As filed with the Securities and Exchange Commission on June 12, 2000.
Registration No. 333-
811-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FORM S-6
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
------------------------
FIRST AMERITAS VARIABLE LIFE SEPARATE ACCOUNT
(REGISTRANT)
FIRST AMERITAS LIFE INSURANCE CORP. of NEW YORK
(DEPOSITOR)
400 Rella Blvd., Suite 304
Suffern, New York 10901-4253
1-800-215-1096
------------------------
DONALD R. STADING
Secretary and General Counsel
First Ameritas Life Insurance Corp. of New York
5900 "O" Street
Lincoln, Nebraska 68510
(402) 467-7465
Approximate Date of Proposed Public Offering: As soon as practicable after
effective date.
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph b
[ ] on ____________ pursuant to paragraph b of Rule 485
[X] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on pursuant to paragraph (a)(1) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
TITLE OF SECURITIES BEING REGISTERED:
SECURITIES OF UNIT INVESTMENT TRUST
<PAGE>
RECONCILIATION AND TIE BETWEEN ITEMS IN FORM N-8B-2
AND THE PROSPECTUS
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
1 Cover Page
2 Cover Page
3 Not Applicable
4 Distribution of the Policies
5 First Ameritas Variable Life Separate Account
6 First Ameritas Variable Life Separate Account
7 Not Required
8 Not Required
9 Legal Proceedings
10 Summary; Addition, Deletion of Substitution of
Investments; Policy Benefits; Policy Rights; Payment and
Allocation of Premiums; General Provisions; Voting
Rights
11 Summary; The Funds
12 Summary; The Funds
13 Summary; The Funds - Charges and Deductions
14 Summary; Payment and Allocation of Premiums
15 Summary; Payment and Allocation of Premiums
16 Summary; Calvert Variable Series, Inc. Ameritas
Portfolios, Calvert Variable Series, Inc., Variable
Insurance Products Fund, Variable Insurance Products
Fund II, The Alger American Fund, MFS Variable Insurance
Trust, and Morgan Stanley Dean Witter Universal Funds,
Inc.
17 Summary, Policy Rights
18 Calvert Variable Series, Inc. Ameritas Portfolios, Calvert
Variable Series, Inc., Variable Insurance Products Fund,
Variable Insurance Products Fund II, The Alger American
Fund, MFS Variable Insurance Trust, and Morgan Stanley
Dean Witter Universal Funds, Inc.
19 General Provisions; Voting Rights
20 Not Applicable
21 Summary; Policy Rights, Loan Benefits; General Provisions
22 Not Applicable
23 Safekeeping of the Separate Account's Assets
24 General Provisions
25 First Ameritas Life Insurance Corp. of New York
26 Not Applicable
27 First Ameritas Life Insurance Corp. of New York
28 Executive Officers and Directors of First Ameritas; First
Ameritas Life Insurance Corp. of New York
29 First Ameritas Life Insurance Corp. of New York
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Not Applicable
36 Not Required
37 Not Applicable
38 Distribution of the Policies
39 Distribution of the Policies
40 Distribution of the Policies
41 Distribution of the Policies
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
42 Not Applicable
43 Not Applicable
44 Accumulation Value; Payment and Allocation of Premium
45 Not Applicable
46 The Funds; Accumulation Value
47 The Funds
48 State Regulation of First Ameritas
49 Not Applicable
50 The Separate Account
51 Cover Page; Summary; Policy Benefits; Payment and
Allocation of Premiums, Charges and Deductions
52 Addition, Deletion or Substitution of Investments
53 Summary; Federal Tax Matters
54 Not Applicable
55 Not Applicable
56 Not Required
57 Not Required
58 Not Required
59 Financial Statements
<PAGE>
FIRST AMERITAS
LIFE INSURANCE CORP. OF NEW YORK LOGO
PROSPECTUS
Suffern, New York
ENCORE! II--A Flexible Premium Variable Universal Life Insurance Policy
issued by First Ameritas Life Insurance Corp. of New York
Service Office: 5900 "O" Street
Lincoln, Nebraska 68501
1-800-745-1112
ENCORE! II is a flexible premium variable universal life insurance Policy
("Policy") issued by First Ameritas Life Insurance Corp. of New York ("First
Ameritas"). Like traditional life insurance policies, an ENCORE! II Policy
provides Death Benefits to Beneficiaries and gives you, the Policy Owner, the
opportunity to increase the Policy's value. Unlike traditional policies, ENCORE!
II lets you vary the frequency and amount of premium payments, rather than
follow a fixed premium payment schedule. It also lets you change the level of
Death Benefits as often as once each year.
An ENCORE! II Policy is different from traditional life insurance policies in
another important way: you select how Policy premiums will be invested. Although
each Policy Owner is guaranteed a minimum Death Benefit, the value of the
Policy, as well as the actual Death Benefit, will vary with the performance of
investments you select.
The Investment Options available through ENCORE! II include investment
portfolios managed by Ameritas Investment Corp., Calvert Asset Management
Company, Inc., Fidelity Management & Research Company, Fred Alger Management,
Inc., Massachusetts Financial Services Company, and Morgan Stanley Dean Witter
Investment Management Inc. Each of these portfolios has its own investment
objective and policies. These are described in the prospectuses for each
investment portfolio which must accompany this ENCORE! II prospectus. You may
also choose to allocate premium payments to the Fixed Account managed by First
Ameritas.
An ENCORE! II Policy will be issued after First Ameritas accepts a prospective
Policy Owner's application. Generally, an application must specify a minimum
Death Benefit of $50,000 ($100,000 if preferred class). ENCORE! II Policies are
available to individuals between the ages of 0 and 80 at the time of purchase.
An ENCORE! II Policy, once purchased, may generally be canceled within 10 days
after you receive it.
This ENCORE! II prospectus is designed to assist you in understanding the
opportunity and risks associated with the purchase of an ENCORE! II Policy.
Prospective Policy Owners are urged to read the prospectus carefully and retain
it for future reference.
This prospectus includes a summary of the most important features of the ENCORE!
II Policy, information about First Ameritas, a list of the investment portfolios
to which you may allocate premium payments, as well as a detailed description of
the ENCORE! II Policy. The appendix to the prospectus includes tables designed
to illustrate how values and Death Benefits may change with the investment
experience of the Investment Options.
This prospectus must be accompanied by a prospectus for each of the investment
portfolios available through ENCORE! II
Although the ENCORE! II Policy is designed to provide life insurance, an ENCORE!
II Policy is considered to be a security. It is not a deposit with, an
obligation of, or guaranteed or endorsed by any banking institution, nor is it
insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board,
or any other agency. The purchase of an ENCORE! II Policy involves investment
risk, including the possible loss of principal. For this reason, ENCORE! II may
not be suitable for all individuals. It may not be advantageous to purchase an
ENCORE! II Policy as a replacement for another type of life insurance or as a
way to obtain additional insurance protection if the purchaser already owns
another flexible premium variable universal life insurance policy.
The Securities and Exchange Commission ("SEC") maintains a web site
(http://www.sec.gov) that contains other information regarding registrants that
file electronically with the Securities and Exchange Commission.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORY AUTHORITY HAS APPROVED THESE SECURITIES, OR DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
___________, 2000
ENCORE! II
1
<PAGE>
TABLE OF CONTENTS
PAGE
DEFINITIONS.............................................................. 3
SUMMARY.................................................................. 6
YEAR 2000................................................................ 10
FIRST AMERITAS, THE SEPARATE ACCOUNT AND THE FUNDS....................... 11
First Ameritas Life Insurance Corp. of New York.................. 11
The Separate Account............................................. 11
Performance Information.......................................... 12
The Funds........................................................ 12
Investment Objectives and Policies of the Funds' Portfolios...... 14
Addition, Deletion or Substitution of Investments................ 17
Fixed Account.................................................... 17
POLICY BENEFITS.......................................................... 18
Purposes of the Policy........................................... 18
Death Benefit Proceeds........................................... 18
Death Benefit Options............................................ 18
Methods of Affecting Insurance Protection........................ 20
Duration of Policy............................................... 20
Accumulation Value............................................... 21
Net Cash Surrender Value Bonus................................... 21
Benefits at Maturity............................................. 22
Payment of Policy Benefits....................................... 22
POLICY RIGHTS............................................................ 23
Loan Benefits.................................................... 23
Surrenders....................................................... 24
Partial Withdrawals.............................................. 24
Transfers........................................................ 25
Systematic Programs.............................................. 25
Free Look Privilege.............................................. 26
Exchange Privilege............................................... 26
PAYMENT AND ALLOCATION OF PREMIUMS....................................... 26
Issuance of a Policy............................................. 26
Premiums......................................................... 27
Allocation of Premiums and Accumulation Value.................... 28
Policy Lapse and Reinstatement................................... 28
CHARGES AND DEDUCTIONS................................................... 29
Deductions From Premium Payments (Percent of Premium Charge)..... 29
Charges from Accumulation Value.................................. 29
Surrender Charge................................................. 30
Daily Charges Against the Separate Account....................... 32
GENERAL PROVISIONS....................................................... 34
DISTRIBUTION OF THE POLICIES............................................. 36
FEDERAL TAX MATTERS...................................................... 37
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS............................. 40
THIRD PARTY SERVICES..................................................... 40
VOTING RIGHTS............................................................ 40
STATE REGULATION OF FIRST AMERITAS....................................... 41
EXECUTIVE OFFICERS AND DIRECTORS OF FIRST AMERITAS....................... 41
LEGAL MATTERS............................................................ 42
LEGAL PROCEEDINGS........................................................ 42
EXPERTS.................................................................. 42
ADDITIONAL INFORMATION................................................... 42
FINANCIAL STATEMENTS..................................................... 42
FIRST AMERITAS LIFE INSURANCE CORP. OF NEW YORK..........................
APPENDICES............................................................... A-1
The Policy, certain Funds, and/or certain riders are not available in all
states.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESPERSON, OR OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
ENCORE! II
2
<PAGE>
DEFINITIONS
ACCRUED EXPENSE CHARGES - Any Monthly Deductions that are due and unpaid.
ACCUMULATION VALUE - The total amount that the Policy provides for investment at
any time. It is equal to the total of the Accumulation Value held in the
Separate Account, the Fixed Account, and any Accumulation Value held in the
General Account which secures Outstanding Policy Debt.
ADMINISTRATIVE EXPENSE CHARGE - A charge, which is part of the Monthly
Deduction, to cover the cost of administering the Policy.
ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE - A daily charge that is deducted from
the overall assets of the Separate Account to provide for expenses of ongoing
administrative services to the Policy Owners as a group.
ATTAINED AGE - The Issue Age of the Insured plus the number of complete Policy
Years that the Policy has been in force.
BENEFICIARY - The person or persons to whom the Death Benefit Proceeds are
payable upon the death of the Insured. (See the sections on Beneficiary and
Change of Beneficiary.)
COST OF INSURANCE - A charge deducted monthly from the Accumulation Value to
provide the life insurance protection. The Cost of Insurance is calculated with
reference to an annual "Cost of Insurance Rate." This rate is based on the
Insured's sex, Issue Age, Policy duration, Specified Amount, and risk class. The
Cost of Insurance is part of the Monthly Deduction.
DEATH BENEFIT - The amount of insurance coverage provided under the selected
Death Benefit option of the Policy.
DEATH BENEFIT PROCEEDS - The proceeds payable to the Beneficiary upon receipt by
First Ameritas of Satisfactory Proof of Death of the Insured while the Policy is
in force. It is equal to: (l) the Death Benefit; (2) plus additional life
insurance proceeds provided by any riders; (3) minus any Outstanding Policy
Debt; (4) minus any Accrued Expense Charges, including the Monthly Deduction for
the month of death.
FIRST AMERITAS ("we, us, our") - First Ameritas Life Insurance Corp. of New
York, a New York stock insurance company. Our Home Office address is 400 Rella
Boulevard, Suite 214, Suffern, New York 10901. Our Service Office where you
should contact us regarding Policy matters is 5900 "O" Street, Lincoln, Nebraska
68501 or you may call us, toll free at 1-800-745-1112.
FIXED ACCOUNT - An account that is a part of First Ameritas's General Account to
which all or a portion of Net Premiums and transfers may be allocated for
accumulation at fixed rates of interest.
GENERAL ACCOUNT - The General Account of First Ameritas includes all of First
Ameritas's assets except those assets segregated into separate accounts such as
the Separate Account.
GRACE PERIOD - A 61 day period from the date written notice of lapse is mailed
to the Policy Owner's last known address. If the Policy Owner makes a payment
during the Grace Period such that the Net Cash Surrender Value of the Policy is
sufficient to pay the Monthly Deduction, the Policy will not lapse.
GUARANTEED DEATH BENEFIT PERIOD - The number of years the "Guaranteed Death
Benefit" provision will apply. The period is three years after issue. This
benefit is provided without an additional Policy charge.
GUARANTEED DEATH BENEFIT PREMIUM - A specified premium which, if paid in advance
on a monthly prorated basis, will keep the Policy in force during the Guaranteed
Death Benefit Period so long as other Policy provisions are met, even if the Net
Cash Surrender Value is zero or less.
ENCORE! II
3
<PAGE>
GUARANTEED INTEREST ON FIXED ACCOUNT - The minimum guaranteed interest rate
credited on that part of the accumulation value in the Fixed Account is an
annual rate of 3.5%.
INSURED - The person whose life is insured under the Policy.
INVESTMENT OPTIONS - Refers to the Subaccounts and/or the Fixed Account offered
under this Policy.
ISSUE AGE - The age of the Insured at the Insured's birthday nearest the Policy
Date.
ISSUE DATE - The date that all financial, contractual and administrative
requirements have been met and processed for the Policy.
MATURITY BENEFIT - The amount payable to the Policy Owner, if the Insured is
living, on the Maturity Date. The Maturity Benefit is the Accumulation Value
less any Outstanding Policy Debt.
MATURITY DATE - The date First Ameritas pays any Maturity Benefit to the Policy
Owner, if the Insured is still living.
MONTHLY ACTIVITY DATE - The same date in each succeeding month as the Policy
Date except should such Monthly Activity Date fall on a date other than a
Valuation Date, the Monthly Activity Date will be the next Valuation Date.
MONTHLY DEDUCTION - The deductions taken from the Accumulation Value on the
Monthly Activity Date. These deductions are equal to: (1) the current Cost of
Insurance; (2) the Administrative Expense Charge; and (3) rider charges, if any.
MORTALITY AND EXPENSE RISK CHARGE - A daily charge that is deducted from the
overall assets of the Separate Account to provide for the risk that mortality
and expense costs may be greater than expected.
NET CASH SURRENDER VALUE - The Accumulation Value of the Policy on any Valuation
Date (including for this purpose, the date of Surrender), less any Surrender
Charges and any Outstanding Policy Debt.
NET POLICY FUNDING - Net Policy Funding is the sum of all premiums paid, less
any partial withdrawals and less any Outstanding Policy Debt.
NET PREMIUM - Premium paid less the Percent of Premium Charge.
OUTSTANDING POLICY DEBT - The sum of all unpaid Policy loans and accrued
interest on Policy loans.
PERCENT OF PREMIUM CHARGE - The amount deducted from each premium received to
cover certain expenses, expressed as a percentage of the premium. This charge
may include a Premium Charge for Taxes. (See the section on Deductions From
Premium Payment.)
PLANNED PERIODIC PREMIUMS - A selected schedule of equal premiums payable at
fixed intervals. The Policy Owner is not required to follow this schedule, nor
does following this schedule ensure that the Policy will remain in force unless
the payments meet the requirements of the Guaranteed Death Benefit.
POLICY - The flexible premium variable universal life insurance Policy offered
by First Ameritas and described in this prospectus.
POLICY ANNIVERSARY DATE - The same day as the Policy Date for each year the
Policy remains in force.
ENCORE! II
4
<PAGE>
POLICY DATE - The effective date for all coverage provided in the application.
The Policy Date is used to determine Policy Anniversary Dates, Policy Years and
Monthly Activity Dates. Policy Anniversaries are measured from the Policy Date.
The Policy Date and the Issue Date will be the same unless: (1) an earlier
Policy Date is specifically requested, or (2) unless there are additional
premiums or application amendments at time of delivery. (See the section on
Issuance of a Policy.)
POLICY OWNER - ("you, your") The owner of the Policy, as designated in the
application or as subsequently changed. If a Policy has been absolutely
assigned, the assignee is the Policy Owner. A collateral assignee is not the
Policy Owner.
POLICY YEAR - The period from one Policy Anniversary Date until the next Policy
Anniversary Date. A "Policy Month" is measured from the same date in each
succeeding month as the Policy Date.
PREMIUM CHARGE FOR TAXES - This charge, which is part of the Percent of Premium
Charge, represents the amount First Ameritas considers necessary to pay all
premium taxes imposed by the states and their subdivisions and to defray the tax
cost due to capitalizing certain Policy acquisition expenses as required under
applicable Federal tax laws. First Ameritas does not expect to derive a profit
from the Premium Charge for Taxes.
SATISFACTORY PROOF OF DEATH - Means all of the following must be submitted: (1)
A certified copy of the death certificate; (2) A Claimant Statement; (3) The
Policy; and (4) Any other information that First Ameritas may reasonably require
to establish the validity of the claim.
SEPARATE ACCOUNT - This term refers to First Ameritas Variable Life Separate
Account, a separate investment account established by First Ameritas to receive
and invest the Net Premiums paid under the Policy and allocated by the Policy
Owner to the Separate Account. The Separate Account is segregated from the
General Account and all other assets of First Ameritas.
SPECIFIED AMOUNT - The minimum Death Benefit under the Policy, as selected by
the Policy Owner.
SUBACCOUNT - A subdivision of the Separate Account. Each Subaccount invests
exclusively in the shares of a specified portfolio of the Funds.
SURRENDER - The termination of the Policy before the Maturity Date during the
Insured's life for the Net Cash Surrender Value.
SURRENDER CHARGE - This charge is assessed against the Accumulation Value of the
Policy if the Policy is Surrendered on or before the 14th Policy Anniversary
Date or, in the case of an increase in the Specified Amount, on or before the
14th anniversary of the increase.
VALUATION DATE - Any day on which the New York Stock Exchange is open for
trading.
VALUATION PERIOD - The period between two successive Valuation Dates, commencing
at the close of the New York Stock Exchange ("NYSE") on one Valuation Date and
ending at the close of the NYSE on the next succeeding Valuation Date.
ENCORE! II
5
<PAGE>
SUMMARY
The following summary of prospectus information and diagram of the Policy should
be read along with the detailed information found elsewhere in this prospectus.
Unless stated otherwise, this prospectus assumes that the Policy is in force and
that there is no Outstanding Policy Debt.
DIAGRAM OF POLICY
PREMIUM PAYMENTS
You can vary amount and frequency.
DEDUCTIONS FROM PREMIUMS
Premium Charge for Taxes--currently 3.5% (maximum 5.0%)
NET PREMIUM
The Net Premium may be invested in the Fixed Account or in the Separate Account
which offers 31 different Subaccounts. The Subaccounts invest in the
corresponding portfolios of Calvert Variable Series, Inc. Ameritas Portfolios,
Calvert Variable Series, Inc., Variable Insurance Products Fund, The Alger
American Fund, MFS(R) Variable Insurance Trust, or The Universal Institutional
Funds, Inc. ("Funds").
DEDUCTIONS FROM ASSETS
Monthly charge for Cost of Insurance and cost of any riders. The charge varies
by the Policy duration and Specified Amount and the Issue Age, gender and risk
class of the Insured. (See the Policy Schedule for rates.)
Monthly charge for administrative expenses:
CURRENT MAXIMUM
POLICY YEAR MONTHLY CHARGE MONTHLY CHARGE
----------- -------------- --------------
1 $5.00 $9.00
2+ $5.00 $8.00
Daily charge from the Subaccounts for mortality and expense risks (this charge
is not deducted from Fixed Account assets.):
CURRENT MAXIMUM
POLICY YEAR MONTHLY CHARGE MONTHLY CHARGE
----------- -------------- --------------
1-4 0.70% 0.90%
5-20 0.45% 0.90%
21+ 0.30% 0.65%
Fund expense charges, which ranged from .28% to 1.79% at the most recent fiscal
year end, are also deducted.
The maximum Surrender Charge on a Policy we issue is $40.00 per $1,000.00 of the
Specified Amount.
LIVING BENEFITS
You may make partial withdrawals, subject to certain restrictions. The Death
Benefit will be reduced by the amount of the partial withdrawal. Partial
withdrawals are subject to a charge of 2% of the amount withdrawn (maximum
charge $25). Each year you may make up to 15 free transfers between the
Investment Options. After 15 free transfers each Policy Year, First Ameritas may
assess a fee of $10 per transfer. Accelerated payment of up to 50% of the lowest
scheduled Death Benefit is available under certain conditions to Insureds
suffering from terminal illness. You may surrender the Policy at any time for
its Net Cash Surrender Value. First Ameritas incurs expenses immediately upon
the issuance of the Policy that are recovered over a period of years. Therefore,
a Policy Surrender prior to on or before the 14th anniversary date will be
assessed a Surrender Charge. The charge decreases each year until no Surrender
Charge is applied after the 14th Policy Year. Increases in coverage after issue
will also have a Surrender Charge associated with them. (See pages 24 and 30.)
RETIREMENT INCOME
BENEFITS
You may take loans at a net zero interest rate after ten years. Should the
Policy lapse while loans are outstanding, the portion of the loan attributable
to earnings will become taxable distributions. (See page 24.) You may Surrender
the Policy or make a partial withdrawal and take values as payments under one or
more of five different payment options.
DEATH BENEFITS
Generally, Death Benefit Income is income tax free to the Beneficiary. The
Beneficiary may be paid a lump sum or may select any of the five payment methods
available as retirement benefits.
