two-thirds of the outstanding shares of the
Corporation. No such alteration, amendment or restatement shall be effective,
however, unless its adoption and consent has been made in compliance with
applicable provisions of the New York Insurance Law.
ARTICLE XII
The duration of the corporate existence of the Corporation shall be
perpetual.
7
<PAGE> 8
CERTIFICATE OF CHANGE OF
NORTHSTAR LIFE INSURANCE COMPANY
UNDER SECTION 805-A OF THE BUSINESS
CORPORATION LAW
Pursuant to the provisions of Section 805-A of the New York Business
Corporation Law, the undersigned corporation adopts the following Certificate of
Change of Northstar Life Insurance Company:
FIRST: The name of the corporation is NORTHSTAR LIFE
INSURANCE COMPANY.
SECOND: The Certificate of Incorporation was filed by the
Department of State on May 18, 1989.
THIRD: The following change of the location of Northstar
Life Insurance Company's office in New York was
authorized by the Board of Directors on September 11,
1990 by unanimous written consent in accordance with
Section 803(b)(1) of the New York Business
Corporation Law:
Article II is amended and reads as follows:
ARTICLE II
The principal office of the Corporation shall be located at University
Corporate Centre at Amherst, 100 Corporate Parkway, Amherst, New York 14226.
Dated:
----------------------------
---------------------------------
, President
---------------------
---------------------------------
, Secretary
---------------------
Acknowledgement:
Subscribed and sworn to before me this day of
, 1999.
-----------------------------
Notary Public
8
<PAGE> 9
CERTIFICATE OF CHANGE OF
NORTHSTAR LIFE INSURANCE COMPANY
UNDER SECTION 805-A OF THE BUSINESS
CORPORATION LAW
Pursuant to the provisions of Section 805-A of the New York Business
Corporation Law, the undersigned corporation adopts the following Certificate of
Change of Northstar Life Insurance Company:
FIRST: The name of the corporation is NORTHSTAR LIFE
INSURANCE COMPANY.
SECOND: The Certificate of Incorporation was filed by the
Department of State on May 18, 1989.
THIRD: The following change of the location of Northstar
Life Insurance Company's office in New York was
authorized by the Board of Directors on September 11,
1990 by unanimous written consent in accordance with
Section 803(b)(1) of the New York Business
Corporation Law:
Article II is amended and reads as follows:
ARTICLE II
The principal office of the Corporation shall be located in the County
of Erie in the State of New York.
Dated:
-------------------------
---------------------------------
, President
---------------------
---------------------------------
, Secretary
---------------------
Acknowledgement:
Subscribed and sworn to before me this day of
, 1999.
-----------------------------
Notary Public
9
<PAGE> 1
EXHIBIT A.(6)(b)
BY-LAWS
OF
NORTHSTAR LIFE INSURANCE COMPANY,
A NEW YORK CORPORATION
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1. Place of Meetings. All meetings of the Shareholders
of the Corporation shall be held at the registered office of the Corporation or
at such places, within or without the State of New York, as may be fixed from
time to time by the Board of Directors.
SECTION 2. Annual Meeting. Commencing in the year 1989, the
annual meeting of Shareholders shall be held on the first Tuesday in March of
every year at 3:00 p.m., if not a legal holiday, and if a legal holiday, then on
the next following business day not a legal holiday, at 3:00 p.m., or at such
other date and time as may be fixed by the Board of Directors. At each annual
meeting of Stockholders, the Stockholders shall elect directors and transact
such other business as may properly be brought before the meeting.
SECTION 3. Notice of Annual Meeting. Written notice of each
annual meeting of Stockholders, stating the place, date and hour of the meeting,
shall be given in the manner set forth in Article IV of these By-Laws not less
than ten nor more than fifty days before the date of the meeting to each
Stockholder entitled to vote at the meeting.
SECTION 4. Special Meetings. Special meetings of Shareholders
may be called at any time for any purpose or purposes, by the Board of
Directors, or by the President, and shall be called by the President or the
Secretary upon the written request of a majority of the Board of Directors, or
upon the written request of a Shareholder or Shareholders holding of record at
least
<PAGE> 2
10% of the outstanding shares of stock of the Corporation entitled to vote
at such meeting. Such request shall state the purpose or purposes of the
proposed meeting.
SECTION 5. Notice of Special Meeting. Notice of each special
meeting of Shareholders shall be given in the manner set forth in Article IV of
these By-Laws not less than ten nor more than fifty days before the date of the
meeting to each Shareholder entitled to vote at such meeting. Each such notice
shall state the place, date and hour of the meeting, and the purpose or purposes
for which the meeting is called and indicate by whom it is being called.
SECTION 6. Quorum. Except as otherwise required by law or the
Charter, the presence in person or by proxy of the holders of record of a
majority of the shares entitled to vote at a meeting of Shareholders shall be
necessary, and shall constitute a quorum, for the transaction of business at
such meeting. If a quorum is not present or represented by proxy at any meeting
of Stockholders, the holders of a majority of the shares entitled to vote at the
meeting who are present in person or represented by proxy may adjourn the
meeting from time to time until a quorum is present. An adjourned meeting may be
held later without notice other than announcement at the meeting, except that if
after the adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given in the manner set forth in
Article IV to each Stockholder entitled to vote at the adjourned meeting. At any
such adjourned meeting at which a quorum is present any business may be
transacted which might have been transacted at the meeting as originally called.
SECTION 7. Qualification of Voters. The only persons entitled
to notice of or to vote at any meeting of Shareholders shall be the persons
shown as Shareholders of the Corporation on the stock records of the Corporation
on the record date fixed by the Board of Directors, or, in the absence thereof,
at the close of business on the date the notice of the meeting is given.
SECTION 8. Voting. At any meeting of Stockholders each
Shareholder having the right to vote shall be entitled to vote in person or by
proxy. Except as otherwise provided by law or
2
<PAGE> 3
the Charter, each Shareholder shall be entitled to one vote for each share of
stock entitled to vote standing in his/her name on the books of the Corporation.
All elections of directors shall be determined by plurality votes. Except as
otherwise provided by law or in the Charter or these By-Laws, any other matter
shall be determined by the vote of the holders of a majority of the shares
voting on it.
SECTION 9. Action Without a Meeting. Except as otherwise
provided by the Charter, whenever the vote of Shareholders is required or
permitted in connection with any corporate action, such action may be taken
without a meeting on written consent setting forth the action so taken, signed
by the holders of all outstanding shares entitled to vote thereon.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. Function. The Board of Directors shall manage the
business of the Corporation, except as otherwise provided by law, the Charter or
these By-Laws.
SECTION 2. Number and Term of Office.The number of directors
constituting the entire Board of Directors shall be such number, not less than
thirteen, as shall be determined by resolution of the Board of Directors from
time to time. At all times a majority of the entire Board of Directors shall be
citizens and residents of the United States and not less than three thereof
shall be residents of the State of New York, and none shall be less than
eighteen years of age. Not less than one-third of the directors shall be neither
officers nor salaried employees of the Corporation or any entity controlling,
controlled by, or under common control with the Corporation and shall not be
beneficial owners of a controlling interest in the voting stock of the
Corporation or any such entity. Directors need not be Stockholders. Except as
otherwise provided by law, the Charter or these By-Laws, the term of office of
each director shall be from the time of the director's election and
qualification until the annual meeting of Shareholders next succeeding the
director's election and
3
<PAGE> 4
until the successor shall have been duly elected and qualified. No director
shall receive a fee for serving in such capacity if such director is a salaried
employee of the Corporation.
SECTION 3. Removal of Directors. Except as otherwise provided
by law, any of the directors may be removed for cause by the vote of a majority
of the entire Board. Except as otherwise provided by law, any director may be
removed with or without cause, at any time, by the vote of the holders of record
of a majority of the shares entitled to vote for the election of directors.
SECTION 4. Vacancies. Newly created directorships resulting
from an increase in the number of directors and vacancies occurring in the Board
for any reason may be filled by the vote of a majority of the directors then in
office, even if less than a quorum exists, or by the Shareholders of the
Corporation at the next annual meeting or any special meeting called for the
purpose, and each director so elected shall hold office until the next annual
election of directors, and until his/her successor shall be duly elected and
qualified.
SECTION 5. Resignation. Any director of the Corporation may
resign at any time by giving written notice of his/her resignation to the Board
of Directors, the President or the Secretary of the Corporation. Such
resignation shall take effect at the time specified therein or, if no time is
specified therein, at the time of receipt thereof, and the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 6. Executive Committee. By the affirmative vote of a
majority of the entire Board, the Board of Directors may designate from among
its members an Executive Committee and other committees, each consisting of at
least five members. At least one-third of the members must be neither officers
nor salaried employees of the Corporation or any entity controlling, controlled
by, or under common control with the Corporation or beneficial owners of a
controlling interest in the voting stock of the Corporation or any such entity
("disinterested directors"). The Executive Committee shall have all the
authority of the Board of Directors except as otherwise provided by Section 712
of the New York Business Corporation Law or other
4
<PAGE> 5
applicable statute. Any other committees shall have such authority as the Board
of Directors shall provide. The Board of Directors may designate one or more
directors as alternate members of the Executive Committee or any other committee
to replace absent members. Members of all committees shall serve at the pleasure
of the Board of Directors.
SECTION 7. Committee of Independent Directors. The Board of
Directors shall establish one committee, consisting of at least five members,
comprised solely of disinterested directors. Such committee shall have
responsibility for recommending the selection of independent certified public
accountants, reviewing the Corporation's financial condition, the scope and
results of the independent audit and any internal audit, nominating candidates
for director for election by Shareholders or policyholders, and evaluating the
performance of officers deemed to be principal officers of the Corporation and
recommending to the Board of Directors the selection and compensation of such
principal officers.
SECTION 8. Action by Unanimous Written Consent. Any action
required or permitted to be taken by the Board of Directors or any committee
thereof may be taken without a meeting if all members of the Board or the
committee consent in writing to the adoption of a resolution authorizing the
action. The resolution and the written consents thereto by the members of the
Board or committee shall be filed with the minutes of the proceedings of the
Board or committee.
SECTION 9. Quorum; Action by the Board or any Committee. A
majority of the entire Board or any committee thereof, as the case may be, shall
constitute a quorum for the transaction of business. Except as otherwise
provided by these By-Laws, or required by law, the affirmative vote of a
majority of the directors present at any meeting at which a quorum is present
shall be required for the taking of any action by the Board of Directors or any
committee thereof, as the case may be. At least one disinterested director must
be included in any quorum for the transaction of business at any meeting of the
Board or any committee thereof. If a quorum is not
5
<PAGE> 6
present at any meeting of directors, a majority of the directors present at the
meeting may adjourn the meeting from time to time until a quorum is present,
without notice of the adjourned meeting other than announcement at the meeting.
ARTICLE III
MEETINGS OF DIRECTORS
SECTION 1. First Meeting. The first meeting of each newly
elected Board of Directors shall be held immediately following each annual
meeting of Shareholders. If the meeting is held at the place of the meeting of
Shareholders, no notice of the meeting need be given to the newly elected
directors. If the first meeting is not so held, it shall be held at a time and
place specified in a notice given in the manner provided for notice of special
meetings of the Board of Directors.
SECTION 2. Regular Meetings. Regular meetings of the Board of
Directors may be held upon such notice, or without notice, at such places and at
such times as shall from time to time be determined by the Board. If any day
fixed for a regular meeting shall be a legal holiday at the place where the
meeting is to be held, then the meeting will be held at that place at the same
hour on the next business day which is not a legal holiday.
SECTION 3. Special Meetings; Notice. Special meetings of the
Board of Directors shall be held whenever called by the President, or by the
Secretary, at the written request of any two directors. Notice of each such
meeting, stating the time and place of the meeting, shall be given in the manner
set forth in Article IV of these By-Laws not less than forty-eight hours before
the time such meeting is to be held. Notice of a meeting need not be given to
any director who submits a signed waiver of notice whether before or after the
meeting, or who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to the director. A notice, or
6
<PAGE> 7
waiver of notice, need not specify the purpose of any meeting of the Board of
Directors, unless otherwise provided by these By-Laws.
SECTION 4. Place of Meeting. The Board of Directors may hold
its meetings and keep the books and records of its proceedings at such place or
places within the State of New York as the Board may from time to time
determine.
ARTICLE IV
NOTICES
SECTION 1. Notice to a Stockholder. Any notice to a
Stockholder shall be in writing and either given personally or by mail. If
mailed, a notice will be deemed given when deposited in the United States mail,
postage prepaid, directed to the Stockholder at his/her address as it appears on
the records of Stockholders or, if the Stockholder shall have filed with the
Secretary of the Corporation a written request that notices to him/her be mailed
to some other address, then addressed to him/her at that other address.
SECTION 2. Notice to a Director. Any notice to a director may
be given personally, by telephone or by mail, telegram, cable or similar
instrumentality. A notice will be deemed given when actually given in person or
by telephone, or seventy-two hours after having been deposited in the United
States mail or with the communications company through which it is given,
directed to the director at his/her business address or at such other address as
the director may have designated to the Secretary in writing as the address to
which notices should be sent.
SECTION 3. Waiver of Notice. Any person may waive notice of
any meeting by signing a written waiver, whether before or after the meeting. In
addition, attendance by a Stockholder at a meeting in person or by proxy will be
deemed a waiver of notice unless the Stockholder protests prior to the
conclusion of the meeting the lack of notice thereof. Attendance
7
<PAGE> 8
by a director at a meeting will be deemed a waiver of notice unless the director
protests, prior to the meeting or at its commencement, the lack of notice
thereof.
ARTICLE V
OFFICERS
SECTION 1. Number. The officers of the Corporation shall be a
President, a Secretary, and a Treasurer, and the Board of Directors may also
elect one or more Vice Presidents, such Assistant Secretaries, Assistant
Treasurers and such other officers as it may from time to time deem advisable.
Any two or more offices, except the offices of the President and Secretary, may
be held by the same person. No officer need be a director of the Corporation.
SECTION 2. Election and Term of Office. Each officer shall be
elected by the Board of Directors and shall hold office for such term, if any,
as the Board of Directors shall determine. Any officer may be removed at any
time, either with or without cause, by the vote of a majority of the entire
Board of Directors.
SECTION 3. Resignation. Any officer may resign at any time by
giving written notice to the Board of Directors or to the President. Such
resignation shall take effect at the time specified therein or, if no time is
specified therein, at the time of receipt thereof, and the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 4. President. The President shall be the Chief
Executive Officer of the Corporation and, subject to the Board of Directors,
shall have charge of the affairs of the Corporation. The President shall keep
the Board of Directors fully informed and shall freely consult them concerning
the business of the Corporation in the President's charge. The President may
sign, execute and deliver in the name of the Corporation all deeds, mortgages,
bonds, contracts or other instruments authorized by the Board of Directors,
except in cases where the signing, execution or delivery thereof shall be
expressly delegated by the Board of Directors or by these By-
8
<PAGE> 9
Laws to some other officer or agent of the Corporation or where any of them
shall be required by law otherwise to be signed, executed or delivered and
he/she may affix the seal of the Corporation to any instrument which shall
require it. Except as otherwise provided by these By-Laws, the President shall
appoint and remove, employ and discharge and fix the compensation of all
servants, agents, employees and clerks of the Corporation. The President shall,
if present, preside at all meetings of the Board of Directors and of the
Shareholders and shall have the power to call special meetings of the
Shareholders and of the Board of Directors and in addition to the powers usually
incident to the office of President as herein provided, shall have such other
powers and shall perform such other duties as may be assigned to the President
by the Board of Directors.
SECTION 5. Vice Presidents. The Vice Presidents, if any, shall
perform such duties as shall from time to time be assigned to them by the Board
of Directors, or the President. In the absence or in the event of the disability
of the President, the Vice Presidents shall, in the order designated by the
Board, perform the duties of the President.
SECTION 6. Secretary. The Secretary shall keep the minutes of
all meetings of the Shareholders and of the Board of Directors in books provided
for that purpose. The Secretary shall attend to the giving and serving of all
notices of the Corporation. The Secretary shall affix the seal of the
Corporation to all contracts and instruments requiring the same. The Secretary
shall have charge of the seal of the Corporation and of such books and papers as
the Board of Directors may direct, all of which shall at all reasonable times be
open to the examination by any director upon application at the office of the
Corporation during business hours, and shall in general perform all the duties
incident to the office of the Secretary, or which may from time to time be
assigned to him/her by the Board of Directors.
SECTION 7. Assistant Secretaries. The Assistant Secretaries,
if any, shall assist the Secretary in the performance of the Secretary's duties
and perform such duties as shall from time to time be assigned to them by the
Board of Directors or the President. In the absence of or in
9
<PAGE> 10
the event of the disability of the Secretary, the Assistant Secretaries shall,
in the order designated by the Board, perform the duties of the Secretary.
SECTION 8. Treasurer. The Treasurer shall have custody of all
funds, securities and other property of the Corporation, and shall keep or cause
to be kept full and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all monies and other valuable
effects in the name and to the credit of the Corporation in such depositories as
may be designated by the Board of Directors. The Treasurer shall disburse the
funds of the Corporation as may be ordered by the Board of Directors, taking
proper vouchers for such disbursements, and shall render to the President and
the Board of Directors, when the President or the Board of Directors so
requires, an account of all transactions as Treasurer and of the financial
condition of the Corporation. In general, the Treasurer shall perform all the
duties incident to the office of Treasurer and such other duties as from time to
time may be assigned to the Treasurer by the Board of Directors.
SECTION 9. Assistant Treasurers. The Assistant Treasurers, if
any, shall assist the Treasurer in the performance of the Treasurer's duties and
perform such duties as shall from time to time be assigned to them by the Board
of Directors or the President. In the absence of or in the event of the
disability of the Treasurer, the Assistant Treasurers shall, in the order
designated by the Board, perform the duties of the Treasurer.
SECTION 10. Compensation. The compensation of the officers
shall be fixed from time to time by the Board of Directors or in such manner as
it may provide.
SECTION 11. Security. The Board of Directors may require any
officer, agent or employee to give security for the faithful performance of
his/her duties.
