Registration No. 2-54015
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 43
TO
FORM S-6
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INTERESTS UNDER VARIABLE LIFE INSURANCE POLICIES
<TABLE>
<C> <C>
SEPARATE ACCOUNT I
of
EQUITABLE VARIABLE LIFE INSURANCE COMPANY James M. Benson, President
(Exact Name of Trust) Equitable Variable Life Insurance Company
EQUITABLE VARIABLE LIFE INSURANCE COMPANY 787 Seventh Avenue
(Exact Name of Depositor) New York, New York 10019
787 Seventh Avenue (Name and Address of Agent for Service)
New York, New York 10019
(Address of Depositor's Principal Executive Offices)
</TABLE>
------------------------
Telephone Numbers, Including Area Code: (212) 554-1234
------------------------
Please send copies of all communications to:
Beth N. Zeiger, Esq. with a copy to:
Counsel MILTON P. KROLL
The Equitable Life Assurance Freedman, Levy, Kroll & Simonds
Society of the United States 1050 Connecticut Avenue, N.W., Suite 825
787 Seventh Avenue Washington, D.C. 20036
New York, New York 10019
------------------------
It is proposed that this filing will become effective (check appropriate line):
______ immediately upon filing pursuant to paragraph (b) of Rule 485.
______ on ( ) pursuant to paragraph (b) of Rule 485.
__X___ 60 days after filing pursuant to paragraph (a) of Rule 485.
on ( ) pursuant to paragraph (a) of Rule 485.
Pursuant to Rule 24f-2(a)(1) under the Investment Company Act of 1940, the
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933. The Registrant filed the 24f-2 Notice for the year ended
December 31, 1995 on February 27, 1996.
- --------
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
VARIABLE LIFE INSURANCE POLICIES
FUNDED THROUGH SEPARATE ACCOUNT I
THE CHAMPION(TM)
SP-1(TM)
BASIC POLICY
EXPANDED POLICY
PROSPECTUS SUPPLEMENT DATED JANUARY 1, 1997
This prospectus supplement updates certain information in the Prospectus you
received for the variable life insurance policy you purchased from Equitable
Variable Life Insurance Company ("Equitable Variable")*. We also mailed to you a
prospectus supplement dated May 1, 1996. Capitalized terms used in this
supplement have the same meanings as in the Prospectus. You should keep this
supplement with your Prospectus and your May 1, 1996 supplement.
On January 1, 1997, Equitable Variable, a wholly-owned subsidiary of The
Equitable Life Assurance Society of the United States ("Equitable") was merged
with and into Equitable. As a result of this merger, all of Equitable Variable's
assets, including the assets of Equitable Variable's Separate Account I, became
the assets of Equitable, and all of Equitable Variable's obligations, including
your policy, were assumed by Equitable. The merger did not affect any policy
values, premiums, investment options or other terms and conditions of your
policy in any way. Policy Account values allocated to the Separate Account Funds
continue after the merger without change or interruption.
Management. A list of our directors and, to the extent they are responsible for
variable life insurance operations, our principal officers and a brief statement
of their business experience for the past five years is contained in Appendix A
to this supplement.
Financial Statements. The financial statements of Separate Account I and
Equitable included in this prospectus supplement have been audited for the years
ended December 31, 1995, 1994 and 1993 by the accounting firm of _____________,
independent accountants, to the extent stated in their reports. The financial
statements of Separate Account I and Equitable for the years ended December 31,
1995, 1994 and 1993 included in this prospectus supplement have been so included
in reliance on the reports of ____________, given on the authority of such firm
as experts in accounting and auditing. The financial statements of Separate
Account I and Equitable for the period ended September 30, 1996 included in this
prospectus supplement are unaudited.
The financial statements of Equitable contained in this prospectus supplement
should be considered only as bearing upon the ability of Equitable to meet its
obligations under the policies. They should not be considered as bearing upon
the investment experience of the funds of the Separate Account. The financial
statements of Separate Account I include periods prior to the merger when
Separate Account I was part of Equitable Variable.
- --------------------------------
* This supplement updates certain information contained in The Champion
Prospectuses dated September 30, 1987 and December 18, 1986; the SP-1
Prospectuses dated September 30, 1987, April 30, 1986 and January 1, 1984; and
the Basic and Expanded Prospectuses dated April 30, 1986 and March 26, 1985.
EVM-104
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Equitable Variable Life Insurance Company
and Policyowners of Separate Account I
of Equitable Variable Life Insurance Company
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of Money Market Division,
Intermediate Government Securities Division, High Yield Division, Balanced
Division, Common Stock Division and Aggressive Stock Division, separate
investment divisions of Equitable Variable Life Insurance Company ("Equitable
Variable Life") Separate Account I at December 31, 1995 and the results of each
of their operations and changes in each of their net assets for the years
indicated, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of Equitable Variable Life's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of shares in The Hudson River Trust at December 31, 1995 with the
transfer agent, provide a reasonable basis for the opinion expressed above.
[__________________________________]
New York, NY
February 7, 1996, except as to Note 8, which is as of September 19, 1996
FSA-1
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT HIGH
MARKET SECURITIES YIELD
DIVISION DIVISION DIVISION
------------- ------------- ------------
<S> <C> <C> <C>
ASSETS
Investments in shares of The Hudson River Trust --
at market value (Notes 2 and 7)
Cost: $ 68,810,062........................................................ $69,878,080
2,278,572........................................................ $2,270,685
8,122,292........................................................ $8,889,685
30,772,800........................................................
288,549,569........................................................
15,051,041........................................................
Receivable for sales of shares of The Hudson River Trust................... -- -- 4,028
Receivable for policy-related transactions................................. -- 122 --
----------- ---------- ----------
Total Assets............................................................... 69,878,080 2,270,807 8,893,713
----------- ---------- ----------
LIABILITIES
Payable for purchases of shares of The Hudson River Trust.................. 42,175 146 --
Payable for policy-related transactions.................................... 374,717 -- 75,483
Amount retained by Equitable Variable Life in Separate Account I (Note 4).. 556,502 108,596 584,394
----------- ---------- ----------
Total Liabilities.......................................................... 973,394 108,742 659,877
----------- ---------- ----------
NET ASSETS ATTRIBUTABLE TO POLICYOWNERS.................................... $68,904,686 $2,162,065 $8,233,835
=========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
COMMON AGGRESSIVE
BALANCED STOCK STOCK
DIVISION DIVISION DIVISION
------------ ------------ -----------
<S> <C> <C> <C>
ASSETS
Investments in shares of The Hudson River Trust --
at market value (Notes 2 and 7)
Cost: $ 68,810,062........................................................
2,278,572........................................................
8,122,292........................................................
30,772,800........................................................ $36,956,684
288,549,569........................................................ $466,189,272
15,051,041........................................................ $24,149,766
Receivable for sales of shares of The Hudson River Trust................... -- -- --
Receivable for policy-related transactions................................. -- -- --
----------- ------------ -----------
Total Assets............................................................... 36,956,684 466,189,272 24,149,766
----------- ------------ -----------
LIABILITIES
Payable for purchases of shares of The Hudson River Trust.................. 13,111 171,915 25,293
Payable for policy-related transactions.................................... 548,410 4,222,963 373,127
Amount retained by Equitable Variable Life in Separate Account I (Note 4).. 552,645 5,700,933 532,544
----------- ------------ -----------
Total Liabilities.......................................................... 1,114,166 10,095,811 930,964
----------- ------------ -----------
NET ASSETS ATTRIBUTABLE TO POLICYOWNERS.................................... $35,842,518 $456,093,461 $23,218,802
=========== ============ ===========
</TABLE>
See Notes to Financial Statements.
FSA-2
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MONEY MARKET DIVISION
--------------------------------------
1995 1994 1993
----------- ----------- ----------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust................................ $3,738,980 $2,684,291 $2,083,651
Expenses (Note 3):
Mortality and expense risk charges................................... 347,935 355,911 373,075
---------- ---------- ----------
NET INVESTMENT INCOME..................................................... 3,391,045 2,328,380 1,710,576
---------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2):
Realized gain (loss) on investments.................................. 31,732 52,117 65,261
Realized gain distribution from The Hudson River Trust............... -- -- --
---------- ---------- ----------
NET REALIZED GAIN (LOSS).................................................. 31,732 52,117 65,261
Unrealized appreciation/depreciation on investments:
Beginning of period.................................................. 920,431 844,597 812,147
End of period........................................................ 1,068,018 920,431 844,597
---------- ---------- ----------
Change in unrealized appreciation/depreciation during the period....... 147,587 75,834 32,450
---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... 179,319 127,951 97,711
---------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........... $3,570,364 $2,456,331 $1,808,287
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT
SECURITIES DIVISION
------------------------------------
1995 1994 1993
---------- ---------- --------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust................................ $145,274 $ 199,648 $115,827
Expenses (Note 3):
Mortality and expense risk charges................................... 11,943 11,365 8,896
-------- --------- --------
NET INVESTMENT INCOME..................................................... 133,331 188,283 106,931
-------- --------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2):
Realized gain (loss) on investments.................................. (94,891) (303,584) (3,141)
Realized gain distribution from The Hudson River Trust............... -- 157,383 157,383
-------- --------- --------
NET REALIZED GAIN (LOSS).................................................. (94,891) (146,201) 154,242
Unrealized appreciation/depreciation on investments:
Beginning of period.................................................. (267,346) (100,844) 8,264
End of period........................................................ (7,887) (267,346) (100,844)
-------- --------- --------
Change in unrealized appreciation/depreciation during the period....... 259,459 (166,502) (109,108)
-------- --------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... 164,568 (312,703) 45,134
-------- --------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........... $297,899 $(124,420) $152,065
======== ========= ========
</TABLE>
See Notes to Financial Statements.
FSA-3
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
HIGH YIELD DIVISION
--------------------------------------
1995 1994 1993
----------- ---------- ----------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust...................................... $ 862,089 $ 806,574 $ 763,325
Expenses (Note 3):
Mortality and expense risk charges......................................... 39,170 41,676 40,466
----------- --------- ----------
NET INVESTMENT INCOME........................................................... 822,919 764,898 722,859
----------- --------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2):
Realized gain (loss) on investments.......................................... (10,426) (94,683) 11,131
Realized gain distribution from The Hudson River Trust....................... -- -- 170,999
---------- --------- ----------
NET REALIZED GAIN (LOSS)........................................................ (10,426) (94,683) 182,130
Unrealized appreciation/depreciation on investments:
Beginning of period........................................................ 98,061 1,064,280 338,796
End of period.............................................................. 767,393 98,061 1,064,280
---------- ---------- ----------
Change in unrealized appreciation/depreciation during the period............. 669,332 (966,219) 725,484
---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.......................... 658,906 (1,060,902) 907,614
---------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................. $1,481,825 $ (296,004) $1,630,473
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
BALANCED DIVISION
--------------------------------------
1995 1994 1993
---------- ------------ ----------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust...................................... $1,126,871 $ 1,006,200 $ 963,517
Expenses (Note 3):
Mortality and expense risk charges......................................... 167,041 164,873 162,512
---------- ----------- ----------
NET INVESTMENT INCOME........................................................... 959,830 841,327 801,005
---------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2):
Realized gain (loss) on investments.......................................... (113,948) (379,076) (6,104)
Realized gain distribution from The Hudson River Trust....................... 1,008,186 -- 1,948,704
---------- ----------- ----------
NET REALIZED GAIN (LOSS)........................................................ 894,238 (379,076) 1,942,600
Unrealized appreciation/depreciation on investments:
Beginning of period........................................................ 2,080,968 5,526,191 4,624,699
End of period.............................................................. 6,183,884 2,080,968 5,526,191
---------- ----------- ----------
Change in unrealized appreciation/depreciation during the period............. 4,102,916 (3,445,223) 901,492
---------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.......................... 4,997,154 (3,824,299) 2,844,092
---------- ----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................. $5,956,984 $(2,982,972) $3,645,097
========== =========== ==========
</TABLE>
See Notes to Financial Statements.
FSA-4
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
COMMON STOCK DIVISION
-------------------------------------------
1995 1994 1993
-------------- ------------- ------------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust..................................... $ 5,978,397 $ 5,727,748 $ 5,678,972
Expenses (Note 3):
Mortality and expense risk charges........................................ 2,095,213 1,942,844 1,844,849
------------ ------------ ------------
NET INVESTMENT INCOME.......................................................... 3,883,184 3,784,904 3,834,123
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2):
Realized gain (loss) on investments......................................... 1,269,512 (328,604) 2,630,537
Realized gain distribution from The Hudson River Trust...................... 25,928,481 20,219,440 47,068,505
------------ ------------ ------------
NET REALIZED GAIN (LOSS)....................................................... 27,197,993 19,890,836 49,699,042
Unrealized appreciation/depreciation on investments:
Beginning of period....................................................... 92,693,149 126,545,990 98,769,799
End of period............................................................. 177,639,703 92,693,149 126,545,990
------------ ------------ ------------
Change in unrealized appreciation/depreciation during the period............ 84,946,554 (33,852,841) 27,776,191
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 112,144,547 (13,962,005) 77,475,233
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................ $116,027,731 $(10,177,101) $ 81,309,356
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE STOCK DIVISION
------------------------------------------
1995 1994 1993
----------- ------------- -------------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust..................................... $ 57,627 $ 22,268 $ 45,872
Expenses (Note 3):
Mortality and expense risk charges........................................ 102,259 89,577 82,479
---------- ----------- ----------
NET INVESTMENT INCOME.......................................................... (44,632) (67,309) (36,607)
---------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2):
Realized gain (loss) on investments......................................... 42,192 (226,938) (57,409)
Realized gain distribution from The Hudson River Trust...................... 2,691,238 -- 1,550,537
---------- ----------- ----------
NET REALIZED GAIN (LOSS)....................................................... 2,733,430 (226,938) 1,493,128
Unrealized appreciation/depreciation on investments:
Beginning of period....................................................... 6,102,433 6,618,938 5,529,963
End of period............................................................. 9,098,725 6,102,433 6,618,938
---------- ----------- ----------
Change in unrealized appreciation/depreciation during the period............ 2,996,292 (516,505) 1,088,975
---------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 5,729,722 (743,443) 2,582,103
---------- ----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................ $5,685,090 $ (810,752) $2,545,496
========== =========== ==========
</TABLE>
See Notes to Financial Statements.