ENCORE! II
6
<PAGE>
SUMMARY
The following summary is intended to highlight the most important features of an
ENCORE! II Policy that you, as a prospective Policy Owner, should consider. You
will find more detailed information in the main portion of the prospectus;
cross-references are provided for your convenience. Capitalized terms are
defined in the Definitions section that begins on page 3 of this prospectus.
This summary and all other parts of this prospectus are qualified in their
entirety by the terms of the ENCORE! II Policy, which is available upon request
from First Ameritas.
WHO IS THE ISSUER OF AN ENCORE! II POLICY?
First Ameritas is the issuer of each ENCORE! II Policy. A stock insurance
company organized in New York, First Ameritas is a wholly owned subsidiary of
Ameritas Life Insurance Corp. ("Ameritas Life"). Ameritas Life guarantees the
obligations of First Ameritas, including the obligations of First Ameritas under
each ENCORE! II Policy. Ameritas Life and its subsidiaries had total assets of
over $4.8 billion as of December 31, 1999. A.M. Best Company ("Best") and
Standard & Poor's ("S & P"), firms that analyze insurance carriers, have not
rated First Ameritas separately from Ameritas Life. Ameritas Life enjoys a long
standing A+ (Superior) rating from A.M. Best, the second highest of Best's
ratings. Ameritas Life is rated AA (Very Strong) for insurer financial strength
from S & P, the third highest of S & P's 21 ratings. (See the section on First
Ameritas Life Insurance Corp. of New York.)
WHY SHOULD I CONSIDER PURCHASING AN ENCORE! II POLICY?
The primary purpose of an ENCORE! II Policy is to provide life insurance
protection on the Insured named in the Policy. This means that, so long as the
Policy is in force, it will provide for:
o payment of a Death Benefit, which will never be less than the Specified
Amount the Policy Owner selects (See the section on Death Benefit Options.)
o Policy loan, Surrender and withdrawal features (See the section on Policy
Rights.)
o the payment of Maturity Benefits to the Policy Owners, if living, on the
Maturity Date. (See the section on Benefits of Maturity.)
An ENCORE! II Policy also includes an investment component. This means that, so
long as the Policy is in force, you will be responsible for selecting the manner
in which Net Premiums will be invested. Thus, the value of an ENCORE! II Policy
will reflect your investment choices over the life of the Policy.
WHAT ARE THE CHARGES ASSOCIATED WITH OWNERSHIP OF AN ENCORE! II POLICY?
The state and its subdivisions may impose premium and other taxes in connection
with insurance policies such as ENCORE! II First Ameritas may deduct up to 5% of
each premium as a Premium Charge for Taxes. Currently, 3.5% is deducted for this
purpose.
Charges are deducted against the Accumulation Value to cover the Cost of
Insurance under the Policy and to compensate First Ameritas for administering
each individual ENCORE! II Policy. These charges, which are part of the Monthly
Deduction, are calculated and paid on each Monthly Activity Date. The Cost of
Insurance is calculated based on risk factors relating to the Insured as
reflected in relevant actuarial tables. The Monthly Deduction also includes a
flat Administrative Expense Charge. This charge is currently $5 per Policy per
month, (maximum $9 per Policy per month the first Policy Year and $8 thereafter)
may be increased during the life of your ENCORE! II Policy, up to the guaranteed
maximum. (See the section on Charges from Accumulation Value.)
For its services in administering the Separate Account and Subaccounts and as
compensation for bearing certain mortality and expense risks, First Ameritas is
also entitled to receive fees. These fees are calculated daily during the first
4 Policy Years of each ENCORE! II Policy, at a combined current annual rate of
0.70% of the value of the net assets of the Separate Account; during Policy
Years 5-20 at a combined current annual rate of 0.45%; and after the 20th Policy
Anniversary Date, the combined current annual rate is expected to decrease to
0.30% of the daily net assets of the Separate Account. The maximum charges are
0.90% for Policy Years 1-20 and 0.65% after the 20th Policy Anniversary Date. No
Mortality and Expense Risk Charge will be deducted from the amounts in the Fixed
Account. (See the section on Daily Charges Against the Separate Account.)
ENCORE! II
7
<PAGE>
Finally, because First Ameritas incurs expenses immediately upon the issuance of
an ENCORE! II Policy that are recovered over a period of years, an ENCORE! II
Policy that is Surrendered on or before its 14th Policy Anniversary Date is
subject to a Surrender Charge. The maximum Surrender Charge is $40 per $1000 of
Specified Amount; additional Surrender Charges may apply if you increase the
Specified Amount of your ENCORE! II Policy. Because the Surrender Charge may be
significant upon early Surrender, you should purchase an ENCORE! II Policy only
if you intend to maintain your ENCORE! II Policy for a substantial period. (See
the section on Surrender Charge.)
FUND EXPENSE SUMMARY. In addition to the charges against the Separate Account
described just above, management fees and expenses will be assessed by the fund
managers against the amounts invested in the various portfolios. No portfolio
fees will be assessed against amounts placed in the Fixed Account.
The information shown below was provided to First Ameritas by the Funds and
First Ameritas has not independently verified such information. Each of the
Funds is managed by an investment advisory organization that is entitled to
receive a fee for its services based on the value of the relevant portfolio's
net assets. Each Fund, other than the Ameritas Portfolios and Calvert Social
Portfolios, is managed by an organization that is not affiliated with First
Ameritas. The Ameritas Portfolios are managed by Ameritas Investment Corp., a
First Ameritas affiliate. Calvert Social Portfolios are managed by Calvert Asset
management Company, Inc., also a First Ameritas affiliate. Other Calvert
companies provide administrative services to certain of the portfolios. Unless
otherwise noted, the amount of expenses, including the asset based advisory fee
referred to above, borne by each portfolio for the fiscal year ended December
31, 1999, was as follows:
<TABLE>
<CAPTION>
INVESTMENT WAIVERS TOTAL
ADVISORY & 12B-1 OTHER TOTAL AND/OR (REFLECTING WAIVERS AND/OR
MANAGEMENT EXPENSES EXPENSES REIMBURSE- REIMBURSEMENTS, IF ANY)
FEES MENTS
<S> <C> <C> <C> <C> <C> <C>
AMERITAS INVESTMENT CORP.
Ameritas Money Market 0.25% - 0.08% 0.33% 0.05% 0.28%
Ameritas Index 500 0.29% - 0.11% 0.40% 0.10% 0.30%
Ameritas Growth 0.80% - 0.10% 0.90% 0.09% 0.81%
Ameritas Income & Growth 0.68% - 0.12% 0.79% 0.09% 0.70%
Ameritas Small Capitalization 0.90% - 0.10% 1.00% 0.08% 0.92%
Ameritas MidCap Growth 0.85% - 0.12% 0.97% 0.11% 0.86%
Ameritas Emerging Growth 0.80% - 0.18% 0.98% 0.11% 0.87%
Ameritas Research 0.80% - 0.62% 1.42% 0.54% 0.88%
Ameritas Growth With Income 0.80% - 0.46% 1.26% 0.36% 0.90%
CALVERT ASSET MANAGEMENT COMPANY, INC.
CVS Social Small Cap Growth 1.00% - 0.58%(2) 1.58% 1.58%
CVS Social Mid Cap Growth 0.90% - 0.21%(2) 1.11% 1.11%
CVS Social International Equity 1.10% - 0.50%(2) 1.60% 1.60%
CVS Social Balanced 0.70% - 0.19%(2) 0.89% 0.89%
FIDELITY MANAGEMENT & RESEARCH COMPANY (all portfolios are Service Class 2)
VIP Equity-Income 0.48% 0.25% 0.10% 0.83% 0.83%(4)
VIP Growth 0.58% 0.25% 0.10% 0.93% 0.93%(4)
VIP High Income 0.58% 0.25% 0.12% 0.95% 0.95%
VIP Overseas 0.73% 0.25% 0.18% 1.16% 1.16%(4)
VIP Asset Manager 0.53% 0.25% 0.11% 0.89% 0.89%(4)
VIP Investment Grade Bond 0.43% 0.25% 0.14% 0.82% 0.82%
VIP Asset Manager: Growth 0.58% 0.25% 0.15% 0.98% 0.98%(4)
VIP Contrafund 0.58% 0.25% 0.12% 0.95% 0.95%(4)
FRED ALGER MANAGEMENT INC.
Alger American Balanced 0.75% - 0.18% 0.93% 0.93%
Alger American Leveraged AllCap 0.85% - 0.08% 0.93% 0.93%
MASSACHUSETTS FINANCIAL SERVICES COMPANY
MFS Utilities 0.75% - 0.16%(6) 0.91% 0.91%
MFS Global Governments 0.75% - 0.30%(6) 1.05% 0.14% 0.91%(7)
MFS New Discovery 0.90% - 1.59%(6) 2.49% 1.42% 1.07%(7)
MORGAN STANLEY ASSET MANAGEMENT
UIF Emerging Markets Equity 1.25% - 2.62% 2.62% 0.83% 1.79%(8)
UIF Global Equity 0.80% - 1.48% 1.48% 0.33% 1.15%(8)
UIF International Magnum 0.80% - 1.67% 1.67% 0.51% 1.16%(8)
UIF Asian Equity 0.80% - 3.03% 3.03% 1.76% 1.27%(8)
UIF U.S. Real Estate 0.80% - 1.90% 1.90% 0.80% 1.10%(8)
</TABLE>
ENCORE! II
8
<PAGE>
(1) The Portfolio's aggregate expenses are limited for a period of one year
following November 1, 1999 (October 29, 1999 for Ameritas Money Market).
Following this one year period, expenses of the Ameritas Portfolios will not
be permitted to exceed an expense ratio which is .10% greater than the prior
expense ratio of the corresponding replaced fund, unless an amendment to the
investment advisory contract is approved modifying or eliminating the
expense guarantee. Total expenses, both before and after waivers and/or
reimbursements, have been restated to reflect the above.
(2) "Other Expenses" reflect an indirect fee. Net fund operating expenses after
reductions for fees paid indirectly would be as follows:
CVS Social Small Cap Growth 1.15%
CVS Social Mid Cap Growth 1.02%
CVS Social International Equity 1.50%
CVS Social Balanced 0.86%
(3) Total expenses have been restated to reflect expenses expected to be
incurred in 2000, resulting from a change in 1999 to the administrative
services agreement, as approved by the shareholders.
(4) A portion of the brokerage commissions that certain Funds pay was used to
reduce Fund expenses. In addition, through arrangements with certain Funds
custodian, credits realized as a result of uninvested cash balances were
used to reduce a portion of each applicable Fund's expenses. After these
reductions, the total operating expenses presented in the table would have
been:
VIP Equity-Income: Service Class 2 0.82%
VIP Growth: Service Class 2 0.91%
VIP Overseas: Service Class 2 1.13%
VIP Asset Manager: Service Class 2 0.88%
VIP Asset Manager: Growth: Service Class 2 0.97%
VIP Contrafund: Service Class 2 0.92%
(5) Fred Alger Management, Inc. ("Alger Management") has agreed to reimburse the
portfolios to the extent that the aggregate annual expenses (excluding
interest, taxes, fees for brokerage services and extraordinary expenses)
exceed respectively: Alger American Balanced, 1.25%, and Alger American
Leveraged AllCap, 1.50%. Included in "Other Expenses" of Leveraged AllCap is
0.01% of interest expense.
(6) Each MFS Trust series has an expense offset arrangement which reduces the
series' custodian fee based upon the amount of cash maintained by the series
with its custodian and dividend disbursing agent. Each series may enter into
other such arrangements and directed brokerage arrangements (which would
also have the effect of reducing the series' expenses). "Other Expenses" do
not take into account these expense reductions and are therefore higher than
the actual expenses of the series. Had these reductions been taken into
account, "Total (reflecting waivers and/or reimbursements, if any)" would be
lower and would equal 0.90% for Utilities Series and Global Governments
Series and 1.05% for New Discovery Series.
(7) MFS has contractually agreed, subject to reimbursement, to bear expenses for
the Global Governments Series and New Discovery Series such that the each
series "Other Expenses" (after taking into account the expense offset
arrangement described at (4), above) do not exceed 0.15% of the average
daily net assets of the series during the current fiscal year. Utilities
Series has no such limitation. These contracted fee arrangements will
continue until at least May 1, 2001, unless changed with the consent of the
board of trustees which oversees the series.
(8) The Portfolios' investment adviser has voluntarily agreed to reduce its
management fee and/or reimburse each Portfolio so that total annual
operating expenses for each Universal Institutional Funds ("UIF") Portfolio
will not exceed:
UIF Emerging Markets Equity Portfolio 1.75%
UIF Global Equity Portfolio 1.15%
UIF International Magnum Portfolio 1.15%
UIF Asian Equity Portfolio 1.20%
UIF U.S. Real Estate Portfolio 1.10%
The investment adviser reserves the right to terminate any waiver and/or
reimbursement at any time and without notice.
In determining the actual amount of voluntary management fee waiver and/or
expense reimbursement for a Portfolio, if any, certain investment related
expenses, such as foreign country tax expense and interest expense on
borrowing are excluded from annual operating expenses. If these expenses
were incurred, the Portfolios' total expenses after voluntary fee waivers
and/or expense reimbursements could exceed the expense ratios shown above.
For the year ended December 31, 1999, after giving effect to the above
voluntary management fee waiver and/or expense reimbursement, the total
expenses for each Portfolio, including certain investment related expenses,
were as stated in the table.
Expense reimbursement agreements are expected to continue in future years but
may be terminated at any time. As long as the expense limitations continue for a
portfolio, if a reimbursement occurs, it has the effect of lowering the
portfolio's expense ratio and increasing its total return.
ENCORE! II
9
<PAGE>
First Ameritas may receive administrative fees from the investment advisers of
certain Funds. First Ameritas currently does not assess a separate charge
against the Separate Account or the Fixed Account for any federal, state or
local income taxes. First Ameritas may, however, make such a charge in the
future if income or gains within the Separate Account will incur any federal, or
any significant state or local income tax liability, or if the federal, state or
local tax treatment of First Ameritas changes.
HOW DOES THE INVESTMENT COMPONENT OF MY ENCORE! II POLICY WORK?
First Ameritas has established Separate Account V, which is separate from all
other assets of First Ameritas, as a vehicle to receive and invest premiums
received from ENCORE! II Policy Owners and owners of certain other variable
universal life products offered by First Ameritas. Separate Account V is divided
into separate Subaccounts. Each Subaccount invests exclusively in shares of one
of the investment portfolios available through ENCORE! II Each Policy Owner may
allocate Net Premiums to one or more Subaccounts, or to First Ameritas's Fixed
Account in the initial application. These allocations may be changed, without
charge, by notifying First Ameritas's Service Office. The aggregate value of
your interests in the Subaccounts and the Fixed Account will represent the
Accumulation Value of your ENCORE! II Policy. (See the section on Accumulation
Value.)
WHAT INVESTMENT OPTIONS ARE AVAILABLE THROUGH THE ENCORE! II POLICY?
The Investment Options available through ENCORE! II include 31 investment
portfolios, each of which is a separate series of a mutual fund managed by
Ameritas Investment Corp., Calvert Asset management Company, Inc., Fidelity
Management & Research Company, Fred Alger Management, Inc., Massachusetts
Financial Services Company, or Morgan Stanley Dean Witter Investment Management
Inc. On December 1, 1998, Morgan Stanley Asset Management, Inc. changed its name
to Morgan Stanley Dean Witter Investment Management Inc. but continues to do
business in certain instances using the name Morgan Stanley Asset Management.
These portfolios are listed in the Fund Expense Summary, above.
Details about the investment objectives and policies of each of the available
investment portfolios and management fees and expenses appear in the sections on
Investment Objectives and Policies of the Funds' Portfolios and Fund Expense
Summary. In addition to the listed portfolios you may also elect to allocate Net
Premiums to First Ameritas's Fixed Account. (See the section on Fixed Account.).
HOW DOES THE LIFE INSURANCE COMPONENT OF AN ENCORE! II POLICY WORK?
An ENCORE! II Policy provides for the payment of a minimum Death Benefit upon
the death of the Insured. The amount of the minimum Death Benefit--sometimes
referred to as the Specified Amount of your ENCORE! II Policy--is chosen by you
at the time your ENCORE! II Policy is established. However, Death Benefit
Proceeds--the actual amount that will be paid after First Ameritas receives
Satisfactory Proof of Death of the Insured--will vary over the life of your
ENCORE! II Policy, depending on which of the two available coverage options you
select.
If you choose Option A, Death Benefit Proceeds payable under your ENCORE! II
Policy will be the Specified Amount of your ENCORE! II Policy OR the applicable
percentage of its Accumulation Value, whichever is greater. If you choose Option
B, Death Benefit Proceeds payable under your ENCORE! II Policy will be the
Specified Amount of your ENCORE! II Policy PLUS the Accumulation Value of your
ENCORE! II Policy, or if it is higher, the applicable percentage of the
Accumulation Value on the date of death. In either case, the applicable
percentage is established based on the age of the Insured at the date of death.
(See the section on Death Benefit Options.)
ARE THERE ANY RISKS INVOLVED IN OWNING AN ENCORE POLICY?
Yes. Over the life of your ENCORE! II Policy, the Subaccounts to which you
allocate your premiums will fluctuate with changes in the stock market and
overall economic factors. These fluctuations will be reflected in the
Accumulation Value of your ENCORE! II Policy and may result in loss of
principal. For this reason, the purchase of an ENCORE! II Policy may not be
suitable for all individuals. It may not be advantageous to purchase an ENCORE!
II Policy to replace or augment your existing insurance arrangements. Appendix A
includes tables illustrating the impact that hypothetical market returns would
have on Accumulation Values under an ENCORE! II Policy.
ENCORE! II
10
<PAGE>
WHAT IS THE PREMIUM THAT MUST BE PAID TO KEEP AN ENCORE! II POLICY IN FORCE?
Like traditional life insurance policies, an ENCORE! II Policy requires the
payment of periodic premiums in order to keep the Policy in force. You will be
asked to establish a payment schedule before your ENCORE! II Policy becomes
effective.
The distinction between traditional life policies and an ENCORE! II Policy is
that an ENCORE! II Policy will not lapse simply because premium payments are not
made according to that payment schedule. However, an ENCORE! II Policy will
lapse, even if scheduled premium payments are made, if the Net Cash Surrender
Value of your ENCORE! II Policy falls below zero or premiums paid do not, in the
aggregate, equal the premium necessary to satisfy the Guaranteed Death Benefit.
(See the section on Premiums.)
HOW ARE PREMIUMS PAID, PROCESSED AND CREDITED TO ME?
Your ENCORE! II Policy will be issued after a completed application is accepted,
and the initial premium payment is received, by First Ameritas at its Service
Office. First Ameritas's Service Office is located at 5900 "O" Street, Lincoln,
Nebraska 68501. Your initial premium will be allocated to the Money Market
Subaccount for 13 days following the Issue Date, and then will be allocated to
the Subaccounts and/or the Fixed Account, according to selections you made in
your application. You have the right to examine your ENCORE! II Policy and
return it for a refund for a limited time, even after the Issue Date. (See the
section on Issuance of a Policy.)
You may make subsequent premium payments according to your Planned Periodic
Premium schedule; although you are not required to do so. First Ameritas will
send premium payment notices to you according to any schedule you select. When
First Ameritas receives your premium payment at its Service Office, we will
deduct any applicable Percent of Premium Charges and allocate the Net Premium to
the Subaccounts and/or the Fixed Account according to your selections. (See the
sections on Premiums and Allocations of Premiums and Accumulation Value.)
As already noted, ENCORE! II provides you considerable flexibility in
determining the frequency and amount of premium payments. This flexibility is
not, however, unlimited. You should keep certain factors in mind in determining
the payment schedule that is best suited to your needs. These include the amount
of the Guaranteed Death Benefit Premium and/or Net Policy Funding requirement
needed to keep your ENCORE! II Policy in force; maximum premium limitations
established under the federal tax laws; and the impact that reduced premium
payments may have on the Net Cash Surrender Value of your ENCORE! II Policy.
(See the section on Premiums.)
IS THE ACCUMULATION VALUE OF MY ENCORE! II POLICY AVAILABLE BEFORE THE MATURITY
DATE WITHOUT SURRENDER?
Yes. You may access the value of your ENCORE! II Policy in one of two ways.
First, you may obtain a loan, secured by the Accumulation Value of your ENCORE!
II Policy. The maximum interest rate on any such loan is 6% annually; the
current rate is 5.5% annually. After the tenth Policy Anniversary, you may
borrow against a limited amount of the Net Cash Surrender Value of your ENCORE!
II Policy at a maximum annual interest rate of 4%; the current rate for such
loans is 3.5% annually. (See the section on Loan Benefits.)
You may also access the value of your ENCORE! II Policy by making a partial
withdrawal. A partial withdrawal is not subject to Surrender Charges, but is
subject to a charge of 2% of the amount withdrawn (maximum charge $25). (See the
section on Partial Withdrawals.)
WHEN DOES MY ENCORE! II POLICY TERMINATE?
You may terminate your ENCORE! II Policy by Surrendering the Policy during the
lifetime of the Insured for its Net Cash Surrender Value. As noted above, your
ENCORE! II Policy will terminate if you fail to pay required premiums or
maintain sufficient Net Cash Surrender Value to cover Policy charges. (See the
sections on Surrenders and Premiums.)
Finally, your ENCORE! II Policy will terminate on its Maturity Date if the named
Insured is living on that date. The Maturity Date is the Policy Anniversary
nearest to the Insured's 100th birthday. On the Maturity Date, First Ameritas
will pay to you, the Policy Owner, an amount--referred to as the Maturity
Benefit--equal to the Accumulation Value of your ENCORE! II Policy, less any
Outstanding Policy Debt. (See the section on Benefits at Maturity.)