10
<PAGE> 11
ARTICLE VI
INDEMNIFICATION
SECTION 5.1. Indemnification of Directors, Officers, Employees
and Agents. Any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (including any action or suit
by or in the right of the Corporation to procure a judgment in its favor) by
reason of the fact that he/she is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall be indemnified to the extent permitted
by the laws of the State of New York, against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him/her in connection with the defense or settlement of such action,
suit or proceeding. The indemnification expressly provided by statute in a
specific case shall not be deemed exclusive or any other rights to which any
person indemnified may be entitled under any lawful agreement, vote of
Stockholders or disinterested directors or otherwise, both as to action in
his/her official capacity and as to action in another capacity while holding
such office, and shall continue as a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
ARTICLE VII
SHARES AND THEIR TRANSFER
SECTION 1. Certificates. The shares of stock of the
Corporation shall be represented by certificates, in such form as the Board of
Directors may from time to time prescribe, signed by the President or a Vice
President and by the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary; however, unless otherwise provided by the Certificate of
11
<PAGE> 12
Incorporation, the Board of Directors may provide by resolution that some or all
of any or all classes and series of shares in the Corporation shall be
uncertified shares, provided that any such resolution shall not apply to shares
represented by a certificate until such certificate has been surrendered to the
Corporation.
SECTION 2. Signatures on Certificates. Each certificate shall
be signed by the President or a Vice President and the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the Corporation and
shall be sealed with the seal of the Corporation; or, where such certificates
are countersigned by a transfer agent and registered by a registrar, the
signatures of such officers and the seal of the Corporation may be in facsimile.
If any officer who has signed or whose facsimile signature has been placed upon
a certificate shall cease to be such officer before such certificate is issued,
it may be issued by the Corporation with the same effect as if he/she were such
officer at the date of issue.
SECTION 3. Lost or Destroyed Certificates. The Board of
Directors may direct that a new certificate be issued in place of any
certificate issued by the Corporation which is alleged to have been lost or
destroyed. When doing so, the Board of Directors may prescribe such terms and
conditions precedent to the issuance of the new certificate as it deems
expedient, and may require a bond sufficient to indemnify the Corporation
against any claim that may be made against it on account of the alleged loss or
destruction of the certificate or the issuance of the new certificate.
SECTION 4. Record Date. The Board of Directors may fix in
advance a date as the record date for determination of the Stockholders entitled
to notice of or to vote at any meeting of Stockholders, or to express consent
to, or dissent from, any proposal without a meeting, or to receive payment of
any dividend or allotment of any rights, or to take or be the subject of any
other action. Such date shall be not less than ten nor more than fifty days
before the date of such meeting, nor more than fifty days prior to any other
action. If no record date is so fixed, the record date shall
12
<PAGE> 13
be as provided by law. A determination of Stockholders entitled to notice of or
to vote at any meeting of Stockholders which has been made as provided in this
Section shall apply to any adjournment thereof, unless the Board of Directors
fixes a new record date for the adjourned meeting.
SECTION 5. Ownership. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, to vote, or to exercise any of the other rights
or privileges of an owner with regard to those shares.
SECTION 6. Rules and Regulations. The Board of Directors shall
have power and authority to make such rules and regulations as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of stock of the Corporation.
ARTICLE VIII
CORPORATE SEAL
The Board of Directors shall provide a suitable seal
containing the name of the Corporation, which seal shall be in the charge of the
Secretary. A duplicate seal may be kept and used.
ARTICLE IX
FISCAL YEAR
The fiscal year of the Corporation shall end at the close of
business on the 31st day of December in each year.
ARTICLE X
AMENDMENTS
Any and all By-Laws of the Corporation shall be subject to
amendment or repeal, in whole or in part, and new By-Laws not inconsistent with
the laws of the State of New York or any
13
<PAGE> 14
provision of the Charter may be adopted, by the affirmative vote of the holders
of record of a majority of the outstanding stock of the Corporation present in
person, or represented by proxy and entitled to vote in respect thereof, given
at an annual meeting or at any special meeting at which a quorum shall be
present, or by the affirmative vote of a majority of the entire Board of
Directors given at any meeting if, in each case, notice of the propose
amendment, repeal, or adoption of new By-Laws has been included in the notice of
such meeting. Any By-Laws adopted by the Board of Directors may be altered or
repealed by the Stockholders. If any By-Law regulating an impending election of
directors is adopted, amended or repealed by the Board of Directors, there shall
be set forth in the notice of the next meeting of Shareholders for the election
of directors the By-Law so adopted, amended or repealed and a concise statement
of the changes made.
14
<PAGE> 1
EXHIBIT A.(10)(a)(i)
================================================================================
NORTHSTAR LIFE EMPLOYER'S APPLICATION
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
Application is hereby made to The Northstar Life Insurance Company for a
Variable Group Universal Life Insurance Plan providing life insurance and other
supplemental benefits as indicated below.
- --------------------------------------------------------------------------------
APPLICANT (Policyholder) NATURE OF BUSINESS
ABC COMPANY Manufacturing
- --------------------------------------------------------------------------------
ADDRESS (Street, City, State, Zip Code)
123 Main Street, Any Town, USA 00000
- --------------------------------------------------------------------------------
KEY CONTACT AND TITLE TELEPHONE NUMBER FAX NUMBER
Bob Johnson,, Manager (000) 111-2222 (000) 111-1111
- --------------------------------------------------------------------------------
PLAN EFFECTIVE DATE
May 1, 1996
- --------------------------------------------------------------------------------
COVERAGE APPLIED FOR (CHECK ALL THAT APPLY).
<TABLE>
<S> <C>
[X] Variable Group Universal Life (employer paid) [X] Variable Group Universal Life (employee paid)
[ ] Accidental Death & Dismemberment [ ] Child Term Life Rider
[ ] Waiver of Premium [X] Spouse/Child Term Life Rider
[ ] Spouse Variable Group Universal Life [X] Policyholder Contribution Rider
[ ] Other
-------------------------------------
PLAN DESIGN IRC SECTION 7702 TESTS
- ----------- ----------------------
[ ] Option A (Level Death Benefit) [X] Cash Value Accumulation Test
[X] Option B (Variable Death Benefit) [ ] Guideline Premium Test
EMPLOYEE SPOUSE
Minimum Coverage $ 10,000 Minimum Coverage $5,000
------------------- -------------------
Maximum Coverage $ 1,000,000 Maximum Coverage $500,000
------------------- -------------------
Guaranteed Issue Amount $ 50,000 Guaranteed Issue Amount $ 25,000
------------------- -------------------
</TABLE>
*To be eligible for the guaranteed issue amount specified above, an eligible
employee's spouse must be actively working outside his or her home at least 20
hours per week on the date he or she signs an application for coverage, and for
20 hours per week for each of the 4 week(s) immediately prior to the date his or
her application for coverage is approved by Northstar Life.
CHILD TERM RIDER
Flat Coverage Amounts $ 4,000 Cost $ 1. 00
------------------- -------------------
$ 5,000 Cost $ 1. 25
------------------- -------------------
$ 10,000 Cost $ 2. 00
------------------- -------------------
Schedule of Insurance - please attach a list of coverage amounts for each
employee classification.
When do changes in coverage apply? (Check only one and give date if applicable.)
[ ] First of the month on or following the salary change.
[X] During annual open enrollment. Date: 5-01-97
-------------------
[ ] Other. Date:
-------------------
ELIGIBILITY: An eligible employee must be actively working at his or her
employer's normal place of business at least 20 hours per week on the date he or
she signs an application for coverage, and for 20 hours per week for each the 4
week(s) immediately prior to the date his or her application for coverage
(except retirees or other persons as designated) is approved by Northstar Life.
Are retirees or any other persons not actively at work to be included in this
plan? [ ] Yes [X] No
(If yes, please attach a list of retirees or other persons, their ages, amounts
of insurance, and under what circumstances we are providing coverage.)
<PAGE> 2
NORTHSTAR LIFE AGREES TO PROVIDE:
1. A life insurance plan to those who have satisfied the eligibility and any
underwriting requirements;
2. Enrollment materials necessary to implement the plan;
3. All Underwriting, Claims and Actuarial services necessary for plan
administration.
THE PARTICIPATING EMPLOYER AGREES TO PROVIDE:
1. Employee information to Northstar Life to facilitate preparation of
enrollment materials and plan set-up.
2. Payroll deduction facilities to collect premiums from insured employees,
accounting for such premiums, and remittance of such premiums to Northstar
Life.
3. Reasonable administrative assistance to Northstar Life with regard to
notification of insured terminations, cancellations, changes in payroll
deduction authorizations, and distributing materials to employees.
Northstar Life can terminate this agreement by giving the participating employer
61 days advance written notice. The participating employer can terminate this
agreement by giving Northstar Life 31 days advance written notice. This
agreement is effective (date) 4-01-96 and will remain in effect for a one-year
period. Unless terminated by either party, this agreement shall automatically
renew for additional one-year periods.
I AGREE THAT BECAUSE THIS APPLICATION IS FOR A VARIABLE GROUP UNIVERSAL LIFE
POLICY, THAT NORTHSTAR LIFE, IF IT IS UNABLE FOR ANY REASON TO COLLECT FUNDS FOR
UNITS WHICH HAVE BEEN ALLOCATED TO A SUB-ACCOUNT UNDER THE POLICY APPLIED FOR,
MAY REDEEM FOR ITSELF THE FULL VALUE OF SUCH UNITS. IF SUCH UNITS ARE NO LONGER
AVAILABLE, IT MAY RECOVER THAT VALUE FROM ANY OTHER UNITS OF EQUAL VALUE
AVAILABLE UNDER THE POLICY.
I UNDERSTAND THAT THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) OF
THE POLICY APPLIED FOR MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT
RESULTS OF THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT. I UNDERSTAND THAT THE
ACCOUNT VALUE OF THE POLICY APPLIED FOR INCREASES AND DECREASES DEPENDING ON THE
INVESTMENT RESULTS. THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE FOR NET
PREMIUMS INVESTED IN THE SUB-ACCOUNTS.
- --------------------------------------------------------------------------------
PARTICIPATING EMPLOYER
ABC Company
- --------------------------------------------------------------------------------
BY TITLE DATE
Bob Johnson Manager 4-01-96
- --------------------------------------------------------------------------------
EIN NUMBER SIGNATURE
4789 X /s/ Bob Johnson
- --------------------------------------------------------------------------------
FOR NORTHSTAR LIFE
- --------------------------------------------------------------------------------
AGENT, BROKER OR REGISTERED REPRESENTATIVE
Sam S. Smith
- --------------------------------------------------------------------------------
AGENCY DATED AT ON
North Agency Any Town, USA 4-01-96
- --------------------------------------------------------------------------------
AGENT/BROKER/REGISTERED REPRESENTATIVE LICENSE SIGNATURE
987-65-4321 X /s/ Sam S. Smith
- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT A.(10)(a)(ii)
================================================================================
NORTHSTAR LIFE VARIABLE GROUP UNIVERSAL LIFE APPLICATION
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
EMPLOYEE APPLICATION POLICY NUMBER:
19974
INSURED'S INFORMATION ================
- --------------------------------------------------------------------------------
NAME DATE OF BIRTH SOCIAL SECURITY NUMBER GENDER
John C. Doe 01-01-61 123-45-6789 [X] M [ ] F
- --------------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE
456 Main Street Anytown USA 00000
- --------------------------------------------------------------------------------
EMPLOYER EMPLOYMENT LOCATION
ABC COMPANY Anytown, USA
- --------------------------------------------------------------------------------
DATE OF EMPLOYMENT ANNUAL SALARY DAYTIME TELEPHONE NUMBER
05-01-97 $50,000 (000) 222-3333
- --------------------------------------------------------------------------------
[ ]Yes [ ]No Have you used tobacco in any form during the past 12 months?
[X]Yes [ ]No On the date you sign this application, are you actively working
at your employer's normal place of business at least 20 hours
per week?
- --------------------------------------------------------------------------------
TO BE ELIGIBLE FOR INSURANCE UNDER THE GROUP POLICY AN EMPLOYEE MUST BE ACTIVELY
WORKING AT HIS OR HER EMPLOYER'S NORMAL PLACE OF BUSINESS AT LEAST 20 HOURS PER
WEEK ON THE DATE HE OR SHE SIGNS THIS APPLICATION FOR COVERAGE, AND FOR 20 HOURS
PER WEEK FOR EACH OF THE 4 WEEK(S) IMMEDIATELY PRIOR TO THE DATE THIS
APPLICATION FOR COVERAGE IS APPROVED BY NORTHSTAR LIFE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BENEFICIARY'S NAME SOCIAL SECURITY NUMBER RELATIONSHIP AND CLASS
Jane A. Doe 234-56-7890 Spouse - Class 1
- --------------------------------------------------------------------------------
MAILING ADDRESS
456 Main Street, Anytown, USA 00000
================================================================================
INSURANCE INFORMATION
================================================================================
<TABLE>
<S> <C> <C> <C> <C> <C>
(1) Employer Paid $ 40,000 .8 x Salary Employer Premium: (1) $ 6.96
Insurance Amount:
(2) Employee Paid $ 10,000 .2 x Salary Employee Premium: (2) $ 1.74
Insurance Amount
(If applying for over
the guaranteed issue
amount, please complete Evidence of Additional Amount Paid: (3) $ 0
Insurability form.)
(3) Total Insurance Amount: $ 50,000 1 x Salary Spouse/Child Rider
Premium: (4) $ 5.60
(4) Spouse/Child Term Rider $ 25,000 $ 5,000 Child Rider Premium: (5) $ N/A
(If elected, please list names
and dates of birth below.) Total Premium: $ 14.30
(Add Lines 1-5)
(5) Child Term Rider
(If elected, please list names $ N/A
and dates of birth below.)
</TABLE>
- --------------------------------------------------------------------------------
Child's Name Date of Birth Child's Name Date of Birth
- --------------------------------------------------------------------------------
Joe B. Doe 03-01-91
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
ACCOUNT OPTIONS
Please select the allocation of net premium:
(Allocations must total 100%. Minimum of 10% in any account, allocations must be
in increments of 1%.)
20% GUARANTEED ACCOUNT
SUB-ACCOUNT OPTIONS
<TABLE>
<CAPTION>
FIXED BALANCED EQUITY
----- -------- ------
<S> <C> <C>
20% Bond 20% Asset Allocation 20% Capital Appreciation
% Maturing Government Bond 2010 20% Growth
% Money Market % Index 500
% Mortgage Securities % International Stock
% VIP High Income % Small Company Growth
% Global Bond % Value Stock
% VIP Equity-Growth Income
% VIP 11 Contrafund
% Small Company Value
% Index 400 Mid-Cap
% Micro-Cap Growth
% Macro-Cap Value
</TABLE>
OWNER
The Proposed Insured will be the Owner of any policy issued on this
application, unless requested otherwise below. The Owner has every benefit,
right or privilege given by policy terms. Policy transactions between
Northstar Life and the Owner do not require the Insured's notice or consent.
Name (If a Corporation, give the state in which it is incorporated)_____________
Relationship to Proposed Insured___________________________
Tax I.D. Number or Social Security Number_______________________________
Owner's Address_________________________________________________________________
City_____________________________State___________________Zip Code_______________
I agree that because this application is for a Variable Group Universal Life
policy, that Northstar Life, if it is unable for any reason to collect funds
for units which have been allocated to a sub-account under the policy applied
for, may redeem for itself the full value of such units. If such units are no
longer available, it may recover that value from any other units of equal
value available under the policy.
I UNDERSTAND THAT THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) OF
THE POLICY APPLIED FOR MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT
RESULTS OF THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT. I UNDERSTAND THAT THE
ACCOUNT VALUE OF THE POLICY APPLIED FOR INCREASES AND DECREASES DEPENDING ON
THE INVESTMENT RESULTS. THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE FOR NET
PREMIUMS INVESTED IN THE SUB-ACCOUNTS.
The information contained in this application is true and complete.
EMPLOYEE'S SIGNATURE (or owner's if different) DATE
x /s/ John C. Doe 05-01-97
<PAGE> 3
INVESTMENT SUITABILITY - TO BE COMPLETED BY OWNER
NASD rules require inquiry concerning the financial condition of individuals
applying for variable policies. The proposed Owner must supply such information
so that an informed judgement may be made as to the suitability of the
investment for the Owner.
NOTE: IF THE PROPOSED INSURED AND PROPOSED OWNER ARE NOT THE SAME, THE PROPOSED
OWNER MUST COMPLETE QUESTIONS 9-11 ALSO.
<TABLE>
<S><C>
1. Have you received the prospectus for the Northstar Life Variable Universal
Life Account, which includes prospectuses for the Advantus Series Fund, Inc.
and the Fidelity's Variable Insurance Products Funds? [X] Yes [ ] No
2. Would you like us to send you a Statement Of Additional Information referred
to in the prospectuses named above? [X] Yes [ ] No
3. Are you a spouse or dependent child of a person who is an employee of Northstar Life? [ ] Yes [X] No
4. Dependents: [X] Spouse Age 36 [X] Children ages 6
------ ------------------
5. Current Approximate:
Annual Income $ 50, 000 Assets $ 150,000 Debt $ 50, 000 Tax Bracket 28%
-------------- ---------- ------------ ----------
6. Other Investments:
Savings $ 10,000 Balanced/Total Return Funds $
--------- ------------
Insurance Cash Value $ Stock Funds $
--------- ------------
Real Estate $ 85,000 Bond Funds $
--------- ------------
Business Interests $ Individual Stocks $
--------- ------------
Retirement Funds $ Individual Bonds $
--------- ------------
Other $
-------------- ---------
7. Ranking of Investment Objectives - (Rank 1-5, in order of importance):
5 Capital Preservation/Conservative Income 1 Growth
--------- -----------
4 Current Income 2 Aggressive Growth
--------- -----------
3 Total Return/Conservative Growth
---------
8. Risk Tolerance (please check one): [ ] Low Risk [X] Moderate Risk [ ] High Risk
</TABLE>
PLEASE ANSWER THE FOLLOWING QUESTIONS IF THE PROPOSED INSURED AND THE PROPOSED
OWNER ARE NOT THE SAME.
9. Employer
---------------------------------------------------------------------
Address
---------------------------------------------------------------------
Occupation Years Employed
----------------------------------------- ------------
10. Are you of legal age in the state of your mailing address? [ ]Yes [ ]No
11. Face amount of life insurance in force (on the proposed Owner) $
-------------
The information contained in this application is true and complete.