FSA-5
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MONEY MARKET DIVISION
---------------------------------------
1995 1994 1993
---------- ------------- -----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................................................ $3,391,045 $ 2,328,380 $ 1,710,576
Net realized gain (loss)..................................................... 31,732 52,117 65,261
Change in unrealized appreciation (depreciation) on investments.............. 147,587 75,834 32,450
----------- ----------- -----------
Net increase (decrease) from operations...................................... 3,570,364 2,456,331 1,808,287
----------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................................................ 5,540,000 6,128,438 7,171,866
Benefits and other policy-related transactions............................... (8,585,006) (8,940,995) (10,608,028)
Net transfers among divisions................................................ (340,867) (1,904,223) (3,931,738)
----------- ----------- -----------
Net increase (decrease) from policy-related transactions..................... (3,385,873) (4,716,780) (7,367,900)
----------- ----------- -----------
NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE
IN SEPARATE ACCOUNT I (Note 4)............................................... (33,731) (22,105) (424)
----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS............................................... 150,760 (2,282,554) (5,560,037)
NET ASSETS, BEGINNING OF PERIOD................................................. 68,753,926 71,036,480 76,596,517
----------- ----------- -----------
NET ASSETS, END OF PERIOD....................................................... $68,904,686 $68,753,926 $71,036,480
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT
SECURITIES DIVISION
--------------------------------------
1995 1994 1993
----------- ------------- ----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................................................ $ 133,331 $ 188,283 $ 106,931
Net realized gain (loss)..................................................... (94,891) (146,201) 154,242
Change in unrealized appreciation (depreciation) on investments.............. 259,459 (166,502) (109,108)
---------- ----------- ----------
Net increase (decrease) from operations...................................... 297,899 (124,420) 152,065
---------- ----------- ----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................................................ 120,110 130,572 114,331
Benefits and other policy-related transactions............................... (292,199) (402,355) (135,104)
Net transfers among divisions................................................ (65,399) 606,857 557,742
---------- ----------- ----------
Net increase (decrease) from policy-related transactions..................... (237,488) 335,074 536,969
---------- ----------- ----------
NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE
IN SEPARATE ACCOUNT I (Note 4)............................................... (12,591) 4,561 (986)
---------- ---------- ----------
INCREASE (DECREASE) IN NET ASSETS............................................... 47,820 215,215 688,048
NET ASSETS, BEGINNING OF PERIOD................................................. 2,114,245 1,899,030 1,210,982
---------- ---------- ----------
NET ASSETS, END OF PERIOD....................................................... $2,162,065 $2,114,245 $1,899,030
========== ========== ==========
</TABLE>
See Notes to Financial Statements.
FSA-6
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
HIGH YIELD DIVISION
-----------------------------------------
1995 1994 1993
----------- ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................................................ $ 822,919 $ 764,898 $ 722,859
Net realized gain (loss)..................................................... (10,426) (94,683) 182,130
Change in unrealized appreciation (depreciation) on investments.............. 669,332 (966,219) 725,484
---------- ----------- -----------
Net increase (decrease) from operations...................................... 1,481,825 (296,004) 1,630,473
---------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................................................ 821,557 852,874 862,281
Benefits and other policy-related transactions............................... (1,690,910) (1,525,854) (1,494,464)
Net transfers among divisions................................................ 154,049 (38,627) 626,135
---------- ----------- -----------
Net increase (decrease) from policy-related transactions..................... (715,304) (711,607) (6,048)
---------- ----------- -----------
NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE
IN SEPARATE ACCOUNT I (Note 4)............................................... (96,346) 14,805 (5,206)
---------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS............................................... 670,175 (992,806) 1,619,219
NET ASSETS, BEGINNING OF PERIOD................................................. 7,563,660 8,556,466 6,937,247
---------- ----------- -----------
NET ASSETS, END OF PERIOD....................................................... $8,233,835 $ 7,563,660 $ 8,556,466
========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
BALANCED DIVISION
-----------------------------------------
1995 1994 1993
------------ ------------- -----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................................................ $ 959,830 $ 841,327 $ 801,005
Net realized gain (loss)..................................................... 894,238 (379,076) 1,942,600
Change in unrealized appreciation (depreciation) on investments.............. 4,102,916 (3,445,223) 901,492
----------- ----------- -----------
Net increase (decrease) from operations...................................... 5,956,984 (2,982,972) 3,645,097
----------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................................................ 3,295,027 3,487,888 3,674,964
Benefits and other policy-related transactions............................... (3,348,951) (3,823,829) (4,982,073)
Net transfers among divisions................................................ (376,087) (3,406) 1,192,337
----------- ----------- -----------
Net increase (decrease) from policy-related transactions..................... (430,011) (339,347) (114,772)
----------- ----------- -----------
NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE
IN SEPARATE ACCOUNT I (Note 4)............................................... (89,517) 42,214 (13,867)
----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS............................................... 5,437,456 (3,280,105) 3,516,458
NET ASSETS, BEGINNING OF PERIOD................................................. 30,405,062 33,685,167 30,168,709
----------- ----------- -----------
NET ASSETS, END OF PERIOD....................................................... $35,842,518 $30,405,062 $33,685,167
=========== =========== ===========
</TABLE>
See Notes to Financial Statements.
FSA-7
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
COMMON STOCK DIVISION
-----------------------------------------
1995 1994 1993
----------- -------------- -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................................................ $ 3,883,184 $ 3,784,904 $ 3,834,123
Net realized gain (loss)..................................................... 27,197,993 19,890,836 49,699,042
Change in unrealized appreciation (depreciation) on investments.............. 84,946,554 (33,852,841) 27,776,191
------------ ------------ ------------
Net increase (decrease) from operations...................................... 116,027,731 (10,177,101) 81,309,356
------------ ------------ ------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................................................ 22,520,480 24,056,215 25,806,986
Benefits and other policy-related transactions............................... (43,155,008) (44,688,333) (46,157,443)
Net transfers among divisions................................................ (27,413) 459,966 1,338,478
------------ ------------ ------------
Net increase (decrease) from policy-related transactions..................... (20,661,941) (20,172,152) (19,011,979)
------------ ------------ ------------
NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE
IN SEPARATE ACCOUNT I (Note 4)............................................... (1,859,326) 149,257 (1,173,722)
------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS............................................... 93,506,464 (30,199,996) 61,123,655
NET ASSETS, BEGINNING OF PERIOD................................................. 362,586,997 392,786,993 331,663,338
------------ ------------ ------------
NET ASSETS, END OF PERIOD....................................................... $456,093,461 $362,586,997 $392,786,993
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE STOCK DIVISION
-------------------------------------------
1995 1994 1993
----------- ------------- -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................................................ $ (44,632) $ (67,309) $ (36,607)
Net realized gain (loss)..................................................... 2,733,430 (226,938) 1,493,128
Change in unrealized appreciation (depreciation) on investments.............. 2,996,292 (516,505) 1,088,975
----------- ------------- ------------
Net increase (decrease) from operations...................................... 5,685,090 (810,752) 2,545,496
----------- ------------- -------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................................................ 1,509,349 1,480,535 1,490,827
Benefits and other policy-related transactions............................... (2,642,068) (1,982,576) (1,737,214)
Net transfers among divisions................................................ 655,717 1,279,484 565,989
----------- ------------- -------------
Net increase (decrease) from policy-related transactions..................... (477,002) 777,443 319,602
----------- ------------- -------------
NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE
IN SEPARATE ACCOUNT I (Note 4)............................................... (150,764) 20,425 (5,961)
----------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS............................................... 5,057,324 (12,884) 2,859,137
NET ASSETS, BEGINNING OF PERIOD................................................. 18,161,478 18,174,362 15,315,225
----------- ------------- -------------
NET ASSETS, END OF PERIOD....................................................... $23,218,802 $ 18,161,478 $ 18,174,362
=========== ============= =============
</TABLE>
See Notes to Financial Statements.
FSA-8
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. General
Equitable Variable Life Insurance Company (Equitable Variable Life), a
wholly-owned subsidiary of The Equitable Life Assurance Society of the
United States (Equitable Life), established Separate Account I (the Account)
under New York insurance law to support the operations of Equitable Variable
Life's scheduled and single premium variable life insurance policies
(Policies). The Account is a unit investment trust registered with the
Securities and Exchange Commission under the Investment Company Act of 1940.
The Account consists of six investment divisions: the Money Market Division,
the Intermediate Government Securities Division, the High Yield Division,
the Balanced Division, the Common Stock Division and the Aggressive Stock
Division. The assets in each Division are invested in shares of a designated
portfolio (Portfolio) of a mutual fund, The Hudson River Trust (the Trust).
Each Portfolio has separate investment objectives.
The assets of the Account are the property of Equitable Variable Life.
However, the portion of the Account's assets equal to the reserves and other
policy liabilities with respect to the Account will not be chargeable with
liabilities arising out of any other business Equitable Variable Life may
conduct. The net assets may not be less than the amount required under New
York insurance law to provide for death benefits (without regard to the
minimum death benefit guarantee) and other policy benefits. Additional
assets are held in Equitable Variable Life's General Account to cover the
contingency that the guaranteed minimum death benefit might exceed the death
benefit which would have been payable in the absence of such guarantee.
2. Significant Accounting Policies
The accompanying financial statements are prepared in conformity with
generally accepted accounting principles (GAAP). The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Investments made in shares of the Trust are valued at the net asset value
per share of the respective Portfolios. The net asset value is determined by
the Trust using the market or fair value of the underlying assets of the
Portfolios.
Investment transactions are recorded on the trade date. Realized gains and
losses include gains and losses on redemptions of the Trust's shares
(determined on the identified cost basis) and Trust distributions
representing the net realized gains on Trust investment transactions.
The operations of the Account are included in the consolidated Federal
income tax return of Equitable. Under the provisions of the Policies,
Equitable Variable Life has the right to charge the Account for Federal
income tax attributable to the Account. No charge is currently being made
against the Account for such tax since, under current tax law, Equitable
Variable Life pays no tax on investment income and capital gains reflected
in variable life insurance policy reserves. However, Equitable Variable Life
retains the right to charge for any Federal income tax incurred which is
attributable to the Account if the law is changed. Charges for state and
local taxes, if any, attributable to the Account may also be made.
Dividends are recorded as income at the end of each quarter on the
ex-dividend date. Capital gains are distributed by the Trust at the end of
each year.
3. Asset Charges
Under the policies, Equitable Variable Life assumes mortality and expense
risks and, to cover these risks, deducts a charge from the assets of the
Account at an annual rate of 0.50% of net assets attributable to
policyowners.
Equitable Variable Life makes certain deductions from net premiums before
amounts are allocated to the Account. The deductions are for (1) premiums
for optional benefits, (2) additional premiums for extra mortality risks,
(3) administrative expenses, (4) state premium taxes, and (5) except as to
single premium policies, a risk charge for the guaranteed minimum death
benefit.
4. Amounts Retained by Equitable Variable Life in Separate Account I
The amount retained by Equitable Variable Life in the Account arises
principally from (1) mortality and other gains and losses resulting from the
Account's operations, (2) contributions from Equitable Variable Life, and
(3) that portion, determined ratably, of the Account's investment results
applicable to those assets in the Account in excess of the net assets for
the Policies. Amounts retained by Equitable Variable Life are not subject to
charges for mortality and expense risks.
Amounts retained by Equitable Variable Life in the Account may be
transferred at any time by Equitable Variable Life to its General Account.
FSA-9
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995
The following table shows the surplus contributions (withdrawals) by
Equitable Variable Life by investment division:
<TABLE>
<CAPTION>
INVESTMENT DIVISION 1995 1994 1993
------------------- ---- ---- ----
<S> <C> <C> <C>
Common Stock $(1,975,000) -- --
Money Market -- -- $ 585,000
Balanced -- -- 375,000
Aggressive Stock (100,000) -- 460,000
High Yield -- -- 475,000
Short-Term World Income -- $(119,356) --
Intermediate Government Securities -- -- 90,000
----------- --------- ----------
$(2,075,000) $(119,356) $1,985,000
=========== ========= ==========
</TABLE>
Equitable Variable Life credits the values of the Policies participating in
the Account to compensate policyowners for their share of the Trust expenses
in excess of (1) fees for advisory services at an annual rate equivalent to
0.25% of the average daily value of the aggregate net assets of the
Portfolios, and (2) the Trust income taxes, if any. For Money Market and
Common Stock Divisions, fees for advisory services in excess of an annual
rate equivalent to 0.25% of the average daily value of the aggregate net
assets of the related Trust Portfolios are refunded to the Divisions. Excess
fees for advisory services for Intermediate Government Securities, High
Yield, Balanced and Aggressive Stock Divisions are absorbed by Equitable
Variable Life's surplus account.
5. Distribution and Servicing Agreement
Equitable Variable Life has entered into a Distribution and Servicing
Agreement with Equitable Life and Equico Securities Inc., (Equico), whereby
registered representatives of Equico, authorized as variable life insurance
agents under applicable state insurance laws, sell the Policies. The
registered representatives are compensated on a commission basis by
Equitable Life.
Equitable Variable Life also has entered into an agreement with Equitable
Life under which Equitable Life performs the administrative services related
to the Policies, including underwriting and issuance, billings and
collections, and policyowner services. There is no charge to the Account
related to this agreement.
6. Share Substitution
On February 22, 1994, Equitable Variable Life, the Account and the Trust
substituted shares of the Trust's Intermediate Government Securities
Portfolio for shares of the Trust's Short-Term World Income Portfolio. The
amount transferred to Intermediate Government Securities Portfolio was
$390,705. The statements of operations and statements of changes in net
assets for the Intermediate Government Securities Portfolio is combined with
the Short-Term World Income Portfolio for periods prior to the merger on
February 22, 1994. The Short-Term World Income Division is not available for
future investment.