ENCORE! II
11
<PAGE>
FIRST AMERITAS, THE SEPARATE ACCOUNT AND THE FUNDS
FIRST AMERITAS LIFE INSURANCE CORP. OF NEW YORK
First Ameritas Life Insurance Corp. of New York ("First Ameritas") is a stock
insurance company organized in the State of New York. First Ameritas filed
articles of incorporation on April 13, 1993 and commenced business May 17, 1994.
First Ameritas is currently licensed to sell life and health insurance in the
State of New York. First Ameritas's financial statements may be found at page
F-II-1.
First Ameritas is a wholly owned subsidiary of Ameritas Life Insurance Corp.
("Ameritas Life"), a Nebraska stock insurance company. The Home Office of First
Ameritas is at 400 Rella Boulevard, Suite 214, Suffern, New York 10901("Home
Office") and the home office of Ameritas Life is at 5900 "O" Street, P.O. Box
81889, Lincoln, Nebraska 68501. First Ameritas's Home Office telephone number is
800-215-1096 and its website address is www.first.ameritas.com.
Ameritas Life and its subsidiaries had total assets at December 31, 1999 of over
$4.8 billion.
A.M. Best Company ("Best") and Standard & Poor's ("S & P"), firms that analyze
insurance carriers, have not rated First Ameritas separately from its parent
company, Ameritas Life. Ameritas Life, with First Ameritas as its insurance
subsidiary in New York, enjoys a long standing A+ (Superior) rating from A.M.
Best, the second highest of Best's ratings. Ameritas Life is rated AA (Very
Strong) for insurer financial strength from S & P, the third highest of S & P's
21 ratings.
Ameritas Life guarantees the obligations of First Ameritas. This guarantee will
continue until First Ameritas is recognized by a national rating agency as
having a financial rating equal to or greater than Ameritas Life, or until First
Ameritas is acquired by another insurance company which has a financial rating
by a national rating agency equal to or greater than Ameritas Life and which
agrees to assume the guarantee.
Ameritas Investment Corp. ("AIC"), the principal underwriter of the Policies,
may publish in advertisements and reports to Policy Owners, the ratings and
other information assigned to Ameritas Life and First Ameritas by one or more
independent rating services. Published material may also include charts and
other information concerning dollar cost averaging, portfolio rebalancing,
earnings sweep, tax-deference, asset allocation, diversification, long term
market trends, index performance and other investment methods and programs. The
purpose of the ratings is to reflect the financial strength of First Ameritas
and Ameritas Life. The ratings do not relate to the performance of the Separate
Account.
THE SEPARATE ACCOUNT
First Ameritas Variable Life Separate Account ("Separate Account") was
established under New York law on March 21, 2000. The assets of the Separate
Account are held by First Ameritas segregated from all of First Ameritas's other
assets, are not chargeable with liabilities arising out of any other business
which First Ameritas may conduct, and are not affected by income, gains, or
losses of First Ameritas. Although the assets maintained in the Separate Account
will not be charged with any liabilities arising out of First Ameritas's other
business, all obligations arising under the Policies are liabilities of First
Ameritas who will maintain assets in the Separate Account of a total market
value at least equal to the reserve and other contract liabilities of the
Separate Account. The Separate Account will at all times contain assets equal to
or greater than Accumulation Values invested in the Separate Account.
Nevertheless, to the extent assets in the Separate Account exceed First
Ameritas's liabilities in the Separate Account, the assets are available to
cover the liabilities of First Ameritas's General Account. First Ameritas may,
from time to time, withdraw assets available to cover the General Account
obligations.
The Separate Account will be registered with the Securities and Exchange
Commission ("SEC") under the Investment Company Act of 1940 ("1940 Act") as a
unit investment trust, which is a type of investment company. This does not
involve any SEC supervision of the management or investment policies or
practices of the Separate Account. For state law purposes, the Separate Account
is treated as a Division of First Ameritas.
ENCORE! II
12
<PAGE>
PERFORMANCE INFORMATION
Performance information for the Subaccounts of the Separate Account and the
Funds available for investment by the Separate Account may appear in
advertisements, sales literature, or reports to Policy Owners or prospective
purchasers. First Ameritas may also provide a hypothetical illustration of
Accumulation Value, Net Cash Surrender Value and Death Benefit based on
historical investment returns of the Funds for a sample Insured based on
assumptions as to age, sex, and other Policy specific assumptions.
First Ameritas may also provide individualized hypothetical illustrations of
Accumulation Value, Net Cash Surrender Value and Death Benefit based on
historical investment returns of the Funds. These illustrations will reflect
deductions for Fund expenses and Policy and the Separate Account charges,
including the Monthly Deduction, Percent of Premium Charge, and the Surrender
Charge. These hypothetical illustrations will be based on the actual historical
experience of the Funds as if the Subaccounts had been in existence and a Policy
issued for the same periods as those indicated for the Funds.
THE FUNDS
There are currently 31 Subaccounts within the Separate Account available to
Policy Owners for new allocations. The assets of each Subaccount are invested in
shares of a corresponding portfolio of one of the following mutual Funds
(collectively, the "Funds"): Calvert Variable Series, Inc. Ameritas Portfolios
("Ameritas Portfolios"); Calvert Variable Series, Inc. ("Calvert Social
Portfolios"); Variable Insurance Products Fund and Variable Insurance Products
Fund II (collectively "Fidelity Portfolios"); The Alger American Fund ("Alger
American Funds"); MFS Variable Insurance Trust ("MFS Trust"); and The Universal
Institutional Funds, Inc. ("Universal Institutional Funds"). The Ameritas
Portfolios receive investment advisory services from Ameritas Investment Corp.
("AIC"). AIC is a registered investment adviser under the Investment Advisers
Act of 1940 and is an affiliate of First Ameritas. AIC also contracts with
subadvisers. The following subadvisers provide investment subadvisory services
to the indicated portfolios:
PORTFOLIO SUBADVISER
Ameritas Money Market Calvert Asset Management Company, Inc.
Ameritas Index 500 State Street Global Advisors
Ameritas Growth Fred Alger Management, Inc.
("Alger Management")
Ameritas Income & Growth Alger Management
Ameritas Small Capitalization Alger Management
Ameritas MidCap Growth Alger Management
Ameritas Emerging Growth Massachusetts Financial Services Company
("MFS Co.")
Ameritas Research MFS Co.
Ameritas Growth With Income MFS Co.
Calvert Social Portfolios, which is managed by Calvert Asset Management, Inc.
("CAMCO"), offers the following portfolios: Calvert Social Small Cap Growth,
Calvert Social Mid Cap Growth, Calvert Social International Equity, and Calvert
Social Balanced. The Fidelity Portfolios, which are managed by Fidelity
Management & Research Company ("Fidelity"), offer the following portfolios: VIP
Equity-Income: Service Class 2, VIP Growth: Service Class 2, VIP High Income:
Service Class 2, VIP Overseas: Service Class 2, VIP Asset Manager: Service Class
2, VIP Investment Grade Bond: Service Class 2, VIP Asset Manager: Growth:
Service Class 2, and VIP Contrafund: Service Class 2. The Alger American Fund,
which is managed by Fred Alger Management, Inc. ("Alger Management"), offers the
following portfolios: Alger American Balanced ("Balanced") and Alger American
Leveraged AllCap ("Leveraged AllCap"). The MFS Trust, managed by Massachusetts
Financial Services Company ("MFS Co."), offers the following portfolios or
series in connection with this Policy: MFS Utilities, MFS Global Governments,
and MFS New Discovery. The Universal Institutional Funds offer the following
portfolios in connection with the Policy, all of which are managed by Morgan
Stanley Asset Management: Emerging Markets Equity, Global Equity, International
Magnum, Asian Equity and U.S. Real Estate. Each Fund is registered with the SEC
under the Investment Company Act of 1940 as an open-end management investment
company.
ENCORE! II
13
<PAGE>
The assets of each portfolio of the Funds are held separately from the assets of
the other portfolios. Thus, each portfolio operates as a separate investment
portfolio, and the income or losses of one portfolio generally have no effect on
the investment performance of any other portfolio.
The investment objectives and policies of each portfolio are summarized below.
There is no assurance that any of the portfolios will achieve their stated
objectives. More detailed information, including a description of investment
objectives, policies, restrictions, expenses and risks, is in the prospectuses
for each of the Funds, which must accompany or precede this prospectus. All
underlying Fund information, including Fund prospectuses, has been provided to
First Ameritas by the underlying Funds. First Ameritas has not independently
verified this information. One or more of the portfolios may employ investment
techniques that involve certain risks, including investing in non-investment
grade, high risk debt securities, entering into repurchase agreements and
reverse repurchase agreements, lending portfolio securities, engaging in "short
sales against the box," investing in instruments issued by foreign banks,
entering into firm commitment agreements and investing in warrants and
restricted securities. In addition, certain of the portfolios may invest in
securities of foreign issuers.
The Leveraged AllCap portfolio may borrow money to increase its portfolio of
securities, and may purchase or sell options and enter into futures contracts on
securities indexes to increase gain or to hedge the value of the portfolio.
Certain of the portfolios are permitted to invest a portion of their assets in
non-investment grade, high risk debt securities; these portfolios include the
VIP High Income, VIP Equity-Income, VIP Asset Manager: Growth, VIP Asset Manager
portfolios of the Fidelity Portfolios, and the Research portfolio of the
Ameritas Portfolios. Certain portfolios are designed to invest a substantial
portion of their assets overseas, such as the VIP Overseas portfolio and the
International Magnum portfolio of the Universal Institutional Funds. Other
portfolios invest primarily in the securities markets of emerging nations.
Investments of this type involve different risks than investments in more
established economies, and will be affected by greater volatility of currency
exchange rates and overall economic and political factors. Such portfolios
include the Emerging Markets Equity and Asian Equity portfolios of the Universal
Institutional Funds. The Emerging Markets Equity portfolio may also invest in
non-investment grade, high risk debt securities (also known as "junk bonds") and
securities of Russian companies. Investment in Russian companies may involve
risks associated with that nation's system of share registration and custody.
Securities of non-U.S. issuers (including issuers in emerging nations) may also
be purchased by each of the portfolios of the MFS Trust, by the Emerging Growth,
Research, and Growth With Income portfolios of the Ameritas Portfolios, and by
the Global Equity portfolio of the Universal Institutional Funds. Investments
acquired by the U.S. Real Estate portfolio of the Universal Institutional Funds
may be subject to the risks associated with the direct ownership of real estate
and direct investments in real estate investment trusts. Further information
about the risks associated with investments in each of the Funds and their
respective portfolios is contained in the prospectus relating to that Fund.
These prospectuses, together with this prospectus, should be read carefully and
retained.
The investments in the Funds may be managed by Fund managers which manage one or
more other mutual funds that have similar names, investment objectives, and
investment styles as the Funds. You should be aware that the Funds are likely to
differ from the other mutual funds in size, cash flow pattern, and tax matters.
Thus, the holdings and performance of the Funds can be expected to vary from
those of the other mutual funds.
You should periodically consider the allocation among the Subaccounts in light
of current market conditions and the investment risks attendant to investing in
the Funds' various portfolios.
The Separate Account will purchase and redeem shares from the portfolios at the
net asset value. Shares will be redeemed to the extent necessary for First
Ameritas to collect charges, pay the Surrender Values, partial withdrawals, and
make policy loans or to transfer assets among Investment Options as you
requested. Any dividend or capital gain distribution received is automatically
reinvested in the corresponding Subaccount.
Since each of the Funds is designed to provide investment vehicles for variable
annuity and variable life insurance contracts of various insurance companies and
will be sold to separate accounts of other insurance companies as investment
vehicles for various types of variable life insurance policies and variable
annuity contracts, there is a possibility that a material conflict may arise
between the interests of the Separate Account and one or more of the
ENCORE! II
14
<PAGE>
separate accounts of another participating insurance company. In the event of a
material conflict, the affected insurance companies agree to take any necessary
steps, including removing their separate accounts from the Funds, to resolve the
matter. The risks of such mixed and shared funding are described further in the
prospectuses of the Funds.
<TABLE>
<CAPTION>
------------------- ------------------------------------------------ --------------------------
INVESTMENT INVESTMENT POLICIES OBJECTIVE
MANAGER/ PORTFOLIO
<S> <C> <C>
------------------- ------------------------------------------------ --------------------------
AMERITAS INVESTMENT CORP.
AMERITAS PORTFOLIOS
------------------- ------------------------------------------------ --------------------------
Ameritas Money Invests in U.S. dollar-denominated money Seeks as high a level of
Market market securities of domestic and foreign current income as is
issuers, including U.S. government securities consistent with
and repurchase agreements. Invests more than preservation of capital
25% of total assets in the financial services and liquidity.
industry.
------------------- ------------------------------------------------ --------------------------
Ameritas Index
500 Under normal circumstances, seeks to track Seeks investment results
the Standard & Poor's 500. that correspond to the
total return of common stocks
publicly traded in the
United States, as represented
by the Standard & Poor's 500.
------------------- ------------------------------------------------ -------------------------
Ameritas Growth Focuses on growing companies that generally Seeks long-term capital
have broad product lines, markets, financial appreciation.
resources and depth of management. Under
normal circumstances, the portfolio invests
primarily in the equity securities of large
companies. The portfolio considers a large
company to have market capitalization of $1
billion or greater.
------------------- ------------------------------------------------ --------------------------
Ameritas Income & Invests in dividend paying equity securities, Primarily seeks to
Growth such as common or preferred stocks, provide a high level of
preferably those which the subadviser believes dividend income. Its
also offer opportunities for capital secondary goal is to
appreciation. provide capital
appreciation.
------------------- ------------------------------------------------ --------------------------
Ameritas Small Focuses on small, fast-growing companies that Seeks long-term capital
Capitalization offer innovative products, service or appreciation.
technologies to a rapidly expanding
marketplace. Under normal circumstances, the
portfolio invests primarily in the equity securities
of small capitalization companies. A small
capitalization company is one that
has a market capitalization within the range
of the Russell 200 Growth Index or the
S&P SmallCap 600 Index.
------------------- ------------------------------------------------ --------------------------
Ameritas MidCap Invests in midsize companies with promising Seeks long-term capital
Growth growth potential. Under normal circumstances, appreciation.
the portfolio invests primarily in the equity
securities of companies having a market
capitalization within the range of
companies in the S&P MidCap 400 Index.
------------------- ------------------------------------------------ --------------------------
Ameritas Emerging Invests, under normal market conditions, at Seeks long-term growth of
Growth least 65% of its total assets in common stocks capital.
and related securities, such as preferred stocks,
convertible securities and depositary receipts
for those securities, of emerging growth companies.
------------------- ------------------------------------------------ --------------------------
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Ameritas Research Invests, under normal market conditions, at Seeks long-term growth
least 80% of its total assets in common stocks of capital and future
and related securities, such as preferred income.
stocks, convertible securities and depositary
receipts. The portfolio focuses on companies
that the Subadviser believes have favorable
prospects for long-term growth, attractive
valuations based on current and expected
earnings or cash flow, dominant or growing
market share and superior management. The
fund may invest in companies of any size. The
portfolio's investments may include securities
traded on securities exchanges or in the
over-the-counter markets.
------------------- ------------------------------------------------ --------------------------
Ameritas Growth Invests, under normal market conditions, at Seeks to provide
With Income least 65% of its total assets in common stocks reasonable current
and related securities, such as preferred income and long-term
stocks, convertible securities and depositary growth of capital and
receipts for those securities. These income.
securities may be listed on a securities
exchange or traded in the over-the-counter
markets. While the portfolio may invest in
companies of any size, it may generally focus
on companies with larger market
capitalizations that the Subadviser believes
have sustainable growth prospects and
attractive valuations based on current and
expected earnings or cash flow.
------------------- ------------------------------------------------ --------------------------
CALVERT ASSET MANAGEMENT COMPANY, INC.
CALVERT SOCIAL PORTFOLIOS
-----------------------------------------------------------------------------------------------
CVS Social Small Invests at least 65% of assets in the common Seeks to provide
Cap Growth stocks of small-cap companies. Returns in the long-term capital
portfolio will be mostly from the changes
in appreciation by the price of the portfolio's
holdings (capital investing primarily in
appreciation). The portfolio currently equity
securities of defines small-cap companies as those with
companies that have market capitalization of $1 billion or
less at small market the time the portfolio initially
invests. * capitalizations.
------------------- ------------------------------------------------ --------------------------
CVS Social Mid Invests primarily in the common stocks of Seeks to provide
Cap Growth mid-size companies. Returns in the portfolio long-term capital
will be mostly from the changes in the price appreciation by
of the portfolio's holdings (capital investing primarily in a
appreciation). The portfolio currently nondiversified portfolio
defines mid-cap companies as those within the of the equity securities
range of market capitalizations of the S&P's of mid-sized companies
Mid-Cap 400 Index. Most companies in the that are undervalued but
Index have a capitalization of $500 million to demonstrate a potential
$10 billion. * for growth.
------------------- ------------------------------------------------ --------------------------
CVS Social Invests primarily in the common stocks of mid- Seeks to provide a high
International to large-cap companies using a value total return consistent
Equity approach. The portfolio identifies those with reasonable risk by
countries with markets and economies that it investing primarily in a
believes currently provide the most favorable globally diversified
climate for investing. The portfolio invests portfolio for equity
primarily in more developed economies and securities.
markets. No more that 5% of Portfolio assets
are invested in the U.S.*
------------------- ------------------------------------------------ --------------------------
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<PAGE>
CVS Social Typically invests about 60% of its assets in Seeks to achieve a
Balanced stocks and 40% in bonds or other fixed-income competitive total return
investments. Stock investments are primarily through an actively
common stock in large-cap companies, while the managed portfolio of
fixed-income investments are primarily a wide stocks, bonds and money
variety of investment grade bonds. * market instruments which
offer income and capital
*The portfolio invests with the philosophy growth
opportunity and that long-term rewards to investors will
come which satisfy the from those organizations whose
products, investment and social services, and methods
enhance the human criteria. condition and the traditional
American values of individual initiative, equality of
opportunity and cooperative effort.
Investments are selected on the basis of their ability to
contribute to the dual objectives of financial soundness and
social criteria.
------------------- ------------------------------------------------ --------------------------
FIDELITY MANAGEMENT & RESEARCH COMPANY
FIDELITY PORTFOLIOS (ALL PORTFOLIOS ARE SERVICE CLASS 2)
-----------------------------------------------------------------------------------------------
VIP Equity-Income Investing at least 65% in income-producing Seeks reasonable
equity securities, which tends to lead to income. Will also
investments in large cap "value" stocks. consider the potential
for capital
appreciation. Seeks a
yield which exceeds the
composite yield on the
securities comprising
the Standard & Poor's
500.
------------------- ------------------------------------------------ --------------------------
VIP Growth Investing primarily in common stocks. Seeks capital
Investing in companies that it believes have appreciation.
above-average growth potential (stocks of
these companies are often called "growth"
stocks). Investing in domestic and foreign
issuers.
------------------- ------------------------------------------------ --------------------------
VIP High Income Investing at least 65% of total assets in Seeks a high level of
income-producing debt securities, preferred current income while
stocks and convertible securities, with an also considering growth
emphasis on lower-quality debt of capital.
securities.
------------------- ------------------------------------------------ --------------------------
VIP Overseas Investing at least 65% of total assets in Seeks long-term growth
foreign securities. Investing primarily in of capital.
common stocks.
------------------- ------------------------------------------------ --------------------------
VIP Asset Manager Allocating the Fund's assets among stocks, Seeks high total return
bonds, and short-term and money with reduced risk over
market instruments. Maintaining a the long term by
neutral mix over time of 50% of assets in allocating its assets
stocks, 40% of bonds, and 10% of in stocks, bonds, and
assets in short-term and money market short-term instruments.
instruments.
------------------- ------------------------------------------------ --------------------------
VIP Investment Investing in U.S. dollar-denominated Seeks as high a level of
Grade Bond investment-grade bonds. current income as is
consistent with the
preservation of capital.
------------------- ------------------------------------------------ --------------------------
VIP Asset Allocating the Fund's assets among stocks, Seeks to maximize total
Manager: Growth bonds, and short-term and money market return by allocating its
instruments. Maintaining a neutral mix over assets among stocks,
time of 70% of assets in stocks, 25% of assets bonds, short-term
in bonds, and 5% of assets in short-term and instruments and other
money market instruments. investments.
------------------- ------------------------------------------------ --------------------------
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<PAGE>
VIP Contrafund Investing primarily in common stocks. Seeks long-term capital
Investing in securities of companies whose appreciation.
value it believes is not fully recognized by
the public.
------------------- ------------------------------------------------ --------------------------
FRED ALGER MANAGEMENT INC.
ALGER AMERICAN FUND
-----------------------------------------------------------------------------------------------
Alger American The portfolio focuses on stocks of companies Seeks current income and
Balanced with growth potential and fixed income long-term capital
securities, with emphasis on income-producing appreciation by
securities which appear to have some potential investment in common
for capital appreciation. Under normal stocks and fixed income
circumstances, it invests in common stocks and and convertible
fixed income securities, which include securities, with
commercial paper and bonds rated within the emphasis on income
four highest rating categories by an producing securities
established rating agency or if not rated, which appear to have
which are determined by the manager to be of potential for capital
comparable quality. Ordinarily, at least 25% appreciation.
of the portfolio's net assets are invested in
fixed-income securities.