- --------------------------------------------------------------------------------
EMPLOYEE'S SIGNATURE (or owners if different) DATE
X /s/ John C. Doe 05-01-97
- --------------------------------------------------------------------------------
FOR HOME OFFICE USE
- --------------------------------------------------------------------------------
SUITABILITY ACCEPTED BY REGISTERED PRINCIPAL DATE
/s/ Sam S. Smith 05-01-97
- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT A.(10)(a)(iii)
================================================================================
NORTHSTAR LIFE VARIABLE GROUP UNIVERSAL LIFE APPLICATION
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S><C>
EMPLOYEE APPLICATION POLICY NUMBER:
19974
INSURED'S INFORMATION --------------
--------------------------------------------------------------------------------------------------------------
NAME DATE OF BIRTH SOCIAL SECURITY NUMBER GENDER
John C. Doe 01-01-61 123-45-6789 [X] M [ ] F
--------------------------------------------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE
456 Main Street, Anytown USA 00000
--------------------------------------------------------------------------------------------------------------
EMPLOYER EMPLOYMENT LOCATION
ABC COMPANY Anytown, USA
--------------------------------------------------------------------------------------------------------------
DATE OF EMPLOYMENT ANNUAL SALARY Daytime TELEPHONE NUMBER
05-01-97 $50,000 (000) 222-3333
--------------------------------------------------------------------------------------------------------------
</TABLE>
Yes[ ] No [X] Have you used tobacco in any form during the past 12 months?
Yes[X] No [ ] On the date you sign this application, are you actively
working at your employer's normal place of business at least 20 hours per
week?
To be eligible for insurance under the group policy an employee must be actively
working at his or her employer's normal place of business at least 20 hours per
week on the date he or she signs this application for coverage, and for 20 hours
per week for each of the 4 week(s) immediately prior to the date this
application for coverage is approved by Northstar Life.
<TABLE>
<CAPTION>
<S><C>
- ----------------------------------------------------------------------------------------------------------------------------
BENEFICIARY'S NAME SOCIAL SECURITY NUMBER RELATIONSHIP AND CLASS
Jane A. Doe 234-56-7890 Spouse - Class 1
- ----------------------------------------------------------------------------------------------------------------------------
MAILING ADDRESS
456 Main Street, Anytown, USA 00000
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Insurance Information
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(1) Employee Paid $ 50,000 1 x Salary Employee Premium: (1) $ 8.70
Insurance Amount
(if applying for over the guaranteed Additional Amount Paid: (2) $ 0
issue amount, please complete Evidence
of Insurability form.) Spouse/Child Rider
Premium: (3) $ 5.60
(2) Spouse/Child Term Rider $ 25,000 $5,000
(If elected, please list
names and dates of birth below.) Child Rider Premium: (4) $ N/A
(3) Child Term Rider $ N/A Total Premium:
(If elected, please list (Add Lines 1-4) $ 14.30
names and dates of birth below.)
</TABLE>
<TABLE>
<CAPTION>
<S><C>
- --------------------------------------------------------------------------------------------------------------------------
SPOUSE'S NAME DATE OF BIRTH
Jane A. Doe 02-10-61
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Child's Name Date of Birth Child's Name Date of Birth
Joe B. Doe 03-01-91
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
ACCOUNT OPTIONS
Please select the allocation of net premium:
(Allocations must total 100%. Minimum of 10% in any account, allocations must be
in increments of 1%.)
20% GUARANTEED ACCOUNT
<TABLE>
<CAPTION>
SUB-ACCOUNT OPTIONS
<S> <C> <C>
FIXED BALANCED EQUITY
- ----- -------- ------
20% BOND 20 % ASSET ALLOCATION 20 % CAPITAL APPRECIATION
% MATURING GOVERNMENT BOND 2010 20 % GROWTH
% MONEY MARKET % INDEX 500
% MORTGAGE SECURITIES % INTERNATIONAL STOCK
% VIP HIGH INCOME % SMALL COMPANY GROWTH
% GLOBAL BOND % VALUE STOCK
% VIP EQUITY-INCOME
% VIP II CONTRAFUND
% SMALL COMPANY VALUE
% INDEX 400 MID-CAP
% MICRO-CAP GROWTH
% MACRO-CAP VALUE
</TABLE>
OWNER
The Proposed Insured will be the Owner of any policy issued on this application,
unless requested otherwise below. The Owner has every benefit, right or
privilege given by policy terms. Policy transactions between Northstar Life and
the Owner do not require the Insured's notice or consent.
Name (If a Corporation, give the state in which it is incorporated)
-------------
Relationship to Proposed Insured
------------------------------------------------
Tax I.D. Number or Social Security Number
---------------------------------------
Owners Address
------------------------------------------------------------------
City State Zip Code
--------------------------------------- --------- ---------------
I agree that because this application is for a Variable Group Universal Life
policy, that Northstar Life, if it is unable for any reason to collect funds for
units which have been allocated to a sub-account under the policy applied for,
may redeem for itself the full value of such units. If such units are no longer
available, it may recover that value from any other units of equal value
available under the policy.
I UNDERSTAND THAT THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) OF
THE POLICY APPLIED FOR MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT
RESULTS OF THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT. I UNDERSTAND THAT THE
ACCOUNT VALUE OF THE POLICY APPLIED FOR INCREASES AND DECREASES DEPENDING ON THE
INVESTMENT RESULTS. THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE FOR NET
PREMIUMS INVESTED IN THE SUB-ACCOUNTS.
The information contained in this application is true and complete.
EMPLOYEE'S SIGNATURE (or owner's if different) DATE
X /s/ John C. Doe 05-01-97
- ------------------ --------
<PAGE> 3
INVESTMENT SUITABILITY -TO BE COMPLETED BY OWNER
NASD rules require inquiry concerning the financial condition of individuals
applying for variable policies. The proposed Owner must supply such information
so that an informed judgement may be made as to the suitability of the
investment for the Owner.
NOTE: IF THE PROPOSED INSURED AND PROPOSED OWNER ARE NOT THE SAME, THE
PROPOSED OWNER MUST COMPLETE QUESTIONS 9-11 ALSO.
1. HAVE YOU RECEIVED THE PROSPECTUS FOR THE NORTHSTAR LIFE VARIABLE
UNIVERSAL LIFE ACCOUNT, WHICH INCLUDES PROSPECTUSES FOR THE ADVANTUS
SERIES FUND, INC. AND THE FIDELITY'S VARIABLE INSURANCE PRODUCTS FUNDS?
[X] YES [ ] NO
2. WOULD YOU LIKE US TO SEND YOU A STATEMENT OF ADDITIONAL INFORMATION
REFERRED TO IN THE PROSPECTUSES NAMED ABOVE?
[X] YES [ ] NO
3. ARE YOU A SPOUSE OR DEPENDENT CHILD OF A PERSON WHO IS AN EMPLOYEE OF
NORTHSTAR LIFE? [ ] YES [X] NO
4. DEPENDENTS: [X] SPOUSE AGE 36 CHILDREN AGES 6
---- --
5. CURRENT APPROXIMATE:
<TABLE>
<S> <C> <C> <C> <C>
ANNUAL INCOME $ 50,000 ASSETS $ 150,000 DEBT $ 50,000 TAX BRACKET 28%
--------- --------- --------- ---------
</TABLE>
6. OTHER INVESTMENTS:
<TABLE>
<S> <C> <C> <C>
Savings $10,000 Balanced/Total Return Funds $
------- -------
Insurance Cash Value $ Stock Funds $
------- -------
Real Estate $85,000 Bond Funds $
------- -------
Business Interests $ Individual Stocks $
------- -------
Retirement Funds $ Individual Bonds $
------- -------
Other $
-------
7. Ranking of Investment Objectives - (Rank 1-5, in order of importance):
5 Capital Preservation/Conservative Income 1 Growth
--- ---
4 Current Income 2 Aggressive Growth
--- ---
3 Total Return/Conservative Growth
---
</TABLE>
<TABLE>
<S> <C> <C> <C>
8. Risk Tolerance (please check one): [ ] Low Risk [X] Moderate Risk [ ] High Risk
PLEASE ANSWER THE FOLLOWING QUESTIONS IF THE PROPOSED INSURED AND THE PROPOSED
OWNER ARE NOT THE SAME.
</TABLE>
9. Employer
-------------------------------------------------------------------
Address
-------------------------------------------------------------------
Occupation Years Employed
--------------------------------------- ----------
10. Are you of legal age in the state of your mailing address? [ ] Yes [ ] No
11. Face amount of life insurance in force (on the proposed Owner) $
----------
The information contained in this application is true and complete.
- --------------------------------------------------------------------------------
EMPLOYEE'S SIGNATURE (or owners if different) DATE
x /s/ John C. Doe 05-01-97
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR HOME OFFICE USE
- --------------------------------------------------------------------------------
SUITABILITY ACCEPTED BY REGISTERED PRINCIPAL DATE
/s/ Sam S. Smith 05-01-97
- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT A(10)(a)(iv)
================================================================================
NORTHSTAR LIFE VARIABLE GROUP UNIVERSAL LIFE APPLICATION
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 - 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
EMPLOYEE APPLICATION POLICY NUMBER:
INSURED'S INFORMATION 19974
<TABLE>
<CAPTION>
<S><C>
- ---------------------------------------------------------------------------------------------------
NAME DATE OF BIRTH SOCIAL SECURITY NUMBER GENDER
John C. Doe 01-01-61 123-45-6789 [X] M [ ] F
- ---------------------------------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE
456 Main Street Anytown USA 00000
- ---------------------------------------------------------------------------------------------------
EMPLOYER EMPLOYMENT LOCATION
ABC COMPANY Anytown, USA
- ---------------------------------------------------------------------------------------------------
DATE OF EMPLOYMENT ANNUAL SALARY DAYTIME TELEPHONE NUMBER
05-01-97 $50,000 (000) 222-3333
- ---------------------------------------------------------------------------------------------------
</TABLE>
[ ] Yes [X] No Have you used tobacco in any form during the past 12 months?
[X] Yes [ ] No On the date you sign this application, are you actively working
at your employer's normal place of business at least 20 hours per
week?
<TABLE>
<CAPTION>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------
BENEFICIARY'S NAME SOCIAL SECURITY NUMBER RELATIONSHIP AND CLASS
Jane A. Doe 234-56-7890 Spouse - Class 1
- ---------------------------------------------------------------------------------------------------
MAILING ADDRESS
456 Main Street, Anytown, USA 00000
- ---------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
TO BE ELIGIBLE FOR INSURANCE UNDER THE GROUP POLICY AN EMPLOYEE MUST BE ACTIVELY
WORKING AT HIS OR HER EMPLOYER'S NORMAL PLACE OF BUSINESS AT LEAST 20 HOURS PER
WEEK ON THE DATE HE OR SHE SIGNS THIS APPLICATION FOR COVERAGE, AND FOR 20 HOURS
PER WEEK FOR EACH OF THE 4 WEEK(S) IMMEDIATELY PRIOR TO THE DATE THIS
APPLICATION FOR COVERAGE IS APPROVED BY NORTHSTAR LIFE.
- --------------------------------------------------------------------------------
INSURANCE INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
(1) Employer Paid $ 50,000 1 x Salary Employer Premium: (1) $ 8.70
Insurance Amount:
Additional Amount Paid: (2) $ 0
(2) Spouse/Child Term
Rider (If elected, $ 25,000 $ 5,000
please list names Spouse/Child Rider
and dates of birth Premium: (3) $ 5.60
below.)
(3) Child Term Rider
(If elected, please $ N/A Child Rider Premium: (4) $ N/A
list names and dates
of birth below.) Total Premium:
(Add Lines 1-4) $ 14,30
</TABLE>
- --------------------------------------------------------------------------------
SPOUSE'S NAME DATE OF BIRTH
Jane A. Doe 02-01-61
- --------------------------------------------------------------------------------
Child's Name Date of Birth Child's Name Date of Birth
- --------------------------------------------------------------------------------
Joe B. Doe 03-01-91
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
ACCOUNT OPTIONS
Please select the allocation of net premium:
(Allocations must total 100%. Minimum of 10% in any account, allocations must be
in increments of 1%.)
20 % GUARANTEED ACCOUNT
- --------
SUB-ACCOUNT OPTIONS
<TABLE>
<CAPTION>
FIXED BALANCED EQUITY
----- -------- ------
<S> <C> <C>
20 % Bond 20 % Asset Allocation 20 % Capital Appreciation
- ---- ---- ----
% Maturing Government Bond 2010 20 % Growth
- ---- ----
% Money Market % Index 500
- ---- ----
% Mortgage Securities - % International Stock
- ---- ----
% VIP High Income - % Small Company Growth
- ---- ----
- % Global Bond - % Value Stock
- ---- ----
%VIP Equity-Income
----
- %VIP 11 Contrafund
----
- % Small Company Value
----
% Index 400 Mid-Cap
----
- % Micro-Cap Growth
----
% Macro-Cap Value
----
</TABLE>
OWNER
The Proposed Insured will be the Owner of any policy issued on this application,
unless requested otherwise below. The Owner has every benefit, right or
privilege given by policy terms. Policy transactions between Northstar Life and
the Owner do not require the Insured's notice or consent.
<TABLE>
<S><C>
Name (If a Corporation, give the state in which it is incorporated)
----------------------------------------
Relationship to Proposed Insured
---------------------------
Tax I.D. Number or Social Security Number
------------------
Owner's Address
--------------------------------------------------------------------------------------------
City State Zip Code
------------------------------------------- ----------------------- -----------------------
</TABLE>
I agree that because this application is for a Variable Group Universal Life
policy, that Northstar Life, if it is unable for any reason to collect funds for
units which have been allocated to a sub-account under the policy applied for,
may redeem for itself the full value of such units. If such units are no longer
available, it may recover that value from any other units of equal value
available under the policy.
I UNDERSTAND THAT THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) OF
THE POLICY APPLIED FOR MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT
RESULTS OF THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT. I UNDERSTAND THAT THE
ACCOUNT VALUE OF THE POLICY APPLIED FOR INCREASES AND DECREASES DEPENDING ON THE
INVESTMENT RESULTS. THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE FOR NET
PREMIUMS INVESTED IN THE SUB-ACCOUNTS.
The information contained in this application is true and complete.
EMPLOYEE'S SIGNATURE (or owner's if different) DATE
x /s/ John C. Doe 05-01-97
- --------------------------------------------------------------------------------
<PAGE> 3
INVESTMENT SUITABILITY - TO BE COMPLETED BY OWNER
NASD rules require inquiry concerning the financial condition of individuals
applying for variable policies. The proposed Owner must supply such information
so that an informed judgement may be made as to the suitability of the
investment for the Owner.
NOTE: IF THE PROPOSED INSURED AND PROPOSED OWNER ARE NOT THE SAME, THE PROPOSED
OWNER MUST COMPLETE QUESTIONS 9-11 ALSO.
1. HAVE YOU RECEIVED THE PROSPECTUS FOR THE NORTHSTAR LIFE VARIABLE UNIVERSAL
LIFE ACCOUNT, WHICH INCLUDES PROSPECTUSES FOR THE ADVANTUS SERIES FUND,
INC. AND THE FIDELITY'S VARIABLE INSURANCE PRODUCTS FUNDS? [x] YES [ ] NO
2. WOULD YOU LIKE US TO SEND YOU A STATEMENT OF ADDITIONAL INFORMATION
REFERRED TO IN THE PROSPECTUSES NAMED ABOVE? [x] YES [ ] NO
3. ARE YOU A SPOUSE OR DEPENDENT CHILD OF A PERSON WHO IS AN EMPLOYEE OF
NORTHSTAR LIFE? [ ] YES [x] NO
4. DEPENDENTS: [x] SPOUSE AGE 36 [x]CHILDREN AGES 6
--------- ----------
5. CURRENT APPROXIMATE:
ANNUAL INCOME $ 50,000 ASSETS $ 150,000 DEBT $ 50,000 Tax Bracket 28 %
---------- ----------- ----------- -----
<TABLE>
<CAPTION>
6. Other Investments:
<S> <C> <C> <C>
Savings $ 10,000 Balanced/Total Return Funds $
------------------ -----------
Insurance Cash Value $ Stock Funds $
------------------ -----------
Real Estate $ 85,000 Bond Funds $
------------------ -----------
Business Interests $ Individual Stocks $
------------------ -----------
Retirement Funds $ Individual Bonds $
------------------ -----------
Other $
------------------ ------------------
</TABLE>
7. Ranking of Investment Objective - (Rank 1-5, in order of importance):
<TABLE>
<CAPTION>
<S> <C>
5 Capital Preservation/Conservative Income 1 Growth
---------- ----------
4 Current Income 2 Aggressive Growth
---------- ----------
3 Total Return/Conservative Growth
----------
</TABLE>
8. Risk Tolerance (please check one): [ ] Low Risk [x] Moderate Risk
[ ] High Risk
PLEASE ANSWER THE FOLLOWING QUESTIONS IF THE PROPOSED INSURED AND THE PROPOSED
OWNER ARE NOT THE SAME.
9. Employer
-------------------------------------------------------------------
Address
-------------------------------------------------------------------
Occupation Years Employed
----------------------------------- ----------------
10. Are you of legal age in the state of your mailing address? [ ] Yes [ ] No
11. Face amount of life insurance in force (on the proposed Owner) $
-----------
The information contained in this application is true and complete.
- --------------------------------------------------------------------------------
EMPLOYEE'S SIGNATURE (or owners if different) DATE
X /S/ John C. Doe 05-01-97
- --------------------------------------------------------------------------------
FOR HOME OFFICE USE
- --------------------------------------------------------------------------------
SUITABILITY ACCEPTED BY REGISTERED PRINCIPAL DATE
/s/ Sam S. Smith 05-01-97
- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT A (10)(a)(v)
================================================================================
NORTHSTAR LIFE EVIDENCE OF INSURABILITY
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
<TABLE>
<S><C>
PLAN SPONSOR/POLICYHOLDER POLICY NUMBER
ABC COMPANY 123456
- ------------------------------------------------------------------------------------------------------------------------------------
NAME DATE OF BIRTH SOCIAL SECURITY NUMBER GENDER
JOHN C. DOE 1-01-60 111-22-3333 [X] M [ ] F
- ------------------------------------------------------------------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE DAYTIME TELEPHONE NUMBER
1616 E. 16TH STREET ANY TOWN USA 00000 (000)555-1111
- ------------------------------------------------------------------------------------------------------------------------------------
HOME TELEPHONE NUMBER OCCUPATION DATE OF EMPLOYMENT SALARY HEIGHT WEIGHT INSURANCE AMOUNT APPLIED FOR
(000)555-2222 ATTORNEY 1-01-95 $50,000 5'10" 170 $150,000
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Yes No
[ ] [X] 1. During the past three years, have you for any reason consulted
a physician or other health care provider, or been hospitalized?
[ ] [X] 2. Have you ever been treated for or advised that you had any of
the following: heart, lung, nervous, kidney, or liver disorder;
high blood pressure; drug abuse including alcohol; cancer or
tumor; diabetes?