7. Investment Returns
The tables on the following page show the gross and net investment returns
with respect to the Divisions for the periods shown. The net return for each
Division is based upon net assets for a policy which commences with the
beginning date of such period and is not based on the average net assets in
the Division during such period. Gross return is equal to the total return
earned by the underlying Trust investment.
FSA-10
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
RATES OF RETURN:
YEAR ENDED DECEMBER 31,
MONEY MARKET ----------------------------------------------------------------------------------------------------
DIVISION(A)(C) 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- -------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 5.74% 4.02% 3.16% 3.75% 6.38% 8.44% 9.44% 7.56% 6.85% 6.86%
Net return................ 5.41% 3.68% 2.62% 3.23% 5.85% 7.90% 8.85% 7.02% 6.32% 6.31%
</TABLE>
<TABLE>
<CAPTION>
APRIL 1(B) TO
INTERMEDIATE YEAR ENDED DECEMBER 31, DECEMBER 31,
GOVERNMENT ------------------------------------ --------------------
SECURITIES DIVISION 1995 1994 1993 1992 1991
- ------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross return.............. 13.33% (4.37)% 10.87% 5.88% 12.51%
Net return................ 13.12% (4.54)% 10.29% 5.35% 12.09%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
HIGH YIELD DIVISION 1995 1994 1993 1992 1991 1990 1989 1988 1987
- ------------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 19.92 % (2.79) % 23.60 % 12.69 % 24.91 % (0.75) % 5.52 % 10.55 % 5.30 %
Net return................ 19.74 % (2.94) % 22.99 % 12.13 % 24.29 % (1.25) % 4.99 % 9.73 % 4.77 %
BALANCED DIVISION
- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 19.75 % (8.02) % 12.44 % (2.68) % 41.52 % 0.43 % 26.08 % 13.84 % (0.65) %
Net return................ 19.33 % (8.35) % 11.91 % (3.17) % 40.81 % (0.07) % 25.45 % 12.99 % (1.15) %
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
COMMON STOCK ---------------------------------------------------------------------------------------------------
DIVISION(A)(C) 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- -------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 32.45 % (2.14) % 24.99 % 3.36 % 38.10 % (7.95) % 25.82 % 22.69 % 7.71 % 17.59 %
Net return................ 31.97 % (2.50) % 24.36 % 2.84 % 37.41 % (8.41) % 25.19 % 22.08 % 7.17 % 17.00 %
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
AGGRESSIVE --------------------------------------------------------------------------------------------
STOCK DIVISION 1995 1994 1993 1992 1991 1990 1989 1988 1987
- -------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return............. 31.63 % (3.81) % 17.05 % (2.91) % 87.41 % 8.49 % 43.93 % 1.78 % 7.69 %
Net return............... 31.29 % (4.07) % 16.45 % (3.40) % 86.47 % 7.95 % 43.21 % 1.02 % 7.15 %
<FN>
(a) The net returns for periods prior to March 22, 1985 are those of the
respective Separate Accounts I and II reorganized on that date into a unit
investment trust. The reorganization was accounted for under the continuing
entity basis of accounting.
(b) Date as of which net premiums under the Policies were first allocated to
the Division. The gross return and the net return for the periods indicated
are not annual rates of return.
(c) Subsequent to March 22, 1985, the date the Account commenced investing in
the Trust, the advisory fees have been deducted prior to calculating the
gross return.
</FN>
</TABLE>
8. Subsequent Event
On September 19, 1996 the Board of Directors of Equitable Life approved an
Agreement and Plan of Merger by and between Equitable Life and Equitable
Variable Life (the "Merger Agreement"). The merger is expected to be
effective on January 1, 1997, subject to receipt of all necessary regulatory
approvals. On that date, and in accordance with the provisions of the Merger
Agreement, the separate existence of Equitable Variable Life sill cease and
Equitable Life will survive the merger. From and after the effective date of
the merger, Equitable Life will be liable in place of Equitable Variable
Life for the liabilities and obligations of Equitable Variable Life,
including liabilities under policies and contracts issued by Equitable
Variable Life, and all of Equitable Variable Life's assets will become
assets of Equitable Life.
FSA-11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of
The Equitable Life Assurance Society of the United States
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, of shareholder's equity and of cash flows
present fairly, in all material respects, the financial position of The
Equitable Life Assurance Society of the United States and its subsidiaries
("Equitable Life") at December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of Equitable Life's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
As discussed in Note 2 to the consolidated financial statements, Equitable Life
changed its methods of accounting for loan impairments in 1995, for
postemployment benefits in 1994 and for investment securities in 1993.
[______________________________]
New York, New York
February 7, 1996
F-1
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available for sale, at estimated fair value............................. $ 15,899.9 $ 7,586.0
Held to maturity, at amortized cost..................................... - 5,223.0
Mortgage loans on real estate............................................. 3,638.3 4,018.0
Equity real estate........................................................ 3,916.2 4,446.4
Policy loans.............................................................. 1,976.4 1,731.2
Other equity investments.................................................. 621.1 678.5
Investment in and loans to affiliates..................................... 636.6 560.2
Other invested assets..................................................... 706.1 489.3
----------------- -----------------
Total investments..................................................... 27,394.6 24,732.6
Cash and cash equivalents................................................... 774.7 693.6
Deferred policy acquisition costs........................................... 3,083.3 3,221.1
Amounts due from discontinued GIC Segment................................... 2,097.1 2,108.6
Other assets................................................................ 2,713.1 2,078.6
Closed Block assets......................................................... 8,612.8 8,105.5
Separate Accounts assets.................................................... 24,566.6 20,469.5
----------------- -----------------
TOTAL ASSETS................................................................ $ 69,242.2 $ 61,409.5
================= =================
LIABILITIES
Policyholders' account balances............................................. $ 21,752.6 $ 21,238.0
Future policy benefits and other policyholders' liabilities................. 4,171.8 3,840.8
Short-term and long-term debt............................................... 1,899.3 1,337.4
Other liabilities........................................................... 3,379.5 2,300.1
Closed Block liabilities.................................................... 9,507.2 9,069.5
Separate Accounts liabilities............................................... 24,531.0 20,429.3
----------------- -----------------
Total liabilities..................................................... 65,241.4 58,215.1
----------------- -----------------
Commitments and contingencies (Notes 10, 12, 13, 14 and 15)
SHAREHOLDER'S EQUITY
Common stock, $1.25 par value 2.0 million shares authorized, issued
and outstanding........................................................... 2.5 2.5
Capital in excess of par value.............................................. 2,913.6 2,913.6
Retained earnings........................................................... 781.6 484.0
Net unrealized investment gains (losses).................................... 338.2 (203.0)
Minimum pension liability................................................... (35.1) (2.7)
----------------- -----------------
Total shareholder's equity............................................ 4,000.8 3,194.4
----------------- -----------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.................................. $ 69,242.2 $ 61,409.5
================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy fee
income...................................................... $ 771.0 $ 715.0 $ 644.5
Premiums...................................................... 606.8 625.6 599.1
Net investment income......................................... 2,127.7 2,030.9 2,599.3
Investment gains, net......................................... 5.3 91.8 533.4
Commissions, fees and other income............................ 886.8 845.4 1,717.2
Contribution from the Closed Block............................ 124.4 151.0 128.3
----------------- ----------------- -----------------
Total revenues.......................................... 4,522.0 4,459.7 6,221.8
----------------- ----------------- -----------------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances.......... 1,244.2 1,201.3 1,330.0
Policyholders' benefits....................................... 1,011.3 920.6 1,003.9
Other operating costs and expenses............................ 1,856.5 1,943.1 3,584.2
----------------- ----------------- -----------------
Total benefits and other deductions..................... 4,112.0 4,065.0 5,918.1
----------------- ----------------- -----------------
Earnings before Federal income taxes and cumulative
effect of accounting change................................. 410.0 394.7 303.7
Federal income taxes.......................................... 112.4 101.2 91.3
----------------- ----------------- -----------------
Earnings before cumulative effect of accounting change........ 297.6 293.5 212.4
Cumulative effect of accounting change, net of Federal
income taxes................................................ - (27.1) -
----------------- ----------------- -----------------
Net Earnings.................................................. $ 297.6 $ 266.4 $ 212.4
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Common stock, at par value, beginning of year................. $ 2.5 $ 2.5 $ 2.0
Increase in par value......................................... - - .5
----------------- ----------------- -----------------
Common stock, at par value, end of year....................... 2.5 2.5 2.5
----------------- ----------------- -----------------
Capital in excess of par value, beginning of year............. 2,913.6 2,613.6 2,273.9
Additional capital in excess of par value..................... - 300.0 340.2
Increase in par value......................................... - - (.5)
----------------- ----------------- -----------------
Capital in excess of par value, end of year................... 2,913.6 2,913.6 2,613.6
----------------- ----------------- -----------------
Retained earnings, beginning of year.......................... 484.0 217.6 5.2
Net earnings.................................................. 297.6 266.4 212.4
----------------- ----------------- -----------------
Retained earnings, end of year................................ 781.6 484.0 217.6
----------------- ----------------- -----------------
Net unrealized investment (losses) gains, beginning of year... (203.0) 131.9 78.8
Change in unrealized investment gains (losses)................ 541.2 (334.9) (9.5)
Effect of adopting new accounting standard.................... - - 62.6
----------------- ----------------- -----------------
Net unrealized investment gains (losses), end of year......... 338.2 (203.0) 131.9
----------------- ----------------- -----------------
Minimum pension liability, beginning of year.................. (2.7) (15.0) -
Change in minimum pension liability........................... (32.4) 12.3 (15.0)
----------------- ----------------- -----------------
Minimum pension liability, end of year........................ (35.1) (2.7) (15.0)
----------------- ----------------- -----------------
TOTAL SHAREHOLDER'S EQUITY, END OF YEAR....................... $ 4,000.8 $ 3,194.4 $ 2,950.6
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Net earnings.................................................. $ 297.6 $ 266.4 $ 212.4
Adjustments to reconcile net earnings to net cash
provided (used) by operating activities:
Net change in trading activities and broker-dealer
related receivables/payables.............................. - - (4,177.8)
Increase in matched resale agreements....................... - - (2,900.5)
Increase in matched repurchase agreements................... - - 2,900.5
Investment gains, net of dealer and trading gains........... (5.3) (91.8) (160.8)
Change in amounts due from discontinued GIC Segment......... - 57.3 47.8
General Account policy charges.............................. (769.7) (711.9) (623.4)
Interest credited to policyholders' account balances........ 1,244.2 1,201.3 1,330.0
Changes in Closed Block assets and liabilities, net......... (69.6) (95.1) (73.3)
Other, net.................................................. 627.1 7.8 (416.1)
----------------- ----------------- -----------------
Net cash provided (used) by operating activities.............. 1,324.3 634.0 (3,861.2)
----------------- ----------------- -----------------
Cash flows from investing activities:
Maturities and repayments................................... 1,863.1 2,319.7 3,479.6
Sales....................................................... 8,901.4 5,661.9 7,399.2
Return of capital from joint ventures and limited
partnerships.............................................. 65.2 39.0 119.5
Purchases................................................... (11,675.5) (7,417.6) (11,184.2)
Decrease (increase) in loans to discontinued GIC Segment.... 1,226.9 (40.0) (880.0)
Cash received on sale of 61% interest in DLJ................ - - 346.7
Other, net.................................................. (625.5) (371.1) (317.0)
----------------- ----------------- -----------------
Net cash (used) provided by investing activities.............. (244.4) 191.9 (1,036.2)
----------------- ----------------- -----------------
Cash flows from financing activities:
Policyholders' account balances:
Deposits.................................................. 2,414.9 2,082.7 2,410.7
Withdrawals............................................... (2,692.7) (2,887.4) (2,433.5)
Net (decrease) increase in short-term financings............ (16.4) (173.0) 4,717.2
Additions to long-term debt................................. 599.7 51.8 97.7
Repayments of long-term debt................................ (40.7) (199.8) (64.4)
Proceeds from issuance of Alliance units.................... - 100.0 -
Payment of obligation to fund accumulated deficit of
discontinued GIC Segment.................................. (1,215.4) - -
Capital contribution from the Holding Company............... - 300.0 -
Other, net.................................................. (48.2) - -
----------------- ----------------- -----------------
Net cash (used) provided by financing activities.............. (998.8) (725.7) 4,727.7
----------------- ----------------- -----------------
Change in cash and cash equivalents........................... 81.1 100.2 (169.7)
Cash and cash equivalents, beginning of year.................. 693.6 593.4 763.1
----------------- ----------------- -----------------
Cash and Cash Equivalents, End of Year........................ $ 774.7 $ 693.6 $ 593.4
================= ================= =================
Supplemental cash flow information
Interest Paid............................................... $ 89.6 $ 34.9 $ 1,437.2
================= ================= =================
Income Taxes (Refunded) Paid................................ $ (82.7) $ 49.2 $ 41.0
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) ORGANIZATION
The Equitable Life Assurance Society of the United States ("Equitable
Life") converted to a stock life insurance company on July 22, 1992 and
became a wholly owned subsidiary of The Equitable Companies Incorporated
(the "Holding Company"). Equitable Life's insurance business, which is
comprised of an Individual Insurance and Annuities segment and a Group
Pension segment is conducted principally by Equitable Life and its
wholly owned life insurance subsidiary, Equitable Variable Life
Insurance Company ("EVLICO"). Equitable Life's investment management
business, which comprises the Investment Services segment, is conducted
principally by Alliance Capital Management L.P. ("Alliance"), Equitable
Real Estate Investment Management, Inc. ("EREIM") and Donaldson, Lufkin
and Jenrette, Inc. ("DLJ"), an investment banking and brokerage
affiliate. AXA, a French holding company for an international group of
insurance and related financial services companies is the Holding
Company's largest shareholder, owning approximately 60.6% at December
31, 1995 (63.5% assuming conversion of Series E Convertible Preferred
Stock held by AXA and 54.2% if all securities convertible into, or
options on, common stock were to be converted or exercised).