------------------- ------------------------------------------------ --------------------------
Alger American Under normal circumstances, the portfolio Seeks long-term capital
Leveraged AllCap invests in the equity securities of companies appreciation.
of any size which demonstrate promising growth
potential. The portfolio can leverage, that
is, borrow money, up to one-third of its total
assets to buy additional securities. By borrowing
money, the portfolio has the potential to
increase its returns if the increase in the
value of the securities purchased exceeds the
cost of borrowing, including interest paid on
the money borrowed
------------------- ------------------------------------------------ --------------------------
MASSACHUSETTS FINANCIAL SERVICES COMPNAY
MFS TRUST
-----------------------------------------------------------------------------------------------
MFS Utilities Invests, under normal market conditions, at Will seek capital growth
Series least 65% of its total assets in equity and and current income
debt securities of both domestic and foreign (income above that
companies in the utilities industry. available from a
portfolio invested
entirely in equity
securities).
------------------- ------------------------------------------------ --------------------------
MFS Global Invests, under normal market conditions, at Will seek to provide
Governments Series least 65% of its total assets in debt income and capital appreciation.
obligations that are issued or guaranteed as
to principal and interest by either (1)
the U.S. Government, its agencies, authorities or
instrumentalities or (2) the governments of foreign
countries (including emerging markets). May also invest in
corporate bonds (including lower rated bonds commonly known
as junk bonds) and mortgage-backed and assets-backed
securities.
------------------- ------------------------------------------------ --------------------------
MFS New Discovery Invests, under normal market conditions, at Will seek capital
Series least 65% of its total assets in common stocks appreciation.
and related securities, such as preferred stocks,
convertible securities and depositary receipts
for those securities, of emerging growth companies.
------------------- ------------------------------------------------ --------------------------
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<PAGE>
MORGAN STANLEY ASSET MANAGEMENT
UNIVERSAL INSTITUTIONAL FUNDS
----------------------------------------------------------------------------------------------
UIF Emerging Invests primarily in equity securities of Long-term capital
Markets Equity emerging market country issuers with a focus appreciation.
on those issuers with attractive growth
characteristics, reasonable valuations,
and managements with a strong
shareholder value orientation.
------------------- ------------------------------------------------ --------------------------
UIF Global Equity Invests primarily in equity securities of Long-term capital
issuers throughout the world, including appreciation.
U.S. issuers and emerging market countries,
using an approach based on individual stock
selection and emphasizing a bottom up approach
to identify stocks that are undervalued.
------------------- ------------------------------------------------ --------------------------
UIF International Invests primarily in equity securities of non- Long-term capital
Magnum U.S. issuers, domiciled in countries appreciation.
comprising the Morgan Stanley Capital
International Europe, Australasia, Far East
Index commonly known as the "EAFE Index."
------------------- ------------------------------------------------ --------------------------
UIF Asian Equity Invests primarily in equity securities of Long-term capital
Asian issuers, excluding Japan, using a appreciation.
disciplined, value-oriented approach to
security selections focusing on larger companies
with strong management teams.
------------------- ------------------------------------------------ --------------------------
UIF U.S. Real Invests primarily in equity securities of Above-average current
Estate companies in the U.S. real estate industry, income and long-term
including real estate investment trusts and capital appreciation.
real estate operating companies.
------------------- ------------------------------------------------ --------------------------
</TABLE>
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
First Ameritas reserves the right, subject to applicable law, to add, delete,
combine, or substitute investments in the Separate Account if, in our judgment,
marketing needs, tax considerations, or investment conditions warrant. This may
happen due to a change in law or a change in a Fund's objectives or
restrictions, or for some other reason. First Ameritas may operate the Separate
Account as a management company under the 1940 Act, it may be deregistered under
that Act if registration is no longer required, or it may be combined with other
First Ameritas separate accounts. First Ameritas may also transfer the assets of
the Separate Account to another separate account. If necessary, we will notify
the SEC and/or state insurance authorities and will obtain any required
approvals before making these changes.
If any changes are made, First Ameritas may, by appropriate endorsement, change
the Policy to reflect the changes. In addition, First Ameritas may, when
permitted by law, restrict or eliminate any voting rights of Policy Owners or
other persons who have voting rights as to the Separate Account. First Ameritas
will determine the basis for making any new Subaccounts available to existing
Policy Owners.
You will be notified of any material change in the investment policy of any Fund
in which you have an interest.
FIXED ACCOUNT
You may elect to allocate all or a portion of your Net Premium payments to the
Fixed Account, and you may also transfer monies between the Separate Account and
the Fixed Account. (See the section on Transfers.)
Payments allocated to the Fixed Account and transferred from the Separate
Account to the Fixed Account are placed in First Ameritas's General Account. The
General Account includes all of First Ameritas's assets, except those assets
segregated in First Ameritas's separate accounts. First Ameritas has the sole
discretion to invest the assets of the General Account, subject to applicable
law. First Ameritas bears an investment risk for all amounts allocated or
transferred to the Fixed Account, plus interest credited thereto, less any
deduction for charges and expenses. The
ENCORE! II
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<PAGE>
Policy Owner bears the investment risk that the declared rate, described below,
will fall to a lower rate after the expiration of a declared rate period.
Because of exemptions and exclusionary provisions, interests in the General
Account have not been registered under the Securities Act of 1933 (the "1933
Act"), nor is the General Account registered as an investment company under the
Investment Company Act of 1940. Accordingly, neither the General Account nor any
interest in it is generally subject to the provisions of the 1933 or 1940 Act.
We understand that the staff of the SEC has not reviewed the disclosures in this
prospectus relating to the Fixed Account portion of the Policy; however, these
disclosures may be subject to generally applicable provisions of the federal
securities laws regarding the accuracy and completeness of statements made in
prospectuses.
First Ameritas guarantees that it will credit interest at a declared rate of at
least 3.5%. First Ameritas may, at its discretion, set a higher declared
rate(s). Each month First Ameritas will establish the declared rate for the
Policies with a Policy Date or Anniversary Date that month. Each month is
assumed to have 30 days, and each year to have 360 days for purposes of
crediting interest on the Fixed Account. The Policy Owner will earn interest on
the amounts transferred or allocated to the Fixed Account at the declared rate
effective for the month in which the Policy was issued, which rate is guaranteed
for the remainder of the first Policy Year. During later Policy Years, all
amounts in the Fixed Account will earn interest at the declared rate in effect
in the month of the last Policy Anniversary. Declared interest rates may
increase or decrease from previous periods, but will not fall below 3.5%. First
Ameritas reserves the right to change the declaration practice, and the period
for which a declared rate will apply.
POLICY BENEFITS
The rights and benefits under the Policy are summarized in this prospectus;
however prospectus disclosure regarding the Policy is qualified in its entirety
by the Policy itself, a copy of which is available upon request from First
Ameritas.
PURPOSES OF THE POLICY
The Policy is designed to provide the Policy Owner with both lifetime insurance
protection to the Policy Anniversary nearest the Insured's 100th birthday and
flexibility in the amount and frequency of premium payments and with the level
of life insurance proceeds payable under the Policy.
You are not required to pay scheduled premiums to keep the Policy in force, but
you may, subject to certain limitations, vary the frequency and amount of
premium payments. You also may adjust the level of Death Benefits payable under
the Policy without having to purchase a new Policy by increasing (with evidence
of insurability) or decreasing the Specified Amount. An increase in the
Specified Amount will increase the Guaranteed Death Benefit Premium required. If
the Specified Amount is decreased, however, the Guaranteed Death Benefit Premium
will not decrease. Thus, as insurance needs or financial conditions change, you
have the flexibility to adjust life insurance benefits and vary premium
payments.
The Death Benefit may, and the Accumulation Value will, vary with the investment
experience of the chosen Subaccounts of Separate Account V. Thus the Policy
Owner benefits from any appreciation in value of the underlying assets, but
bears the investment risk of any depreciation in value. As a result, whether or
not a Policy continues in force may depend in part upon the investment
experience of the chosen Subaccounts. The failure to pay a Planned Periodic
Premium will not necessarily cause the Policy to lapse, but the Policy could
lapse even if Planned Periodic Premiums have been paid, depending upon the
investment experience of the Separate Account. If the Guaranteed Death Benefit
Premiums are satisfied by Net Policy Funding, First Ameritas will keep the
Policy in force during the Guaranteed Death Benefit Period and provide a Death
Benefit. In certain instances, this Net Policy Funding will not, after the
payment of Monthly Deductions, generate positive Net Cash Surrender Values.
DEATH BENEFIT PROCEEDS
As long as the Policy remains in force, First Ameritas will pay the Death
Benefit Proceeds of the Policy upon Satisfactory Proof of Death, according to
the Death Benefit option in effect at the time of the Insured's death. The
amount of the Death Benefits payable will be determined at the end of the
Valuation Period during which the
ENCORE! II
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<PAGE>
Insured's death occurred. The Death Benefit Proceeds may be paid in a lump sum
or under one or more of the payment options set forth in the Policy. (See the
section on Payment Options.)
Death Benefit Proceeds will be paid to the surviving Beneficiary or
Beneficiaries you specified in the application or subsequently changed. If you
do not choose a Beneficiary, the proceeds will be paid to you, as the Policy
Owner, or to your estate.
DEATH BENEFIT OPTIONS
The Policy provides two Death Benefit options. The Policy Owner selects one of
the options in the application. The Death Benefit under either option will never
be less than the current Specified Amount of the Policy as long as the Policy
remains in force. (See the section on Policy Lapse and Reinstatement.) The
minimum initial Specified Amount is $50,000 (100,000 if preferred class). The
net amount at risk for Option A will generally be less than the net amount at
risk for Option B. If you choose Option A, your Cost of Insurance deduction will
generally be lower than if you choose Option B. (See the section on Charges and
Deductions.) The following graphs illustrate the differences in the two Death
Benefit options.
Option A.
OMITTED GRAPH ILLUSTRATES PAYOUT UNDER DEATH BENEFIT OPTION A, SPECIFICALLY BY
SHOWING THE RELATIONSHIPS OVER TIME, BETWEEN THE SPECIFIED AMOUNT AND THE
ACCUMULATION VALUE.
Death Benefit Option A. Pays a Death Benefit equal to the Specified
Amount or the Accumulation Value multiplied by the Death Benefit
percentage (as illustrated at Point A) whichever is greater.
Under Option A, the Death Benefit is the current Specified Amount of the Policy
or, if greater, the applicable percentage of Accumulation Value on the date of
death. The applicable percentage is 250% for Insureds with an Attained Age 40 or
younger on the Policy Anniversary Date prior to the date of death. For Insureds
with an Attained Age over 40 on that Policy Anniversary Date, the percentage
declines. For example, the percentage at Attained Age 40 is 250%, at Attained
Age 50 is 185%, at Attained Age 60 is 130%, at Attained Age 70 is 115%, at
Attained Age 80 is 105%, and at Attained Age 90 is 100%. Accordingly, under
Option A the Death Benefit will remain level at the Specified Amount unless the
applicable percentage of Accumulation Value exceeds the current Specified
amount, in which case the amount of the Death Benefit will vary as the
Accumulation Value varies. Policy Owners who prefer to have favorable investment
performance, if any, reflected in higher Accumulation Value, rather than
increased insurance coverage, generally should select Option A.
ENCORE! II
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<PAGE>
Option B.
OMITTED GRAPH ILLUSTRATES PAYOUT UNDER DEATH BENEFIT OPTION B, SPECIFICALLY BY
SHOWING THE RELATIONSHIPS OVER TIME, BETWEEN THE SPECIFIED AMOUNT AND THE
ACCUMULATION VALUE.
Death Benefit Option B. Pays a Death Benefit equal to the Specified
Amount plus the Policy's Accumulation Value or the Accumulation Value
multiplied by the Death Benefit percentage, whichever is greater.
Under Option B, the Death Benefit is equal to the current Specified Amount plus
the Accumulation Value of the Policy or, if greater, the applicable percentage
of the Accumulation Value on the date of death. The applicable percentage is the
same as under Option A: 250% for Insureds with an Attained Age 40 or younger on
the Policy Anniversary Date prior to the date of death. For Insureds with an
Attained Age over 40 on that Policy Anniversary Date the percentage declines.
Accordingly, under Option B the amount of the Death Benefit will always vary as
the Accumulation Value varies (but will never be less than the Specified
Amount). Policy Owners who prefer to have favorable investment performance, if
any, reflected in increased insurance coverage, rather than higher Accumulation
Values, generally should select Option B.
CHANGE IN DEATH BENEFIT OPTION. The Death Benefit option may be changed once per
year after the first Policy Year by sending First Ameritas a written request.
The effective date of such a change will be the Monthly Activity Date on or
following the date the change is approved by First Ameritas. A change may have
federal tax consequences.
If the Death Benefit option is changed from Option A to Option B, the Specified
Amount after the change will equal the Specified Amount before the change less
the Accumulation Value as of the date of the change. If the Death Benefit option
is changed from Option B to Option A, the Specified Amount under Option A after
the change will equal the Death Benefit under Option B on the effective date of
change.
No charges will be imposed upon a change in Death Benefit option, nor will such
a change in and of itself result in an immediate change in the amount of a
Policy's Accumulation Value. However, a change in the Death Benefit option may
affect the Cost of Insurance because this charge varies depending on the net
amount at risk (i.e. the amount by which the Death Benefit as calculated on a
Monthly Activity Date exceeds the Accumulation Value on that date). Changing
from Option B to Option A generally will decrease the net amount at risk in the
future, and will therefore decrease the Cost of Insurance. Changing from Option
A to Option B generally will result in an increase in the Cost of Insurance over
time because the Cost of Insurance Rate will increase with the Insured's age,
even though the net amount at risk will generally remain level. If, however, the
change was from Option B to Option A, the Cost of Insurance rate may be
different for the increased Death Benefit. On a change from Option A to Option
B, the Specified Amount will decrease so that the Cost of Insurance Rate may be
different. (See the sections on Charges and Deductions and Federal Tax Matters.)
CHANGE IN SPECIFIED AMOUNT. Subject to certain limitations, after the first
Policy Year, a Policy Owner may increase or decrease the Specified Amount of a
Policy. A change in Specified Amount may affect the Cost of Insurance Rate and
the net amount at risk, both of which may affect a Policy Owner's Cost of
Insurance and have federal tax consequences. (See the sections on Charges and
Deductions and Federal Tax Matters.)
ENCORE! II
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<PAGE>
Any increase or decrease in the Specified Amount will become effective on the
Monthly Activity Date on or following the date a written request is approved by
First Ameritas. The Specified Amount of a Policy may be changed only once per
year and First Ameritas may limit the size of a change in a Policy Year. In the
first three Policy Years, the Specified Amount remaining in force after any
requested decrease may not be less than $50,000 in the first three Policy Years
and $35,000 thereafter. At no time may the Specified Amount be less than
$100,000, for the preferred non-tobacco risk class. In addition, if a decrease
in the Specified Amount makes the Policy not comply with the maximum premium
limits required by federal tax law, the decrease may be limited or the
Accumulation Value may be returned to you, at your election, to the extent
necessary to meet the requirements. (See the section on Premiums.)
Increases in the Specified Amount will be allowed after the first Policy Year.
For an increase in the Specified Amount, you must submit a written supplemental
application. First Ameritas may also require additional evidence of
insurability. Although an increase need not necessarily be accompanied by an
additional premium, in certain cases an additional premium will be required to
put the requested increase in effect. (See the section on Premiums upon
Increases in Specified Amount.) The minimum amount of any increase is $25,000,
and an increase cannot be made if the Insured's Attained Age is over 80. An
increase in the Specified Amount will also increase Surrender Charges. An
increase in the Specified Amount during the time the Guaranteed Death Benefit
provision is in effect will increase the respective premium requirements. (See
the section on Charges and Deductions.)
METHODS OF AFFECTING INSURANCE PROTECTION
You may increase or decrease the pure insurance protection provided by a
Policy--the difference between the Death Benefit and the Accumulation Value--in
several ways as your insurance needs change. These ways include increasing or
decreasing the Specified Amount of insurance, changing the level of premium
payments, and making a partial withdrawal of the Policy's Accumulation Value.
Certain of these changes may have federal tax consequences. The consequences of
each of these methods will depend upon the individual circumstances.
DURATION OF THE POLICY
The duration of the Policy generally depends upon the Accumulation Value. The
Policy will remain in force so long as the Net Cash Surrender Value is
sufficient to pay the Monthly Deduction or if the Guaranteed Death Benefit
provision is in effect. (See the section on Charges from Accumulation Value.)
However, when the Net Cash Surrender Value is insufficient to pay the Monthly
Deduction and the Grace Period expires without an adequate payment by the Policy
Owner, the Policy will lapse and terminate without value. (See the section on
Policy Lapse and Reinstatement.)
ACCUMULATION VALUE
The Accumulation Value will reflect the investment performance of the chosen
Investment Options, the Net Premiums paid, any partial withdrawals, and the
charges assessed in connection with the Policy. You may Surrender the Policy at
any time and receive the Policy's Net Cash Surrender Value. (See the section on
Surrenders.) There is no guaranteed minimum Accumulation Value.
Accumulation Value is determined on each Valuation Date. On the Issue Date, the
Accumulation Value will equal the portion of any Net Premium allocated to the
Investment Options, reduced by the portion of the first Monthly Deduction
allocated to the Investment Options. (See the section on Allocation of Premiums
and Accumulation Value.) Thereafter, on each Valuation Date, the Accumulation
Value of the Policy will equal:
(1) The aggregate values belonging to the Policy in each of the
Subaccounts on the Valuation Date, determined by multiplying each
Subaccount's unit value by the number of Subaccount units you have
allocated to the Policy; plus
(2) The value of allocations to the Fixed Account; plus
(3) Any Accumulation Value impaired by Outstanding Policy Debt held in the
General Account; plus
(4) Any Net Premiums received on that Valuation Date; plus
(5) Any amounts credited as Net Cash Surrender Value bonus; less
(6) Any partial withdrawal, and its charge, made on that Valuation Date;
less
(7) Any Monthly Deduction to be made on that Valuation Date; less
(8) Any federal or state income taxes charged against the Accumulation
Value.
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<PAGE>
In computing the Policy's Accumulation Value on the Valuation Date, the number
of Subaccount units allocated to the Policy is determined after any transfers
among Investment Options (and deduction of transfer charges), but before any
other Policy transactions, such as receipt of Net Premiums and partial
withdrawals. Because the Accumulation Value depends on a number of variables, a
Policy's Accumulation Value cannot be predetermined.
THE UNIT VALUE. The unit value of each Subaccount reflects the investment
performance of that Subaccount. The unit value of each Subaccount is calculated
by (1) multiplying the net asset value per share of each Fund portfolio on the
Valuation Date times the number of shares held by that Subaccount, before the
purchase or redemption of any shares on that Valuation Date; minus (2) a charge
not exceeding an annual rate of 0.90% for mortality and expense risk; minus (3)
a charge not exceeding an annual rate of 0.25% for administrative service
expenses; and (4) dividing the result by the total number of units held in the
Subaccount on the Valuation Date, before the purchase or redemption of any units
on that Valuation Date. (See the section on Daily Charges Against the Separate
Account.)
VALUATION DATE AND VALUATION PERIOD. A Valuation Date is each day on which the
New York Stock Exchange ("NYSE") is open for trading. The net asset value for
each Fund portfolio is determined as of the close of regular trading on the
NYSE. The net investment return for each Subaccount and all transactions and
calculations with respect to the Policies as of any Valuation Date are
determined as of that time. A Valuation Period is the period between two
successive Valuation Dates, commencing at the close of the NYSE on each
Valuation Date and ending at the close of the NYSE on the next succeeding
Valuation Date.
NET CASH SURRENDER VALUE BONUS
Beginning with the 21st Policy Anniversary, a bonus equal to .25% of the Net
Cash Surrender Value will be credited to the Fixed Account and/or the
Subaccounts on each Policy anniversary, provided that the Net Cash Surrender
Value of the Policy on the Policy Anniversary is at least $500,000. This bonus
is guaranteed. The bonus will be credited to the Fixed Account and/or the
Subaccounts based on the premium allocation percentages in effect at that time.
BENEFITS AT MATURITY
If the Insured is living on the Maturity Date, First Ameritas will pay the
Policy Owner the Accumulation Value of the Policy, less Outstanding Policy Debt
("Maturity Benefits"). The Policy will mature on the Policy Anniversary Date
nearest the Insured's 100th birthday. The Death Benefit will be the Accumulation
Value. As long as the Policy continues in force, all other Policy provisions
will remain in effect. Interest on Policy loans will continue to accrue and
become part of the Outstanding Policy Debt.
PAYMENT OF POLICY BENEFITS
Death Benefit Proceeds under the Policy will usually be paid within seven days
after First Ameritas receives Satisfactory Proof of Death. Maturity Benefits
will ordinarily be paid within seven days of receipt of a written request.
Payments may be postponed in certain circumstances. (See the section on General
Provisions - Postponement of Payments.) The Policy Owner may decide the form in
which Death Benefit Proceeds or Maturity Benefits will be paid. During the
Insured's lifetime, the Policy Owner may arrange for the Death Benefit Proceeds
to be paid in a lump sum or under one or more of the optional methods of payment
described below. Changes must be in writing and will revoke all prior elections.
If no election is made, First Ameritas will pay Death Benefit Proceeds or
Accumulation Value Benefit in a lump sum. When Death Benefit Proceeds are
payable in a lump sum and no election for an optional method of payment is in
force at the death of the Insured, the Beneficiary may select one or more of the
optional methods of payment. Further, if the Policy is assigned, any amounts due
to the assignee will first be paid in one sum. The balance, if any, may be
applied under any payment option. Once payments have begun, the payment option
may not be changed.