[ ] [X] 3. Have you ever been diagnosed as having AIDS, ARC, or any
disorder of your immune system; or had a test showing evidence
of antibodies to the AIDS virus (positive HIV test)?
If the answer is "Yes", give particulars on the reverse side. Please include
dates, name and address of physicians or hospitals, the reason for the visit
or consultation and, in your own words, the diagnosis that was made.
The information contained in this application is true and complete. To
determine my insurability or for claim purposes, I authorize any person(s),
medical practitioner, institution, insurance company or the Medical
Information Bureau to give any medical or non-medical information about me
including alcohol or drug abuse, to Northstar Life Insurance Company
("Company"), Amherst, New York 14226 and its reinsurers. I authorize all said
sources, except the Medical Information Bureau, to give such information to
any agency employed by Northstar Life Insurance Company to collect and
transmit such information. I understand in determining eligibility for
insurance or benefits, this information may be made available to underwriting,
claims, medical and support staff to Northstar Life Insurance Company.
This information shall be valid for 26 months from the date this application
is signed. A photocopy shall be as valid as the original. I have read this
authorization and the Consumer Privacy Notice on the back, and understand I
may receive copies. The guaranteed amount of insurance will be effective only
if this application is dated prior to the end of the enrollment period. The
Company shall incur no liability until this application is approved by the
Company and the first premium paid while my health and other conditions
affecting my insurability are as described on this application.
- --------------------------------------------------------------------------------
SIGNATURE DATE
X /S/ JOHN C. DOE 1-01-95
- --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
<S><C>
ADDITIONAL HEALTH INFORMATION:
QUESTION NAME AND ADDRESS OF
NAME NUMBER DOCTOR, CLINIC, HOSPITAL REASON FOR CONSULTATION DIAGNOSIS AND TREATMENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
IMPORTANT NOTICE
The information you provide will be treated as confidential except that
Northstar Life Insurance Company or its reinsurers may 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. Upon request by another member insurance company to which you have
applied for life or health insurance coverage or to which a claim is submitted,
the Medical Information Bureau will supply such company with the information it
may have in its files.
Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file. If you question the accuracy of
information in the Bureau's File, you may contact the Bureau and seek a
correction in accordance with the procedures set forth in the Federal Fair
Credit Reporting Act. The address of the Bureau's information office is Post
Office Box 105, Essex Station, Boston, MA 02112; Telephone (617) 426-3660.
Northstar Life Insurance Company may also release the information in its file to
other life insurance companies to whom you may apply for life or health
insurance or to whom a claim for benefits may be submitted. Personal information
may be obtained in connection with this application from you or others in
certain circumstances without your authorization. You have a right to know about
and correct any personal information about you in our files. If you would like a
more detailed explanation of our information practices, please contact: Group
Underwriting Department, Northstar Life Insurance Company, Suite 424, 100
Corporate Parkway, Amherst, New York 14226.
NORTHSTAR LIFE
Northstar Life Insurance Company
100 Corporate Parkway
Amherst, New York 14226
FOR HOME OFFICE USE ONLY
<TABLE>
<CAPTION>
<S><C>
EMPLOYEE SPOUSE CHILD
[X] Approved [X] Approved [X] Approved
[ ] Declined [ ] Declined [ ] Declined
[ ] Declined as Incomplete [ ] Declined as Incomplete [ ] Declined as Incomplete
- ------------------------------------------------------------------------------------------------------------------------------------
By: JJJ Date: 1-01-95 By: JJJ Date: 1-01-95 By: JJJ Date: 1-01-95
--- ------- --- ------- --- -------
Currently in force Currently Applied for Currently in force Currently Applied for Currently in force Currently Applied for
GI: $ 0 GI: $ 100,000 GI: $ 0 GI: $100,000 GI: $ 0 GI: $ 0
--- --------- --- -------- --- ---
U/W: $ 0 U/W: $ 150,000 U/W: $ 0 U/W: $150,000 U/W: $ 0 U/W: $4,000
--- --------- --- -------- --- ------
</TABLE>
<PAGE> 1
EXHIBIT A(10)(a)(vi)
================================================================================
NORTHSTAR LIFE VARIABLE GROUP UNIVERSAL LIFE APPLICATION
- --------------------------------------------------------------------------------
Northstar Life Insurance Company - University Corporate Centre at Amherst -
Suite 424 100 Corporate Parkway - Amherst, New York 14226
- --------------------------------------------------------------------------------
<TABLE>
<S><C>
SPOUSE APPLICATION POLICY NUMBER:
19974
INSURED'S INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
NAME DATE OF BIRTH SOCIAL SECURITY NUMBER GENDER
Jane A. Doe 02-01-61 234-56-7890 [ ] M [X] F
- ------------------------------------------------------------------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE DAYTIME TELEPHONE NUMBER
456 Main Street Anytown USA 00000 (000) 333-4444
- ------------------------------------------------------------------------------------------------------------------------------------
BENEFICIARY'S NAME SOCIAL SECURITY NUMBER RELATIONSHIP AND CLASS
John C. Doe 123-45-6789 Spouse - Class 1
- ------------------------------------------------------------------------------------------------------------------------------------
MAILING ADDRESS
456 Main Street, Anytown, USA 00000
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(1) [ ] Yes [X] No Have you used tobacco in any form during the past 12 months?
(2) [X] Yes [ ] No On the date you sign this application, are you actively working outside your home at least 20 hours
per week?
- ------------------------------------------------------------------------------------------------------------------------------------
TO BE ELIGIBLE FOR THE GUARANTEED ISSUE AMOUNT AN ELIGIBLE EMPLOYEE'S SPOUSE MUST BE ACTIVELY WORKING OUTSIDE
HIS OR HER HOME FOR AT LEAST 20 HOURS PER WEEK ON THE DATE HE OR SHE SIGNS THIS APPLICATION FOR COVERAGE, AND
FOR 20 HOURS PER WEEK FOR EACH OF THE 4 WEEK(S) IMMEDIATELY PRIOR TO THE DATE THIS APPLICATION FOR COVERAGE
IS APPROVED BY NORTHSTAR LIFE. IF YOU HAVE ANSWERED YES TO THE SECOND QUESTION, AND YOU MEET THE ELIGIBILITY
REQUIREMENTS AS STATED ABOVE, YOU ARE ELIGIBLE FOR THE SPOUSE GUARANTEED ISSUE AMOUNT AS SPECIFIED ON THE
POLICYHOLDER'S APPLICATION TO THE GROUP POLICY.
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
EMPLOYEE INFORMATION
====================================================================================================================================
NAME DATE OF BIRTH SOCIAL SECURITY NUMBER
John C. Doe 01-01-61 123-45-6789
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EMPLOYER DATE OF EMPLOYMENT EMPLOYMENT LOCATION EMPLOYEE IDENTIFICATION NUMBER
ABC COMPANY 05-01-97 Anytown, USA 111-22-3333
====================================================================================================================================
INSURANCE INFORMATION
====================================================================================================================================
Insurance Amount: $ 25,000 Premium Amount: (1) $ 4.35
Child Term Rider
(If elected, please list names $ N/A Additional Amount Paid: (2) $ 0
and dates of birth below)
Child Rider Premium: (3) $ N/A
Total Premium: (Add Lines 1-3) $ 4.35
NOTE: YOU OR YOUR SPOUSE MAY CHOOSE CHILDREN'S COVERAGE, NOT BOTH.
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Child's Name Date of Birth Child's Name Date of Birth
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
ACCOUNT OPTIONS
Please select the allocation of net premium:
(Allocations must total 100%. Minimum of 10% in any account, allocations must be
in increments of 1%.)
20 % GUARANTEED ACCOUNT
- --
SUB-ACCOUNT OPTIONS
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FIXED BALANCED EQUITY
- ----- -------- ------
<C> <C> <C>
20 % BOND 20 % ASSET ALLOCATION 20 % CAPITAL APPRECIATION
% MATURING GOVERNMENT BOND 2010 20 % GROWTH
- --
% MONEY MARKET % INDEX 500
- -- --
% MORTGAGE SECURITIES % INTERNATIONAL STOCK
- -- --
% VIP HIGH INCOME % SMALL COMPANY GROWTH
- -- --
% GLOBAL BOND % VALUE STOCK
- -- --
% VIP EQUITY-INCOME
--
% VIP 11 CONTRAFUND
--
% SMALL COMPANY VALUE
--
% INDEX 400 MID-CAP
--
% MICRO-CAP GROWTH
--
% MACRO-CAP VALUE
--
</TABLE>
OWNER
The Proposed Insured will be the Owner of any policy issued on this application,
unless requested otherwise below. The Owner has every benefit, right or
privilege given by policy terms. Policy transactions between Northstar Life and
the Owner do not require the Insured's notice or consent.
Name (If a Corporation, give the state in which it is incorporated)
-------------
Relationship to Proposed Insured
-----------------------------------------------
Tax I.D. Number or Social Security Number
---------------------------------------
Owner's Address
-----------------------------------------------------------------
City State Zip Code
------------------------------ ------------------ -------------
I agree that because this application is for a Variable Group Universal Life
policy, that Northstar Life, if it is unable for any reason to collect funds for
units which have been allocated to a sub-account under the policy applied for,
may redeem for itself the full value of such units. If such units are no longer
available, it may recover that value from any other units of equal value
available under the policy.
I UNDERSTAND THAT THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) OF
THE POLICY APPLIED FOR MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT
RESULTS OF THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT. I UNDERSTAND THAT THE
ACCOUNT VALUE OF THE POLICY APPLIED FOR INCREASES AND DECREASES DEPENDING ON THE
INVESTMENT RESULTS. THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE FOR NET
PREMIUMS INVESTED IN THE SUB-ACCOUNTS.
The information contained in this application is true and complete.
EMPLOYEE'S SIGNATURE (or owner's if different) DATE
X /s/ John C. Doe 05-01-97
- --------------------------------------------------------------------------------
<PAGE> 3
INVESTMENT SUITABILITY -TO BE COMPLETED BY OWNER
NASD rules require inquiry concerning the financial condition of individuals
applying for variable policies. The proposed Owner must supply such information
so that an informed judgement may be made as to the suitability of the
investment for the Owner.
NOTE: IF THE PROPOSED INSURED AND PROPOSED OWNER ARE NOT THE SAME, THE
PROPOSED OWNER MUST COMPLETE QUESTIONS 9-11 ALSO.
<TABLE>
<S><C>
1 . Have you received the prospectus for the Northstar Life Variable Universal Life Account, which includes
prospectuses for the Advantus Series Fund, Inc. and the
Fidelity's Variable Insurance Products Funds? [X] Yes [ ] No
2. Would you like us to send you a Statement of Additional Information referred to in the
prospectuses named above? [X] Yes [ ] No
3. Are you an employee of Northstar Life? [ ] Yes [X] No
4. Are you a spouse or dependent child of an employee of Northstar Life? [ ] Yes [X] No
5. Are you an employee of a NASD firm? [ ] Yes [X] No
6. Dependents: [ ] Spouse Age [ ] Children Ages
------------- -------------------------
7. Current Approximate:
Annual Income $50,000 Assets $ 150,000 Debt $ 50,000 Tax Bracket 28%
8. Other Investments:
Savings $10,000 Balanced/Total Return Funds $
------------- -------------
Insurance Cash Value $ Stock Funds $
------------- -------------
Real Estate $85,000 Bond Funds $
------------- -------------
Business Interests $ Individual Stocks $
------------- -------------
Retirement Funds $ Individual Bonds $
------------- -------------
Other $
-------------
9. Ranking of Investment Objectives - (Rank 1-5, in order of importance):
5 Capital Preservation/Conservative Income 1 Growth
---- ----
4 Current Income 2 Aggressive Growth
---- ----
3 Total Return/Conservative Growth
----
10. Risk Tolerance (please check one): [ ]Low Risk [X] Moderate Risk [ ]High Risk
PLEASE ANSWER THE FOLLOWING QUESTIONS IF THE PROPOSED INSURED AND THE PROPOSED OWNER ARE NOT THE SAME.
11. Employer
---------------------------------------------------------------------------------------------------------------------
Address
---------------------------------------------------------------------------------------------------------------------
Occupation Years Employed
----------------------------------------------------------------------- --------------------------
12. Are you of legal age in the state of your mailing address? [ ] Yes [ ] No
The information contained in this application is true and complete.
- ------------------------------------------------------------------------------------------------------------------------------------
SPOUSE'S SIGNATURE (OR OWNER'S IF DIFFERENT) DATE
X /s/ Jane A. Doe 05-01-97
- ------------------------------------------------------------------------------------------------------------------------------------
FOR HOME OFFICE USE
- ------------------------------------------------------------------------------------------------------------------------------------
SUITABILITY ACCEPTED BY REGISTERED PRINCIPAL DATE
/s/ Sam S. Smith 05-01-97
</TABLE>
<PAGE> 1
EXHIBIT A.(11)
ADVANTUS POLICY & PROCEDURE MANUAL -
ADVANTUS CODE OF ETHICS, PERSONAL SECURITIES TRADING
- --------------------------------------------------------------------------------
PROCEDURE NAME: ADVANTUS CODE OF ETHICS, PERSONAL SECURITIES TRADING
- --------------------------------------------------------------------------------
PROCESS REF. #: ADVANTUS 101
CONTACT NAME: GARY PETERSON
AUTHOR: GARY PETERSON
APPROVAL DATE: 10/28/99
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURPOSE
- --------------------------------------------------------------------------------
While affirming its confidence in the integrity and good faith of all their
employees, officers and directors, Advantus Capital Management, Inc. (Advantus)
and Ascend Financial Services, Inc. (Ascend) recognize that the knowledge of
present or future fund portfolio transactions and, in certain instances, the
power to influence fund portfolio transactions made by or for the Advantus Funds
may place such individuals, if they engage in Personal Securities Transactions
in securities which are eligible for investment by the Advantus Mutual and
Series Funds (Funds), in a position where their personal interest may conflict
with that of the Funds.
In view of the above and of the provisions of Rule 17j-1(b)(1) under the
Investment Company Act of 1940 (the "1940 Act") and other regulations and legal
considerations, Advantus, Ascend, and the Funds have determined to adopt this
Code of Ethics to specify and prohibit certain types of transactions which would
create conflicts of interest (or at least the potential for the appearance of
conflicts of interest), and to establish reporting requirements and enforcement
procedures. This Code supplements but does not supersede or contradict the
Minnesota Life Code of Ethics.
- --------------------------------------------------------------------------------
SCOPE
- --------------------------------------------------------------------------------
The attached Code of Ethics, (Appendix A), applies to all individuals defined as
access persons and certain Employees. This includes all Advantus employees
engaged in making investment decisions or supporting the investment process
regarding marketable securities and other employees of Advantus or Ascend,
(permanent, temporary and/or contractors), as defined in the Code.
- --------------------------------------------------------------------------------
1
<PAGE> 2
PROCEDURE
- --------------------------------------------------------------------------------
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<CAPTION>
TASK/ACTION RESPONSIBILITY
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For Newly Hired and Transferring Access Persons
<S> <C>
Provide the Code of Ethics to new or transferred access persons coincident Advantus Human
with their hire Advantus Human Resources or transfer date. Provide an Resources
initial holdings report form to be completed by the access person.
Conduct training/orientation regarding the Code of Ethics and related Advantus Compliance
procedures in groups Advantus Compliance or in one-on-one meetings, as
appropriate. This must be done within 10 business days of their hire or
transfer.
Review the Code of Ethics and complete the attached signoff form within 10 Access Personnel
business days Access Personnel of receipt. Return the signoff forms to
Advantus Compliance department. Complete the initial holdings report and
return the report to the Advantus Compliance department.
For Annual Review or Code of Ethics Revisions
Distribute the Code of Ethics, the annual signoff form, and the annual Advantus Compliance
security holdings Advantus Compliance report to all access persons
according to the annual schedule as defined by Advantus compliance officer.
Complete special distributions of the Code of Ethics and signoff forms to
all access persons when changes in the Code of Ethics occur.
Review the Code of Ethics, or revisions to the Code, then complete the Access Personnel
signoff form and Access Personnel return it to Advantus Compliance
department within 10 business days of receipt. Complete the annual security
holdings report and return to the Advantus Compliance department.
</TABLE>
2
<PAGE> 3
APPENDIX A
CODE OF ETHICS
FOR
ADVANTUS CAPITAL MANAGEMENT, INC.
AND AFFILIATES
I. PURPOSE AND CONSTRUCTION.
This Code of Ethics ("Code") is adopted by Advantus Capital Management,
Inc. (the "Adviser"), Ascend Financial Services, Inc. ("Ascend"), and the Funds
to set forth their policy with regard to conduct by their officers, directors
and employees and in an effort to comply with and prevent violations of Section
17 of the 1940 Act, Section 15(f) of the Securities Exchange Act of 1934 and
Section 204A of the Investment Advisers Act of 1940. The focus of this Code is
to set forth the standards of ethical conduct expected from employees, officers
and directors and the restriction or prevention of some investment activities by
persons with access to certain information that might be harmful to the
interests of the Funds or which might enable such persons to profit illicitly
from their relationship with the Funds.
II. STATEMENT OF GENERAL ETHICAL PRINCIPLES.
A. Individuals covered by this Code will at all times conduct
themselves with integrity and distinction, putting first the
interests of the Funds.
B. The Code is based on the principle that the individuals covered by
this Code owe a fiduciary duty to the Funds, including, among others,
the shareholders of the Funds, to conduct their Personal Securities
Transactions in a manner which does not interfere with Fund portfolio
transactions and in such a manner as to avoid any actual or potential
conflict or interest or abuse of such person's position of trust and
responsibility; or otherwise take inappropriate advantage of such
person's position in relation to the Funds. Individuals covered by
this Code must adhere to this general principle as well as comply with
the Code's specific provisions. It bears emphasis that technical
compliance with the Code's procedures will not automatically insulate
from scrutiny, activities which show a pattern of abuse of the
individual's fiduciary duties to the Funds.
III. RESTRICTIONS.
A. NONDISCLOSURE OF INFORMATION. An Access Person shall not divulge
to any person, contemplated or completed securities transactions of a
Fund, except in the performance of his or her duties. This prohibition
shall not apply if such information previously has become a matter of
public knowledge.
B. SECTION 17(D) LIMITATIONS. No Affiliated Person of a Fund, or
Ascend, or any Affiliated Person of such person or Ascend, acting as
principal, shall effect any transaction in which a Fund, or a company
controlled by a Fund, is a joint or a joint and several participant
with such person, Ascend or Affiliated Person, in contravention of
such rules and regulations as the Securities and Exchange Commission
may prescribe under Section 17(d) of the 1940 Act for the purpose of
3
<PAGE> 4
limiting or preventing participation by the Funds or controlled
companies on a basis different from or less advantageous than that of
such other participant.