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
-----------------------------------------------------
The accompanying consolidated financial statements are prepared in
conformity with generally accepted accounting principles ("GAAP").
The accompanying consolidated financial statements include the accounts
of Equitable Life and its wholly owned life insurance subsidiaries
(collectively, the "Insurance Group"); non-insurance subsidiaries,
principally Alliance, an investment advisory subsidiary and EREIM, a
real estate investment management subsidiary; and those partnerships and
joint ventures in which the Company has control and a majority economic
interest (collectively, including its consolidated subsidiaries, the
"Company"). The consolidated statement of earnings and cash flow for the
year ended December 31, 1993 include the results of operations and cash
flow of DLJ, an investment banking and brokerage affiliate, on a
consolidated basis through December 15, 1993 (see Note 20). Subsequent
to that date, DLJ is accounted for on the equity basis. The Closed Block
assets and liabilities and results of operations are presented in the
consolidated financial statements as single line items (see Note 6).
Unless specifically stated, all disclosures contained herein supporting
the consolidated financial statements exclude the Closed Block related
amounts.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
All significant intercompany transactions and balances have been
eliminated in consolidation other than intercompany transactions and
balances with the Closed Block and the discontinued Guaranteed Interest
Contract ("GIC") Segment (see Note 7).
Certain reclassifications have been made in the amounts presented for
prior periods to conform these periods with the 1995 presentation.
F-6
<PAGE>
Closed Block
------------
As of July 22, 1992, Equitable Life established the Closed Block for the
benefit of certain classes of individual participating policies for
which Equitable Life had a dividend scale payable in 1991 and which were
in force on that date. Assets were allocated to the Closed Block in an
amount which, together with anticipated revenues from policies included
in the Closed Block, was reasonably expected to be sufficient to support
such business, including provision for payment of claims, certain
expenses and taxes, and for continuation of dividend scales payable in
1991, assuming the experience underlying such scales continues.
Assets allocated to the Closed Block inure solely to the benefit of the
holders of policies included in the Closed Block and will not revert to
the benefit of the Holding Company. The plan of demutualization
prohibits the reallocation, transfer, borrowing or lending of assets
between the Closed Block and other portions of Equitable Life's General
Account, any of its Separate Accounts or to any affiliate of Equitable
Life without the approval of the New York Superintendent of Insurance.
Closed Block assets and liabilities are carried on the same basis as
similar assets and liabilities held in the General Account.
The excess of Closed Block liabilities over Closed Block assets
represents the expected future post-tax contribution from the Closed
Block which would be recognized in income over the period the policies
and contracts in the Closed Block remain in force. If the actual
contribution from the Closed Block in any given period equals or exceeds
the expected contribution for such period as determined at the
establishment of the Closed Block, the expected contribution would be
recognized in income for that period. Any excess of the actual
contribution over the expected contribution would also be recognized in
income to the extent that the aggregate expected contribution for all
prior periods exceeded the aggregate actual contribution. Any remaining
excess of actual contribution over expected contributions would be
accrued in the Closed Block as a liability for future dividends to be
paid to the Closed Block policyholders. If, over the period the policies
and contracts in the Closed Block remain in force, the actual
contribution from the Closed Block is less than the expected
contribution from the Closed Block, only such actual contribution would
be recognized in income.
Discontinued Operations
-----------------------
In 1991, the Company's management adopted a plan to discontinue the
business operations of the GIC Segment, consisting of the Guaranteed
Interest Contract and Group Non-Participating Wind-Up Annuities lines of
business. The Company established a pre-tax provision for the estimated
future losses of the GIC line of business and a premium deficiency
reserve for the Group Non-Participating Wind-Up Annuities. Subsequent
losses incurred have been charged to the allowance for future losses and
the premium deficiency reserve. Total allowances are based upon
management's best judgment and there is no assurance that the ultimate
losses will not differ.
Accounting Changes
------------------
In the first quarter of 1995, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for
Impairment of a Loan". This statement applies to all loans, including
loans restructured in a troubled debt restructuring involving a
modification of terms. This statement addresses the accounting for
impairment of a loan by specifying how allowances for credit losses
should be determined. Impaired loans within the scope of this statement
are measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate, at the loan's
observable market price or the fair value of the collateral if the loan
is collateral dependent. The Company provides for impairment of loans
through an allowance for possible losses. The adoption of this statement
did not have a material effect on the level of these allowances or on
the Company's consolidated statements of earnings and shareholder's
equity.
F-7
<PAGE>
In the fourth quarter of 1994 (effective as of January 1, 1994), the
Company adopted SFAS No. 112, "Employers' Accounting for Postemployment
Benefits," which required employers to recognize the obligation to
provide postemployment benefits. Implementation of this statement
resulted in a charge for the cumulative effect of accounting change of
$27.1 million, net of a Federal income tax benefit of $14.6 million.
At December 31, 1993, the Company adopted SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," which expanded the
use of fair value accounting for those securities that a company does
not have positive intent and ability to hold to maturity. Implementation
of this statement increased consolidated shareholder's equity by $62.6
million, net of deferred policy acquisition costs, amounts attributable
to participating group annuity contracts and deferred Federal income
tax. Beginning coincident with issuance of SFAS No. 115 implementation
guidance in November 1995, the Financial Accounting Standards Board
("FASB") permitted companies a one-time opportunity, through December
31, 1995, to reassess the appropriateness of the classification of all
securities held at that time. On December 1, 1995, the Company
transferred $4,794.9 million of securities classified as held to
maturity to the available for sale portfolio. As a result consolidated
shareholder's equity increased by $126.2 million, net of deferred policy
acquisition costs, amounts attributable to participating group annuity
contracts and deferred Federal income tax.
New Accounting Pronouncements
-----------------------------
In January 1995, the FASB issued SFAS No. 120, "Accounting and Reporting
by Mutual Life Insurance Enterprises and by Insurance Enterprises for
Certain Long-Duration Participating Contracts," which permits, but does
not require, stock life insurance companies with participating life
contracts to account for those contracts in accordance with Statement of
Position No. 95-1, "Accounting for Certain Insurance Activities of
Mutual Life Insurance Enterprises". The Company has decided to retain
the existing methodology to account for traditional participating
policies and, therefore, will not adopt this statement.
In March 1995, the FASB issued SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of," which requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or changes in
circumstances indicate the carrying amount of such assets may not be
recoverable. The Company will implement this statement as of January 1,
1996. The cumulative effect of this accounting change will be a charge
of $23.4 million, net of a Federal income tax benefit of $12.1 million,
due to the writedown to fair value of building improvements relating to
facilities being vacated beginning in 1996. The Company currently
provides allowances for possible losses for other assets under the scope
of this statement. Management has not yet determined the impact of this
statement on assets to be held and used.
In May 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage
Servicing Rights," which requires a mortgage banking enterprise to
recognize rights to service mortgage loans for others as separate assets
however those servicing rights are acquired. It further requires
capitalized mortgage servicing rights be assessed for impairment based
on the fair value of those rights. The Company will implement this
statement as of January 1, 1996. Implementation of this statement will
not have a material effect on the Company's consolidated financial
statements.
In October 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation". This statement defines a fair value based
method of accounting for stock-based employee compensation plans while
continuing to allow an entity to measure compensation cost for such
plans using the intrinsic value based method of accounting. Management
has decided to retain the current compensation cost methodology
prescribed by Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees".
F-8
<PAGE>
Valuation of Investments
------------------------
Fixed maturities, which the Company has both the ability and the intent
to hold to maturity, are stated principally at amortized cost. Fixed
maturities identified as available for sale are reported at estimated
fair value. The amortized cost of fixed maturities is adjusted for
impairments in value deemed to be other than temporary.
Mortgage loans on real estate are stated at unpaid principal balances,
net of unamortized discounts and valuation allowances. Effective with
the adoption of SFAS No. 114 on January 1, 1995, the valuation
allowances are based on the present value of expected future cash flows
discounted at the loan's original effective interest rate or the
collateral value if the loan is collateral dependent. However, if
foreclosure is or becomes probable, the measurement method used is
collateral value. Prior to the adoption of SFAS No. 114, the valuation
allowances were based on losses expected by management to be realized on
transfers of mortgage loans to real estate (upon foreclosure or
in-substance foreclosure), on the disposition or settlement of mortgage
loans and on mortgage loans management believed may not be collectible
in full. In establishing valuation allowances, management previously
considered, among other things the estimated fair value of the
underlying collateral.
Real estate, including real estate acquired in satisfaction of debt, is
stated at depreciated cost less valuation allowances. At the date of
foreclosure (including in-substance foreclosure), real estate acquired
in satisfaction of debt is valued at estimated fair value. Valuation
allowances on real estate held for the production of income are computed
using the forecasted cash flows of the respective properties discounted
at a rate equal to the Company's cost of funds; valuation allowances on
real estate available for sale are computed using the lower of current
estimated fair value, net of disposition costs, or depreciated cost.
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which the Company does not
have control and a majority economic interest are reported on the equity
basis of accounting and are included either with equity real estate or
other equity investments, as appropriate.
Common stocks are carried at estimated fair value and are included in
other equity investments.
Short-term investments are stated at amortized cost which approximates
fair value and are included with other invested assets.
Cash and cash equivalents includes cash on hand, amounts due from banks
and highly liquid debt instruments purchased with an original maturity
of three months or less.
All securities are recorded in the consolidated financial statements on
a trade date basis.
Investment Results and Unrealized Investment Gains (Losses)
-----------------------------------------------------------
Net investment income and realized investment gains and losses
(collectively, "investment results") related to certain participating
group annuity contracts are passed through to the contractholders as
interest credited to policyholders' account balances.
Realized investment gains and losses are determined by specific
identification and are presented as a component of revenue. Valuation
allowances are netted against the asset categories to which they apply
and changes in the valuation allowances are included in investment gains
or losses.
Unrealized investment gains and losses on fixed maturities available for
sale and equity securities held by the Company are accounted for as a
separate component of shareholder's equity, net of related deferred
Federal income taxes, amounts attributable to the discontinued GIC
Segment, Closed Block, participating group annuity contracts and
deferred policy acquisition costs related to universal life and
investment-type products.
F-9
<PAGE>
Recognition of Insurance Income and Related Expenses
----------------------------------------------------
Premiums from universal life and investment-type contracts are reported
as deposits to policyholders' account balances. Revenues from these
contracts consist of amounts assessed during the period against
policyholders' account balances for mortality charges, policy
administration charges and surrender charges. Policy benefits and claims
that are charged to expense include benefit claims incurred in the
period in excess of related policyholders' account balances.
Premiums from traditional life and annuity policies with life
contingencies generally are recognized as income when due. Benefits and
expenses are matched with such income so as to result in the recognition
of profits over the life of the contracts. This match is accomplished by
means of the provision for liabilities for future policy benefits and
the deferral and subsequent amortization of policy acquisition costs.
For contracts with a single premium or a limited number of premium
payments due over a significantly shorter period than the total period
over which benefits are provided, premiums are recorded as income when
due with any excess profit deferred and recognized in income in a
constant relationship to insurance in force or, for annuities, the
amount of expected future benefit payments.
Premiums from individual health contracts are recognized as income over
the period to which the premiums relate in proportion to the amount of
insurance protection provided.
Deferred Policy Acquisition Costs
---------------------------------
The costs of acquiring new business, principally commissions,
underwriting, agency and policy issue expenses, all of which vary with
and are primarily related to the production of new business, are
deferred. Deferred policy acquisition costs are subject to
recoverability testing at the time of policy issue and loss recognition
testing at the end of each accounting period.
For universal life products and investment-type products, deferred
policy acquisition costs are amortized over the expected average life of
the contracts (periods ranging from 15 to 35 years and 5 to 17 years,
respectively) as a constant percentage of estimated gross profits
arising principally from investment results, mortality and expense
margins and surrender charges based on historical and anticipated future
experience, updated at the end of each accounting period. The effect on
the amortization of deferred policy acquisition costs of revisions to
estimated gross profits is reflected in earnings in the period such
estimated gross profits are revised. The effect on the deferred policy
acquisition cost asset that would result from realization of unrealized
gains (losses) is recognized with an offset to unrealized gains (losses)
in consolidated shareholder's equity as of the balance sheet date.
For traditional life and annuity policies with life contingencies,
deferred policy acquisition costs are amortized in proportion to
anticipated premiums. Assumptions as to anticipated premiums are
estimated at the date of policy issue and are consistently applied
during the life of the contracts. Deviations from estimated experience
are reflected in earnings in the period such deviations occur. For these
contracts, the amortization periods generally are for the estimated life
of the policy.
For individual health benefit insurance, deferred policy acquisition
costs are amortized over the expected average life of the contracts (10
years for major medical policies and 20 years for disability income
products) in proportion to anticipated premium revenue at time of issue.
Policyholders' Account Balances and Future Policy Benefits
----------------------------------------------------------
Policyholders' account balances for universal life and investment-type
contracts are equal to the policy account values. The policy account
values represent an accumulation of gross premium payments plus credited
interest less expense and mortality charges and withdrawals.
F-10
<PAGE>
For traditional life insurance policies, future policy benefit and
dividend liabilities are estimated using a net level premium method on
the basis of actuarial assumptions as to mortality, persistency and
interest established at policy issue. Assumptions established at policy
issue as to mortality and persistency are based on the Insurance Group's
experience which, together with interest and expense assumptions,
provide a margin for adverse deviation. When the liabilities for future
policy benefits plus the present value of expected future gross premiums
for a product are insufficient to provide for expected future policy
benefits and expenses for that product, deferred policy acquisition
costs are written off and thereafter, if required, a premium deficiency
reserve is established by a charge to earnings. Benefit liabilities for
traditional annuities during the accumulation period are equal to
accumulated contractholders' fund balances and after annuitization are
equal to the present value of expected future payments. Interest rates
used in establishing such liabilities range from 2.25% to 11.5% for life
insurance liabilities and from 2.25% to 13.5% for annuity liabilities.