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PAYMENT OPTIONS FOR DEATH BENEFIT PROCEEDS OR MATURITY BENEFITS ("POLICY
PROCEEDS"). The minimum amount of each payment is $100. If a payment would be
less than $100, First Ameritas has the right to make payments less often so that
the amount of each payment is at least $100. Once a payment option is in effect,
Policy Proceeds will be transferred to First Ameritas's General Account. First
Ameritas may make other payment options available in the future. For additional
information concerning these options, see the Policy itself. The following
payment options are currently available:
INTEREST PAYMENT OPTION. First Ameritas will hold any amount applied under
this option. Interest on the unpaid balance will be paid or credited each
month at a rate determined by First Ameritas.
FIXED AMOUNT PAYABLE OPTION. Each payment will be for an agreed fixed
amount. Payments continue until the amount First Ameritas holds runs out.
FIXED PERIOD PAYMENT OPTION. Equal payments will be made for any period
selected up to 20 years.
LIFETIME PAYMENT OPTION. Equal monthly payments are based on the life of a
named person. Payments will continue for the lifetime of that person.
Variations provide for guaranteed payments for a period of time.
JOINT LIFETIME PAYMENT OPTION. Equal monthly payments are based on the
lives of two named persons. While both are living, one payment will be made
each month. When one dies, the same payment will continue for the lifetime
of the other.
As an alternative to the above payment options, Death Benefits Proceeds or
Maturity Benefits may be paid in any other manner approved by First Ameritas.
POLICY RIGHTS
LOAN BENEFITS
LOAN PRIVILEGES. The Policy Owner may borrow an amount up to the current Net
Cash Surrender Value less twelve times the most recent Monthly Deduction, at
regular or reduced loan rates (described below). Loans usually are funded within
seven days after receipt of a written request. The loan may be repaid at any
time while the Insured is living, prior to the Maturity Date. Policy Owners in
certain states may borrow 100% of the Net Cash Surrender Value after deducting
Monthly Deductions and any interest on Policy loans that will be due for the
remainder of the Policy Year. Loans may have tax consequences. (See the section
on Federal Tax Matters.)
INTEREST. First Ameritas charges interest to Policy Owners at regular and
reduced rates. Regular loans will accrue interest on a daily basis at a rate of
up to 6% per year; currently the interest rate on regular Policy loans is 5.5%.
Each year after the tenth Policy Anniversary Date, the Policy Owner may borrow a
limited amount of the Net Cash Surrender Value at a reduced interest rate. For
those loans, interest will accrue on a daily basis at a rate of up to 4% per
year; the current reduced loan rate is 3.5%. The amount available at the reduced
loan rate is 10% of the Net Cash Surrender Value as of the most recent Policy
Anniversary Date, plus any loan previously made at a reduced loan rate. If
unpaid when due, interest will be added to the amount of the loan and bear
interest at the same rate. The Policy Owner earns 3.5% interest on the
Accumulation Values securing the loans.
EFFECT OF POLICY LOANS. When a loan is made, Accumulation Value equal to the
amount of the loan will be transferred from the Investment Options to the
General Account as security for the loan. The Accumulation Value transferred
will be allocated from the Investment Options according to the instructions you
give when you request the loan. The minimum amount which can remain in a
Subaccount or the Fixed Account as a result of a loan is $100. If no
instructions are given, the amounts will be withdrawn in proportion to the
various Accumulation Values in the Investment Options. In any Policy Year that
loan interest is not paid when due, First Ameritas will add the interest due to
the principal amount of the Policy loan on the next Policy Anniversary. This
loan interest due will be transferred from the Investment Options as set out
above. No charge will be made for these transfers. A Policy loan will
permanently affect the Accumulation Value and may permanently affect the amount
of the Death Benefits,
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even if the loan is repaid. Policy loans will also affect Net Policy Funding for
determining whether the Guaranteed Death Benefit provision is met.
Interest earned on amounts held in the General Account will be allocated to the
Investment Options on each Policy Anniversary in the same proportion that Net
Premiums are being allocated to those Investment Options at the time. Upon
repayment of loan amounts, the portion of the repayment allocated in accordance
with the repayment of loan provision (see below) will be transferred to increase
the Accumulation Value in that Investment Option.
OUTSTANDING POLICY DEBT. The Outstanding Policy Debt equals the total of all
Policy loans and accrued interest on Policy loans. If the Outstanding Policy
Debt exceeds the Accumulation Value less any Surrender Charge and any Accrued
Expense Charges, the Policy Owner must pay the excess. First Ameritas will send
a notice of the amount which must be paid. If you do not make the required
payment within the 61 days after First Ameritas sends the notice, the Policy
will terminate without value ("lapse"). Should the Policy lapse while Policy
loans are outstanding, the portion of the loans attributable to earnings will
become taxable. You may lower the risk of a Policy lapsing while loans are
outstanding as a result of a reduction in the market value of investments in the
Subaccounts by investing in a diversified group of lower risk investment
portfolios and/or transferring the funds to the Fixed Account and receiving a
guaranteed rate of return. Should you experience a substantial reduction, you
may need to lower anticipated withdrawals and loans, repay loans, make
additional premium payments, or take other action to avoid Policy lapse. A
lapsed Policy may later be reinstated. (See the section on Policy Lapse and
Reinstatement.)
REPAYMENT OF LOAN. Unscheduled premiums paid while a Policy loan is outstanding
are treated as repayment of the debt only if the Policy Owner so requests. As a
loan is repaid, the Accumulation Value in the General Account securing the
repaid loan will be allocated among the Subaccounts and the Fixed Account in the
same proportion that Net Premiums are being allocated at the time of repayment.
SURRENDERS
At any time during the lifetime of the Insured and prior to the Maturity Date,
the Policy Owner may partially withdraw a portion of the Accumulation Value or
Surrender the Policy by sending a written request to First Ameritas. The amount
available for Surrender is the Net Cash Surrender Value at the end of the
Valuation Period when the Surrender request is received at First Ameritas's
Service Office. Surrenders will generally be paid within seven days of receipt
of the written request. (See the section on Postponement of Payments.)
SURRENDERS MAY HAVE TAX CONSEQUENCES. Surrenders may be subject to Surrender
Charges. (See the section on Surrender Charge.) Once a Policy is Surrendered, it
may not be reinstated. (See the section on Tax Treatment of Policy Proceeds.)
If the Policy is being Surrendered in its entirety, the Policy itself must be
returned to First Ameritas along with the request. First Ameritas will pay the
Net Cash Surrender Value. Coverage under the Policy will terminate as of the
date of a total Surrender. A Policy Owner may elect to have the amount paid in a
lump sum or under a payment option. (See the section on Payment Options.)
PARTIAL WITHDRAWALS
Partial withdrawals are irrevocable. The amount of a partial withdrawal may not
be less than $500. The Net Cash Surrender Value after a partial withdrawal must
be at least $1,000 or an amount sufficient to maintain the Policy in force for
the remainder of the Policy Year.
The amount paid will be deducted from the Investment Options according to your
instructions when you request the withdrawal. However, the minimum amount
remaining in a Subaccount as a result of the allocation is $100. If no
instructions are given, the amounts will be withdrawn in proportion to the
various Accumulation Values in the Investment Options.
The Death Benefit will be reduced by the amount of any partial withdrawal and
may affect the way the Cost of Insurance charge is calculated and the amount of
pure insurance protection under the Policy. (See the sections on Monthly
Deduction--Cost of Insurance and Death Benefit Options--Methods of Affecting
Insurance Protection.) If Death Benefit option B is in effect, the Specified
Amount will not change, but the Accumulation Value will be reduced.
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In the first three Policy Years, the Specified Amount remaining in force after a
partial withdrawal may not be less than $500,000 for Insureds with an Issue Age
of 49 or less, and $250,000 for those with an Issue Age of 50 or more. In Policy
Years four through ten, the Specified Amount remaining in force following a
partial withdrawal must be at least $400,000 for Insureds with an Issue Age of
20-49 and $200,000 for those with Issue Ages of 50-80. After the 10th Policy
Year, the Specified Amount remaining in force following a partial withdrawal
must be at least $100,000, regardless of age. Any request for a partial
withdrawal that would reduce the Specified Amount below this amount will not be
implemented. A fee of 2% of the amount withdrawn (maximum charge $25) is
deducted from the Accumulation Value. (See the section on Partial Withdrawal
Charge.) Partial withdrawals will also affect Net Policy Funding for determining
whether the Guaranteed Death Benefit provision is met.
TRANSFERS
Accumulation Value may be transferred among the Subaccounts of Separate Account
V and to the Fixed Account as often as desired. However, transfers out of the
Fixed Account may only be made during the 30 day period following the Policy
Anniversary Date, as noted below. The transfers may be ordered in person, by
mail, by telephone, or, when available, through our website. The total amount
transferred each time must be at least $250, or the balance of the Subaccount,
if less. The minimum amount that may remain in a Subaccount or the Fixed Account
after a transfer is $100. The first 15 transfers per Policy Year will be
permitted free of charge. After that, a transfer charge of $10 may be imposed
each additional time amounts are transferred. This amount will be deducted pro
rata from each Subaccount (and if applicable, the Fixed Account) in which the
Policy Owner is invested. Additional restrictions on transfers may be imposed at
the fund level. Specifically, Fund managers may have the right to refuse sales,
or suspend or terminate the offering of portfolio shares, if they determine that
such action is necessary in the best interests of the portfolio's shareholders.
If a Fund manager refuses a transfer for any reason, the transfer will not be
allowed. First Ameritas will not be able to process the transfer if the Fund
manager refuses. Transfers resulting from Policy loans or exercise of the
exchange privilege will not be subject to a transfer charge and will not be
counted towards the 15 free transfers per Policy Year. First Ameritas may at any
time revoke or modify the transfer privilege, including the minimum amount
transferable.
Transfers out of the Fixed Account, unless part of the dollar cost averaging
systematic program described below, may be made only during the 30 day period
following the Policy Anniversary Date in any Policy Year. Transfers out of the
Fixed Account are limited to the greater of (1) 25% of the Fixed Account
attributable to the Policy; (2) the largest transfer made by the Policy Owner
out of the Fixed Account during the last 13 months; or (3) $1,000. This
provision is not available while dollar cost averaging from the Fixed Account.
Each year, any time within ten days after the Policy Anniversary Date, you have
the option to transfer all funds to the Fixed Account and receive guaranteed
reduced paid up benefits. The amount of the guaranteed reduced paid up benefits
will be that amount which the funds will purchase based on the mortality table
on which the guaranteed rates are calculated and the guaranteed interest rate.
The privilege to initiate transactions by telephone or through our website, when
available, will be made available to Policy Owners automatically. The registered
representative designated on the application will have the authority to initiate
telephone transfers. Policy Owners who do not wish to authorize First Ameritas
to accept telephone transactions from their registered representative must
specify so on the application. First Ameritas will employ reasonable procedures
to confirm that instructions communicated by telephone are genuine, and if it
does not, First Ameritas may be liable for any losses due to unauthorized or
fraudulent instructions. The procedures First Ameritas follows for transactions
initiated by telephone include, but are not limited to, requiring the Policy
Owner to provide the Policy number at the time of giving transfer instructions;
First Ameritas's tape recording of all telephone transfer instructions; and
First Ameritas providing written confirmation of telephone transactions.
When available, procedures for making transfers through our website can be
accessed at the Internet address stated in the First Ameritas Life Insurance
Corp. of New York section of this prospectus.
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SYSTEMATIC PROGRAMS
First Ameritas may offer systematic programs as discussed below. These programs
will be subject to administrative guidelines First Ameritas may establish from
time to time. We will count your transfers in these programs when determining
whether the transfer fee applies. Lower minimum amounts may be allowed to
transfer as part of a systematic program. No other separate fee is assessed when
one of these options is chosen. All other normal transfer restrictions, as
described above, also apply.
You can request participation in the available programs when purchasing the
Policy or at a later date. You can change the allocation percentage or
discontinue any program by sending written notice or calling the Service Office.
Other scheduled programs may be made available. First Ameritas reserves the
right to modify, suspend, or terminate such programs at any time. Use of
systematic programs may not be advantageous, and does not guarantee success.
PORTFOLIO REBALANCING. Under the Portfolio Rebalancing program, you can instruct
First Ameritas to reallocate the Accumulation Value among the Subaccounts (but
not the Fixed Account) on a systematic basis, according to your specified
allocation instructions.
DOLLAR COST AVERAGING. Under the Dollar Cost Averaging program, you can instruct
First Ameritas to automatically transfer, on a systematic basis, a predetermined
amount or specified percentage from the Fixed Account or the Money Market
Subaccount to any other Subaccount(s). Dollar cost averaging is permitted from
the Fixed Account if each monthly transfer is no more than 1/36th of the value
of the Fixed Account at the time dollar cost averaging is established. Dollar
Cost Averaging is not available with Earnings Sweep, below.
EARNINGS SWEEP. This program permits systematic redistribution of earnings among
Investment Options. Earnings Sweep is not available with Dollar Cost Averaging,
above.
FREE LOOK PRIVILEGE
You may cancel the Policy within 10 days after you receive it, within 10 days
after First Ameritas delivers a notice of your right of cancellation, or within
45 days of completing Part I of the application, whichever is later. The amount
of the refund will equal the gross premiums paid. To cancel the Policy, you
should mail or deliver it to the selling agent, or to First Ameritas at the
Service Office. A refund of premiums paid by check may be delayed until the
check has cleared your bank. (See the section on General Provisions -
Postponement of Payments.)
PAYMENT AND ALLOCATION OF PREMIUMS
ISSUANCE OF A POLICY
Individuals wishing to purchase a Policy must complete an application and submit
it to First Ameritas's Service Office (5900 "O" Street, Lincoln, Nebraska
68501). A Policy will generally be issued only to individuals 0-80 years of age
on their nearest birthday who supply satisfactory evidence of insurability to
First Ameritas. Acceptance is subject to First Ameritas's underwriting rules,
and First Ameritas reserves the right to reject an application for any reason.
The Policy Date is the effective date for all coverage in the original
application. The Policy Date is used to determine Policy Anniversary Dates,
Policy Years and Policy Months. The Issue Date is the date that all financial,
contractual and administrative requirements have been met and processed for the
Policy. The Policy Date and the Issue Date will be the same unless: (1) an
earlier Policy Date is specifically requested, or (2) additional premiums or
application amendments are needed. When there are additional requirements before
issue (see below) the Policy Date will be the date the Policy is sent for
delivery and the Issue Date will be the date the requirements are met.
When all required premiums and application amendments have been received by
First Ameritas in its Service Office, the Issue Date will be the date the Policy
is mailed to you or sent to the agent for delivery to you. When application
amendments or additional premiums need to be obtained upon delivery of the
Policy, the Issue Date will be when the Policy receipt and federal funds (monies
of member banks within the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received and available to First Ameritas, and the
application
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amendments are received and reviewed in First Ameritas's Service Office. On the
Issue Date, the initial premium payment will be allocated to the Money Market
Subaccount for 13 days. After the expiration of the 13-day period, the
Accumulation Value will be reallocated to the Investment Options you select.
Subject to approval, a Policy may be backdated, but the Policy Date may not be
more than six months prior to the date of the application. Backdating can be
advantageous if the Insured's lower Issue Age results in lower Cost of Insurance
Rates. If a Policy is backdated, the minimum initial premium required will
include sufficient premium to cover the backdating period. Monthly Deductions
will be made for the period the Policy Date is backdated.
Interim conditional insurance coverage may be issued prior to the Policy Date,
provided that certain conditions are met, upon the completion of an application
and the payment of the required premium at the time of the application. The
amount of the interim coverage is limited to the smaller of (1) the amount of
insurance applied for, (2) $100,000, or (3) $25,000 if the proposed Insured is
over age 60 at their nearest birthday.
PREMIUMS
No insurance will take effect before the initial premium payment is received by
First Ameritas in federal funds. The initial premium payment must be at least
1/12 of the first year Guaranteed Death Benefit Premium times the number of
months between the Policy Date and the Issue Date, plus one. Subsequent premiums
are payable at First Ameritas's Service Office. A Policy Owner has flexibility
in determining the frequency and amount of premiums. However, unless you have
paid sufficient premiums to pay the Monthly Deduction and Percent of Premium
Charges, the Policy may have a zero Net Cash Surrender Value and lapse. Net
Policy Funding, if adequate, may satisfy Guaranteed Death Benefit Premium
requirements. (See the section on Policy Benefits, Purposes of the Policy.)
PLANNED PERIODIC PREMIUMS. At the time the Policy is issued you may determine a
Planned Periodic Premium schedule that provides for the payment of level
premiums at selected intervals. The Planned Periodic Premium schedule may
include the Guaranteed Death Benefit Premium. You are not required to pay
premiums according to this schedule. You have considerable flexibility to alter
the amount and frequency of premiums paid. We reserve the right to limit the
amount of premium payments as described below:
(1) The premium payment must be at least $10.00
(2) Any premium that would immediately result in the Death Benefit becoming
equal to a percentage of the Accumulation Value.
(3) Any premium that would prevent the coverage under this Policy from
continuing to qualify as life insurance under the Internal Revenue Code
of 1954.
If any premium is excess of the limits described in (2) and (3) above is
accepted, we will return it to the Owner within 60 days after the end of the
Policy Year in which we receive the excess.
You may also change the frequency and amount of Planned Periodic Premiums by
sending a written request to the Service Office, although First Ameritas
reserves the right to limit any increase. Premium payment notices will be sent
annually, semi-annually or quarterly, depending upon the frequency of the
Planned Periodic Premiums. Payment of the Planned Periodic Premiums does not
guarantee that the Policy remains in force unless the Guaranteed Death Benefit
provision is in effect. Instead, the duration of the Policy depends upon the
Policy's Net Cash Surrender Value. (See the section on Duration of the Policy.)
Unless the Guaranteed Death Benefit provision is in effect, even if Planned
Periodic Premiums are paid, the Policy will lapse any time the Net Cash
Surrender Value is insufficient to pay the Monthly Deduction, and the Grace
Period expires without a sufficient payment. (See the section on Policy Lapse
and Reinstatement.)
PREMIUM LIMITS. First Ameritas's current minimum premium limit is $45, $15 if
paid by automatic bank draft. First Ameritas currently has no maximum premium
limit, other than the current maximum premium limits established by federal tax
laws. First Ameritas reserves the right to change any premium limit. In no event
may the total of all premiums paid, both planned and unscheduled, exceed the
current maximum premium limits established by federal tax laws. (See the section
on Federal Tax Matters - Tax Status of the Policy.)
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If at any time a premium is paid which would result in total premiums exceeding
the current maximum premium limits, First Ameritas will accept only that portion
of the premium which will make total premiums equal the maximum. Any part of the
premium in excess of that amount will be returned or applied as otherwise agreed
and no further premiums will be accepted until allowed by the current maximum
premium limits allowed by law. First Ameritas may require additional evidence of
insurability if any premium payment would result in an increase in the Policy's
net amount at risk on the date the premium is received.
PREMIUMS UPON INCREASES IN SPECIFIED AMOUNT. Depending upon the Accumulation
Value of the Policy at the time of an increase in the Specified Amount of the
Policy and the amount of the increase requested by the Policy Owner, an
additional premium payment may be required. First Ameritas will notify you of
any premium required to fund the increase, which premium must be made in a
single payment. The Accumulation Value of the Policy will be immediately
increased by the amount of the payment, less the applicable Percent of Premium
Charge.
ALLOCATION OF PREMIUMS AND ACCUMULATION VALUE
ALLOCATION OF NET PREMIUMS. In the application for a Policy, the Policy Owner
allocates Net Premiums to one or more Subaccounts and/or to the Fixed Account.
Allocations must be whole number percentages and must total 100%. The allocation
of future Net Premiums may be changed without charge by providing proper
notification to the Service Office. If there is any Outstanding Policy Debt at
the time of a payment, First Ameritas will treat the payment as a premium
payment unless you instruct otherwise by proper written notice.
On the Issue Date, the initial premium payment will be allocated to the Money
Market Subaccount for 13 days. Thereafter, the Accumulation Value will be
reallocated to the Investment Options you selected. Premium payments received by
First Ameritas prior to the Issue Date are held in the General Account until the
Issue Date and are credited with interest at a rate determined by First Ameritas
for the period from the date the payment has been converted into federal funds
and is available to First Ameritas. In no event will interest be credited prior
to the Policy Date.
The Accumulation Value of the Subaccounts will vary with the investment
performance of these Subaccounts and you, as the Policy Owner, will bear the
entire investment risk. This will affect the Policy's Accumulation Value, and
may affect the Death Benefit as well. You should periodically review your
allocations of premiums and values in light of market conditions and overall
financial planning requirements.
POLICY LAPSE AND REINSTATEMENT
LAPSE. Unlike conventional life insurance policies, the failure to make a
Planned Periodic Premium payment will not itself cause the Policy to lapse.
Lapse will occur when the Net Cash Surrender Value is insufficient to cover the
Monthly Deduction and a Grace Period expires without a sufficient payment,
unless the Guaranteed Death Benefit provision is in effect. The Grace Period is
61 days from the date First Ameritas mails a notice that the Grace Period has
begun. First Ameritas will notify you at the beginning of the Grace Period by
mail addressed to your last known address on file with First Ameritas.
The notice will specify the premium required to keep the Policy in force. The
required premium will equal the greater of (1) the amount necessary to cover the
Monthly Deductions and Percent of Premium Charges for the three Policy Months
after commencement of the Grace Period, or (2) the amount necessary to raise the
Net Cash Surrender Value above zero on the date of reinstatement. Failure to pay
the required premium within the Grace Period will result in lapse of the Policy.
If the Insured dies during the Grace Period, any overdue Monthly Deductions and
Outstanding Policy Debt will be deducted from the Death Benefit Proceeds. (See
the section on Charges and Deductions.)