C. PROSCRIBED ACTIVITIES UNDER RULE 17J-1(B). Rule 17j-1(b) under the
1940 Act provides:
It shall be unlawful for any affiliated person of or principal
underwriter for a Fund, or any affiliated person of an investment
adviser of or principal underwriter for a Fund, in connection with the
purchase or sale, directly, or indirectly, by such person of a
Security Held or to be Acquired, as defined in section IX, by such
Fund--
1. To employ any device, scheme or artifice to defraud such Fund;
2. To make to such Fund any untrue statement of a material fact
or omit to state to such Fund a material fact necessary in order
to make the statements made, in light of the circumstances under
which they were made, not misleading;
3. To engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon any such
Fund; or
4. To engage in any manipulative practice with respect to such
Fund.
Any violation of Rule 17j-1(b) shall be deemed to be a violation
of this Code.
D. COVENANT TO EXERCISE BEST JUDGMENT. An Advisory Person shall act
on his or her best judgment in effecting, or failing to effect, any
Fund transaction and such Advisory Person shall not take into
consideration his or her personal financial situation in connection
with decisions regarding Fund portfolio transactions.
E. LIMITATIONS ON PERSONAL SECURITIES TRANSACTIONS.
1. NO PERSONAL SECURITIES TRANSACTIONS WITHOUT PRIOR APPROVAL. No
Access Person or Employee shall engage in a Personal Securities
Transaction without Pre-Clearance, as defined below.
a. Prior to effecting any Personal Securities Transaction,
except as provided in Paragraph b. below, an Access Person
or Employee shall secure Pre-Clearance utilizing the
procedures set forth in (i) or (ii) below.
i. Manual Pre-Clearance.
An Access Person shall notify the President of the
Adviser, or his or her designee, of the proposed
transaction, and shall provide the name of the issuer,
the title or type of Security, the number of shares and
the price per share or the principal amount of the
transaction. The President of the Adviser, or his or
her designee, shall, after investigation, determine
that such proposed transaction would, may, or would not
be consistent with the specific limitations of Section
III.E. and with this Code generally.
The conclusion of the President of the Adviser, or his
or her designee, shall be promptly communicated to the
person making such request. The President of the
Adviser, or his or her designee, shall make written
records of actions under this
4
<PAGE> 5
Section, which records shall be maintained and made
available in the manner required by Rule 17j-1(f).
ii. E-Mail Based Prior Clearance.
As an alternative to Manual Prior Clearance set Forth
above, an Access Person or Employee may utilize the
Lotus Notes based Trade Approval System ("TAS") to pre-
clear Personal Securities Transactions. Thereafter TAS
will be loaded onto the computer of that Access Person
or Employee. (An Access Person or Employee who has
undergone TAS training and has had TAS installed on
their computer is called a User).
The User will enter the proposed Personal Securities
Transaction on the TAS system. The User will enter
the security ticker symbol and other information
required by TAS. TAS searches all applicable restricted
lists based on the security ticker symbol. The User has
the responsibility for determining that the security
ticker symbol is accurate. If the proposed Personal
Securities Transaction clears the restricted lists, the
User will forward the proposed trade to the applicable
trading desk for further clearance. Approval or
rejection of each proposed Personal Securities
Transaction will be made by e-mail notification to the
mailbox of the User. The User will be required to enter
information as to whether the trade is executed or not
executed and the price at which it was executed.
In utilizing the TAS system, the User is required to
make certifications with regard to the transaction
as set forth on the TAS system. For each proposed
Personal Securities Transaction the User has the
responsibility to enter the information correctly
and ensure the accuracy of each of these statements.
Failure to enter the correct security ticker symbol
or to ensure that each certification is correct may
result in disciplinary action being taken against
the User in accordance with the provisions of the
Code. Records of actions under this Section, shall
be maintained and made available in the manner
required by Rule l7j-l(f).
b. Personal Securities Transactions in the following securities
do not require prior approval pursuant to this section:
i. Purchases or sales of securities issued by the
Government of the United States (transactions in
securities that are indirect obligations of the U.S.
Government such as securities of the Federal National
Mortgage Association are not exempted);
ii. Purchases or sales of shares of registered open-end
investment companies;
iii. Purchases or sales of banker's acceptances or bank
certificates of deposit; or
iv. Purchases or sales of commercial paper and high quality
short term instruments, including repurchase
agreements.
2. LIMITATIONS RELATED TO TIME OF TRANSACTIONS.
a. No Access Person or Employee shall engage in a Personal
Securities Transaction involving any Security which, with
respect to any Fund, has been purchased or sold
5
<PAGE> 6
within the most recent 7 days or which has a pending "buy"
or "sell" order.
b. No Access Person or Employee who is a portfolio manager or
analyst shall engage in a Personal Securities Transaction
involving any Security which, with respect to the Funds they
manage or make recommendations for, is being considered for
purchase or sale within the next 7 days.
c. The following exceptions to Paragraphs a. and b. above will
apply if any such Security:
i. is no longer held by any Fund as a result of a sale
within the most recent 7 days, in which case such
Security may be sold the next day following the
completion of such a transaction by a Fund, or
ii. is purchased or sold solely by a Fund which tracks the
performance of an Index, in which case such Security
may be purchased or sold on any day except a day on
which any Fund is trading in such security.
d. No Access Person or Employee shall profit from the purchase
and sale, or sale and purchase, of the same
(or an equivalent) Security in a Personal Securities
Transaction within sixty calendar days.
e. The following Personal Securities Transactions are not
subject to the limitations set forth in Paragraphs a., b.,
and d. above:
i. Purchases or sales effected in any account over which
the person has no direct or indirect influence or
control;
ii. Purchases or sales of securities which are not eligible
for purchase or sale by any Fund;
iii. Purchases which are part of an automatic dividend
reinvestment plan;
iv. Purchases effected upon the exercise or rights issued
by an issuer pro rata to all holders of a class of its
securities, to the extent such rights were acquired
from such issuer, and sales of such rights so acquired.
3. INITIAL PUBLIC OFFERING LIMITATIONS. No Access Person or
Employee shall engage in any Personal Securities Transaction
that involves the purchase of a Security which is part of an
Initial Public Offering.
4. LIMITED OFFERING LIMITATIONS.
a. No Access Person or Employee shall engage in any
Personal Securities Transaction that involves a Limited
Offering of Securities without the express prior
approval of the President of the Adviser, or his or her
designee in accordance with the procedures set forth in
Section III.E.6. In reviewing any such approval
request, the President of the Adviser, or his or her
designee, shall consider, among other factors, whether
the investment opportunity should be reserved for a
Fund and its shareholders, and whether
6
<PAGE> 7
the opportunity is being offered to the requesting
individual by virtue of his or her position with the
Funds or the Adviser.
b. Access Persons and Employees who have received approval
as set forth above and who continue to hold the
Security acquired in such Limited Offering, shall
disclose any such continuing investment to the
President of the Adviser, or his or her designee, if
and when they should become involved in any subsequent
consideration of an investment in the same issuer for
the portfolio of any Fund. In such case the decision to
invest in the Securities of such an issuer shall be
subject to the approval of the President of the
Adviser, or his or her designee.
c. The President of the Adviser, or his or her designee,
shall make written records of actions under this
Paragraph.
5. COPIES OF BROKERAGE REPORTS. All Access Persons that engages
in a Personal Securities Transaction are required to have
the executing broker send a duplicate copy of the
confirmation of the transaction to the President of the
Adviser or his or her designee at the same time as it is
provided to such person. In such event, the Access Person
shall also direct such broker to provide duplicate copies of
any periodic statements on any account maintained by such
person to the President of the Adviser, or his or her
designee.
6. WAIVERS. An Access Person or Employee may also request
prior approval of a Personal Securities Transaction which,
on its face, would be prohibited by the limitations of
Section III.E. Such person shall provide to the President of
the Adviser, or his or her designee, a description of the
proposed transaction, including the name of the issuer, the
title or type of the Security, the number of shares and the
price per share or the principal amount of the transaction,
and shall also provide a statement why the applicable
limitation should be waived in the case of the proposed
transaction. The President of the Adviser, or his or her
designee, shall, after investigation, determine that a
waiver of the limitations otherwise applicable to the
proposed transaction would, may, or would not be consistent
with the purpose of this Code. Purchases and sales
consistent with the Code shall include those which are only
remotely potentially harmful to any Fund, those which would
be very unlikely to affect a highly institutional market,
and those which clearly are not related economically to the
securities to be purchased, sold or held by any Fund.
IV. REPORTING REQUIREMENTS.
A. QUARTERLY REPORT. Not later than ten (10) days after the end of
each calendar quarter, each Employee and each Access Person shall
submit a report (as shown in Exhibit A) which shall specify the
following information with respect to transactions during the then
ended calendar quarter in any Security in which such Employee or
Access Person has, or by reason of such transaction acquired, any
direct or indirect beneficial ownership in the Security:
1. the date of transaction, the name of the issuer, the title
or type of Security, the interest rate and maturity (if
applicable), the number of shares, and the principal amount
of each Security involved;
7
<PAGE> 8
2. the nature of the transaction (i.e., purchase, sale, or any
other type of acquisition or disposition);
3. the price of the Security at which the transaction was
effected;
4. the name of the broker, dealer, or bank with or through whom
the transaction was effected;
5. the date that the report is submitted by the Access Person
or Employee; and
6. any account established in the quarter by the Access Person
in which any securities were held during the quarter for the
direct or indirect benefit of the Access Person.
If no transactions have occurred, or no accounts have been
established, in the quarter, the report shall so indicate.
The President of the Adviser, may in his or her discretion, not
require an Access Person or Employee to make a quarterly
transaction report, if the report duplicates information contained
in the broker trade confirmation received by the Adviser, contains
all required information as described in this section IV.A, the
broker trade confirmation is received no later than 10 days after
quarter end, and no accounts have been established as described in
this section IV.A.6.
B. LIMITATION ON REPORTING REQUIREMENTS. Notwithstanding the
provisions of Section IV.A., no Access Person or Employee shall be
required:
1. To make a report with respect to transactions effected for
any account over which such person does not have any direct
or indirect influence or control; or
2. To make a quarterly report, initial or annual holdings
report, if such person is not an "interested person" of a
Fund as defined in Section 2(a)(19) of the 1940 Act, and
would be required to make such a report solely by reason of
being a director of a Fund, EXCEPT where such director knew,
or in the ordinary course of fulfilling his or her official
duties as a director of a Fund should have known, that
during the 15-day period immediately preceding or after the
date of the transaction in a Security by the director, such
Security was being purchased or sold by a Fund or such
purchase or sale by a Fund was being considered by a Fund or
the Adviser.
C. REPORTS OF VIOLATIONS. In addition to the quarterly reports
required under this Section IV, each Employee and each Access
Person promptly shall report any transaction which is, or might
appear to be, in violation of this Code. Such report shall contain
the information required in quarterly reports filed pursuant to
Section IV.A.
D. INITIAL AND ANNUAL REPORTS BY PERSONNEL. All Access Persons and
Employees shall submit to the President of the Adviser, or his or
her designee, a report of all Securities beneficially owned by
them at the time that they commence employment with the Adviser or
Ascend (or any affiliated company) or at the time they become an
Access Person. This report shall be submitted to the President of
the Adviser, or his or her designee, within 10 days of
commencement of employment or within 10 days after notification of
becoming an Access Person. All Access Persons and Employees shall
submit to the President of the Adviser, or his or her designee,
within 30 days of the end of each calendar year, a report of all
Securities beneficially owned by them as
8
<PAGE> 9
of December 31 of each year or at such other date selected by the
President of the Adviser. The initial and annual security holdings
report must include the following information:
1. the name of the security, number of shares, and principal
amount of each Security in which the Access Person or
Employee has any direct or indirect beneficial ownership;
2. the name of the broker, dealer, or bank with whom the Access
Person or Employee maintains an account in which any
securities are held for the direct or indirect benefit of
the Access Person or Employee. The initial security holdings
report should be as of the date the person became an Access
Person; and
3. the date the report is submitted by the Access Person or
Employee.
E. FILING OF REPORTS. All reports prepared pursuant to this Section
IV shall be filed with the person designated by the President of
the Adviser to review these materials.
F. QUARTERLY REPORT BY ADVISER. Each calendar quarter, after the
receipt of reports from reporting persons, the President of the
Adviser, or his or her designee, shall prepare a report which
shall certify, to the best of his or her knowledge, that all
persons required to file a report under Section IV.A. have
complied with this Code for such prior quarter or, if unable to
make such certification, shall describe in detail incomplete
reports, violations or suspected violations of this Code.
G. DISSEMINATION OF REPORTS. The General Counsel of the Funds shall
have the right at any time to receive or review copies of any
reports submitted pursuant to this Section IV. Such General
Counsel shall keep all reports confidential except as disclosure
thereof to the Boards of Directors of the Funds, the Adviser,
Ascend, or other appropriate persons may be reasonably necessary
to accomplish the purposes of this Code.
V. RECORDKEEPING REQUIREMENTS
A. The Adviser, Ascend and the Funds must each at its principal place
of business, maintain records in the manner and extent set out in
this Section of the Code and must make available to the Securities
and Exchange Commission (SEC) or any representative of the SEC at
any time and from time to time for reasonable periodic, special or
other examination:
1. A copy of each code of ethics of the Adviser, Ascend and the
Funds that is in effect, or at any time within the past five
years was in effect, must be maintained in an easily
accessible place;
2. A record of any violation of the code of ethics, and of any
action taken as a result of the violation, must be
maintained in an easily accessible place for at least five
years after the end of the fiscal year in which the
violation occurs;
3. A copy of each report made by an Access Person or Employee
as required, including any information provided in lieu of a
quarterly transaction report, see Section IV.A, must be
maintained for at least five years after the end of the
fiscal year in which the report is made or the information
is provided, the first two years in an easily accessible
place;
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<PAGE> 10
4. A record of all persons, currently or within the past five
years, who are or were required to make reports as deemed
Access Persons or Employee, or who are or were responsible
for reviewing these reports, must be maintained in an easily
accessible place;
5. A copy of each report defined in Section VI.B must be
maintained for at least five years after the end of the
fiscal year in which it is made, the first two years in an
easily accessible place.
B. The Adviser, Ascend, and the Funds must maintain a record of any
decision, and the reasons supporting the decision, to approve the
acquisition by investment personnel of Limited Offering
securities, for at least five years after the end of the fiscal
year in which the approval is given.
VI. FIDUCIARY DUTIES OF THE FUND BOARD OF DIRECTORS
A. The Fund Board of Directors, including a majority of directors who
are not interested persons, must approve the Code of Ethics
adopted by the Adviser, Ascend and the Funds and any material
change to the Code. The Board must base its approval of a code and
any material changes to the code on a determination that the code
contains provisions reasonably necessary to prevent Access Persons
from engaging in any conduct prohibited by section III.C. Before
approving the Code of the Adviser, Ascend, and the Funds, the Fund
Board of Directors must receive a certification from the Adviser,
Ascend, and the Funds that each has adopted procedures reasonably
necessary to prevent Access Persons or Employees from violating
its Code of Ethics. The Fund Board of Directors must approve the
Code of the Adviser, Ascend, and the Funds before initially
retaining the services of the Adviser or Ascend. The Fund Board of
Directors must approve a material change to the Code no later than
six months after adoption of the material change. The Adviser,
Ascend and the Funds must each use reasonable diligence and
institute procedures reasonably necessary to prevent violations of
its Code of Ethics.
B. No less frequently than annually, the Adviser, Ascend, and the
Funds must furnish to the Fund Board of Directors a written report
that:
1. Describes any issues arising under the Code of Ethics since
the last report to the Fund Board of Directors, including,
but not limited to, information about material violations of
the Code or procedures and sanctions imposed in response to
the material violations; and
2. Certifies that the Adviser, Ascend, and the Funds have
adopted procedures reasonably necessary to prevent Access
Persons or Employees from violating the Code.
VII. ENFORCEMENT AND SANCTIONS.
A. GENERAL. Any Affiliated Person of the Adviser or Ascend who is
found to have violated any provision of this Code may be
permanently dismissed, reduced in salary or position, temporarily
suspended from employment, or sanctioned in such other manner as
may be determined by the Board of Directors of the Adviser or
Ascend in its discretion. The Board of Directors of the Adviser or
Ascend may delegate this authority to such person or persons they
deem appropriate. If an alleged violator is not affiliated with
the Adviser or Ascend, the Board of Directors of the Fund or Funds
involved shall have the responsibility for enforcing this Code and
determining appropriate sanctions. In determining sanctions to be
imposed for violations of this Code, the
10
<PAGE> 11
Board of Directors may consider any factors deemed relevant,
including but not limited to the following:
1. the degree of willfulness of the violation;
2. the severity of the violation;
3. the extent, if any, to which the violator profited or
benefited from the violation;
4. the adverse effect, if any, of the violation on the Fund or
Funds;
5. the market value and liquidity of the class of Securities
involved in the violation;
6. the prior violations of the Code, if any, by the violator;
7. the circumstances of discovery of the violation; and
8. if the violation involved the purchase or sale of Securities
in violation of this Code, (a) the price at which the Fund
purchase or sale was made and (b) the violator's
justification for making the purchase or sale, including the
violator's tax situation, the extent of the appreciation or
depreciation of the Securities involved, and the period the
Securities have been held.
B. VIOLATIONS OF SECTION III.E.
1. At its election, a Fund may choose to treat a transaction
prohibited under Section III.E. of this Code as having been
made for its account. Such an election may be made only by a
majority vote of the directors of the Fund who are not
Affiliated Persons of the Adviser. Notice of an election
under this Section VII.B.1. shall not be effective unless
given to the Adviser within sixty (60) days after the Fund
is notified of such transaction. In the event of a violation
involving more than one Fund, recovery shall be allocated
between the affected Funds in proportion to the relative net
asset values of the Funds as of the date of the violation.