Individual health benefit liabilities for active lives are estimated
using the net level premium method, and assumptions as to future
morbidity, withdrawals and interest which provide a margin for adverse
deviation. Benefit liabilities for disabled lives are estimated using
the present value of benefits method and experience assumptions as to
claim terminations, expenses and interest.
Claim reserves and associated liabilities for individual disability
income and major medical policies were $639.6 million, $570.6 million at
December 31, 1995 and 1994, respectively. Incurred benefits (benefits
paid plus changes in claim reserves) and benefits paid for individual
disability income and major medical policies are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Incurred benefits related to current year.......... $ 176.0 $ 188.6 $ 193.1
Incurred benefits related to prior years........... 67.8 28.7 106.1
----------------- ---------------- -----------------
Total Incurred Benefits............................ $ 243.8 $ 217.3 $ 299.2
================= ================ =================
Benefits paid related to current year.............. $ 37.0 $ 43.7 $ 48.9
Benefits paid related to prior years............... 137.8 132.3 123.1
----------------- ---------------- -----------------
Total Benefits Paid................................ $ 174.8 $ 176.0 $ 172.0
================= ================ =================
</TABLE>
The amount of policyholders' dividends to be paid (including those on
policies included in the Closed Block) is determined annually by
Equitable Life's Board of Directors. The aggregate amount of
policyholders' dividends is related to actual interest, mortality,
morbidity and expense experience for the year and judgment as to the
appropriate level of statutory surplus to be retained by Equitable Life.
Equitable Life is subject to limitations on the amount of statutory
profits which can be retained with respect to certain classes of
individual participating policies that were in force on July 22, 1992
which are not included in the Closed Block and with respect to
participating policies issued subsequent to July 22, 1992. Excess
statutory profits, if any, will be distributed over time to such
policyholders and will not be available to Equitable Life's shareholder.
Earnings in excess of limitations are accrued as policyholders'
dividends.
At December 31, 1995, participating policies including those in the
Closed Block represent approximately 27.2% ($58.4 billion) of directly
written life insurance in force, net of amounts ceded. Participating
policies represent primarily all of the premium income as reflected in
the consolidated statements of earnings and in the results of the Closed
Block.
F-11
<PAGE>
Federal Income Taxes
--------------------
Equitable Life and its life insurance and non-life insurance
subsidiaries file a consolidated Federal income tax return with the
Holding Company and its non-life insurance subsidiaries. Current Federal
income taxes are charged or credited to operations based upon amounts
estimated to be payable or recoverable as a result of taxable operations
for the current year. Deferred income tax assets and liabilities are
recognized based on the difference between financial statement carrying
amounts and income tax bases of assets and liabilities using enacted
income tax rates and laws.
Separate Accounts
-----------------
Separate Accounts are established in conformity with the New York State
Insurance Law and generally are not chargeable with liabilities that
arise from any other business of the Insurance Group. Separate Accounts
assets are subject to General Account claims only to the extent the
value of such assets exceeds the Separate Accounts liabilities.
Assets and liabilities of the Separate Accounts, representing net
deposits and accumulated net investment earnings less fees, held
primarily for the benefit of contractholders, and for which the
Insurance Group does not bear the investment risk, are shown as separate
captions in the consolidated balance sheets. The Insurance Group bears
the investment risk on assets held in one Separate Account, therefore,
such assets are carried on the same basis as similar assets held in the
General Account portfolio. Assets held in the other Separate Accounts
are carried at quoted market values or, where quoted values are not
available, at estimated fair values as determined by the Insurance
Group.
The investment results of Separate Accounts on which the Insurance Group
does not bear the investment risk are reflected directly in Separate
Accounts liabilities. For the years ended December 31, 1995, 1994 and
1993, investment results of such Separate Accounts were $1,956.3
million, $676.3 million and $1,676.5 million, respectively.
Deposits to all Separate Accounts are reported as increases in Separate
Accounts liabilities and are not reported in revenues. Mortality, policy
administration and surrender charges on all Separate Accounts are
included in revenues.
F-12
<PAGE>
3) INVESTMENTS
The following tables provide additional information relating to fixed
maturities and equity securities:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
----------------- ----------------- ---------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
DECEMBER 31, 1995
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 10,910.7 $ 617.6 $ 118.1 $ 11,410.2
Mortgage-backed.................... 1,838.0 31.2 1.2 1,868.0
U.S. Treasury securities and
U.S. government and
agency securities................ 2,257.0 77.8 4.1 2,330.7
States and political subdivisions.. 45.7 5.2 - 50.9
Foreign governments................ 124.5 11.0 .2 135.3
Redeemable preferred stock......... 108.1 5.3 8.6 104.8
----------------- ----------------- ---------------- ---------------
Total Available for Sale............... $ 15,284.0 $ 748.1 $ 132.2 $ 15,899.9
================= ================= ================ ===============
Equity Securities:
Common stock......................... $ 97.3 $ 49.1 $ 18.0 $ 128.4
================= ================= ================ ===============
December 31, 1994
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 5,663.4 $ 34.6 $ 368.0 $ 5,330.0
Mortgage-backed.................... 686.0 2.9 44.8 644.1
U.S. Treasury securities and
U.S. government and
agency securities................ 1,519.3 6.7 71.9 1,454.1
States and political subdivisions.. 23.4 .1 .7 22.8
Foreign governments................ 43.8 .3 4.2 39.9
Redeemable preferred stock......... 108.4 .4 13.7 95.1
----------------- ----------------- ---------------- ---------------
Total Available for Sale............... $ 8,044.3 $ 45.0 $ 503.3 $ 7,586.0
================= ================= ================ ===============
Held to Maturity:
Corporate.......................... $ 4,661.0 $ 67.9 $ 233.8 $ 4,495.1
U.S. Treasury securities and
U.S. government and
agency securities................ 428.9 4.6 44.2 389.3
States and political subdivisions.. 63.4 .9 3.7 60.6
Foreign governments................ 69.7 4.2 2.0 71.9
================= ================= ================ ===============
Total Held to Maturity................. $ 5,223.0 $ 77.6 $ 283.7 $ 5,016.9
================= ================= ================ ===============
Equity Securities:
Common stock......................... $ 126.4 $ 31.2 $ 23.5 $ 134.1
================= ================= ================ ===============
</TABLE>
F-13
<PAGE>
For publicly traded fixed maturities and equity securities, estimated
fair value is determined using quoted market prices. For fixed
maturities without a readily ascertainable market value, the Company has
determined an estimated fair value using a discounted cash flow
approach, including provisions for credit risk, generally based upon the
assumption that such securities will be held to maturity. Estimated fair
value for equity securities, substantially all of which do not have a
readily ascertainable market value, has been determined by the Company.
Such estimated fair values do not necessarily represent the values for
which these securities could have been sold at the dates of the
consolidated balance sheets. At December 31, 1995 and 1994, securities
without a readily ascertainable market value having an amortized cost of
$3,748.9 million and $3,980.4 million, respectively, had estimated fair
values of $3,981.8 million and $3,858.7 million, respectively.
The contractual maturity of bonds at December 31, 1995 is shown below:
<TABLE>
<CAPTION>
AVAILABLE FOR SALE
------------------------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Due in one year or less................................................ $ 357.9 $ 360.0
Due in years two through five.......................................... 3,773.1 3,847.1
Due in years six through ten........................................... 4,709.8 4,821.8
Due after ten years.................................................... 4,497.1 4,898.2
Mortgage-backed securities............................................. 1,838.0 1,868.0
---------------- -----------------
Total.................................................................. $ 15,175.9 $ 15,795.1
================ =================
</TABLE>
Bonds not due at a single maturity date have been included in the above
table in the year of final maturity. Actual maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balances, beginning of year........................ $ 284.9 $ 355.6 $ 512.0
Additions charged to income........................ 136.0 51.0 92.8
Deductions for writedowns and asset dispositions... (95.6) (121.7) (249.2)
----------------- ---------------- -----------------
Balances, End of Year.............................. $ 325.3 $ 284.9 $ 355.6
================= ================ =================
Balances, end of year comprise:
Mortgage loans on real estate.................... $ 65.5 $ 64.2 $ 144.4
Equity real estate............................... 259.8 220.7 211.2
----------------- ---------------- -----------------
Total.............................................. $ 325.3 $ 284.9 $ 355.6
================= ================ =================
</TABLE>
Deductions for writedowns and asset dispositions for 1993 include an
$87.1 million writedown of fixed maturity investments at December 31,
1993 as a result of adopting a new accounting statement for the
valuation of these investments that requires specific writedowns instead
of valuation allowances.
At December 31, 1995, the carrying values of investments held for the
production of income which were non-income producing for the twelve
months preceding the consolidated balance sheet date were $37.2 million
of fixed maturities and $84.7 million of mortgage loans on real estate.
F-14
<PAGE>
The Insurance Group's fixed maturity investment portfolio includes
corporate high yield securities consisting of public high yield bonds,
redeemable preferred stocks and directly negotiated debt in leveraged
buyout transactions. The Insurance Group seeks to minimize the higher
than normal credit risks associated with such securities by monitoring
the total investments in any single issuer or total investment in a
particular industry group. Certain of these corporate high yield
securities are classified as other than investment grade by the various
rating agencies, i.e., a rating below Baa or National Association of
Insurance Commissioners ("NAIC") designation of 3 (medium grade), 4 or 5
(below investment grade) or 6 (in or near default). At December 31,
1995, approximately 15.57% of the $15,139.9 million aggregate amortized
cost of bonds held by the Insurance Group were considered to be other
than investment grade.
In addition to its holdings of corporate high yield securities, the
Insurance Group is an equity investor in limited partnership interests
which primarily invest in securities considered to be other than
investment grade.
The Company has restructured or modified the terms of certain fixed
maturity investments. The fixed maturity portfolio, based on amortized
cost, includes $15.9 million and $30.5 million at December 31, 1995 and
1994, respectively, of such restructured securities. These amounts
include fixed maturities which are in default as to principal and/or
interest payments, are to be restructured pursuant to commenced
negotiations or where the borrowers went into bankruptcy subsequent to
acquisition (collectively, "problem fixed maturities") of $1.6 million
and $9.7 million as of December 31, 1995 and 1994, respectively. Gross
interest income that would have been recorded in accordance with the
original terms of restructured fixed maturities amounted to $3.0
million, $7.5 million and $11.7 million in 1995, 1994 and 1993,
respectively. Gross interest income on these fixed maturities included
in net investment income aggregated $2.9 million, $6.8 million and $9.7
million in 1995, 1994 and 1993, respectively.
At December 31, 1995 and 1994, mortgage loans on real estate with
scheduled payments 60 days (90 days for agricultural mortgages) or more
past due or in foreclosure (collectively, "problem mortgage loans on
real estate") had an amortized cost of $87.7 million (2.4% of total
mortgage loans on real estate) and $96.9 million (2.3% of total mortgage
loans on real estate), respectively.
The payment terms of mortgage loans on real estate may from time to time
be restructured or modified. The investment in restructured mortgage
loans on real estate, based on amortized cost, amounted to $531.5
million and $447.9 million at December 31, 1995 and 1994, respectively.
These amounts include $3.8 million and $1.0 million of problem mortgage
loans on real estate at December 31, 1995 and 1994, respectively. Gross
interest income on restructured mortgage loans on real estate that would
have been recorded in accordance with the original terms of such loans
amounted to $52.1 million, $44.9 million and $51.8 million in 1995, 1994
and 1993, respectively. Gross interest income on these loans included in
net investment income aggregated $37.4 million, $32.8 million and $46.0
million in 1995, 1994 and 1993, respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
December 31, 1995
-------------------
(IN MILLIONS)
<S> <C>
Impaired mortgage loans with provision for losses....................................... $ 310.1
Impaired mortgage loans with no provision for losses.................................... 160.8
-------------------
Recorded investment in impaired mortgage loans.......................................... 470.9
Provision for losses.................................................................... 62.7
-------------------
Net Impaired Mortgage Loans............................................................. $ 408.2
===================
</TABLE>
F-15
<PAGE>
Impaired mortgage loans with no provision for losses are loans where the
fair value of the collateral or the net present value of the loan equals
or exceeds the recorded investment. Interest income earned on loans
where the collateral value is used to measure impairment is recorded on
a cash basis. Interest income on loans where the present value method is
used to measure impairment is accrued on the net carrying value amount
of the loan at the interest rate used to discount the cash flows.
Changes in the present value attributable to changes in the amount or
timing of expected cash flows are reported as investment gains or
losses.
During the year ended December 31, 1995, the Company's average recorded
investment in impaired mortgage loans was $429.0 million. Interest
income recognized on these impaired mortgage loans totaled $27.9 million
for the year ended December 31, 1995, including $13.4 million recognized
on a cash basis.
At December 31, 1995, investments owned of any one issuer, including its
affiliates, for which the aggregate carrying values are 10% or more of
total shareholders' equity, were $508.3 million relating to Trammell
Crow and affiliates (including holdings of the Closed Block and the
discontinued GIC Segment). The amount includes restructured mortgage
loans on real estate with an amortized cost of $152.4 million. A $294.0
million commercial loan package which was in bankruptcy at the beginning
of the year was resolved in 1995, with part of the package reclassified
as restructured and the remainder reclassified as equity real estate.
The Insurance Group's investment in equity real estate is through direct
ownership and through investments in real estate joint ventures. At
December 31, 1995 and 1994, the carrying value of equity real estate
available for sale amounted to $255.5 million and $447.8 million,
respectively. For the years ended December 31, 1995, 1994 and 1993,
respectively, real estate of $35.3 million, $189.8 million and $261.8
million was acquired in satisfaction of debt. At December 31, 1995 and
1994, the Company owned $862.7 million and $1,086.9 million,
respectively, of real estate acquired in satisfaction of debt.