REINSTATEMENT. A lapsed Policy may be reinstated any time within three years
after the beginning of the Grace Period, but before the Maturity Date. We will
reinstate your Policy based on the Insured's rating class at the time of the
reinstatement.
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Reinstatement is subject to the following:
(1) Evidence of insurability of the Insured satisfactory to First Ameritas
(including evidence of insurability of any person covered by a rider
to reinstate the rider);
(2) Any Outstanding Policy Debt on the date of lapse will be reinstated
with interest due and accrued;
(3) The Policy cannot be reinstated if it has been Surrendered for its
full Net Cash Surrender Value;
(4) The minimum premium required at reinstatement is the greater of:
(a) the amount necessary to raise the Net Cash Surrender Value as of
the date of reinstatement to equal to or greater than zero; or
(b) three times the current Monthly Deduction.
The amount of Accumulation Value on the date of reinstatement will equal:
(1) The amount of the Net Cash Surrender Value on the date of lapse,
increased by
(2) The premium paid at reinstatement, less
(3) The Percent of Premium Charges and the amounts stated above, plu
(4) That part of the Contingent Deferred Sales Charge and Contingent
Deferred Administrative Charge that would apply if the Policy were
Surrendered on the date of reinstatement.
The last addition to the Accumulation Value is designed to avoid duplicate
Surrender Charges. The original Policy Date, and the dates of increases in the
Specified Amount (if applicable), will be used for purposes of calculating the
Surrender Charge. If any Outstanding Policy Debt is reinstated, that debt will
be held in First Ameritas's General Account. Accumulation Value calculations
will then proceed as described under the section on Accumulation Value.
The effective date of reinstatement will be the first Monthly Activity Date on
or next following the date of approval by First Ameritas of the application for
reinstatement.
CHARGES AND DEDUCTIONS
Charges will be deducted in connection with the Policy to compensate First
Ameritas for: (1) providing the insurance benefits set forth in the Policy and
any optional insurance benefits added by rider; (2) administering the Policy and
payment of applicable taxes; (3) assuming certain risks in connection with the
Policy; and (4) incurring expenses in distributing the Policy. The nature and
amount of these charges are described more fully below.
Any adjustments to non-guaranteed cost factors (interest credits, Administrative
Expense Charge, administrative charge, Mortality and Expense Risk Charges and
Cost of Insurance charges) will be by class based on changes in future
expectations of such elements as mortality, persistency, investment earnings,
expenses and taxes. Any changes is Policy cost factors will be determined in
accordance with procedures and standards on file with the Superintendent of
Insurance. Cost factors will be reviewed for in force Policies for adjustments
not more often than once per year nor less often than once every five years.
DEDUCTIONS FROM PREMIUM PAYMENTS (PERCENT OF PREMIUM CHARGE)
SALES CHARGE. There are no sales charges deducted from premium payments in
connection with the Policy. The Policy is, however, subject to a Contingent
Deferred Sales Charge if the Policy is surrendered. (See the section on
Surrender Charge.)
PREMIUM CHARGE FOR TAXES. A deduction of up to 5% of the premium is made from
each premium payment to pay applicable taxes; currently the charge is 3.5%. The
deduction is an amount First Ameritas considers necessary to pay all premium
taxes imposed by the state and its subdivisions, and to defray the tax cost due
to capitalizing certain Policy acquisition expenses as required under applicable
federal tax laws. (See the section on Federal Tax Matters.) First Ameritas does
not expect to derive a profit from the Premium Charge for Taxes.
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CHARGES FROM ACCUMULATION VALUE
MONTHLY DEDUCTION. Charges will be deducted as of the Policy Date and on each
Monthly Activity Date thereafter from the Accumulation Value of the Policy to
compensate First Ameritas for administrative expenses and insurance provided.
These charges will be allocated among the Subaccounts, and the Fixed Account on
a pro rata basis. Each of these charges is described in more detail below.
ADMINISTRATIVE EXPENSE CHARGE. To compensate First Ameritas for the ordinary
administrative expenses expected to be incurred in connection with a Policy, the
Monthly Deduction includes a per Policy charge (currently $5.00 per Policy per
month). The Administrative Expense Charge is levied throughout the life of the
Policy and is guaranteed not to increase above $9.00 per month the first Policy
year and $8.00 per month thereafter. First Ameritas does not expect to make any
profit from the Administrative Expense Charge.
COST OF INSURANCE. Because the Cost of Insurance depends upon several variables,
the cost for each Policy Month can vary from month to month. First Ameritas will
determine the monthly Cost of Insurance by multiplying the applicable Cost of
Insurance Rate by the net amount at risk for each Policy Month. The net amount
at risk on any Monthly Activity Date is based on the amount by which the Death
Benefit which would have been payable on that Monthly Activity Date exceeds the
Accumulation Value on that date.
COST OF INSURANCE RATE. The Annual Cost of Insurance Rate is based on the
Insured's sex, Issue Age, Policy duration, Specified Amount, and rating class.
The rate will vary depending upon tobacco use and other risk factors. For the
initial Specified Amount, the Cost of Insurance Rate will not exceed those shown
in the Schedule of Guaranteed Annual Cost of Insurance Rates shown in the
schedule pages of the Policy. These guaranteed rates are based on the Insured's
Attained Age and are equal to the 1980 Insurance Commissioners Standard Ordinary
Smoker and Non-Smoker, Male and Female Mortality Tables. The current rates range
between 40% and 100% of the rates based on the 1980 Commissioners Standard
Ordinary Tables, based on First Ameritas's own mortality experience. Policies
issued on a unisex basis are based on the 1980 Insurance Commissioners Standard
Ordinary Table B assuming 80% male and 20% female lives. The Cost of Insurance
Rates, Surrender Charges, and payment options for Policies issued in Montana and
certain other states are on a sex-neutral (unisex) basis. Any change in the Cost
of Insurance Rates will apply to all persons of the same age, sex, Specified
Amount and rating class and whose Policies have been in effect for the same
length of time.
If the rating class for any increase in the Specified Amount is not the same as
the rating class at issue, the Cost of Insurance Rate used after such increase
will be a composite rate based upon a weighted average of the rates of the
different rating classes. Decreases may be reflected in the Cost of Insurance
Rate, as discussed earlier.
The actual charges made during the Policy Year will be shown in the annual
report delivered to Policy Owners.
RATING CLASS. The rating class of an Insured will affect the Cost of Insurance
Rate. First Ameritas currently places Insureds into both standard rating classes
and substandard rating classes that involve a higher mortality risk. In an
otherwise identical Policy, an Insured in the standard rating class will have a
lower Cost of Insurance Rate than an Insured in a rating class with higher
mortality risks. If, when issued, a Policy is rated with a tabular extra rating,
the guaranteed rate is a multiple of the guaranteed rate for a standard issue
Policy. This multiple factor is shown in the Schedule of Benefits in the Policy,
and may be from 1.18 to 4 times the guaranteed rate for a standard issue Policy.
If appropriate, Insureds may also be assigned a flat extra rating charge to
reflect higher mortality risks. The flat extra rating charge will be added to
the Cost of Insurance Rate and thus will be deducted as part of the Monthly
Deduction on each Monthly Activity Date.
SURRENDER CHARGE
If a Policy is Surrendered prior to the 14th Policy Anniversary Date, First
Ameritas will assess a Surrender Charge based upon percentages of the premiums
actually paid and a charge per $1,000 of insurance issued based upon sex and
Issue Age.
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The maximum Surrender charge, determined at issue, will grade down to zero at
the end of 14 years based on the following schedule:
PERCENT OF MAXIMUM PERCENT OF MAXIMUM
SURRENDER CHARGE AT SURRENDER CHARGE
POLICY ISSUE THAT WILL APPLY POLICY ISSUE THAT WILL APPLY
YEAR DURING POLICY YEAR YEAR DURING POLICY YEAR
---- ------------------ ---- ------------------
1 100% 9 50%
2 96% 10 42%
3 92% 11 33%
4 88% 12 25%
5 83% 13 17%
6 75% 14 8%
7 67% 15+ 0%
8 58%
No Surrender Charge will be assessed on decreases in the Specified Amount of the
Policy or partial withdrawals of Accumulation Value. First Ameritas will,
however, assess Surrender Charges due to increases in the Specified Amount. The
Surrender Charge on increases will be based on the Attained Age at the time of
the increase and the amount of the increase in the Specified Amount. Surrender
Charges on increases in the initial Specified Amount will be applied with
respect to Surrenders within 14 years of the date of the increase, the same as
in the chart, above.
The sales charges applied in any Policy Year are not necessarily related to
actual distribution expenses incurred in that year. Instead, First Ameritas
expects to incur the majority of distribution expenses in the early Policy Years
and to recover amounts to pay such expenses over the life of the Policy. To the
extent that sales and distribution expenses exceed sales charges in any year,
First Ameritas will pay such expenses from its other assets or surplus in its
General Account, including amounts from mortality and expense risk charges and
other charges made under the Policy. First Ameritas believes that this
distribution financing arrangement will benefit Separate Account V and the
Policy Owners.
TRANSFER CHARGE. After 15 transfers among the Investment Options in a Policy
Year, a transfer charge of $10 (guaranteed not to increase) may be imposed for
each additional transfer to compensate First Ameritas for the costs of
processing the transfer. Since the charge reimburses First Ameritas only for the
cost of processing the transfer, First Ameritas does not expect to make any
profit from the transfer charge. This charge will be deducted pro rata from each
Subaccount (and, if applicable, the Fixed Account) in which the Policy Owner is
invested. The transfer charge will not be imposed on transfers that occur as a
result of Policy loans or the exercise of exchange rights.
PARTIAL WITHDRAWAL CHARGE. A charge will be imposed for each partial withdrawal.
This charge will compensate First Ameritas for the administrative costs of
processing the requested payment and in making necessary calculations for any
reductions in Specified Amount which may be required because of the partial
withdrawal. This charge is 2% of the amount withdrawn (maximum charge $25). No
Surrender Charge is assessed on a partial withdrawal and a partial withdrawal
charge is not assessed when a Policy is Surrendered.
DAILY CHARGES AGAINST THE SEPARATE ACCOUNT
A daily Mortality and Expense Risk Charge will be deducted from the value of the
net assets of the Separate Account to compensate First Ameritas for mortality
and expense risks assumed in connection with the Policy. This daily charge from
the Separate Account is currently at the rate of 0.001912% (equivalent to an
annual rate of 0.70%) for Policy Years 1-4 and 0.001229% (equivalent to an
annual rate of 0.45%) for Policy Years 5-20. After the twentieth year the daily
charge will be applied at the rate of 0.000820% (equivalent to an annual rate of
0.30%) and will not exceed 0.90% annually (0.002459% daily) in the first 20
Policy Years, nor will it exceed 0.65% annually (0.001776% daily) after 20
Policy Years. The daily charge will be deducted from the net asset value of the
Separate Account, and therefore the Subaccounts, on each Valuation Date. Where
the previous day or days was not
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a Valuation Date, the deduction on the Valuation Date will be the applicable
daily rate multiplied by the number of days since the last Valuation Date. No
Mortality and Expense Risk Charges will be deducted from the amounts in the
Fixed Account.
First Ameritas believes that this level of charge is within the range of
industry practice for comparable flexible premium variable universal life
policies. The mortality risk assumed by First Ameritas is that Insureds may live
for a shorter time than calculated, and that the aggregate amount of Death
Benefits paid will be greater than initially estimated. The expense risk assumed
is that expenses incurred in issuing and administering the Policies will exceed
the administrative charges provided in the Policies.
An Asset-Based Administrative Expense Charge will also be deducted from the
value of the net assets of Separate Account V on a daily basis. Currently, there
is no charge applied for Policy Years 1-4. Thereafter, this charge is applied at
a rate of 0.000683% (equivalent to 0.25% annually) for Policy Years 5-20 and at
a rate of 0.000409% (equivalent to 0.15% annually) for each Policy Year
thereafter. The rate of this charge will never exceed 0.25% annually. No
Asset-Based Administrative Expense Charge will be deducted from the amounts in
the Fixed Account.
Policy Owners who choose to allocate Net Premiums to one or more of the
Subaccounts will also bear a pro rata share of the management fees and expenses
paid by each of the investment portfolios in which the various Subaccounts
invest. No such management fees are assessed against Net Premiums allocated to
the Fixed Account.
(See the Summary section for the Fund Expense Summary.)
Expense reimbursement agreements are expected to continue in future years but
may be terminated at any time. As long as the expense limitations continue for a
portfolio, if a reimbursement occurs, it has the effect of lowering the
portfolio's expense ratio and increasing its total return.
First Ameritas may receive administrative fees from the investment advisers of
certain Funds. First Ameritas currently does not assess a separate charge
against the Separate Account or the Fixed Account for any federal, state or
local income taxes. First Ameritas may, however, make such a charge in the
future if income or gains within the Separate Account will incur any federal, or
any significant state or local income tax liability, or if the federal, state or
local tax treatment of First Ameritas changes.
GENERAL PROVISIONS
THE CONTRACT. The Policy, the application, any supplemental applications, and
any riders, amendments or endorsements make up the entire contract. Only the
President, Vice President, Secretary or Assistant Secretary can modify the
Policy. Any changes must be made in writing, and approved by First Ameritas. 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. The rights and
benefits under the Policy are summarized in this prospectus; however prospectus
disclosure regarding the Policy is qualified in its entirety by the Policy
itself, a copy of which is available upon request from First Ameritas.
CONTROL OF POLICY. The Policy Owner is as shown in the application or subsequent
written endorsement. Subject to the rights of any irrevocable Beneficiary and
any assignee of record, all rights, options, and privileges belong to the Policy
Owner, if living; otherwise to any successor-owner or owners, if living;
otherwise to the estate of the last Policy Owner to die.
BENEFICIARY. Policy Owners may name both primary and contingent Beneficiaries in
the application. Payments will be shared equally among Beneficiaries of the same
class unless otherwise stated. If a Beneficiary dies before the Insured,
payments will be made to any surviving Beneficiaries of the same class;
otherwise to any Beneficiary(ies) of the next class; otherwise to the Policy
Owner; otherwise to the estate of the Policy Owner.
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CHANGE OF BENEFICIARY. The Policy Owner may change the Beneficiary by written
request at any time during the Insured's lifetime unless otherwise provided in
the previous designation of Beneficiary. The change will take effect as of the
date the change is recorded at the Service Office. First Ameritas will not be
liable for any payment made or action taken before the change is recorded.
CHANGE OF POLICY OWNER OR ASSIGNMENT. In order to change the Policy Owner of the
Policy or assign Policy rights, an assignment of the Policy must be made in
writing and filed with First Ameritas at its Service Office. Any such assignment
is subject to Outstanding Policy Debt. The change will take effect as of the
date the change is recorded at the Service Office, and First Ameritas will not
be liable for any payment made or action taken before the change is recorded.
Payment of Death Benefit Proceeds is subject to the rights of any assignee of
record. A collateral assignment is not a change of ownership.
PAYMENT OF PROCEEDS. The Death Benefit Proceeds are subject first to any debt to
First Ameritas and then to the interest of any assignee of record. The balance
of any Death Benefit Proceeds shall be paid in one sum to the designated
Beneficiary unless an Optional Method of Payment is selected. If no Beneficiary
survives the Insured, the Death Benefit Proceeds shall be paid in one sum to the
Policy Owner, if living; otherwise to any successor-owner, if living; otherwise
to the Policy Owner's estate. Any proceeds payable on the Maturity Date or upon
Surrender shall be paid in one sum unless an Optional Method of Payment is
elected.
INCONTESTABILITY. First Ameritas cannot contest the Policy or reinstated Policy
during the lifetime of the Insured after it has been in force for two years from
the Policy Date (or reinstatement effective date). After the Policy Date, First
Ameritas cannot contest an increase in the Specified Amount or addition of a
rider during the lifetime of the Insured after such increase or addition has
been in force for two years from its effective date. However, this two year
provision shall not apply to riders with their own contestability provision.
MISSTATEMENT OF AGE AND SEX. If the age or sex of the Insured or any person
insured by rider has been misstated, the amount of the Death Benefit and any
added riders provided will be those that would be purchased by the most recent
deduction for the Cost of Insurance and the cost of any additional riders at the
Insured's correct age or sex. The Death Benefit Proceeds will be adjusted
correspondingly.
SUICIDE. The Policy does not cover suicide within two years of the Policy Date
unless otherwise provided by a state's Insurance law. If the Insured commits
suicide within two years after the Policy Date, First Ameritas will pay only the
premiums received less any partial withdrawals, the cost for riders and any
outstanding Policy debt. If the Insured commits suicide within two years after
the effective date of any increase in the Specified Amount, First Ameritas's
liability with respect to such increase will only be its total Cost of Insurance
applicable to the increase.
POSTPONEMENT OF PAYMENTS. Payment of any amount upon Surrender, partial
withdrawal, Policy loans, benefits payable at death or maturity, and transfers
may be postponed whenever: (1) the New York Stock Exchange ("NYSE") is closed
other than customary weekend and holiday closings, or trading on the NYSE is
restricted as determined by the SEC; (2) the SEC by order permits postponement
for the protection of Policy Owners; (3) an emergency exists, as determined by
the SEC, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to determine the value of the
Separate Account's net assets; or (4) Surrenders, loans or partial withdrawals
from the Fixed Account may be deferred for up to 6 months from the date of
written request. Payments under the Policy of any amounts derived from premiums
paid by check may be delayed until such time as the check has cleared the Policy
Owner's bank.
REPORTS AND RECORDS. First Ameritas will maintain all records relating to the
Separate Account and will mail to the Policy Owner, at the last known address of
record, within 30 days after each Policy Anniversary, an annual report which
shows the current Accumulation Value, Net Cash Surrender Value, Death Benefit,
premiums paid, Outstanding Policy Debt and other information. Quarterly
statements are also mailed detailing Policy activity during the calendar
quarter. Instead of receiving an immediate confirmation of transactions made
pursuant to some types of periodic payment plan (such as a dollar cost averaging
program, or payment made by automatic bank draft or salary reduction
arrangement), the Policy Owner may receive confirmation of such transactions in
their quarterly
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statements. The Policy Owner should review the information in these statements
carefully. All errors or corrections must be reported to First Ameritas
immediately to assure proper crediting to the Policy. First Ameritas will assume
all transactions are accurately reported on quarterly statements unless First
Ameritas is notified otherwise within 30 days after receipt of the statement.
The Policy Owner will also be sent a periodic report for the Funds and a list of
the portfolio securities held in each portfolio of the Funds.
ADDITIONAL INSURANCE BENEFITS (RIDERS). Subject to certain requirements, one or
more of the following additional insurance benefits may be added to a Policy by
rider. All riders are not available in all states. The cost, if any, of
additional insurance benefits will be deducted as part of the Monthly Deduction.
(See the section on Charges From Accumulation Value--Monthly Deduction.)
ACCELERATED BENEFIT RIDER FOR TERMINAL ILLNESS (LIVING BENEFIT RIDER).
Upon satisfactory proof of terminal illness after the two-year
contestable period, (no waiting period in certain states) First Ameritas
will accelerate the payment of up to 50% of the lowest scheduled Death
Benefit as provided by eligible coverages, less an amount up to two
guideline level premiums.
Future premium allocations after the payment of the benefit must be
allocated to the Fixed Account. Payment will not be made for amounts
less than $4,000 or more than $250,000 on all policies issued by First
Ameritas or its affiliates. First Ameritas may charge the lesser of 2%
of the benefit or $25 as an expense charge to cover the costs of
administration. Satisfactory proof of terminal illness must include a
written statement from a licensed physician who is not related to the
Insured or the Policy Owner stating that the Insured has a
non-correctable medical condition that, with a reasonable degree of
medical certainty, will result in the death of the Insured in less than
12 months (6 months in certain states) from the date of the physician's
statement. Further, the condition must first be diagnosed while the
Policy is in force.
The accelerated benefit first will be used to repay any Outstanding
Policy Debt, and will also affect future loans, partial withdrawals, and
Surrenders. The accelerated benefit will be treated as a lien against
the Policy Death Benefit and will thus reduce the Death Benefit
Proceeds. Interest on the lien will be charged at the Policy loan
interest rate. There is no extra premium for this rider.
ACCIDENTAL DEATH BENEFIT RIDER. This rider provides additional insurance
if the Insured's death results from accidental death, 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 First Ameritas that
death resulted directly and independently of all other causes from
accidental bodily injuries incurred before the rider terminates and
within 91 days after such injuries were incurred.
CHILDREN'S PROTECTION RIDER. This rider provides for term insurance on
the Insured's children, as defined in the rider. Under the terms of the
rider, the Death Benefit will be payable to the named Beneficiary upon
the death of any insured child. Upon receipt of proof of the Insured's
death before the rider terminates, the rider will be considered paid up
for the term of the rider.
WAIVER OF MONTHLY DEDUCTIONS ON DISABILITY RIDER. This rider provides
for the waiver of Monthly Deductions for the Policy and all riders while
the Insured is disabled.
GUARANTEED INSURABILITY RIDER. This rider provides that the Policy Owner
can purchase additional insurance for the Insured by increasing the
Specified Amount of the Policy at certain future dates without evidence
of insurability.
DISABILITY BENEFIT PAYMENT RIDER. This rider provides for the payment by
First Ameritas of a disability benefit in the form of premiums while the
Insured is disabled. The benefit amount may be chosen by the Policy
Owner at the issue of the rider. In addition, while the Insured is
totally disabled, the Cost of Insurance for the rider will not be
deducted from Accumulation Value.
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TERM RIDER FOR COVERED INSURED. This rider provides a specified amount
of insurance to the Beneficiary upon receipt of Satisfactory Proof of
Death of any covered Insured, as identified in the rider.