2. If securities purchased in violation of Section III.E. of
this Code have been sold in a bona fide sale, the Fund shall
be entitled to recover the profit made by the seller. If
such securities are still owned by the seller, or have been
disposed of by such seller other than by a bona fide sale at
the time notice of election is given by the Fund, the Fund
shall be entitled to recover from the seller the difference
between the cost of such Securities to the violator and the
fair market value of such Securities on the date the Fund
acquired such Securities. If the violation consists of a
sale of Securities in violation of Section III.E. of this
Code, the Fund shall be entitled to recover from the
violator the difference between the net sale price per share
received by the violator and the net sale price per share
received by the Fund, multiplied by the number of shares
sold by the violator. Each violation shall be treated
individually and no offsetting or netting of violations
shall be permitted. The sums due from a violator under this
Paragraph shall include sums due a Fund as a result of a
violation by a Member of the Immediate Family of such
violator.
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<PAGE> 12
3. Knowledge on the part of director or officer of a Fund who
is an Affiliated Person of the Adviser of a transaction in
violation of this Code shall not be deemed to be notice
under Section VII.B.1.
4. If the Board of Directors of a Fund determines that a
violation of this Code has caused financial detriment to
such Fund, upon reasonable notice to the Adviser, the
Adviser shall use its best efforts, including such legal
action as may be required, to cause a person who has
violated this Code to deliver to the Fund such Securities,
or to pay to the Fund such sums, as the Fund shall declare
to be due under this Section VII.B., provided that:
a. the Adviser shall not be required to bring legal action
if the amount reasonably recoverable would not be
expected to exceed $2,500.
b. In lieu of bringing a legal action against the
violator, the Adviser may elect to pay to the Fund such
sums as the Fund shall declare to be due under this
Section VII.B.; and
c. the Adviser shall have no obligation to bring any legal
action if the violator was not an Affiliated Person or
Employee of either the Adviser or Ascend.
C. RIGHTS OF ALLEGED VIOLATOR. A person charged with a violation of
this Code shall be informed of the violation in writing and shall
have the opportunity to appear before the Board of Directors (or
such Boards designees) as may have authority to impose sanctions
pursuant to this Code, at which time such person shall have the
opportunity, orally or in writing, to deny any and all charges, set
forth mitigating circumstances, and set forth reasons why the
sanctions for any violations should not be severe.
D. DELEGATION OF DUTIES. The Board of Directors of the Adviser, Ascend
or of any Fund may delegate its enforcement duties under this
Section VII to a special committee of the Board of Directors
comprised of at least three persons; provided, however, that no
director shall serve on such committee or participate in the
deliberations of the Board of Directors hereunder who is charged
with a violation of this Code. The Board of Directors of Adviser or
Ascend may delegate its enforcement duties under this Section VII to
such officers of Adviser or Ascend and with such authority as the
Board deem appropriate.
E. NON-EXCLUSIVITY OF SANCTIONS. The imposition of sanctions hereunder
by the Board of Directors of the Adviser or Ascend will not preclude
the imposition of additional sanctions by the Board of Directors of
the Funds and shall not be deemed a waiver of any rights by the
Funds.
VIII. MISCELLANEOUS PROVISIONS.
A. IDENTIFICATION OF ACCESS PERSONS. The Adviser shall, on behalf of
the Funds and Ascend, identify all Employees and all Access
Persons who are under a duty to make reports under Section IV and
shall inform such persons of such duty.
B. MAINTENANCE OF RECORDS. The Adviser shall, on behalf of the Funds
and Ascend, maintain and make available records as required by Rule
17j-1(d).
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<PAGE> 13
C. ANNUAL CERTIFICATION OF COMPLIANCE. All Access Persons and
Employees shall sign a certificate to be presented to the Adviser
at the end of each calendar year certifying that they have read and
understood this Code and acknowledging that they are subject to the
terms of the Code. The certificate shall additionally provide that
such person has disclosed or reported all Personal Securities
Transactions required to be disclosed or reported pursuant to the
provisions of this Code.
D. SERVICE AS DIRECTOR. An Access Person or Employee may not serve as
a director of a publicly traded company without the prior consent
of the President of the Adviser, or his or her designee. The
President of the Adviser, or his or her designee, shall not provide
such authorization unless he or she finds that such board service
would be consistent with the interests of the Funds and their
shareholders. Should any person receive such authorization, any
investment by the Funds in the securities of any such publicly
traded company while such person is serving as a director shall be
previously approved by the President of the Adviser, or his or her
designee.
E. EFFECTIVE DATE. The effective date of this Code shall be October
28, 1999.
IX. DEFINITIONS.
A. "ACCESS PERSON" shall mean any director, officer, or Advisory
Person of the Adviser or of a Fund, or with respect to Ascend, any
director or officer who in the ordinary course of his or her
business makes, participates in or obtains information regarding
the purchase or sale of Securities for a Fund or whose functions
or duties as part of the ordinary course of his or her business
relate to the making of any recommendation to a Fund regarding the
purchase or sale of Securities.
B. "ADVISORY PERSON" means:
1. Any employee of the Adviser or of a Fund (or of any company
in a control relationship to the Adviser or a Fund) who, in
connection with his or her regular functions or duties,
makes, participates in, or obtains information regarding the
purchase or sale of a Security by a Fund, or whose functions
or duties relate to the making of any recommendations with
respect to such purchases or sales, and
2. Any natural person in a control relationship to the Adviser
or a Fund who obtains information concerning recommendations
made to a Fund with regard to the purchase or sale of a
Security.
C. "AFFILIATED PERSON" means:
1. Any person directly or indirectly owning, controlling or
holding with power to vote, five percent (5%) or more of the
outstanding voting securities of such other person;
2. Any person, five percent (5%) or more of whose outstanding
voting securities are directly or indirectly owned,
controlled, or held with power to vote, by such other
person;
3. Any person directly or indirectly controlling, controlled
by, or under common control with, such other person;
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<PAGE> 14
4. Any officer, director, partner, co-partner, or employee of
such other person;
5. If such other person is an investment company, any
investment adviser thereof or any member of any advisory
board thereof; and
6. If such other person is an unincorporated investment company
not having a board of directors, the depositor thereof.
D. "SECURITY HELD OR TO BE ACQUIRED" means any Security which,
within the most recent 15 days (i) is or has been held by the
Fund, or (ii) is being considered by the Fund or Adviser for
purchase by the Fund, and (iii) includes any option to purchase or
sell, and any Security that is exchangeable for or convertible
into, any Security that is held or to be acquired by the Fund.
E. "BENEFICIAL OWNERSHIP" shall be interpreted in the same manner
as it would be in determining whether a person is subject to the
provisions of Section 16 of the Securities Exchange Act of 1934
pursuant to Rule 16a-1 thereunder, except that the determination
of direct or indirect beneficial ownership shall apply to all
Securities which the person has or acquires Beneficial Ownership
includes, but is not limited to those securities owned by a Person
who directly or indirectly through any contract, arrangement,
understanding, relationship or otherwise, has or shares a direct
or indirect pecuniary interest in the securities. Direct pecuniary
interest includes the opportunity directly or indirectly to profit
or share in any profit derived from a transaction in the
securities. The term indirect pecuniary interest includes but is
not limited to securities held by members of a person's immediate
family sharing the same household. You are generally considered to
be the beneficial owner of securities owned by any of the
following:
1. your spouse/domestic partner;
2. minor children of you, your spouse/domestic partner, or
both;
3. a trust of which you are a trustee or a beneficiary;
4. any of your relatives, or relatives of your spouse/domestic
partner, that share your home;
5. a partnership of which you are a partner;
6. a corporation of which you are a substantial shareholder; or
7. any other person who relies on you to make investment
decisions.
F. "COMPLIANCE OFFICER" means the Compliance Officer of the Adviser.
G. "CONTROL" shall have the meaning set forth in Section 2(a)(9) of
the 1940 Act and shall include the power to exercise a controlling
influence over the management or policies of a company, unless
such power is solely the result of an official position with such
company. A person who directly or indirectly owns more than 25% of
the voting securities of a company is presumed to control such
company.
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<PAGE> 15
H. "EMPLOYEE" means an employee of the Adviser, or with respect to
Ascend or any other affiliated company an employee who has been
notified that he or she is also subject to this Code.
I. "FUND" means any investment company registered under the 1940
Act for which the Adviser acts as the investment adviser and
manager. For purposes of this Code, such term shall also include
any other account managed by the Adviser.
J. "1940 ACT" means the Investment Company Act of 1940, 15 U.S.C.
80a-1 to 80a-52, as the same may be amended from time to time.
K. "PERSONAL SECURITIES TRANSACTION" means a transaction in a
Security which an individual effects for his or her own account
or for a Member of his or her Immediate Family.
L. "PRESIDENT OF THE ADVISER" shall mean the President of Advantus
Capital Management, Inc., or its successor.
M. "PURCHASE OR SALE OF A SECURITY" also includes the writing of an
option to purchase or sell a Security.
N. "SECURITY" means any security as that term is defined in Section
2 (a)(36) of the 1940 Act and includes, but is not limited to:
notes, stock, treasury stock, bonds debentures, evidences of
indebtedness, certificates of interest or participations in any
profit-sharing agreement, collateral-trust certificates,
pre-organization certificates or subscriptions, transferable
shares, investment contracts, voting-trust certificates, any puts,
calls, straddles, options or privileges on any security (including
a certificate of deposit) or on any group or index of securities,
or, in general, any interest or instrument commonly known as a
"security". Indirect obligations of the U.S. Government such as
securities of the Federal National Mortgage association are also
Securities for the purposes of the Code. Security does not
include:
1. direct obligations of the Government of the United States;
2. bankers acceptances, bank certificates of deposit,
commercial paper and high quality short-term instruments,
including repurchase agreements; and
3. shares issued by registered open-end investment companies.
O. "INITIAL PUBLIC OFFERING" means an offering of securities
registered with the Commission, the issuer of which, immediately
before the registration, was not required to file reports with the
Commission.
P. "LIMITED OFFERING" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to section
4(2) or section 4(6) or pursuant to rule 504, rule 505, or rule
506 under the Securities Act of 1933.
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<PAGE> 16
EXHIBIT A
QUARTERLY SECURITIES TRANSACTION REPORT *
PURSUANT TO THE CODE OF ETHICS FOR
ADVANTUS CAPITAL MANAGEMENT, INC. AND AFFILIATES
For the Calendar Quarter Ending: MARCH 31, 2000
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
NAME OF ISSUER AND DATE OF NATURE OF NUMBER OF SHARES OR PRICE AT WHICH THROUGH WHOM
TITLE OR TYPE OF SECURITY TRANSACTION TRANSACTION PRINCIPAL AMOUNT EFFECTED TRANSACTION EFFECTED
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
ACCOUNTS OPENED THIS QUARTER**
- -----------------------------------------------------------------------------------------------------------------------------
BROKER OR BANK NAME ACCOUNT TITLE ACCOUNT NUMBER
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The reporting of any transaction hereon shall not be construed as an admission
that the reporting person has any direct or indirect beneficial ownership in
such security.
- ----------------------------- -------------------------- ------------------
Name (Please Print) Signature Date
Date
*Transactions by the Access Person, Employee, or family members as defined in
the Code.
** Accounts opened by the Access Person, Employee, or family members as defined
in the Code.
- - SEND TO: 16-5354 NO LATER THAN APRIL 10, 2000
16
<PAGE> 17
APPENDIX B
INSIDER TRADING
SUPPLEMENT
TO THE
CODE OF ETHICS
The purpose of this Supplement to the Code of Ethics is to expand upon
the provisions of the Code of Ethics and on prior group and private discussions
regarding the topic of insider trading. If you have any further questions on
insider trading, talk with your supervisor, an Advantus attorney, or the
Compliance Officer.
The term "insider trading" refers to the use of material non-public
information to trade securities. It is also a violation of law to communicate
material non-public information to others.
The Code of Ethics of Advantus Capital Management, Inc., and Ascend
Financial Services, Inc. (together "Advantus") prohibits the use of any special
knowledge, personal contacts or access to property or equipment obtained in
connection with employment at Advantus for personal gain. The use of inside
information for personal securities transactions is clearly included in the
prohibition. In addition to personal transactions, insider trading prohibitions
apply to securities transactions made on behalf of Advantus and any of its
clients.
In recent years several highly publicized insider trading cases involved
the merger and acquisition areas of brokerage companies or had some other
connection with the underwriting of securities. Advantus is not involved in the
merger and acquisition business and does not participate in the sort of
securities underwritings that leads to the typical insider trading violations.
(e.g., a person knowingly takes secret information about a company and tries to
make money by buying or selling securities whose price will be affected by the
secret information). However, the insider trading law applies to a very broad
range of activity and should be a matter of constant consideration in all of
Advantus' security trades.
We at Advantus must be vigilant against even inadvertent violations. We
seldom come across dramatic inside information in the regular course of our
business. What inside information we do come across is so similar in nature to
the non-inside information about companies we regularly use that without a
constant awareness of inside information issues, a trade could be made which is
inadvertently based in part on items of tainted information.
WHO IS AN INSIDER? The concept of insider includes the officers,
directors and employees of the company whose securities are in question. It also
includes people who enter into a special confidential relationship with the
company and as a result are given access to confidential information about the
company. These can include attorneys, accountants, consultants, lenders and the
employees of such organizations. Advantus will most often be an insider due to
being a lender to a company.
WHAT IS MATERIAL INFORMATION? Information for which there is a
substantial likelihood that reasonable investors would consider it important to
making their investment decisions, or information that is reasonably certain to
have a substantial effect on the price of a company's securities is material
information.
WHAT IS NON-PUBLIC INFORMATION? Information that has not yet been
communicated to the public through, for example, SEC filings, newspaper reports
or wire service reports, is non-public information.
PREVENTION AND DETECTION OF INSIDER TRADING. Advantus has a continuing
obligation to prevent and detect insider trading. An Advantus employee who
obtains information about a company which appears to be
17
<PAGE> 18
material non-public information should disclose that information to his superior
and the Compliance Officer. If it appears that the information is material
non-public information, two things will be done by the Compliance Officer: (1)
Instruct the appropriate Portfolio Management Assistant to put the company on
the restricted stock or bond list so that employees of Advantus know not to
trade the stock or bond in personal transactions and the identified stocks and
bonds are included in the examination of the Securities Transaction Reports
filed quarterly by employees and (2) Inform all investment division heads,
mortgage, bond and stock, that they should not trade the securities of the
identified company because Advantus possesses inside information with respect to
the company. These restrictions will be removed when the Compliance Officer
determines that the information no longer constitutes material non-public
information.
When deemed appropriate, Advantus management may also review trades made
in personal accounts and on behalf of Advantus or any of its clients for
evidence of trading in violation of these rules.
As with all matters concerning ethical conduct, Advantus rules and
procedures for insider trading are intended to promote the highest ethical
standards. It is not sufficient by itself that a course of action is legal. It
also must be the right thing to do. There are no transactions important enough
to risk the reputation of Advantus or Minnesota Life Insurance Company. All
business should be conducted with this in mind.
18
<PAGE> 19
APPENDIX C
GIFT AND BUSINESS ENTERTAINMENT
SUPPLEMENT TO THE CODE OF ETHICS
As an employee of Advantus Capital Management, Inc., or Ascend Financial
Services, Inc. , or an employee of an affiliated company who has been notified
that he or she is also subject to the Code of Ethics, you are being paid solely
to conduct the business of the company to the best of your ability. Any special
knowledge or personal contacts you develop while working at Advantus should be
used for the benefit of the company and should not be considered supplemental
compensation or used for personal gain.
No single rule or group of rules can anticipate every circumstance a
person might encounter which has ethical implications. You must use your own
judgment as to right and wrong but be guided by the knowledge that you are being
relied upon by Advantus to preserve and promote its reputation as a trustworthy
and honorable institution. If in doubt, you are encouraged to talk with your
superiors, but ultimately you are responsible for your own actions.
Below are guidelines to assist you in exercising your own good judgment
in two areas that commonly produce questions concerning appropriate conduct.
Business Entertainment
Letting someone pay for a business meal or other entertainment generally
is permissible if the primary purpose is related to company business. Avoid
situations in which such meals or entertainment may influence or appear to
influence your independence of judgment. If you could not provide your host with
a similar meal or entertainment and put it on your expense report it is probably
inappropriate to accept.
Gifts
You may accept gifts (or prizes) of nominal value, that is, gifts (or
prizes) so low in value that the gift is insignificant.
Duty to Disclose Conflicts
All employees shall disclose to their superiors in a timely manner all
conflicts of interest and other matters which could reasonably be expected to
interfere with their duty to Advantus or impair their ability to render unbiased
and objective advice.
Sanctions
Upon discovering a violation of this Code of Ethics, Advantus may impose
such sanctions as it may deem appropriate. A record will be kept of all known
violations and any sanctions imposed.
Any person charged with a violation of the Code of Ethics shall be
informed of the violation and shall have the opportunity to explain his actions
prior to the imposition of any sanction.
19
<PAGE> 1
EXHIBIT C
NORTHSTAR LIFE
University Corporate Centre at Amherst
Suite 424
100 Corporate Parkway
Amherst, NY 14226
January 28, 2000
Northstar Life Insurance Company
Northstar Life Variable Universal Life Account
University Corporate Centre at Amherst
100 Corporate Parkway
Amherst, New York 14226
RE: NORTHSTAR LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
Gentlepersons:
In my capacity as counsel for Northstar Life Insurance Company ("the Company"),
I reviewed certain legal matters relating to Northstar Life Variable Universal
Life Account ("the Account") in connection with the Registration Statement to be
filed by it and by the Company on Form S-6 with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, with respect to certain
group and individual Variable Universal Life Insurance Policies ("the Policies")
to be issued by the Separate Account.
Based upon my review, I am of the following opinion:
1. The Separate Account is a separate account of the Company duly
created and validly existing pursuant to the laws of the State of
New York;
2. The issuance and sale of the Policies have been duly authorized by
the Company and such Policies, when issued with and as described
in the current Prospectus contained in the Registration Statement,
as amended, and upon compliance with local and federal laws, will
be legal and binding obligations of the Company in accordance with
the terms of those Policies; and
3. The assets held in the Separate Account not in excess of Contract
liabilities and reserves are not chargeable with liabilities
arising out of any other business the Company may conduct.
In arriving at the foregoing opinion, I have made such examination of law and
examined such records or other documents as in my judgment are necessary or
appropriate.
I hereby consent to the filing of this opinion as an Exhibit to the Registration
Statement and to the reference to me under the caption "Legal Matters" in the
prospectus contained in the above-mentioned Registration Statement.