Depreciation of real estate is computed using the straight-line method
over the estimated useful lives of the properties, which generally range
from 40 to 50 years. Accumulated depreciation on real estate was $662.4
million and $703.1 million at December 31, 1995 and 1994, respectively.
Depreciation expense on real estate totaled $121.7 million, $117.0
million and $115.3 million for the years ended December 31, 1995, 1994
and 1993, respectively.
F-16
<PAGE>
4) JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information of real estate joint ventures
(38 and 47 individual ventures as of December 31, 1995 and 1994,
respectively) and of limited partnership interests accounted for under
the equity method, in which the Company has an investment of $10.0
million or greater and an equity interest of 10% or greater is as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
FINANCIAL POSITION
Investments in real estate, at depreciated cost........................ $ 2,684.1 $ 2,786.7
Investments in securities, generally at estimated fair value........... 2,459.8 3,071.2
Cash and cash equivalents.............................................. 489.1 359.8
Other assets........................................................... 270.8 398.7
---------------- -----------------
Total assets........................................................... 5,903.8 6,616.4
---------------- -----------------
Borrowed funds - third party........................................... 1,782.3 1,759.6
Borrowed funds - the Company........................................... 220.5 238.0
Other liabilities...................................................... 593.9 987.7
---------------- -----------------
Total liabilities...................................................... 2,596.7 2,985.3
---------------- -----------------
Partners' Capital...................................................... $ 3,307.1 $ 3,631.1
================ =================
Equity in partners' capital included above............................. $ 902.2 $ 964.2
Equity in limited partnership interests not included above............. 212.8 224.6
Excess (deficit) of equity in partners' capital over investment cost
and equity earnings.................................................. 3.6 (1.8)
Notes receivable from joint venture.................................... 5.3 6.1
---------------- -----------------
Carrying Value......................................................... $ 1,123.9 $ 1,193.1
================ =================
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures............. $ 463.5 $ 537.7 $ 602.7
Revenues of other limited partnership interests.... 242.3 103.4 319.1
Interest expense - third party..................... (135.3) (114.9) (118.8)
Interest expense - the Company..................... (41.0) (36.9) (52.1)
Other expenses..................................... (397.7) (430.9) (531.7)
----------------- ---------------- -----------------
Net Earnings....................................... $ 131.8 $ 58.4 $ 219.2
================= ================ =================
Equity in net earnings included above.............. $ 49.1 $ 18.9 $ 71.6
Equity in net earnings of limited partnerships
interests not included above..................... 44.8 25.3 46.3
Excess of earnings in joint ventures over equity
ownership percentage and amortization of
differences in bases............................. .9 1.8 9.2
Interest on notes receivable....................... .1 - .5
----------------- ---------------- -----------------
Total Equity in Net Earnings....................... $ 94.9 $ 46.0 $ 127.6
================= ================ =================
</TABLE>
F-17
<PAGE>
5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES)
The sources of net investment income are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ 1,151.0 $ 1,024.5 $ 981.7
Trading account securities......................... - - 709.3
Securities purchased under resale agreements....... - - 533.8
Mortgage loans on real estate...................... 329.0 384.3 457.4
Equity real estate................................. 560.4 561.8 539.1
Other equity investments........................... 76.9 35.7 110.4
Policy loans....................................... 144.4 122.7 117.0
Broker-dealer related receivables.................. - - 292.2
Other investment income............................ 279.7 336.3 304.9
----------------- ---------------- -----------------
Gross investment income.......................... 2,541.4 2,465.3 4,045.8
----------------- ---------------- -----------------
Interest expense to finance short-term trading
instruments...................................... - - 983.4
Other investment expenses.......................... 413.7 434.4 463.1
----------------- ---------------- -----------------
Investment expenses.............................. 413.7 434.4 1,446.5
----------------- ---------------- -----------------
Net Investment Income.............................. $ 2,127.7 $ 2,030.9 $ 2,599.3
================= ================ =================
</TABLE>
Investment gains (losses), net, including changes in the valuation
allowances, are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ 119.9 $ (14.1) $ 123.1
Mortgage loans on real estate...................... (40.2) (43.1) (65.1)
Equity real estate................................. (86.6) 20.6 (18.5)
Other equity investments........................... 12.8 76.0 119.5
Dealer and trading gains........................... - - 372.5
Sales of newly issued Alliance Units............... - 52.4 -
Other.............................................. (.6) - 1.9
----------------- ---------------- -----------------
Investment Gains, Net.............................. $ 5.3 $ 91.8 $ 533.4
================= ================ =================
</TABLE>
Writedowns of fixed maturities amounted to $46.7 million, $30.8 million
and $5.4 million for the years ended December 31, 1995, 1994 and 1993,
respectively.
For the years ended December 31, 1995 and 1994, respectively, proceeds
received on sales of fixed maturities classified as available for sale
amounted to $8,206.0 million and $5,253.9 million. Gross gains of $211.4
million and $65.2 million and gross losses of $64.2 million and $50.8
million, respectively, were realized on these sales. The change in
unrealized investment gains (losses) related to fixed maturities
classified as available for sale for the years ended December 31, 1995
and 1994 amounted to $1,077.2 million and $(742.2) million,
respectively.
Gross gains of $188.5 million and gross losses of $145.0 million were
realized on sales of investments in fixed maturities held for investment
and available for sale for the year ended December 31, 1993.
F-18
<PAGE>
During each of the years ended December 31, 1995 and 1994, one security
classified as held to maturity was sold and during the eleven months
ended November 30, 1995 and the year ended December 31, 1994,
respectively, twelve and six securities so classified were transferred
to the available for sale portfolio. All actions were taken as a result
of a significant deterioration in creditworthiness. The aggregate
amortized cost of the securities sold were $1.0 million and $19.9
million with a related investment gain of $-0- million and $.8 million
recognized in 1995 and 1994, respectively; the aggregate amortized cost
of the securities transferred was $116.0 million and $42.8 million with
gross unrealized investment losses of $3.2 million and $3.1 million
charged to consolidated shareholders' equity for the eleven months ended
November 30, 1995 and the year ended December 31, 1994, respectively. On
December 1, 1995, the Company transferred $4,794.9 million of securities
classified as held to maturity to the available for sale portfolio. As a
result, unrealized gains on fixed maturities increased $307.0 million,
offset by deferred policy acquisition costs of $73.7 million, amounts
attributable to participating group annuity contracts of $39.2 million
and deferred Federal income tax of $67.9 million.
Investment gains from other equity investments for the year ended
December 31, 1993, included $79.9 million generated by DLJ's involvement
in long-term corporate development investments.
For the years ended December 31, 1995, 1994 and 1993, investment results
passed through to certain participating group annuity contracts as
interest credited to policyholders' account balances amounted to $131.2
million, $175.8 million and $243.2 million, respectively.
During 1995, Alliance entered into an agreement to acquire the business
of Cursitor-Eaton Asset Management Company and Cursitor Holdings Limited
(collectively, "Cursitor") for approximately $141.5 million consisting
of $84.9 million in cash, 1,764,115 of Alliance's publicly traded units
("Alliance Units"), 6% notes aggregating $21.5 million payable ratably
over four years, and substantial additional consideration which will be
determined at a later date. The transaction, which is expected to be
completed during the first quarter of 1996, is subject to the receipt of
consents, regulatory approvals, and certain other closing conditions,
including client approval of the transfer of Cursitor accounts. Upon
completion of this transaction, the Company's ownership percentage of
Alliance will be reduced.
In 1994, Alliance sold 4.96 million newly issued Alliance Units to third
parties at prevailing market prices. The sales decreased the Company's
ownership of Alliance's Units from 63.2% to 59.2%. In addition, the
Company continues to hold its 1% general partnership interest in
Alliance. The Company recognized an investment gain of $52.4 million as
a result of these transactions.
The Company's ownership interest in Alliance will be further reduced
upon the exercise of options granted to certain Alliance employees. At
December 31, 1995, Alliance had options outstanding to purchase an
aggregate of 4.8 million Alliance Units at a price ranging from $6.0625
to $22.25 per unit. Options are exercisable at a rate of 20% on each of
the first five anniversary dates from the date of grant.
Net unrealized investment gains (losses), included in the consolidated
balance sheets as a component of equity and the changes for the
corresponding years, are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year......................... $ (203.0) $ 131.9 $ 78.8
Changes in unrealized investment (losses) gains.... 1,117.7 (823.8) (14.1)
Effect of adopting SFAS No. 115.................... - - 283.9
Changes in unrealized investment (gains)
losses attributable to:
Participating group annuity contracts.......... (78.1) 40.8 (36.2)
Deferred policy acquisition costs.............. (208.4) 269.5 (150.5)
Deferred Federal income taxes.................. (290.0) 178.6 (30.0)
----------------- ---------------- -----------------
Balance, End of Year............................... $ 338.2 $ (203.0) $ 131.9
================= ================ =================
</TABLE>
F-19
<PAGE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, end of year comprises:
Unrealized investment (losses) gains on:
Fixed maturities............................... $ 615.9 $ (461.3) $ 283.9
Other equity investments....................... 31.1 7.7 75.8
Other.......................................... 31.6 14.5 25.0
----------------- ---------------- -----------------
Total........................................ 678.6 (439.1) 384.7
Amounts of unrealized investment (gains)
losses attributable to:
Participating group annuity contracts........ (72.2) 5.9 (34.9)
Deferred policy acquisition costs............ (89.4) 119.0 (150.5)
Deferred Federal income taxes................ (178.8) 111.2 (67.4)
----------------- ---------------- -----------------
Total.............................................. $ 338.2 $ (203.0) $ 131.9
================= ================ =================
</TABLE>
6) CLOSED BLOCK
Summarized financial information of the Closed Block follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1995 1994
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets
Fixed Maturities:
Available for sale, at estimated fair value (amortized cost,
$3,662.8 and $1,270.3)........................................... $ 3,896.2 $ 1,197.0
Held to maturity, at amortized cost (estimated fair value of
$1,785.0 in 1994)................................................ - 1,927.8
Mortgage loans on real estate........................................ 1,368.8 1,543.7
Policy loans......................................................... 1,797.2 1,827.9
Cash and other invested assets....................................... 440.9 442.5
Deferred policy acquisition costs.................................... 823.6 878.1
Other assets......................................................... 286.1 288.5
----------------- -----------------
Total Assets......................................................... $ 8,612.8 $ 8,105.5
================= =================
Liabilities
Future policy benefits and policyholders' account balances........... $ 9,346.7 $ 8,965.3
Other liabilities.................................................... 160.5 104.2
----------------- -----------------
Total Liabilities.................................................... $ 9,507.2 $ 9,069.5
================= =================
</TABLE>
F-20
<PAGE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Premiums and other revenue......................... $ 753.4 $ 798.1 $ 860.2
Investment income (net of investment
expenses of $26.7, $19.0 and $17.3).............. 538.9 523.0 526.5
Investment losses, net............................. (20.2) (24.0) (15.0)
----------------- ---------------- -----------------
Total revenues............................... 1,272.1 1,297.1 1,371.7
----------------- ---------------- -----------------
Benefits and Other Deductions
Policyholders' benefits and dividends.............. 1,085.1 1,075.6 1,141.4
Other operating costs and expenses................. 62.6 70.5 102.0
----------------- ---------------- -----------------
Total benefits and other deductions.......... 1,147.7 1,146.1 1,243.4
----------------- ---------------- -----------------
Contribution from the Closed Block................. $ 124.4 $ 151.0 $ 128.3
================= ================ =================
</TABLE>
The fixed maturity portfolio, based on amortized cost, includes $4.3
million and $23.8 million at December 31, 1995 and 1994, respectively,
of restructured securities which includes problem fixed maturities of
$1.9 million and $6.4 million, respectively.
During the eleven months ended November 30, 1995, one security
classified as held to maturity was sold and ten securities classified as
held to maturity were transferred to the available for sale portfolio.
All actions resulted from a significant deterioration in
creditworthiness. The amortized cost of the security sold was $4.2
million. The aggregate amortized cost of the securities transferred was
$81.3 million with gross unrealized investment losses of $.1 million
transferred to equity. At December 1, 1995, $1,750.7 million of
securities classified as held to maturity were transferred to the
available for sale portfolio. As a result, unrealized gains of $88.5
million on fixed maturities were recognized and offset by an increase to
the deferred dividend liability. Implementation of SFAS No. 115 for the
valuation of fixed maturities at December 31, 1993 resulted in the
recognition of a deferred dividend liability of $49.6 million.
At December 31, 1995 and 1994, problem mortgage loans on real estate had
an amortized cost of $36.5 million and $27.6 million, respectively, and
mortgage loans on real estate for which the payment terms have been
restructured had an amortized cost of $137.7 million and $179.2 million,
respectively. At December 31, 1995 and 1994, the restructured mortgage
loans on real estate amount included $8.8 million and $.7 million,
respectively, of problem mortgage loans on real estate.
Valuation allowances amounted to $18.4 million and $46.2 million on
mortgage loans on real estate and $4.3 million and $2.6 million on
equity real estate at December 31, 1995 and 1994, respectively.
Writedowns of fixed maturities amounted to $16.8 million and $15.9
million and $1.7 million for the years ended December 31, 1995, 1994 and
1993, respectively.
Many expenses related to Closed Block operations are charged to
operations outside of the Closed Block; accordingly, the contribution
from the Closed Block does not represent the actual profitability of the
Closed Block operations. Operating costs and expenses outside of the
Closed Block are, therefore, disproportionate to the business outside of
the Closed Block.