PAYOR WAIVER OF MONTHLY DEDUCTIONS ON DISABILITY OF A COVERED PERSON
RIDER. This rider provides for the wavier of monthly deductions for the
Policy and all riders while the covered person is disabled. This rider
is available for Insureds ages 0-14
PAYOR DISABILITY RIDER. This rider provides for the payment by First
Ameritas of a disability benefit in the form of premiums while the
covered person, as defined in the rider, is totally disabled. The
benefit amount may be chosen by the Policy Owner when the rider is
issued. In addition, while the covered person is totally disabled, the
cost of insurance for the rider will not be deducted from accumulation
value.
DISTRIBUTION OF THE POLICIES
The principal underwriter for the Policies is Ameritas Investment Corp., a
wholly owned subsidiary of AMAL Corporation, a holding company in which Ameritas
Life Insurance Company is the majority owner, and an affiliate of First
Ameritas. AIC was organized under Nebraska law on December 29, 1983, and is
registered as a broker-dealer with the SEC and is a member of the National
Association of Securities Dealers ("NASD"). First Ameritas pays AIC for acting
as the principal underwriter under an Underwriting Agreement. In 1999, AIC
received gross variable universal life compensation of $0, and retained $0 in
underwriting fees, and $0 in brokerage commissions on First Ameritas's variable
universal life policies.
AIC offers its clients a wide variety of financial products and services and has
the ability to execute stock and bond transactions on a number of national
exchanges. AIC also serves as principal underwriter for First Ameritas's
variable annuities, and for Ameritas Life's variable life and variable annuity.
AIC is the underwriter for the Ameritas Portfolios, and also serves as its
investment adviser. It also has executed selling agreements with a variety of
mutual funds, unit investment trusts and direct participation programs.
The Policies are sold through registered representatives of AIC or other
broker-dealers which have entered into selling agreements with First Ameritas or
AIC. These registered representatives are also licensed by state insurance
officials to sell First Ameritas's variable life policies. Each of the
broker-dealers with a selling agreement is registered with the SEC and is a
member of the NASD.
Under these selling agreements, First Ameritas pays commission to the
broker-dealers, which in turn pay commissions to the registered representative
who sells this Policy. During the first Policy Year, the commission may equal an
amount up to 95% of the first year target premium paid plus the first year cost
of any riders and 2% for premiums paid in excess of the first year target
premium. For Policy Years two through four, the commission may equal an amount
up to 2% of premiums paid. Broker-dealers may also receive a service fee up to
an annualized rate of .25% of the Accumulation Value beginning in the fifth
Policy Year. Compensation arrangements may vary among broker-dealers. In
addition, First Ameritas may also pay override payments, expense allowances,
bonuses, wholesaler fees, and training allowances. Registered representatives
who meet certain production standards may receive additional compensation. First
Ameritas may reduce or waive the sales charge and/or other charges on any Policy
sold to directors, officers or employees of First Ameritas or any of its
affiliates, employees and registered representatives of any broker-dealer that
has entered into a sales agreement with First Ameritas or AIC and the spouses or
children of the above persons. In no event will any such reduction or waiver be
permitted where it would be unfairly discriminatory to any person.
FEDERAL TAX MATTERS
The following discussion provides a general description of the federal income
tax considerations associated with the Policy and does not purport to be
complete or cover all situations. This discussion is not intended as tax advice.
No attempt has been made to consider in detail any applicable state or other tax
laws except premium taxes (See discussion in the section on Premium Charge for
Taxes). This discussion is based upon First Ameritas's
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understanding of the relevant laws at the time of filing. Counsel and other
competent tax advisors should be consulted for more complete information before
a Policy is purchased. First Ameritas makes no representation as to the
likelihood of the continuation of present federal income tax laws nor of the
interpretations by the Internal Revenue Service. Federal tax laws are subject to
change and thus tax consequences to the Insured, Policy Owner or Beneficiary may
be altered.
(1) TAXATION OF FIRST AMERITAS. First Ameritas is taxed as a life insurance
company under Part I of Subchapter L of the Internal Revenue Code of 1986,
(the "Code"). At this time, since the Separate Account is not a separate
entity from First Ameritas, and its operations form a part of First
Ameritas, it will not be taxed separately as a "regulated investment
company" under Subchapter M of the Code. Net investment income and realized
net capital gains on the assets of the Separate Account are reinvested and
automatically retained as a part of the reserves of the Policy and are
taken into account in determining the Death Benefit and Accumulation Value
of the Policy. First Ameritas believes that the Separate Account net
investment income and realized net capital gains will not be taxable to the
extent that such income and gains are retained as reserves under the
Policy.
First Ameritas does not currently expect to incur any federal income tax
liability attributable to the Separate Account with respect to the sale of
the Policies. Accordingly, no charge is being made currently to the
Separate Account for federal income taxes. If, however, First Ameritas
determines that it may incur such taxes attributable to the Separate
Account, it may assess a charge for such taxes against the Separate
Account. First Ameritas may also incur state and local taxes (in addition
to premium taxes for which a deduction from premiums is currently made). At
present, they are not charges against the Separate Account. If there is a
material change in state or local tax laws, charges for such taxes
attributable to the Separate Account, if any, may be assessed against the
Separate Account.
(2) TAX STATUS OF THE POLICY. The Code (Section 7702) includes a definition of
a life insurance contract for federal tax purposes which places limitations
on the amount of premiums that may be paid for the Policy and the
relationship of the Accumulation Value to the Death Benefit. First Ameritas
believes that the Policy meets the statutory definition of a life insurance
contract. If the Death Benefit of a Policy is changed, the applicable
defined limits may change.
The Code (Section 7702A) also defines a "modified endowment contract" for
federal tax purposes. If a life insurance policy is classified as a
modified endowment contract, distributions from it (including loans) are
taxed as ordinary income to the extent of any gain. This Policy will become
a "modified endowment contract" if the premiums paid into the Policy fail
to meet a 7-pay premium test as outlined in Section 7702A of the Code.
Certain benefits the Policy Owner may elect under this Policy may be
material changes affecting the 7-pay premium test. These include, but are
not limited to, changes in Death Benefits and changes in the Specified
Amount. One may avoid a Policy becoming a modified endowment contract by,
among other things, not making excessive payments or reducing benefits.
Should you deposit excessive premiums during a Policy Year, that portion
that is returned by First Ameritas within 60 days after the Policy
Anniversary Date will reduce the premiums paid to avoid the Policy becoming
a modified endowment contract. All modified endowment policies issued by
First Ameritas to the same Policy Owner in any 12 month period are treated
as one modified endowment contract for purposes of determining taxable gain
under Section 72(e) of the Internal Revenue Code. Any life insurance policy
received in exchange for a modified endowment contract will also be treated
as a modified endowment contract. You should contact a competent tax
professional before paying additional premiums or making other changes to
the Policy to determine whether such payments or changes would cause the
Policy to become a modified endowment contract.
The Code (Section 817(h)) also authorizes the Secretary of the Treasury
(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. If the Policy is not treated as life insurance because it fails
the diversification requirements, the Policy Owner is then subject to
federal income
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tax on gain in the Policy as it is earned. The Separate Account, through
the Funds, intends to comply with the diversification requirements
prescribed by the Treasury in regulations published in the Federal Register
on March 2, 1989, which affect how the Fund's assets may be invested.
While AIC and CAMCO, First Ameritas affiliates, are advisers to certain of
the portfolios, First Ameritas does not have control over any of the Funds
or their investments. However, First Ameritas believes that the Funds will
be operated in compliance with the diversification requirements of the
Internal Revenue Code. Thus, First Ameritas believes that the Policy will
be treated as a life insurance contract for federal tax purposes.
In connection with the issuance of regulations relating to the
diversification requirements, the Treasury announced that such regulations
do not provide guidance concerning the extent to which policy owners may
direct their investments to particular divisions of a separate account.
Regulations in this regard may be issued in the future. It is not clear
what these regulations will provide nor whether they will be prospective
only. It is possible that when regulations are issued, the Policy may need
to be modified to comply with such regulations. For these reasons, First
Ameritas reserves the right to modify the Policy as necessary to prevent
the Policy Owner from being considered the owner of the assets of the
Separate Account or otherwise to qualify the Policy for favorable tax
treatment.
The following discussion assumes that the Policy will qualify as a life
insurance contract for federal tax purposes.
(3) TAX TREATMENT OF POLICY PROCEEDS. First Ameritas believes that the Policy
will be treated in a manner consistent with a fixed benefit life insurance
policy for federal income tax purposes. Thus, First Ameritas believes that
the Death Benefit payable prior to the original Maturity Date will
generally be excludable from the gross income of the Beneficiary under
Section 101(a)(1) of the Code and the Policy Owner will not be deemed to be
in constructive receipt of the Accumulation Value under the Policy until
its actual Surrender. However there are certain exceptions to the general
rule that death benefit proceeds are non-taxable. Federal, state and local
tax consequences of ownership or receipt of proceeds under a Policy depends
on the circumstances of each Policy Owner and Beneficiary.
DISTRIBUTIONS FROM POLICIES THAT ARE NOT "MODIFIED ENDOWMENT CONTRACTS."
Distributions (while the Insured is still alive) from a Policy that is not
a modified endowment contract are generally treated as first a recovery of
the investment in the Policy and then only after the return of all such
investment, as disbursing taxable income. However, in the case of a
decrease in the Death Benefit, a partial withdrawal, a change in Death
Benefit option, or any other such change that reduces future benefits under
the Policy during the first 15 years after a Policy is issued an that
results in a cash distribution to the Policy Owner in order for the Policy
to continue complying with the Section 7702 defined limits on premiums and
Accumulation Values, such distributions may be taxable in whole or in part
as ordinary income to the Policy Owner (to the extent of any gain in the
Policy) as prescribed in Section 7702. In addition, upon a complete
Surrender or lapse of a Policy that is not a "modified endowment contract,"
if the amount received plus the amount of any outstanding Policy debt
exceeds the total investment in the Policy, the excess will generally be
treated as ordinary income for tax purposes. Investment in the Policy means
(1) the total amount of any premiums paid for the Policy plus the amount of
any loan received under the Policy to the extent the loan is included in
gross income of the Policy Owner minus(2) the total amount received under
the Policy by the Policy Owner that was excludable from gross income,
excluding any non-taxable loan received under the Policy.
First Ameritas also believes that loans received under a Policy that is not
a 'modified endowment contract"will be treated as debt of the Policy Owner
and that no part of any loan under a Policy will constitute income to the
Policy Owner so long as the Policy remains in force, unless the Policy
becomes a "modified endowment contract." See discussion of modified
endowment contract distributions in the section on Tax Status of the
Policy. Should the Policy lapse while Policy loans are outstanding the
portion of the loans attributable to earnings will become taxable.
Generally, interest paid on any loan under a Policy owned by an individual
will not be tax-deductible.
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Except for policies with respect to a limited number of key persons of an
employer (both as defined in the Internal Revenue Code), and subject to
applicable interest rate caps and debt limits, the Health Insurance
Portability and Accountability Act of 1996 (the "Health Insurance Act")
generally repeals the deduction for interest paid or accrued after October
13, 1995 on loans from corporate owned life insurance policies on the lives
of officers, employees or persons financially interested in the taxpayer's
trade or business. Certain transitional rules for then existing debt are
included in the Health Insurance Act. The transitional rules include a
phase-out of the deduction for debt incurred (1) before January 1, 1996, or
(2) before January 1, 1997, for policies entered into in 1994 or 1995. The
phase-out of the interest expense deduction occurs over a transition
period between October 13, 1995 and January 1, 1999. There is also a
special rule for pre-June 21, 1986 policies. The Taxpayer Relief Act of
1997 ("TRA '97"), further expanded the interest deduction disallowance for
businesses by providing, with respect to policies issued after June 8,
1997, that no deduction is allowed for interest paid or accrued on any debt
with respect to life insurance covering the life of any individual (except
as noted above under pre-'97 law with respect to key persons and pre-June
21, 1986 policies). Any material change in a policy (including a material
increase in the death benefit) may cause the policy to be treated as a new
policy for purposes of this rule. TRA '97 also provides that no deduction
is permissible for premiums paid on a life insurance policy if the taxpayer
is directly or indirectly a beneficiary under the policy. Also under TRA
"97 and subject to certain exceptions, for policies issued after June 8,
1997, no deduction is allowed for that portion of a taxpayer's interest
expense that is allocable to unborrowed policy cash values. This
disallowance generally does not apply to policies owned by natural persons.
Policy Owners should consult a competent tax advisor concerning the tax
implications of these changes for their Policies.
DISTRIBUTIONS FROM POLICIES THAT ARE "MODIFIED ENDOWMENT CONTRACTS." Should
the Policy become a "modified endowment contract" partial withdrawals, full
Surrenders, assignments, pledges, and loans (including loans to pay loan
interest) under the Policy will be taxable to the extent of any gain under
the Policy. A 10% penalty tax also applies to the taxable portion of any
distribution made prior to the taxpayer is disabled as defined under the
Code or if the distribution is paid out in the form of a life annuity on
the life of the taxpayer or the joint lives of the taxpayer and
Beneficiary.
The right to exchange the Policy for a flexible premium adjustable life
insurance policy (See the section on Exchange Privilege.), the right to
change Policy Owners (See the section on General Provisions.), and the
provision for partial withdrawals (See the section on Surrenders.) may have
tax consequences depending on the circumstances of such exchange, change,
or withdrawal. Upon complete Surrender or when Maturity Benefits are paid,
if the amount received plus any Outstanding Policy Debt exceeds the total
premiums paid (the "basis") that are not treated as previously withdrawn by
the Policy Owner, the excess generally will be taxed as ordinary income.
Federal estate and state and local estate, inheritance, and other tax
consequences of ownership or receipt of Death Benefit Proceeds depend on
applicable law and the circumstances of each Policy Owner or Beneficiary.
In addition, if the Policy is used in connection with tax-qualified
retirement plans, certain limitations prescribed by the Internal Revenue
Service on, and rules with respect to the taxation of, life insurance
protection provided through such plans may apply. Further, the tax
consequences of using the Policy in nonqualified plan arrangements may vary
depending on the particular facts and circumstances of the arrangement. The
advice of competent counsel should be sought in connection with use of life
insurance in a qualified or nonqualified plan.
YOU SHOULD CONSULT QUALIFIED TAX AND/OR LEGAL ADVISORS TO OBTAIN COMPLETE
INFORMATION OF FEDERAL, STATE AND LOCAL TAX CONSIDERATIONS APPLICABLE TO YOUR
PARTICULAR SITUATION.
ENCORE! II
40
<PAGE>
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS
First Ameritas holds the assets of the Separate Account. The assets are kept
physically segregated and held separately and apart from the General Account
assets, except for the Fixed Account. First Ameritas maintains records of all
purchases and redemptions of Funds' shares by each of the Subaccounts.
THIRD PARTY SERVICES
First Ameritas is aware that certain third parties are offering investment
advisory, asset allocation, money management and timing services in connection
with the Policies. First Ameritas does not engage any such third parties to
offer such services of any type. In certain cases, First Ameritas has agreed to
honor transfer instructions from such services where it has received powers of
attorney, in a form acceptable to it, from the Policy Owners participating in
the service. Firms or persons offering such services do so independently from
any agency relationship they may have with First Ameritas for the sale of
Policies. First Ameritas takes no responsibility for the investment allocations
and transfers transacted on a Policy Owner's behalf by such third parties or any
investment allocation recommendations made by such parties. Policy Owners should
be aware that fees paid for such services are separate and in addition to fees
paid under the Policies.
VOTING RIGHTS
First Ameritas is the legal holder of the shares held in the Subaccounts of the
Separate Account and as such has the right to vote the shares, to elect
Directors of the Funds, and to vote on matters that are required by the
Investment Company Act of 1940 and upon any other matter that may be voted upon
at a shareholder meeting. To the extent required by law, First Ameritas will
vote all shares of each of the Funds held in the Separate Account at regular and
special shareholder meetings of the Funds according to instructions received
from Policy Owners based on the number of shares held as of the record date for
such meeting.
The number of Fund shares in a Subaccount for which instructions may be given by
a Policy Owner is determined by dividing the Accumulation Value held in that
Subaccount by the net asset value of one share in the corresponding portfolio of
the Fund. Fractional shares will be counted. Fund shares held in each Subaccount
for which no timely instructions from Policy Owners are received and Fund shares
held in each Subaccount which do not support Policy Owner interests will be
voted by First Ameritas in the same proportion as those shares in that
Subaccount for which timely instructions are received. Voting instructions to
abstain on any item to be voted will be applied on a pro rata basis to reduce
the votes eligible to be cast. Should applicable federal securities laws or
regulations permit, First Ameritas may elect to vote shares of the Fund in its
own right.
DISREGARD OF VOTING INSTRUCTION. First Ameritas may, if required by state
insurance officials, disregard voting instructions if those instructions would
require shares to be voted to cause a change in the subclassification or
investment objectives or policies of one or more of the Funds' portfolios, or to
approve or disapprove an investment adviser or principal underwriter for the
Funds. In addition, First Ameritas itself may disregard voting instructions that
would require changes in the investment objectives or policies of any portfolio
or in an investment adviser or principal underwriter for the Funds, if First
Ameritas reasonably disapproves those changes in accordance with applicable
federal regulations. If First Ameritas does disregard voting instructions, it
will advise Policy Owners of that action and its reasons for the action in the
next annual report or proxy statement to Policy Owners.
STATE REGULATION OF FIRST AMERITAS
First Ameritas, a stock insurance company organized under the laws of New York,
is subject to regulation by the New York Department of Insurance. On or before
March 1 of each year an NAIC convention blank covering the operations and
reporting on the financial condition of First Ameritas and the Separate Account
as of December 31 of the preceding year must be filed with the New York
Department of Insurance. Periodically, the New York Department of Insurance
examines the liabilities and reserves of First Ameritas and the Separate
Account.
ENCORE! II
41
<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS OF FIRST AMERITAS
This list shows name and position(s) with First Ameritas followed by the
principal occupations for the last five years. Where an individual has held more
than one position with an organization during the last 5-year period, the last
position held has been given.
KENNETH C. LOUIS, DIRECTOR, CHAIRMAN OF THE BOARD
Director, President and Chief Operating Officer: Ameritas Life; also serves as
officer and/or director of other subsidiaries and/or affiliates of Ameritas
Life.
MITCHELL F. POLITZER, DIRECTOR, PRESIDENT AND CHIEF EXECUTIVE OFFICER*
Director, Senior Vice President/Chief Marketing Officer: Unity Mutual Life
Insurance Company; Director, President and Chief Executive Officer: Unity
Financial Life Insurance Company; Director and President: Germantown Financial
Group, Inc; formerly Director and President Germantown Life Reinsurance Company.
LAWRENCE J. ARTH, DIRECTOR
Director, Chairman of the Board, and Chief Executive Officer: Ameritas Life;
also serves as officer and/or director of other subsidiaries and/or affiliates
of Ameritas Life.
JOHN P. CARSTEN, DIRECTOR
PHYLLIS J. CARSTEN-BOYLE, DIRECTOR, VICE PRESIDENT - GROUP OPERATIONS*
ROBERT J. LANIK, DIRECTOR
JOANN M. MARTIN, DIRECTOR, VICE PRESIDENT
Senior Vice President and Chief Financial Officer: Ameritas Life; also serves as
officer and/or director of other subsidiaries and/or affiliates of Ameritas
Life.
DAVID C. MOORE, DIRECTOR
DAVID J. MEYERS, DIRECTOR
JAMES F. NISSEN, DIRECTOR
TONN M. OSTERGARD, DIRECTOR
JAMES E. REMBOLT, DIRECTOR
EDMUND G. SULLIVAN, DIRECTOR
ROBERT C. BARTH, CONTROLLER
DONALD R. STADING, VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
Senior Vice President, Secretary and Corporate General Counsel: Ameritas Life;
also serves as officer and/or director of other subsidiaries and/or affiliates
of Ameritas Life.
Principal business address of all, except as noted is Ameritas Life Insurance
Corp., 5900 "O" Street, P.O. Box 81889, Lincoln, Nebraska 68501 * Principal
business address: First Ameritas Life Insurance Corp. of New York, 400 Rella
Boulevard, Suite 214, Suffern, New York 10901
ENCORE! II
42
<PAGE>
LEGAL MATTERS
All matters of New York law pertaining to the Policy, including the validity of
the Policy and First Ameritas's right to issue the Policy under New York
Insurance Law, have been passed upon by Donald R. Stading, Secretary and General
Counsel of First Ameritas.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Separate Account is a party or to
which the assets of the Separate Account are subject. First Ameritas is not
involved in any litigation that is of material importance in relation to its
ability to meet its obligations under the Policies, or that relates to the
Separate Account. AIC is not involved in any litigation that is of material
importance in relation to its ability to perform under its underwriting
agreement.
EXPERTS
Actuarial matters included in this prospectus have been examined by Russell J.
Wiltgen, Vice President - Individual Product Management of Ameritas Life
Insurance Corp., as stated in the opinion filed as an exhibit to the
registration statement.
ADDITIONAL INFORMATION
A registration statement will be filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, with respect to the
Policy offered hereby. This prospectus does not contain all the information set
forth in the registration statement and the amendments and exhibits to the
registration statement, to all of which reference is made for further
information concerning the Separate Account, First Ameritas and the Policy
offered hereby. Statements contained in this prospectus as to the contents of
the Policy and other legal instruments are summaries. For a complete statement
of the terms thereof reference is made to such instruments as filed.
FINANCIAL STATEMENTS
The financial statements of First Ameritas which are included in this prospectus
should be considered only as bearing on the ability of First Ameritas to meet
its obligations under the Policies. They should not be considered as bearing on
the investment performance of the assets held in the Separate Account.