Sincerely,
/s/Helen W. Leslie
Helen W. Leslie
Vice President and Assistant Secretary
HWL:pjh
<PAGE> 1
EXHIBIT E
MINNESOTA LIFE INSURANCE COMPANY
400 Rovert Street North
St. Paul, MN 55101-2096
651 665.3500 Tel
January 28, 2000
Northstar Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
Re: Variable Universal Life Insurance Policies
Form S-6
Dear Sir or Madam:
This opinion is furnished in connection with the filing of the Registration
Statement on Form S-6 ("Registration Statement"), which covers premiums expected
to be received under group and individual Variable Universal Life Insurance
Policies ("Policies") on the form referenced above and offered by Northstar Life
Insurance Company ("Northstar Life"). The prospectus included in the
Registration Statement describes Policies offered by Northstar Life in the State
of New York where the Policies have been approved by appropriate state insurance
authorities. The policy form was prepared under my direction, and I am familiar
with the Registration Statement and Exhibits thereto. In my opinion:
1. The descriptions of death benefits and account values for the Policies,
described under the headings "Death Benefit" and "Account Values" and
fully illustrated in Appendix I of the prospectus entitled
"Illustrations of Account Values and Death Benefits" and in Appendix II
of the prospectus entitled "Policy Loan Example" are consistent with
the provisions of the Policies and the administrative procedures of
Northstar Life. This rate structure of the Policies has not been
designed and the assumptions for the illustrations have not been
selected so as to make the relationship between premiums and benefits,
as shown in the illustrations, appear to be disproportionately more
favorable to a prospective purchaser of a Policy for persons of the age
and death benefit option illustrated than for any other prospective
purchasers of Policies at other ages.
2. The illustrations include those for commonly used classifications and
for premium amounts and ages appropriate to the markets in which the
Policies will be sold.
<PAGE> 2
Northstar Life Insurance Company
January 28, 2000
Page 2
I hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to my name under the heading "Experts" in the
prospectus.
Very truly yours,
/s/Robert M. Olafson
Robert M. Olafson, F.S.A.
Vice President
RMO:pjh
<PAGE> 1
EXHIBIT F
JONES & BLOUCH L.L.P.
SUITE 410 WEST
1025 THOMAS JEFFERSON STREET, N.W.
WASHINGTON, D.C. 20007-0805
JORDEN BURT BERENSON & JOHNSON LLP TELEPHONE (202) 223-3500
AFFILIATED COUNSEL TELECOPIER (202) 223-4593
January 28, 2000
Northstar Life Insurance Company
University Corporate Centre at Amherst
100 Corporate Parkway
Amherst, New York 14226
Dear Sirs:
We hereby consent to the reference to this firm under the caption
"Legal Matters" in the prospectus contained in the registration statement on
Form S-6 of Northstar Life Variable Universal Life Account, to be filed with the
Securities and Exchange Commission.
Very truly yours,
Jones & Blouch L.L.P.
<PAGE> 1
EXHIBIT G
November 1999
DESCRIPTION OF NORTHSTAR LIFE INSURANCE
COMPANY'S ISSUANCE, TRANSFER
AND REDEMPTION PROCEDURES FOR POLICIES
PURSUANT TO RULE 6E-2(B)(12)(II)
AND
METHOD OF COMPUTING ADJUSTMENTS IN
PAYMENTS AND CASH VALUES OF POLICIES
UPON CONVERSION TO FIXED BENEFIT
POLICIES PURSUANT TO RULE 6E-2(B)(13)(V)(B)
This document sets forth the administrative procedures established by Northstar
Life Insurance Company ("we", "our", "us") in connection with the issuance of
our Variable Universal Life insurance policy ("policy"), the transfer of assets
held thereunder, and the redemption by owners of their interests in those
policies. This document also explains the method that we will follow when a
policy is exchanged for a fixed benefit insurance policy as provided by the
policy provisions and subject to Rule 6e-2(b)(13)(v)(B).
I. PROCEDURES RELATING TO ISSUANCE AND PURCHASE OF THE POLICIES
We will generally issue a group insurance contract to a group, as
defined and permitted by state law, allowing eligible members of that
group to become insured under the group contract. The class(es) of
members eligible to be insured by a policy under the group contract are
identified on that contract's specifications page. The group contract
will be issued upon receipt of an application signed by a duly
authorized officer of the group and the acceptance of that application
by a duly authorized officer of Northstar Life.
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Individuals wishing to purchase a policy insuring an eligible member
under a group-sponsored insurance program must complete the appropriate
application for life insurance and submit it to our home office. If the
policy is approved, we will issue to the owner either a certificate or
an individual policy (the word "policy" will be used in this document
to describe either the certificate or the individual policy issued
under a group-sponsored insurance program).
A policy will not take effect until the owner signs the appropriate
application for insurance, the initial premium has been paid prior to
the insured's death, the insured is eligible, and we approve the
completed application. The date on which the last of these events
occurs will be the effective date of the insurance coverage ("issue
date").
The minimum face amount that we will issue on a policy will vary based
on the group-sponsored insurance program and will be indicated on the
specifications page attached to the owner's policy. Generally, this
amount will be at least $10,000.
The policy must be issued on an insured who is no more than age 94.
Before issuing any policy, we may require evidence of insurability
satisfactory to us, which in some cases will require a medical
examination. Persons who satisfy the underwriting requirements are
accepted for insurance coverage, while persons who do not satisfy the
underwriting requirements are not accepted for insurance coverage.
Acceptance of an application is subject to our underwriting rules and
we reserve the right to reject an application for any reason.
Guaranteed maximum cost of insurance charges will vary by age and
tobacco usage. Guaranteed maximum charges are 125 percent of the
maximum rates that could be charged based on 1980 Commissioners
Standard Ordinary Mortality Tables ("1980 CSO
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<PAGE> 3
Table"). Current cost of insurance rates are generally lower than 100
percent of the 1980 CSO Table.
When the policy is issued, the face amount, planned premium and a
listing of any supplemental agreements are stated on the specifications
page attached to the policy.
A. PREMIUM SCHEDULES AND UNDERWRITING STANDARDS
Premiums for the policies will not be the same for all owners.
Charges will vary based on the group-sponsored insurance program
under which the policy is issued. We will determine charges
pursuant to our established actuarial procedures, and in doing so
we will not discriminate unreasonably or unfairly against any
person or class of persons. The charges (other than cost of
insurance rates) for policies under a group-sponsored insurance
program are shown on the specifications page of the policy.
Cost of insurance rates for each group-sponsored insurance
program are determined based on a variety of factors related to
group mortality including gender mix, average amount of
insurance, age distribution, occupations, industry, geographic
location, participation, level of medical underwriting required,
degree of stability in the charges sought by the group sponsor,
prior mortality experience of the group, number of actual or
anticipated owners electing the continuation option, and other
factors which may affect expected mortality experience. In
addition, cost of insurance rates may be intended to cover
expenses to the extent they are not covered by the other policy
charges. Changes in the current cost of insurance rates may be
made based on any factor which affects the actual or expected
mortality or expenses of the group.
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Cost of insurance rates are generally determined at the beginning
of each policy year, although changes may be made at other times
if warranted due to a change in the underlying characteristics of
the group, changes in benefits included in policies under the
group-sponsored insurance program, experience of the group,
changes in the expense structure, or a combination of these
factors.
The policies will be offered and sold pursuant to our
underwriting procedures, in accordance with state insurance laws.
Individuals who satisfy the eligibility requirements under a
particular group contract may be required to submit to an
underwriting procedure which requires satisfaction of
underwriting requirements.
B. APPLICATION
When we receive a completed application from an applicant we may
require medical evidence of insurability to determine whether the
applicant is insurable. If so, we will follow certain insurance
underwriting (risk evaluation) procedures. This process may
involve such verification procedures as medical examinations and
may require that further information be provided by the proposed
insured before a determination can be made. We may also issue
policies that do not require medical evidence of insurability.
Schedules for evidence of insurability requirements may be
determined for each group-sponsored insurance program and are
based on a variety of factors related to the group. In
determining these schedules we will not discriminate unreasonably
or unfairly against any person or class of persons.
The date on which the last of the following events occurs shall
be the effective date of coverage ("issue date"): we receive the
signed application for insurance, the
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<PAGE> 5
initial premium is paid prior to the insured's death, the insured
is eligible, and we approve the completed application. The policy
date is the first day of the calendar month on or following the
issue date. The policy date is the date from which subsequent
policy years and policy months are measured. The policy date also
represents the commencement of the suicide and contestable
periods for purposes of the policy.
C. PREMIUM PAYMENTS
A premium must be paid to put a policy in force, and may be
remitted to us by the group sponsor on behalf of the owner.
Generally, premium payments for policies under group-sponsored
insurance programs are regularly deducted by an employer from the
policy owner's paycheck. If an owner's insurance is continued
following loss of the insured's eligibility under the
group-sponsored insurance program (requirements for continuation
are described in the policy and prospectus), we will accept
direct premium payments from the owner by check or electronic
funds transfer from a checking or savings account. If an owner in
such a situation elects to remit premiums by check, we will send
a premium notice for the premium due to the owner's address on
record. If an owner elects to remit premiums by electronic funds
transfer, we will deduct the premium due from the checking or
savings account monthly on the date specified by the owner.
The initial premium for a policy must cover the premium expense
charges and the first month's deductions. Premiums paid after the
initial premium may be in any amount. A premium must be paid when
there is insufficient net cash value to pay the monthly deduction
necessary to keep the policy in force. In this situation, we will
send the owner a notice that a premium payment is required.
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When the policy is established, the policy's specifications page
may show premium payments scheduled and the amounts of those
payments. However, the owner may elect to skip or omit making
those premium payments. The policy does not obligate the owner to
pay premiums in accordance with a premium schedule. Failure to
pay one or more premium payments will not by itself cause the
policy to lapse. Lapse will occur only when the net cash value is
insufficient to cover the monthly deduction, and the subsequent
grace period expires without sufficient payment being made.
The grace period is 61 days. The grace period will start on the
day we mail the owner a notice that the policy will lapse if the
premium amount specified in the notice is not paid by the end of
the grace period. We will mail this notice on any policy's
monthly anniversary when the net cash value is insufficient to
pay for the monthly deduction for the insured. The notice will
specify the amount of premium required to keep the policy in
force and the date the premium is due. If we do not receive the
required amount within the grace period, the policy will lapse
and terminate. There is no grace period for the first premium.
Failure of a group sponsor to remit the authorized premium
payments may cause the group contract to terminate. Nonetheless,
provided that there is sufficient net cash value to prevent the
policy from lapsing, the owner's insurance can be converted to an
individual policy of life insurance in the event of such
termination, as described in the policy and prospectus. The
owner's insurance can continue if the insured's eligibility under
the group-sponsored insurance program terminates because the
insured is no longer a part of the group or otherwise fails to
satisfy the eligibility requirements set forth in the
specifications page to the group contract and policy
(requirements for continuation are described in the policy and
prospectus).
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<PAGE> 7
Since the policy permits flexible premium payments, it may become
a modified endowment contract for federal income tax purposes. We
have procedures in place to determine whether premium schedules
and payments will result in the policy being classified as a
modified endowment contract and to notify owners and take
appropriate actions based on the owner's elections.
D. PREMIUM ALLOCATION
Net premiums, which are premiums after the deduction of the
charges assessed against premiums, are allocated to the
guaranteed account and/or sub-accounts of the Variable Universal
Life Account. The Variable Universal Life Account will, in turn,
invest in shares of the Portfolios of Advents Series Fund, Inc.,
Fidelity's Variable Insurance Products Fund, and Fidelity's
Variable Insurance Products Fund II (the "Funds").
Net premiums are allocated to the guaranteed account and/or the
sub-accounts as selected by the owner on the application for the
policy, subject to the limitations in the policy and the
prospectus. The owner may change the allocation instructions for
future premiums by giving us a written request or through any
other method made available by us under the group-sponsored
insurance program. A change will not take effect until it is
recorded by us in our home office.
The allocation to the guaranteed account or to any sub-account of
the separate account must be at least 10 percent of the net
premium. We reserve the right to restrict the allocation of net
premiums to the guaranteed account for policies under
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<PAGE> 8
some group-sponsored insurance programs. For these policies, the
allocation of net premiums to the guaranteed account will range
from 0 percent to 50 percent.
We also reserve the right to delay the allocation of net premiums
to named sub-accounts. Such a delay will be for a period of 10
days after policy issue or policy change. This right will be
exercised by us only when we believe economic conditions make
such an allocation necessary to reduce market risk during the
free look period. If we exercise this right, net premiums will be
allocated to the Money Market sub-account until the end of that
period.
In accordance with industry practice, we will establish
procedures to handle errors in premium payments to refund
overpayments and collect underpayments, except for de minimis
amounts.
E. REINSTATEMENT
A lapsed policy may be reinstated, any time within three years
from the date of lapse, provided the insured is living.
Reinstatement is made by application for reinstatement and
payment of an amount that, after the deduction of charges
assessed against premiums, is large enough to cover all monthly
deductions which have accrued on the policy up to the effective
date of reinstatement, plus the monthly deductions for the two
months following the effective date of reinstatement. The
application and payment must be submitted to our home office. If
any loans and loan interest charges are not repaid, this
indebtedness will be reinstated along with the insurance. No
evidence of the insured's insurability will be required during
the first 31 days following lapse, but such evidence satisfactory
to us will be required from the 32nd day to three years from the
date of lapse.
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<PAGE> 9
The amount of account value on the date of reinstatement will be
equal to the amount of any loans and loan interest charges
reinstated increased by the net premiums paid at the time of
reinstatement.
The reinstatement will take effect as of the date we approve the
application for reinstatement. There will be a full monthly
deduction for the policy month that includes that date.
We will allocate the net premiums submitted for a reinstatement,
namely premiums after the deduction of the charges assessed
against premiums, to the guaranteed account and/or the
sub-accounts of the Variable Universal Life Account which, in
turn, invest in Fund shares.
F. REPAYMENT OF A POLICY LOAN
If the policy is in force, the loan principal and any accrued
loan interest charges can be repaid in part or in full at any
time before the insured's death. The loan principal may also be
repaid within 60 days after the date of the insured's death, if
we have not paid any of the benefits under the policy. Any loan
repayment must be at least $100 unless the balance due is less
than $100. We currently accept loan repayment checks at our home
office.
Loan repayments are allocated to the guaranteed account. The
owner may reallocate amounts in the guaranteed account among the
sub-accounts, subject to the limitations in the policy and
prospectus on such transfers.
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<PAGE> 10
Loan repayments will be applied first to reduce the amount of
accrued loan interest charges. Any remaining portion of the
repayment will then be used to reduce the loan principal. The net
cash value will increase by the amount of the loan repayment.
II. TRANSFER OF CASH VALUE
A separate account called the Northstar Life Variable Universal Life
Account was established on May 1, 1996, in accordance with provisions
of the New York insurance law. The Variable Universal Life Account
currently has nineteen sub-accounts to which owners may allocate
premiums. Each sub-account invests in shares of a corresponding
Portfolio of the Advantus Series Fund, Inc., Fidelity's Variable
Insurance Products Fund, and Fidelity's Variable Insurance Products
Fund II (the "Funds").
The policy allows transfers among sub-accounts and between the
sub-accounts and the guaranteed account. The owner's instructions for
transfer may be made in writing or the owner, or a person authorized by
the owner, may make such changes by telephone (during our normal
business hours). Owners may also submit their requests for transfer to
us by facsimile (FAX) transmission or through any other method made
available by us under the group-sponsored insurance program. We will
make the telephone and facsimile transmission transfer service
available to all policy owners.
We will employ reasonable procedures to satisfy ourselves that transfer
instructions are genuine and, to the extent that we do not, we may be
liable for any losses due to unauthorized or fraudulent instructions.
We require policy owners to identify themselves in electronic
transactions through policy numbers or such other information as we may
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<PAGE> 11
deem to be reasonable. We record electronic transfer instructions and
we provide policy owners with a written confirmation of the electronic
transfers.
Transfers made pursuant to a telephone call or other electronic means
are subject to the same conditions and procedures as would apply to
written transfer requests. During periods of marked economic or market
changes, owners may experience difficulty in implementing a telephone
or other electronic transfer due to a heavy volume of network usage. In
such a circumstance, owners should consider submitting a written
transfer request while continuing to attempt an electronic redemption.
We reserve the right to restrict the frequency of, or otherwise modify,
condition, terminate or impose charges upon, electronic transfer
privileges.
The amount to be transferred to or from a sub-account or the guaranteed
account must be at least $250. If the balance is less than $250, the
entire account value attributable to that sub-account or the guaranteed
account must be transferred. If a transfer would reduce the account
value in the sub-account from which the transfer is to be made to less
than $250, we reserve the right to include that remaining amount with
the amount transferred.
The maximum amount of net cash value to be transferred out of the
guaranteed account to the sub-accounts is limited to twenty percent (or
$250 if greater) of the guaranteed account value. Transfers to or from
the guaranteed account are limited to one such transfer per policy
year. We may further restrict transfers by requiring that the request
is received by us or postmarked in the 30-day period before or after
the last day of the policy anniversary. Requests for transfers which
meet these conditions would be effective after we approve and record
them at our home office.
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A transfer is subject to a transaction charge, not to exceed $10.
Currently, no such charge is imposed on a transfer.
For transfers out of the separate account or among the sub-accounts of
the separate account, we will credit and cancel units based on the
sub-account unit values as of the end of the valuation period during
which the owner's request is received at our home office. Transfers
from the guaranteed account will be dollar amounts deducted at the end
of the day on which the transfer request is received at our home
office.
From time to time the separate account may receive a transfer request
that we regard as disruptive to the efficient management of the
sub-accounts. This could be because of the timing of the request and
the availability of settlement proceeds in federal funds in the
underlying portfolio of the fund, the size of the transfer amount
involved or the trading history of the investor.
A transfer or exchange from one sub-account to another is generally
treated as a simultaneous sale of units currently held and the purchase
of units where a new investment is desired. In the event that
cumulative redemptions from a sub-account on a given day equal or
exceed $5,000,000, or if the investment adviser of the underlying
portfolio of the fund determines that selling securities to satisfy the
redemptions could be harmful to the fund, some requested transfers or
exchanges may be denied. In addition, any transfer request or requests
affecting a particular sub-account which, individually or collectively
with other transfer requests submitted by the owner of multiple
individual policies or by the owners of certificates under a single
group contract for that sub-account on a given day, equal or exceed
$5,000,000 may be denied unless all such transfer requests are received
by 12:00 p.m. Eastern Time. In these events, the order of such
redemptions from the fund will be as follows: all automatic exchanges
(for example,
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dollar cost averaging), written transfer and exchange requests, faxed
transfer and exchange requests, and telephone transfer and exchange
requests (including telephone and internet transaction site requests).