F-21
<PAGE>
7) DISCONTINUED OPERATIONS
Summarized financial information of the GIC Segment follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1995 1994
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets
Mortgage loans on real estate........................................ $ 1,485.8 $ 1,730.5
Equity real estate................................................... 1,122.1 1,194.8
Other invested assets................................................ 665.2 978.8
Other assets......................................................... 579.3 529.5
----------------- -----------------
Total Assets......................................................... $ 3,852.4 $ 4,433.6
================= =================
Liabilities
Policyholders' liabilities........................................... $ 1,399.8 $ 1,924.0
Allowance for future losses.......................................... 164.2 185.6
Amounts due to continuing operations................................. 2,097.1 2,108.6
Other liabilities.................................................... 191.3 215.4
----------------- -----------------
Total Liabilities.................................................... $ 3,852.4 $ 4,433.6
================= =================
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Investment income (net of investment expenses
of $143.8, $174.0 and $175.8).................... $ 325.1 $ 395.0 $ 535.1
Investment (losses) gains, net..................... (22.9) 26.8 (22.6)
Policy fees, premiums and other income............. .7 .3 8.7
----------------- ---------------- -----------------
Total revenues..................................... 302.9 422.1 521.2
Benefits and other deductions...................... 328.0 443.8 545.9
----------------- ---------------- -----------------
Losses Charged to Allowance for Future Losses...... $ (25.1) $ (21.7) $ (24.7)
================= ================ =================
</TABLE>
In 1991, the Company established a pre-tax provision of $396.7 million
for the estimated future losses of the GIC Segment. At December 31,
1993, implementation of SFAS No. 115 for the valuation of fixed
maturities resulted in a benefit of $13.1 million, offset by a
corresponding addition to the allowance for future losses.
The amounts due to continuing operations at December 31, 1994 consisted
of $3,324.0 million borrowed by the GIC Segment from continuing
operations, offset by $1,215.4 million representing an obligation of
continuing operations to provide assets to fund the accumulated deficit
of the GIC Segment. In January 1995, continuing operations transferred
$1,215.4 million in cash to the GIC Segment in settlement of its
obligation. Subsequently, the GIC Segment remitted $1,155.4 million in
cash to continuing operations in partial repayment of borrowings by the
GIC Segment. No gains or losses were recognized on these transactions.
Amounts due to continuing operations at December 31, 1995, consisted of
$2,097.1 million borrowed by the discontinued GIC Segment.
F-22
<PAGE>
Investment income included $88.2 million and $97.7 million of interest
income for the years ended December 31, 1994 and 1993, respectively, on
amounts due from continuing operations. Benefits and other deductions
includes $154.6 million, $219.7 million and $197.1 million of interest
expense related to amounts borrowed from continuing operations in 1995,
1994 and 1993, respectively.
Valuation allowances amounted to $19.2 million and $50.2 million on
mortgage loans on real estate and $77.9 million and $74.7 million on
equity real estate at December 31, 1995 and 1994, respectively.
Writedowns of fixed maturities amounted to $8.1 million, $17.8 million
and $1.1 million for the years ended December 31, 1995, 1994 and 1993,
respectively.
The fixed maturity portfolio, based on amortized cost, includes $15.1
million and $43.3 million at December 31, 1995 and 1994, respectively,
of restructured securities. These amounts include problem fixed
maturities of $6.1 million and $9.7 million at December 31, 1995 and
1994, respectively.
At December 31, 1995 and 1994, problem mortgage loans on real estate had
amortized costs of $35.4 million and $14.9 million, respectively, and
mortgage loans on real estate for which the payment terms have been
restructured had amortized costs of $289.3 million and $371.2 million,
respectively.
At December 31, 1995 and 1994, the GIC Segment had $310.9 million and
$312.2 million, respectively, of real estate acquired in satisfaction of
debt.
8) SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1995 1994
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Short-term debt...................................................... $ - $ 20.0
----------------- -----------------
Long-term debt:
Equitable Life:
Surplus notes, 6.95%, scheduled to mature 2005..................... 399.3 -
Surplus notes, 7.70%, scheduled to mature 2015..................... 199.6 -
Eurodollar notes, 10.375% due 1995................................. - 34.6
Eurodollar notes, 10.5% due 1997................................... 76.2 76.2
Zero coupon note, 11.25% due 1997.................................. 120.1 107.8
Other.............................................................. 16.3 14.3
----------------- -----------------
Total Equitable Life........................................... 811.5 232.9
----------------- -----------------
Wholly Owned and Joint Venture Real Estate:
Mortgage notes, 4.98% - 12.75% due through 2019.................... 1,084.4 1,080.6
----------------- -----------------
Alliance:
Other.............................................................. 3.4 3.9
----------------- -----------------
Total long-term debt................................................. 1,899.3 1,317.4
----------------- -----------------
Total Short-term and Long-term Debt.................................. $ 1,899.3 $ 1,337.4
================= =================
</TABLE>
Short-term Debt
---------------
Equitable Life has a $350.0 million bank credit facility available to
fund short-term working capital needs and to facilitate the securities
settlement process. The credit facility consists of two types of
borrowing options with varying interest rates. The interest rates are
based on external indices dependent on the type of borrowing and at
December 31, 1995 range from 5.8% (the London Interbank Offering Rate
plus 22.5 basis points) to 8.5% (the prime rate). There were no
borrowings outstanding under this bank credit facility at December 31,
1995.
F-23
<PAGE>
Equitable Life has a commercial paper program with an issue limit of
$500.0 million. This program is available for general corporate purposes
used to support Equitable Life's liquidity needs and is supported by
Equitable Life's existing $350.0 million five-year bank credit facility.
There were no borrowings outstanding under this program at December 31,
1995.
In 1994, Alliance established a $100.0 million revolving credit facility
with several banks. On March 31, 1997, the revolving credit facility
converts into a term loan payable in quarterly installments through
March 31, 1999. Outstanding borrowings generally bear interest at the
Eurodollar rate plus .875% per annum through March 31, 1997 and at the
Eurodollar rate plus 1.125% per annum after conversion through March 31,
1999. In addition, a quarterly commitment fee of .25% per annum is paid
on the average daily unused amount. At December 31, 1995, there were no
amounts outstanding under the facility.
In 1994, Alliance also established a $100.0 million commercial paper
program and entered into a three-year $100.0 million revolving credit
facility with a group of commercial banks to support commercial paper to
be issued under the program and for general corporate purposes. Amounts
outstanding under the facility bear interest at an annual rate ranging
from the Eurodollar rate plus .225% to the Eurodollar rate plus .2875%.
A fee of .125% per annum is paid quarterly on the entire facility. At
December 31, 1995, Alliance had not issued any commercial paper and
there were no amounts outstanding under the revolving credit facility.
During 1994, EREIM established two bank lines of credit totaling $30.0
million of which $20.0 million was outstanding at December 31, 1994.
Long-term Debt
--------------
Several of the long-term debt agreements have restrictive covenants
related to the total amount of debt, net tangible assets and other
matters. The Company is in compliance with all debt covenants.
On December 18, 1995, Equitable Life issued, in accordance with Section
1307 of the New York Insurance Law, $400.0 million of surplus notes
having an interest rate of 6.95% scheduled to mature in 2005 and $200.0
million of surplus notes having an interest rate of 7.70% scheduled to
mature in 2015. Proceeds from the issuance of the surplus notes were
$596.6 million, net of related issuance costs. The unamortized discount
on the surplus notes was $1.1 million at December 31, 1995. Payments of
interest on or principal of the surplus notes are subject to prior
approval by the New York Insurance Department.
The Company has pledged real estate, mortgage loans, cash and securities
amounting to $1,629.7 million and $1,744.4 million at December 31, 1995
and 1994, respectively, as collateral for certain long-term debt.
At December 31, 1995, aggregate maturities of the long-term debt based
on required principal payments at maturity for 1996 and the succeeding
four years are $124.0 million, $466.6 million, $309.5 million, $15.8
million, respectively, and $1,015.0 million thereafter.
9) FEDERAL INCOME TAXES
A summary of the Federal income tax expense (benefit) in the
consolidated statements of earnings is shown below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Federal income tax expense (benefit):
Current.......................................... $ (11.7) $ 4.0 $ 115.8
Deferred......................................... 124.1 97.2 (24.5)
----------------- ---------------- -----------------
Total.............................................. $ 112.4 $ 101.2 $ 91.3
================= ================ =================
</TABLE>
F-24
<PAGE>
The Federal income taxes attributable to consolidated operations are
different from the amounts determined by multiplying the earnings before
Federal income taxes and cumulative effect of accounting change by the
expected Federal income tax rate of 35%. The sources of the difference
and the tax effects of each are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Expected Federal income tax expense................ $ 143.5 $ 138.1 $ 106.3
Differential earnings amount....................... - (16.8) (23.2)
Adjustment of tax audit reserves................... 4.1 (4.6) 22.9
Tax rate adjustment................................ - - (5.0)
Other.............................................. (35.2) (15.5) (9.7)
----------------- --------------- -----------------
Federal Income Tax Expense......................... $ 112.4 $ 101.2 $ 91.3
================= ================ =================
</TABLE>
Prior to the date of demutualization, Equitable Life reduced its
deduction for policyholder dividends by the differential earnings
amount. This amount was computed, for each tax year, by multiplying
Equitable Life's average equity base, as determined for tax purposes, by
an estimate of the excess of an imputed earnings rate for stock life
insurance companies over the average mutual life insurance companies'
earnings rate. The differential earnings amount for each tax year was
subsequently recomputed when actual earnings rates were published by the
Internal Revenue Service. As a stock life insurance company, Equitable
Life is no longer required to reduce its policyholder dividend deduction
by the differential earnings amount, but differential earnings amounts
for pre-demutualization years were still being recomputed in 1994 and
1993.
The components of the net deferred Federal income tax asset are as
follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995 December 31, 1994
--------------------------------- ---------------------------------
ASSETS LIABILITIES Assets Liabilities
--------------- ---------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Deferred policy acquisition costs,
reserves and reinsurance............. $ - $ 303.2 $ - $ 220.3
Investments............................ - 326.9 - 18.7
Compensation and related benefits...... 293.0 - 307.3 -
Other.................................. - 32.3 - 5.8
--------------- ---------------- --------------- ---------------
Total.................................. $ 293.0 $ 662.4 $ 307.3 $ 244.8
=============== ================ =============== ===============
</TABLE>
The deferred Federal income tax expense (benefit) impacting operations
reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The sources of
these temporary differences and the tax effects of each are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Deferred policy acquisition costs, reserves
and reinsurance.................................. $ 55.1 $ 13.0 $ (46.7)
Investments........................................ 13.0 89.3 60.4
Compensation and related benefits.................. 30.8 10.0 (50.1)
Other.............................................. 25.2 (15.1) 11.9
----------------- ---------------- -----------------
Deferred Federal Income Tax Expense (Benefit)...... $ 124.1 $ 97.2 $ (24.5)
================= ================ =================
</TABLE>
F-25
<PAGE>
The Internal Revenue Service completed its audit of the Company's
Federal income tax returns for the years 1984 through 1988. There was no
material effect on the Company's consolidated results of operations.
10) REINSURANCE AGREEMENTS
The Insurance Group assumes and cedes reinsurance with other insurance
companies. The Insurance Group evaluates the financial condition of its
reinsurers to minimize its exposure to significant losses from reinsurer
insolvencies. The effect of reinsurance (excluding group life and
health) is summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Direct premiums.................................... $ 474.2 $ 476.7 $ 458.8
Reinsurance assumed................................ 171.3 180.5 169.9
Reinsurance ceded.................................. (38.7) (31.6) (29.6)
----------------- ---------------- -----------------
Premiums........................................... $ 606.8 $ 625.6 $ 599.1
================= ================ =================
Universal Life and Investment-type Product
Policy Fee Income Ceded.......................... $ 38.9 $ 27.5 $ 33.7
================= ================ =================
Policyholders' Benefits Ceded...................... $ 48.2 $ 20.7 $ 72.3
================= ================ =================
Interest Credited to Policyholders' Account
Balances Ceded................................... $ 28.5 $ 25.4 $ 24.1
================= ================ =================
</TABLE>
In February 1993, management established a practice limiting the risk
retention on new policies issued by the Insurance Group to a maximum of
$5.0 million. In addition, effective January 1, 1994, all in force
business above $5.0 million was reinsured. The Insurance Group also
reinsures the entire risk on certain substandard underwriting risks as
well as in certain other cases.
The Insurance Group cedes 100% of its group life and health business to
a third party insurance company. Premiums ceded totaled $260.6 million,
$241.0 million and $895.1 million for the years ended December 31, 1995,
1994 and 1993, respectively. Ceded death and disability benefits totaled
$188.1 million, $235.5 million and $787.8 million for the years ended
December 31, 1995, 1994 and 1993, respectively. Insurance liabilities
ceded totaled $724.2 million and $833.4 million at December 31, 1995 and
1994, respectively.
11) EMPLOYEE BENEFIT PLANS
The Company sponsors qualified and non-qualified defined benefit plans
covering substantially all employees (including certain qualified
part-time employees), managers and certain agents. The pension plans are
non-contributory and benefits are based on a cash balance formula or
years of service and final average earnings, if greater, under certain
grandfathering rules in the plans. The Company's funding policy is to
make the minimum contribution required by the Employee Retirement Income
Security Act of 1974.
Components of net periodic pension (credit) cost for the qualified and
non-qualified plans are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 30.0 $ 30.3 $ 29.8
Interest cost on projected benefit obligations..... 122.0 111.0 108.0
Actual return on assets............................ (309.2) 24.4 (178.6)
Net amortization and deferrals..................... 155.6 (142.5) 55.3
----------------- ---------------- -----------------
Net Periodic Pension (Credit) Cost................. $ (1.6) $ 23.2 $ 14.5
================= ================ =================
</TABLE>
F-26
<PAGE>
The funded status of the qualified and non-qualified pension plans is as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Actuarial present value of obligations:
Vested............................................................... $ 1,642.4 $ 1,295.5
Non-vested........................................................... 10.9 8.7
--------------- -----------------
Accumulated Benefit Obligation......................................... $ 1,653.3 $ 1,304.2
================ =================
Plan assets at fair value.............................................. $ 1,503.8 $ 1,193.5
Projected benefit obligation........................................... 1,743.0 1,403.4
---------------- -----------------
Projected benefit obligation in excess of plan assets.................. (239.2) (209.9)
Unrecognized prior service cost........................................ (25.5) (33.2)
Unrecognized net loss from past experience different from that
assumed.............................................................. 368.2 298.9
Unrecognized net asset at transition................................... (7.3) (20.8)
Additional minimum liability........................................... (51.9) (37.8)
---------------- -----------------
Prepaid (Accrued) Pension Cost......................................... $ 44.3 $ (2.8)
================ =================
</TABLE>
The discount rate and rate of increase in future compensation levels
used in determining the actuarial present value of projected benefit
obligations were 7.25% and 4.50%, respectively, at December 31, 1995 and
8.75% and 4.88%, respectively, at December 31, 1994. As of January 1,
1995 and 1994, the expected long-term rate of return on assets for the
retirement plan was 11% and 10%, respectively.