ENCORE! II
43
<PAGE>
APPENDIX A
ILLUSTRATIONS OF DEATH BENEFITS AND VALUES
The following tables illustrate how the values and Death Benefits of a Policy
may change with the investment experience of the Fund. The tables show how the
values and Death Benefits of a Policy issued to an Insured of a given age and
specified underwriting risk classification who pays the given premium at issue
would vary over time if the investment return on the assets held in each
portfolio of the Funds were a uniform, gross, after-tax annual rate of 0%, 6%,
or 12%. The tables on pages A-3 through A-6 illustrate a Policy issued to a
male, age 45, under a preferred rate non-tobacco underwriting risk
classification. This Policy provides for a standard tobacco use and non-tobacco
use, and preferred non-tobacco classification and different rates for certain
specified amounts. The values and Death Benefits would be different from those
shown if the gross annual investment rates of return averaged 0%, 6%, and 12%
over a period of years, but fluctuated above and below those averages for
individual Policy Years, or if the Insured were assigned to a different
underwriting risk classification.
The second column of the tables shows the accumulated value of the premiums paid
at 5%. The following columns show the Death Benefits and the values for uniform
hypothetical rates of return shown in these tables. The tables on pages A-3 and
A-5 are based on the current Cost of Insurance Rates, current expense deductions
and the current percent of premium loads. These reflect the basis on which First
Ameritas currently sells its Policies. The maximum allowable Cost of Insurance
Rates under the Policy are based upon the 1980 Commissioner's Standard Ordinary
Smoker and Non-Smoker, Male and Female Mortality Tables (Smoker is referenced
for tobacco use rates; Non-Smoker is referenced for non-tobacco use rates).
Since these are recent tables and are split to reflect tobacco use and sex, the
current Cost of Insurance Rates used by First Ameritas are at this time equal to
the maximum Cost of Insurance Rates for many ages. First Ameritas anticipates
reflecting future improvements in actual mortality experience through
adjustments in the current Cost of Insurance Rates actually applied. First
Ameritas also anticipates reflecting any future improvements in expenses
incurred by applying lower percent of premiums of loads and other expense
deductions. The Death Benefits and values shown in the tables on pages A-4 and
A-6 are based on the assumption that the maximum allowable Cost of Insurance
Rates as described above and maximum allowable expense deductions are made
throughout the life of the Policy.
The amounts shown for the Death Benefits, Surrender values and accumulation
values reflect the fact that the net investment return of the Subaccounts is
lower than the gross, after-tax return of the assets held in the Funds as a
result of expenses paid by the Fund and charges levied against the Subaccounts.
The values shown take into account an average of the expenses paid by each
portfolio available for investment at an equivalent annual rate of 1.00% (which
is in excess of the current equivalent annual rate of 0.96% of the aggregate
average daily net assets of the Funds) and the daily charge by First Ameritas to
each Subaccount for assuming mortality and expense risks and administrative
expenses (which is equivalent to a charge at an annual rate of 0.70% for Policy
Years 1-20 and 0.45% thereafter on pages A-3 and A-5 and at an annual rate of
1.15% on pages A-4 and A-6 of the average net assets of the Subaccounts). A
portion of the brokerage commissions that certain Fidelity Portfolios pay was
used to reduce Portfolio expenses. In addition, certain Fidelity Portfolios have
entered into arrangements with their custodian whereby interest earned on
uninvested cash balances was used to reduce custodian expenses. Without these
reductions, expenses would have been higher. The investment adviser or other
affiliates of the various Funds have agreed to reimburse the portfolios to the
extent that the aggregate operating expenses (certain portfolios may exclude
certain items and the Ameritas Portfolios rates after reimbursement may be
increased after November 1, 2000) were in excess of an annual rate of 0.30% for
the Ameritas Money Market portfolio, 0.28% for the Ameritas Index 500 Portfolio,
0.79% for the Ameritas Growth portfolio; 0.70% for the Ameritas Income & Growth
portfolio, 0.89% for the Ameritas Small Capitalization portfolio, 0.84% for the
Ameritas MidCap Growth portfolio, 0.85% for the Ameritas Emerging Growth
portfolio, 0.86% for the Ameritas Research portfolio, 0.88% for the Ameritas
Growth With Income portfolio, 1.25% for the Alger American Balanced portfolio;
1.50% for the Alger American Leveraged AllCap portfolio, 1.20% for the UIF Asian
Equity, 1.15% for the UIF Global Equity and UIF International Magnum, 1.10% for
the UIF U.S. Real Estate Portfolios of daily net assets. MFS Co. has agreed to
bear expenses for the Global Governments Series and New Discovery Series,
subject to reimbursement by the series, such that each series "Other Expenses"
shall not exceed 0.25% of the average daily net assets of the series during the
current fiscal year. These agreements are expected to continue in future years
but may be terminated at
A-1
<PAGE>
any time. As long as the expense limitations continue for a portfolio, if a
reimbursement occurs, it has the effect of lowering the portfolio's expense
ratio and increasing its total return. The illustrated gross annual investment
rates of return of 0%, 6%, and 12% were computed after deducting fund expenses
and correspond to approximate net annual rates of -1.60%, 4.40%, and 10.40%
respectively, for Policy Years 1-20 and -1.35%, 4.65%, and 10.65% for the Policy
Years thereafter respectively, on pages A-3 and A-5 and -2.05%, 3.95%, and 9.95%
respectively, on pages A-4 and A-6.
The hypothetical values shown in the tables do not reflect any charges for
federal income tax burden attributable to the Separate Account, since First
Ameritas is not currently making such charges. However, such charges may be made
in the future and, in that event, the gross annual investment rate of return
would have to exceed 0 percent, 6 percent, or 12 percent by an amount sufficient
to cover the tax charges in order to produce the Death Benefits and Accumulation
Values illustrated. (See the section on Federal Tax Matters.)
The tables illustrate the Policy values that would result based upon the
hypothetical investment rates of return if premiums are paid as indicated, if
all Net Premiums are allocated to the Separate Account, and if no Policy loans
have been made. The tables are also based on the assumptions that the Policy
Owner has not requested an increase or decrease in the initial Specified Amount,
that no partial withdrawals have been made, and that no more than fifteen
transfers have been made in any Policy Year so that no transfer charges have
been incurred. Illustrated values would be different if the proposed Insured
were female, a tobacco user, in substandard risk classification, or were another
age, or if a higher or lower premium was illustrated.
Upon request, First Ameritas will provide comparable illustrations based upon
the proposed Insured's age, sex and underwriting classification, the Specified
Amount, the Death Benefit option, and planned periodic premium schedule
requested, and any available riders requested. These illustrations may be
provided to you in printed form by your registered representative. First
Ameritas may also make these illustrations available to you by electronic means,
such as through our website. In addition, upon client request, illustrations may
be furnished reflecting allocation of premiums to specified Subaccounts. Such
illustrations will reflect the expenses of the portfolio in which the Subaccount
invests.
A-2
<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES
FIRST AMERITAS LIFE INSURANCE CORP. OF NEW YORK
ENDOWMENT AT AGE 100
Male Issue Age: 45 Nontobacco Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $6000
INITIAL SPECIFIED AMOUNT: $500000
DEATH BENEFIT OPTION: A
USING CURRENT SCHEDULE OF COST OF INSURANCE RATES
0% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(-1.79% Net) ( 4.21% Net) (10.21% Net)
---------------------------------------------------------------------------------------
Accumulated
End Of Premiums At Accumu- Cash Accumu- Cash Accumu- Cash
Policy 5% Interest lation Surrender Death lation Surrender Death lation Surrender Death
Year Per Year Value Value Benefit Value Value Benefit Value Value Benefit
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 6300 4405 0 500000 4711 0 500000 5018 0 500000
2 12915 8626 1911 0 9513 2798 500000 10438 3723 500000
3 19860 12663 5948 500000 14407 7692 500000 16301 9586 500000
4 27153 16520 9805 500000 19400 12685 500000 22657 15942 500000
5 34811 20197 13482 500000 24493 17778 500000 29554 22839 500000
6 42852 23699 17655 500000 29695 23652 500000 37056 31013 500000
7 51294 27020 21648 500000 35004 29632 500000 45220 39848 500000
8 60159 30171 25470 500000 40431 35731 500000 54128 49427 500000
9 69467 33144 29115 500000 45977 41948 500000 63853 59824 500000
10 79240 35941 32583 500000 51646 48289 500000 74485 71127 500000
15 135944 47219 47219 500000 81991 81991 500000 145177 145177 500000
20 208315 53019 53019 500000 115476 115476 500000 259307 259307 500000
Ages
60 135944 47219 47219 500000 81991 81991 500000 145177 145177 500000
65 208315 53019 53019 500000 115476 115476 500000 259307 259307 500000
70 300680 47418 47418 500000 149178 149178 500000 452488 452488 524886
75 418564 20154 20154 500000 175961 175961 500000 781429 781429 836129
</TABLE>
1) Assumes an annual $6000 premium is paid at the beginning of each policy year.
Values would be different if premiums with a different frequency or in different
amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals may
cause this policy to lapse because of insufficient cash value.
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, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH
VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS
CAN BE MADE BY FIRST AMERITAS OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-3
<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES
FIRST AMERITAS LIFE INSURANCE CORP. OF NEW YORK
ENDOWMENT AT AGE 100
Male Issue Age: 45 Nontobacco Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $6000
INITIAL SPECIFIED AMOUNT: $500000
DEATH BENEFIT OPTION: A
USING MAXIMUM ALLOWABLE SCHEDULE OF COST OF INSURANCE RATES
0% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(-2.04% Net) ( 3.96% Net) ( 9.96% Net)
---------------------------------------------------------------------------------------
Accumulated
End Of Premiums At Accumu- Cash Accumu- Cash Accumu- Cash
Policy 5% Interest lation Surrender Death lation Surrender Death lation Surrender Death
Year Per Year Value Value Benefit Value Value Benefit Value Value Benefit
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 6300 4405 0 500000 4711 0 500000 5018 0 500000
2 12915 8042 1327 500000 8908 2193 500000 9812 3097 500000
3 19860 11491 4776 500000 13155 6440 500000 14968 8253 500000
4 27153 14734 8019 500000 17436 10721 500000 20503 13788 500000
5 34811 17758 11043 500000 21735 15020 500000 26441 19726 500000
6 42852 20560 14516 500000 26044 20001 500000 32818 26775 500000
7 51294 23110 17738 500000 30337 24965 500000 39652 34280 500000
8 60159 25385 20684 500000 34581 29881 500000 46963 42262 500000
9 69467 27360 23331 500000 38753 34724 500000 54780 50751 500000
10 79240 29002 25644 500000 42808 39451 500000 63129 59771 500000
15 135944 31280 31280 500000 60192 60192 500000 114361 114361 500000
20 208315 19566 19566 500000 67704 67704 500000 187183 187183 500000
Ages
60 135944 31280 31280 500000 60192 60192 500000 114361 114361 500000
65 208315 19566 19566 500000 67704 67704 500000 187183 187183 500000
70 300680 0* 0* 0* 51765 51765 500000 295923 295923 500000
75 418564 0* 0* 0* 0* 0* 0* 481266 481266 514954
</TABLE>
* In the absence of an additional premium
1) Assumes an annual $6000 premium is paid at the beginning of each policy year.
Values would be different if premiums with a different frequency or in different
amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals may
cause this policy to lapse because of insufficient cash value.
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, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH
VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS
CAN BE MADE BY FIRST AMERITAS OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-4
<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES
FIRST AMERITAS LIFE INSURANCE CORP. OF NEW YORK
ENDOWMENT AT AGE 100
Male Issue Age: 45 Nontobacco Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $20000
INITIAL SPECIFIED AMOUNT: $500000
DEATH BENEFIT OPTION: B
USING CURRENT SCHEDULE OF COST OF INSURANCE RATES
0% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(-1.79% Net) ( 4.21% Net) (10.21% Net)
---------------------------------------------------------------------------------------
Accumulated
End Of Premiums At Accumu- Cash Accumu- Cash Accumu- Cash
Policy 5% Interest lation Surrender Death lation Surrender Death lation Surrender Death
Year Per Year Value Value Benefit Value Value Benefit Value Value Benefit
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 21000 17661 10946 517661 18777 12062 517661 19893 13178 519893
2 43050 34887 28172 534887 38222 31507 534887 41691 34976 541691
3 66202 51682 44967 551682 58358 51643 551682 65584 58869 565584
4 90512 68053 61338 568053 79215 72500 568053 91785 85070 591785
5 116038 84003 77288 584003 100817 94102 584003 120524 113809 620524
6 142840 99539 93496 599539 123197 117154 599539 152062 146019 652062
7 170982 114659 109287 614659 146377 141005 614659 186673 181301 686673
8 200531 129376 124675 629376 170395 165694 629376 224676 219976 724676
9 231557 143686 139657 643686 195277 191248 643686 266408 262379 766408
10 264135 157592 154234 657592 221054 217697 657592 312244 308887 812244
15 453149 221113 221113 721113 364528 364528 721113 619012 619012 1119012
20 694384 273836 273836 773836 534777 534777 773836 1110876 1110876 1610876
Ages
60 453149 221113 221113 721113 364528 364528 721113 619012 619012 1119012
65 694384 273836 273836 773836 534777 534777 773836 1110876 1110876 1610876
70 1002268 312745 312745 812745 746515 746515 812745 1938642 1938642 2438642
75 1395214 326042 326042 826042 987033 987033 826042 3287390 3287390 3787390
</TABLE>
1) Assumes an annual $20000 premium is paid at the beginning of each policy
year. Values would be different if premiums with a different frequency or in
different amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals may
cause this policy to lapse because of insufficient cash value.
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, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH
VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS
CAN BE MADE BY FIRST AMERITAS OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-5
<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES
FIRST AMERITAS LIFE INSURANCE CORP. OF NEW YORK
ENDOWMENT AT AGE 100
Male Issue Age: 45 Nontobacco Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $20000
INITIAL SPECIFIED AMOUNT: $500000
DEATH BENEFIT OPTION: B
USING MAXIMUM ALLOWABLE SCHEDULE OF COST OF INSURANCE RATES
0% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(-2.04% Net) ( 3.96% Net) ( 9.96% Net)
---------------------------------------------------------------------------------------
Accumulated
End Of Premiums At Accumu- Cash Accumu- Cash Accumu- Cash
Policy 5% Interest lation Surrender Death lation Surrender Death lation Surrender Death
Year Per Year Value Value Benefit Value Value Benefit Value Value Benefit
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 21000 17614 10899 517614 18730 12015 518730 19847 13132 519847
2 43050 33991 27276 533991 37286 30571 537286 40717 34002 540717
3 66202 49891 43176 549891 56430 49715 556430 63515 56800 563515
4 90512 65314 58599 565314 76174 69459 576174 88420 81705 588420
5 116038 80249 73534 580249 96522 89807 596522 115624 108909 615624
6 142840 94698 88655 594698 117487 111444 617488 145342 139299 645342
7 170982 108636 103264 608636 139061 133689 639061 177791 172419 677791
8 200531 122039 117338 622038 161229 156528 661228 213203 208503 713204
9 231557 134887 130858 634887 183984 179955 683984 251846 247817 751846
10 264135 147148 143790 647148 207306 203949 707306 293991 290634 793992
15 453149 198864 198864 698864 331912 331912 831912 569354 569354 1069354
20 694384 231132 231132 731132 466728 466728 966728 993166 993166 1493166
Ages
60 453149 198864 198864 698864 331912 331912 831912 569354 569354 1069354
65 694384 231132 231132 731132 466728 466728 966728 993166 993166 1493166
70 1002268 235504 235504 735504 602030 6020301102030 1642058 1642058 2142058
75 1395214 198788 198788 698788 719818 7198181219818 2632615 2632615 3132615
</TABLE>
1) Assumes an annual $20000 premium is paid at the beginning of each policy
year. Values would be different if premiums with a different frequency or in
different amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals may
cause this policy to lapse because of insufficient cash value.
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, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH
VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS
CAN BE MADE BY FIRST AMERITAS OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-6
<PAGE>
INCORPORATION BY REFERENCE
The Registrant, First Ameritas Variable Life Separate Account, purchases or will
purchase units from the portfolios of these Funds at the direction of its Policy
Owners. The prospectuses of these Funds will be distributed with this prospectus
and are hereby incorporated by reference. The prospectuses incorporated by
reference are as follows:
Calvert Variable Series, Inc.
Ameritas Portfolios
Registration No. 2-80154
Calvert Variable Series, Inc.
Registration No. 2-80154
Variable Insurance Products Fund
Registration No. 2-75010
The Alger American Fund
Registration No. 33-21722
MFS Variable Insurance Trust
Registration No. 333-74668
The Universal Institutional Funds, Inc.
Registration No. 333-3013
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore, or hereafter duly adopted pursuant to authority conferred
in that section.
Registrant makes the following representation pursuant to the National
Securities Markets Improvements Act of 1996:
First Ameritas Life Insurance Corp. of New York represents that 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 the insurance company.
RULE 484 UNDERTAKING
First Ameritas's By-laws provide as follows:
"Any person made or threatened to be made a party to an action or proceeding,
whether civil or criminal, by reason of the fact that he, his testator or
intestate then is or was a director, officer or employee of the Company, or then
serves or has served any other corporation in any capacity at the request of the
Company, shall be indemnified by the Company against expenses, judgments, fines
and amounts paid in settlement to the full extent that officers and directors
are permitted to be indemnified by the laws of the State of New York. The
provisions of this article shall not adversely affect any right to
indemnification which any person may have apart from the provisions of this
article."
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and wil be governed by the final
adjudication of such issue.
REPRESENTATION PURSUANT TO RULE 6E-3(T)
This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment
Company Act of 1940.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
The prospectus consisting of 48 pages.
The undertaking to file reports.
The undertaking pursuant to Rule 484.
Representations pursuant to Rule 6e-3(T).
The signatures.
Written consents of the following:
(a) Russell J. Wiltgen
(b) Donald R. Stading
(c) Auditors - To be provided.
The Following Exhibits:
1. The following exhibits correspond to those required by paragraph A of the
instructions as to exhibits in Form N-8B-2.
(1)Resolution of the Board of Directors of First Ameritas Authorizing
Establishment of the Account.
(2)Not applicable.
(3)(a) Principal Underwriting Agreement.
(b) Proposed Form of Selling Agreement.
(c) Commission Schedule. To be provided.
(4) Not Applicable.
(5)(a) Proposed Form of Policy.
(b) Proposed Form of Policy Riders.
(6)(a) Articles of Incorporation of First Ameritas Life Insurance Corp.
of New York.
(b) Bylaws of First Ameritas Life Insurance Corp. of New York.
(7)Not applicable.
(8)Proposed Form of Participation Agreement.
(9)Not Applicable.
(10) Application for Policy. To be provided.
(11) Code of Ethics.
2. (a)(b) Opinion and Consent of Donald R. Stading.
3. No financial statements will be omitted from the final Prospectus pursuant
to Instruction 1(b) or (c) or Part I.
4. Not applicable.
5. Not applicable.
6. (a)(b) Opinion and Consent of Russell J. Wiltgen.
7. Consent of auditors. To be provided.
8. Form of Notice of Withdrawal Right and Refund pursuant to Rule 6e-3(T)(b)
(13)(viii) under the Investment Company Act of 1940. To be provided.
9. Powers of Attorney.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets all the requirements of Securities
Act Rule 485(a) for effectiveness of this Registration Statement on Form S- 6,
and has caused this Registration Statement to be signed on its behalf in the
City of Lincoln, State of Nebraska on June 12, 2000.
FIRST AMERITAS VARIABLE LIFE SEPARATE ACCOUNT, Registrant
FIRST AMERITAS LIFE INSURANCE CORP. OF NEW YORK, Depositor
By:/S/ KENNETH C. LOUIS *
----------------------
Kenneth C. Louis
Chairman of the Board
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons on June 12, 2000 in the capacities and on the
duties indicated.
SIGNATURE TITLE
/S/ KENNETH C. LOUIS * Director, Chairman of the Board
----------------------
Kenneth C. Louis
/S/ MITCHELL F. POLITZER * Director, President and
--------------------------
Mitchell F. Politzer Chief Executive Officer
/S/ ROBERT C. BARTH * Controller
---------------------
Robert C. Barth (PRINCIPAL ACCOUNTING OFFICER)
/S/ WILLIAM W. LESTER * Treasurer
----------------------
William W. Lester (PRINCIPAL FINANCIAL OFFICER)
/s/ Donald R. Stading
by _______________________ for and on behalf of:
Donald R. Stading
Lawrence J. Arth * Director
John P. Carsten * Director
Phyllis J. Carsten-Boyle * Director
Robert J. Lanik * Director
JoAnn M. Martin * Director
David C. Moore * Director
David J. Meyers * Director
James F. Nissen * Director
Tonn Ostergard * Director
James E. Rembolt * Director
Edmund G. Sullivan * Director
* Signed by Donald R. Stading under Powers of Attorney executed effective as of
June 6, 2000.
<PAGE>
EXHIBIT INDEX
EXHIBIT
1.(A)(1) Resolution of the Board of Directors of First Ameritas Authorizing
Establishment of the Account
1.(A)(3)(a)Principal Underwriting Agreement
1.(A)(3)(b)Proposed Form of Selling Agreement
1.(A)(5)(a)Proposed Form of Policy
1.(A)(6)(a)Articles of Incorporation of First Ameritas Life Insurance Corp. of
New York
1.(A)(6)(b)Bylaws of First Ameritas Life Insurance Corp. of New York
1.(A)(8) Proposed Form of Participation Agreement
1.(A)(11) Code of Ethics
2. (a)(b) Opinion and Consent of Donald R. Stading
6. (a)(b) Opinion and Consent of Russell J. Wiltgen
9. Powers of Attorney