Transfer and exchange requests will be processed in the order of
receipt within their respective category. In no event will there be any
limitation on redemptions in connection with surrenders, withdrawals or
loans. The owner will be notified when these limitations are imposed on
a transfer request.
In the event of disruptive circumstances which don't result in the
denial of a request as outlined above, the size or timing of the
transfer may make it impossible for the exchange to occur on the same
day. In that event, the request for exchange will be treated as a
request for a transfer of units on the date of the receipt of the
request. The price of the new units will also be calculated on that day
and that determination will be used as the basis for determining the
number of units outstanding in the sub-account. However, the transfer
of the redemption proceeds and the purchase of units, and shares in the
new portfolio, will be accomplished only when federal funds are
received from the sale to allow the purchase and sale without
disruption. Should the transfer not be completed because of
non-payment, we will reimburse the separate account for any decline in
the price of the units to the time of the cancellation. Similarly, any
fees or disbursements resulting from any legal action because of the
non-payment will similarly be the liability of Northstar Life. The
owner will be notified when this limitation is imposed on a transfer
request.
Although we currently intend to continue to permit transfers in the
foreseeable future, we reserve the right to modify the transfer
privilege by changing the minimum amount transferable, by altering the
frequency of transfers, by imposing a transfer charge, by prohibiting
transfers, or in such other manner as we may determine at our
discretion.
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<PAGE> 14
III. "REDEMPTION" PROCEDURES: SURRENDER AND RELATED TRANSACTIONS
A. REQUEST FOR SURRENDER OR WITHDRAWAL
If the insured is living, we will pay the surrender value of the
policy to the owner upon written request. The surrender value of
the policy is the net cash value (the account value less any
outstanding loan principal and accrued loan interest charges, and
less any charges due, plus accrued loan interest credits). The
determination of the surrender value is made as of the end of the
valuation period during which we receive the surrender request at
our home office. The surrender payment can be in cash or, at the
option of the owner, can be applied on a settlement option as
described in the policy.
A partial surrender (withdrawal) of the net cash value of the
policy is permitted in an amount equal to at least the minimum
established for policies under each group-sponsored insurance
program. The minimum will never exceed $500. The maximum
withdrawal is equal to an amount that would cause the net cash
value after the withdrawal to be 10 percent of the account value
immediately prior to the withdrawal. We reserve the right to
limit the number of withdrawals to one per policy month, change
the minimum amount for withdrawals, limit the frequency of
withdrawals, or restrict or prohibit withdrawals from the
guaranteed account.
A withdrawal will cause a decrease in the face amount equal to
the amount surrendered if the current death benefit option for
the policy is Option A (level death benefit). A withdrawal has no
effect on the face amount if the current death benefit option for
a the policy is Option B (variable death benefit). However, since
the account value is reduced by the amount of the withdrawal, the
death benefit is
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<PAGE> 15
reduced by the same amount, as the account value represents a
portion of the death benefit proceeds.
On a withdrawal, the owner may tell us the sub-accounts from
which a withdrawal is to be taken or whether it is to be taken in
whole or in part from the guaranteed account. If the owner does
not, the withdrawal will be deducted from the guaranteed account
value and separate account value in the same proportion that
those values bear to each other and, as to the separate account
value, from each sub-account in the proportion that the
sub-account value of each such sub-account bears to the separate
account value. We reserve the right to restrict or prohibit
withdrawals from the guaranteed account. We will tell the owner,
on request, what amounts are available for a withdrawal under the
policy.
A transaction charge will be deducted from the net cash value in
connection with a withdrawal for policies under some
group-sponsored insurance programs. The amount of the charge will
never exceed the lesser of $25 or 2 percent of the amount
withdrawn. The charge will be allocated to the guaranteed account
value and the separate account value in the same proportion as
those values bear to each other and, as to the separate account
value, from each sub-account in the same proportion that the
sub-account value of each such sub-account bears to the separate
account value.
Payment of a surrender or withdrawal will be made as soon as
possible, but not later than seven days after our receipt of the
owner's written request for surrender or withdrawal. However, if
any portion of the net cash value to be surrendered is
attributable to a premium payment made by non-guaranteed funds
such as a personal check, we will delay mailing that portion of
the surrender proceeds until we have reasonable assurance that
the payment has cleared and that good payment has been
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<PAGE> 16
collected. The amount the owner receives on surrender may be more
or less than the total premiums paid under the policy.
B. DEATH CLAIMS
If the policy is in force at the time of the insured's death,
upon receipt of due proof of death of the insured and on
completion of all other requirements necessary to make payment,
we will pay a death benefit to the beneficiary. Death benefit
proceeds will ordinarily be paid within seven days after we
receive all information required for such payment. Payment of the
death benefit is also subject to the provisions of the policy
regarding suicide and incontestability.
The death benefit provided by the policy depends upon the death
benefit option in effect at the time of death. There is a level
death benefit ("Option A") and a variable death benefit ("Option
B"). The death benefit under either option will never be less
than the current face amount of the policy as long as the policy
remains in force and there are no loans. The face amount elected
must be at least the minimum stated on the specifications page of
the policy.
Under Option A, the death benefit will be determined as follows:
(1) The face amount of insurance on the insured's date of death
while the policy is in force; plus
(2) the amount of the cost of insurance for the portion of the
policy month from the date of death to the end of the policy
month; plus
(3) any accrued loan interest credits; less
(4) any outstanding loan principal and accrued loan interest
charges; less
(5) any unpaid monthly deductions determined as of the date of
the insured's death.
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<PAGE> 17
Under Option B, the death benefit will be determined as follows:
(1) The face amount of insurance on the insured's date of death
while the policy is in force; plus
(2) the amount of the account value as of the date we receive due
proof of death satisfactory to us; plus
(3) the amount of the cost of insurance for the portion of the
policy month from the date of death to the end of the policy
month; plus
(4) any monthly deductions taken under the policy since the date
of death; plus
(5) any accrued loan interest credits; less
(6) any outstanding loan principal and accrued loan interest
charges; less
(7) any unpaid monthly deductions determined as of the date of
the insured's death.
The death benefit option for all policies issued under a
group-sponsored insurance program will initially be the death
benefit option selected by the group sponsor. For policies under
some group-sponsored insurance programs, we will allow the owner
to request a change in the death benefit option once, during the
lifetime of the insured. For policies under group-sponsored
insurance programs where we do not allow the owner to request a
change in the death benefit option, the death benefit option will
remain unchanged from the group sponsor's initial selection. The
current death benefit option will be shown on the specifications
page of the policy.
If an owner elects to change the death benefit option from Option
A to Option B, the face amount under Option B will be equal to
the face amount under Option A less the policy account value on
the effective date of the change.
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<PAGE> 18
If an owner elects to change the death benefit option from Option
B to Option A, the face amount under Option A will be equal to
the face amount under Option B plus the policy account value on
the effective date of the change.
Under the Option A death benefit, interest will be paid on the
death benefit from the date of the insured's death until the date
of payment. Under the Option B death benefit, interest will be
paid on the face amount of insurance from the date of the
insured's death until the date of payment. The account value will
remain as invested in the guaranteed account and/or separate
account until the date of payment; therefore, the account value
may increase or decrease in value from the date of the insured's
death to the date of the payment of death benefit proceeds.
Interest will also be paid on any charges taken under the policy
since the date of death, from the date the charge was taken until
the date of payment. Interest will be at an annual rate
determined by us, but never less than 3 percent per year,
compounded annually, or the minimum rate required by state law.
Death benefit proceeds will be paid to the surviving beneficiary
specified on the signed application or as subsequently changed.
The owner may arrange for death benefit proceeds to be paid in a
single lump sum or under one of the optional methods of
settlement described in the policy. When no election for an
optional method of settlement is in force at the death of the
insured, the beneficiary may select one or more of the optional
methods of settlement at any time before death benefit proceeds
are paid. An election or change of method of settlement must be
in writing. A change in beneficiary revokes any previous
settlement election.
If a rider permitting the accelerated payment of death benefit
proceeds has been added to the policy, a portion or all of the
death benefit may be accelerated and a
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<PAGE> 19
payment made prior to the death of the insured, and any remaining
death benefit may then be less than otherwise would be paid upon
the death of the insured.
C. LAPSE
The failure to make a premium payment following the payment of
the premium which puts the policy into force will not itself
cause a policy to lapse. Lapse will occur only when the net cash
value is insufficient to cover the monthly deduction, and the
subsequent grace period expires without sufficient payment being
made.
The grace period is 61 days. The grace period will start on the
day we mail the owner a notice that the policy will lapse if the
premium amount specified in the notice is not paid by the end of
the grace period. We will mail this notice on any policy's
monthly anniversary when the net cash value is insufficient to
pay for the monthly deduction for the insured. The notice will
specify the amount of premium required to keep the policy in
force and the date the premium is due. The insured's life will
continue to be insured during this grace period. If we do not
receive the required amount within the grace period, the policy
will lapse and terminate. There is no grace period for the first
premium.
Failure of a group sponsor to remit the authorized premium
payments may cause the group contract to terminate. Nonetheless,
provided that there is sufficient net cash value to prevent the
policy from lapsing, the owner's insurance can be converted to an
individual policy of life insurance in the event of such
termination, as described in the policy and prospectus. The
owner's insurance can continue if the insured's eligibility under
the group-sponsored insurance program terminates because the
insured is no longer a part of the group or otherwise fails to
satisfy the eligibility
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<PAGE> 20
requirements set forth in the specifications page to the group
contract and policy (requirements for continuation are described
in the policy and prospectus).
D. LOANS
The owner may borrow from us using only the policy as the
security for the loan. The owner may borrow up to an amount equal
to 90 percent of the owner's account value less the loan
principal and accrued loan interest charges. The maximum loan
amount is determined as of the date we receive the owner's
request for a loan at our home office.
The minimum loan amount is $100.
At the owner's request, we will send the owner a loan request
form for his or her signature. The owner may also submit a loan
request by telephone (during our normal business hours), by
facsimile (FAX) transmission or through any other method made
available by us under the group-sponsored insurance program. We
will make the telephone and facsimile transmission service
available to all policy owners. Should the owner make a request
by telephone call or other electronic means, we will ask for
personal identification and policy number.
When the owner takes a loan, we will reduce the net cash value by
the amount borrowed. This determination will be made as of the
end of the valuation period during which the loan request is
received at our home office. Unless the owner directs us
otherwise, the loan will be taken from the guaranteed account
value and separate account value in the same proportion that
those values bear to each other and, as to the separate account
value, from each sub-account in the proportion that the
sub-account value of each such sub-account bears to the owner's
separate account value. The number of units to be canceled will
be based upon the value of
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<PAGE> 21
the units as of the end of the valuation period during which we
receive the owner's loan request at our home office.
The amount borrowed continues to be part of the account value, as
the amount borrowed becomes part of the loan principal where it
will accrue loan interest credits and will be held in our general
account. A loan has no immediate effect on the owner's account
value since at the time of the loan the account value is the sum
of the guaranteed account value, the separate account value and
the loan principal. When a loan is to come from the guaranteed
account value, we have the right to postpone a loan payment for
up to six months.
If a policy enters a grace period and if the net cash value is
insufficient to cover the monthly deduction and the loan
repayment, the owner will have to make a loan repayment to keep
the policy in force. We will give the owner notice of our intent
to terminate the policy and the loan repayment required to keep
it in force. The time for repayment will be within 31 days after
our mailing of the notice.
The interest rate charged on the loan principal will be 8 percent
per year. Interest charged will be based on a daily rate which if
compounded for the number of calendar days in the year will equal
8 percent annually, and compounded for the number of days since
loan interest charges were last updated.
We will charge interest on the loan principal in arrears. Loan
interest charges are due at the end of the policy month. If the
owner does not pay in cash the accrued loan interest charges at
the end of the policy month, this unpaid interest will be
deducted from the account value and added to the loan principal.
The new loan principal will be subject to the same rate of
interest as the loan principal in effect.
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<PAGE> 22
Interest is also credited on the loan principal. Interest credits
on the loan principal shall be at a rate which is not less than 6
percent per year. Interest credited will be based on a daily rate
which if compounded for the number of calendar days in the year
will be at least 6 percent annually, and compounded for the
number of days since loan interest charges were last updated.
Loan interest charges and loan interest credits are allocated
monthly, at loan repayment, at policy surrender and at death.
Loan interest charges and loan interest credits are allocated to
a policy's guaranteed account value and separate account value in
the same proportion that those values bear to each other and, as
to the separate account value, to each sub-account in the
proportion that the sub-account value of each such sub-account
bears to the separate account value.
A loan, whether or not it is repaid, will have a permanent effect
on the account value because the investment results of the
sub-accounts will apply only to the amount remaining in the
sub-accounts. The effect could be either positive or negative. If
net investment results of the sub-accounts are greater than the
rate credited on the loan, the account value will not increase as
rapidly as it would have if no loan had been made. If investment
results of the sub-accounts are less than the rate credited on
the loan, the account value will be greater than if no loan had
been made.
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<PAGE> 23
IV. POLICY CONVERSION OR CONTINUATION
A. POLICY CONVERSION
The policy provides that the owner may exchange the insurance to
a policy of permanent individual life insurance which we then
customarily issue for purposes of conversion, under the
conditions described below. We will not require evidence of
insurability for the insured.
We will offer conversion if the group contract is terminated or
if the insured's insurance under the group contract ends due to
the termination of employment or membership in the class or
classes eligible for coverage under the group contract (including
loss of eligibility as a result of his or her total and permanent
disability). We will also offer conversion if the insured's
insurance is reduced on or after the attainment of age sixty in
any increment or series of increments totaling twenty percent or
more of the amount of insurance in force under the policy prior
to the first reduction at age sixty.
The owner may convert all or part of the amount of insurance
under the group contract at the time of termination or, if
insurance is reduced due to age, the amount of insurance equal to
the amount which was reduced. However, if an insured's insurance
terminates because the group contract is terminated, the insured
is eligible to convert an amount up to the amount of insurance he
or she had just prior to the termination, less any amount he or
she may become eligible for under any group contract within 45
days of the termination. The owner may convert up to the full
amount of terminated insurance if termination occurs because an
insured spouse's coverage terminates due to divorce or annulment
of marriage to the insured employee.
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<PAGE> 24
The owner's written application to convert to an individual
policy and the first premium for the individual policy must be
received in our home office within 31 days of the date the
insurance terminates or reduces under the group contract. The
premium charge for the converted insurance will be based upon the
insured's age as of his or her nearest birthday.
If the insured dies within 31 days of the date that insurance
terminated under the group contract, the full amount of insurance
that could have been converted under the policy will be paid as a
death benefit.
We will notify the owner of his or her conversion right within 15
days before or after the event that results in termination or
reduction of the insured's group life coverage. We will mail the
notice to the owner's last address furnished to us by the group
contract holder. If the notice is given more than 15 days but
less than 90 days after the event, the time allowed to exercise
the conversion privilege will be extended to 45 days after the
notice is sent. If the notice is not given within 90 days after
the event, the time allowed to exercise the conversion privilege
expires 90 days after the notice is sent.
The cash value adjustment upon conversion is equal to the
difference between the net cash value on the Variable Universal
Life insurance policy and the cash value that is needed on the
permanent individual life insurance policy at the time of the
conversion. The cash value needed on the individual policy is
defined as the cash value at the time of conversion that would
have accumulated on a comparable policy purchased at issue.
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<PAGE> 25
B. POLICY CONTINUATION
As an alternative to the conversion privilege, an owner may
continue the current group coverage following loss of the
insured's eligibility under the group contract, unless (1) the
policy is no longer in force; or (2) the group contract has
terminated (although we may allow continuation for policies under
some group-sponsored insurance programs if there is no successor
plan); or (3) there is less than the required minimum in the
policy's net cash value after deduction of charges for the month
in which eligibility ends. The required minimum will vary based
on the group-sponsored insurance program under which the policy
is issued. The minimum will never be higher than $250.
If any of the limitations above apply, the owner may still elect
to continue the current group coverage, but only for a period not
to exceed one year. At the end of this continuation period, the
owner may convert the insurance to an individual policy of
permanent insurance as described above.
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<PAGE> 1
Northstar Life Insurance Company
Power of Attorney
To Sign Registration Statements
WHEREAS, Northstar Life Insurance Company ("Northstar Life") has
established a separate account to fund certain variable life insurance
contracts, and
WHEREAS, Northstar Life Variable Universal Life Account ("Variable
Universal Life Account") is a separate account of Northstar Life which has been
established for the purpose of issuing group and individual variable universal
life insurance policies on a variable basis and which is to be registered as a
unit investment trust under the Investment Company Act of 1940 offering group
and individual variable universal life insurance policies to be registered under
the Securities Act of 1933;
NOW THEREFORE, We, the undersigned Directors and Officers of Northstar
Life, do hereby appoint Dennis E. Prohofsky and Helen W. Leslie, and each of
them individually, as attorney in fact for the purpose of signing in their names
and on their behalf as Directors of Northstar Life and filing with the
Securities and Exchange Commission Registration Statements, or any amendment
thereto, for the purpose of: a) registering policies of the Variable Universal
Life Account for sale by that entity and Northstar Life under the Securities Act
of 1933; and b) registering the Variable Universal Life Account as a unit
investment trust under the Investment Company Act of 1940.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Robert E. Hunstad President November 12, 1999
----------------------------------
Robert E. Hunstad
/s/John F. Bruder Director November 12, 1999
----------------------------------
John F. Bruder
/s/Keith M. Campbell Director November 12, 1999
----------------------------------
Keith M. Campbell
/s/Susan L. Ebertz Director November 12, 1999
----------------------------------
Susan L. Ebertz
/s/John M. Gibbons Director November 12, 1999
----------------------------------
John M. Gibbons, III
/s/Kathleen A. Hagen Director November 12, 1999
----------------------------------
Kathleen A. Hagen
/s/James E. Johnson Director November 12, 1999
----------------------------------
James E. Johnson
</TABLE>
<PAGE> 2
<TABLE>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Helen W. Leslie Director November 12, 1999
----------------------------------
Helen W. Leslie
/s/Marc J. Lifset Director November 12, 1999
----------------------------------
Marc J. Lifset
/s/Harry P. Meislahn Director November 12, 1999
----------------------------------
Harry P. Meislahn
/s/Dennis E. Prohofsky Director November 12, 1999
----------------------------------
Dennis E. Prohofsky
/s/Joseph W. Sarbinowski Director November 12, 1999
----------------------------------
Joseph W. Sarbinowski
/s/Robert L. Senkler Director November 12, 1999
----------------------------------
Robert L. Senkler
</TABLE>