The Company recorded, as a reduction of shareholder's equity, an
additional minimum pension liability of $35.1 million and $2.7 million,
net of Federal income taxes, at December 31, 1995 and 1994,
respectively, representing the excess of the accumulated benefit
obligation over the fair value of plan assets and accrued pension
liability.
The pension plan's assets include corporate and government debt
securities, equity securities, equity real estate and shares of Group
Trusts managed by Alliance.
As of December 31, 1993, the Company changed the method of determining
the market-related value of plan assets from fair value to a calculated
value. This change in estimate had no material effect on the Company's
consolidated statements of earnings.
Prior to 1987, the qualified plan funded participants' benefits through
the purchase of non-participating annuity contracts from Equitable Life.
Benefit payments under these contracts were approximately $36.4 million,
$38.1 million and $39.9 million for the years ended December 31, 1995,
1994 and 1993, respectively.
The Company provides certain medical and life insurance benefits
(collectively, "postretirement benefits") for qualifying employees,
managers and agents retiring from the Company on or after attaining age
55 who have at least 10 years of service. The life insurance benefits
are related to age and salary at retirement. The costs of postretirement
benefits are recognized in accordance with the provisions of SFAS No.
106. The Company continues to fund postretirement benefits costs on a
pay-as-you-go basis and, for the years ended December 31, 1995, 1994 and
1993, the Company made estimated postretirement benefits payments of
$31.1 million, $29.8 million and $29.7 million, respectively.
F-27
<PAGE>
The following table sets forth the postretirement benefits plan's
status, reconciled to amounts recognized in the Company's consolidated
financial statements:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 4.0 $ 3.9 $ 5.3
Interest cost on accumulated postretirement
benefits obligation.............................. 34.7 28.6 29.2
Unrecognized prior service cost.................... (2.3) (3.9) (6.9)
Net amortization and deferrals..................... - - 1.5
----------------- ---------------- -----------------
Net Periodic Postretirement Benefits Costs......... $ 36.4 $ 28.6 $ 29.1
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Accumulated postretirement benefits obligation:
Retirees............................................................. $ 391.8 $ 300.4
Fully eligible active plan participants.............................. 50.4 33.0
Other active plan participants....................................... 64.2 44.0
---------------- -----------------
506.4 377.4
Unrecognized benefit of plan amendments................................ - 3.2
Unrecognized prior service cost........................................ 56.3 61.9
Unrecognized net loss from past experience different from that
assumed and from changes in assumptions.............................. (181.3) (64.7)
---------------- -----------------
Accrued Postretirement Benefits Cost................................... $ 381.4 $ 377.8
================ =================
</TABLE>
In 1993, the Company amended the cost sharing provisions of
postretirement medical benefits. At January 1, 1994, medical benefits
available to retirees under age 65 are the same as those offered to
active employees and medical benefits will be limited to 200% of 1993
costs for all participants.
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefits obligation was 10% in 1995,
gradually declining to 3.5% in the year 2008 and in 1994 was 10%,
gradually declining to 5% in the year 2004. The discount rate used in
determining the accumulated postretirement benefits obligation was 7.25%
and 8.75% at December 31, 1995 and 1994, respectively.
If the health care cost trend rate assumptions were increased by 1%, the
accumulated postretirement benefits obligation as of December 31, 1995
would be increased 6.5%. The effect of this change on the sum of the
service cost and interest cost would be an increase of 6.7%.
12) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivatives
-----------
The Insurance Group primarily uses derivatives for asset/liability risk
management and for hedging individual securities. Derivatives mainly are
utilized to reduce the Insurance Group's exposure to interest rate
fluctuations. Accounting for interest rate swap transactions is on an
accrual basis. Gains and losses related to interest rate swap
transactions are amortized as yield adjustments over the remaining life
of the underlying hedged security. Income and expense resulting from
interest rate swap activities are reflected in net investment income
except for hedging transactions related to insurance liabilities. The
notional amount of matched interest rate swaps outstanding at December
31, 1995 was $1,120.8 million. The average unexpired terms at December
31, 1995 range from 2.5 to 3.0 years. At December 31, 1995, the cost of
terminating outstanding matched swaps in a loss position was $15.9
million and the unrealized gain on
F-28
<PAGE>
outstanding matched swaps in a gain position was $19.0 million. The
Company has no intention of terminating these contracts prior to
maturity. During 1995, 1994 and 1993, net gains (losses) of $1.4
million, $(.2) million and $-0- million, respectively, were recorded in
connection with interest rate swap activity. Equitable Life has
implemented an interest rate cap program designed to hedge crediting
rates on interest-sensitive individual annuities contracts. The
outstanding notional amounts at December 31, 1995 of contracts purchased
and sold were $2,625.0 million and $300.0 million, respectively. The net
premium paid by Equitable Life on these contracts was $12.5 million and
is being amortized ratably over the contract periods ranging from 3 to 5
years. Income and expense resulting from this program are reflected as
an adjustment to interest credited to policyholders' account balances.
Substantially all of DLJ's business related derivatives is by its nature
trading activities which are primarily for the purpose of customer
accommodations. DLJ's derivative activities consist of option writing
and trading in forward and futures contracts. Derivative financial
instruments have both on-and-off balance sheet implications depending on
the nature of the contracts. DLJ's involvement in swap contracts is not
significant.
Fair Value of Financial Instruments
-----------------------------------
The Company defines fair value as the quoted market prices for those
instruments that are actively traded in financial markets. In cases
where quoted market prices are not available, fair values are estimated
using present value or other valuation techniques. The fair value
estimates are made at a specific point in time, based on available
market information and judgments about the financial instrument,
including estimates of timing, amount of expected future cash flows and
the credit standing of counterparties. Such estimates do not reflect any
premium or discount that could result from offering for sale at one time
the Company's entire holdings of a particular financial instrument, nor
do they consider the tax impact of the realization of unrealized gains
or losses. In many cases, the fair value estimates cannot be
substantiated by comparison to independent markets, nor can the
disclosed value be realized in immediate settlement of the instrument.
Certain financial instruments are excluded, particularly insurance
liabilities other than financial guarantees and investment contracts.
Fair market value of off-balance-sheet financial instruments of the
Insurance Group was not material at December 31, 1995 and 1994.
Fair value for mortgage loans on real estate are estimated by
discounting future contractual cash flows using interest rates at which
loans with similar characteristics and credit quality would be made.
Fair values for foreclosed mortgage loans and problem mortgage loans are
limited to the estimated fair value of the underlying collateral if
lower.
The estimated fair values for the Company's liabilities under GIC and
association plan contracts are estimated using contractual cash flows
discounted based on the T. Rowe Price GIC Index Rate for the appropriate
duration. For durations in excess of the published index rate, the
appropriate Treasury rate is used plus a spread equal to the longest
duration GIC rate spread published.
The estimated fair values for those group annuity contracts which are
classified as investment contracts are measured at the estimated fair
value of the underlying assets. Deposit administration contracts
(included with group annuity contracts) classified as insurance
contracts are measured at estimated fair value of the underlying assets.
The estimated fair values for single premium deferred annuities ("SPDA")
are estimated using projected cash flows discounted at current offering
rates. The estimated fair values for supplementary contracts not
involving life contingencies ("SCNILC") and annuities certain are
derived using discounted cash flows based upon the estimated current
offering rate.
Fair value for long-term debt is determined using published market
values, where available, or contractual cash flows discounted at market
interest rates. The estimated fair values for non-recourse mortgage debt
are determined by discounting contractual cash flows at a rate which
takes into account the level of current market interest rates and
collateral risk. The estimated fair values for recourse mortgage debt
are determined by discounting contractual cash flows at a rate based
upon current interest rates of other companies with credit ratings
similar to the Company. The Company's fair value of short-term
borrowings approximates their carrying value.
F-29
<PAGE>
The following table discloses carrying value and estimated fair value
for financial instruments not otherwise disclosed in Notes 3, 6 and 7:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------------
1995 1994
--------------------------------- ---------------------------------
CARRYING ESTIMATED Carrying Estimated
VALUE FAIR VALUE Value Fair Value
--------------- ---------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Consolidated Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... $ 3,638.3 $ 3,973.6 $ 4,018.0 $ 3,919.4
Other joint ventures................... 492.7 492.7 544.4 544.4
Policy loans........................... 1,976.4 2,057.5 1,731.2 1,676.6
Policyholders' account balances:
Association plans.................... 101.0 100.0 141.0 141.0
Group annuity contracts.............. 2,335.0 2,395.0 2,450.0 2,469.0
SPDA................................. 1,265.8 1,272.0 1,744.3 1,732.7
Annuities certain and SCNILC......... 649.1 680.7 599.1 624.7
Long-term debt......................... 1,899.3 1,962.9 1,317.4 1,249.2
Closed Block Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... 1,368.8 1,461.4 1,543.7 1,477.8
Other equity investments............... 151.6 151.6 179.5 179.5
Policy loans........................... 1,797.2 1,891.4 1,827.9 1,721.9
SCNILC liability....................... 34.8 34.5 39.5 37.0
GIC Segment Financial Instruments:
----------------------------------
Mortgage loans on real estate.......... 1,485.8 1,666.1 1,730.5 1,743.7
Fixed maturities....................... 107.4 107.4 219.3 219.3
Other equity investments............... 455.9 455.9 591.8 591.8
Guaranteed interest contracts.......... 329.0 352.0 835.0 855.0
Long-term debt......................... 135.1 136.0 134.8 127.9
</TABLE>
13) COMMITMENTS AND CONTINGENT LIABILITIES
The Company has provided, from time to time, certain guarantees or
commitments to affiliates, investors and others. These arrangements
include commitments by the Company, under certain conditions: to make
liquidity advances to cover delinquent principal and interest and
property protection expenses with respect to loan servicing agreements
for securitized mortgage loans which at December 31, 1995 totaled $2.8
billion (as of December 31, 1995, $4.0 million have been advanced under
these commitments); to make capital contributions of up to $246.7
million to affiliated real estate joint ventures; to provide equity
financing to certain limited partnerships of $129.4 million at December
31, 1995, under existing loan or loan commitment agreements; and to
provide short-term financing loans which at December 31, 1995 totaled
$45.8 million. Management believes the Company will not incur any
material losses as a result of these commitments.
Equitable Life is the obligor under certain structured settlement
agreements which it had entered into with unaffiliated insurance
companies and beneficiaries. To satisfy its obligations under these
agreements, Equitable Life owns single premium annuities issued by
previously wholly owned life insurance subsidiaries. Equitable Life has
directed payment under these annuities to be made directly to the
beneficiaries under the structured settlement agreements. A contingent
liability exists with respect to these agreements should the previously
wholly owned subsidiaries be unable to meet their obligations.
Management believes the satisfaction of those obligations by Equitable
Life is remote.
At December 31, 1995, the Insurance Group had $29.0 million of letters
of credit outstanding.
F-30
<PAGE>
14) LITIGATION
A number of lawsuits have been filed against life and health insurers in
the jurisdictions in which Equitable Life and its subsidiaries do
business involving insurers' sales practices, alleged agent misconduct,
failure to properly supervise agents, and other matters. Some of the
lawsuits have resulted in the award of substantial judgments against
other insurers, including material amounts of punitive damages, or in
substantial settlements. In some states juries have substantial
discretion in awarding punitive damages. Equitable Life and its
insurance subsidiaries, like other life and health insurers, from time
to time are involved in such litigation. To date, no such lawsuit has
resulted in an award or settlement of any material amount against the
Company. Among litigations pending against Equitable Life and its
insurance subsidiaries of the type referred to in this paragraph are the
litigations described in the following two paragraphs.
An action entitled Golomb et al. v. The Equitable Life Assurance Society
of the United States was filed on January 20, 1995 in New York County
Supreme Court. The action purports to be brought on behalf of a class of
persons insured after 1983 under Lifetime Guaranteed Renewable Major
Medical Insurance Policies issued by Equitable Life (the "policies").
The complaint alleges that premium increases for these policies after
1983, all of which were filed with and approved by the New York State
Insurance Department and certain other state insurance departments,
breached the terms of the insurance policies, and that statements in the
policies and elsewhere concerning premium increases constituted
fraudulent concealment, misrepresentations in violation of New York
Insurance Law Section 4226 and deceptive practices under New York
General Business Law Section 349. The complaint seeks a declaratory
judgment, injunctive relief restricting the methods by which Equitable
Life increases premiums on the policies in the future, a refund of
premiums, and punitive damages. Plaintiffs also have indicated that they
will seek damages in an unspecified amount. Equitable Life has moved to
dismiss the complaint in its entirety on the grounds that it fails to
state a claim and that uncontroverted documentary evidence establishes a
complete defense to the claims. That motion is awaiting decision by the
court. In January 1996, separate actions were filed in Pennsylvania and
Texas state courts (entitled, respectively, Malvin et al. v. The
Equitable Life Assurance Society of the United States and Bowler et al.
v. The Equitable Life Assurance Society of the United States), making
claims similar to those in the New York action described above. These
new actions are asserted on behalf of proposed classes of Pennsylvania
issued or renewed policyholders and Texas issued or renewed
policyholders, insured under the policies. The Pennsylvania and Texas
actions seek compensatory and punitive damages and injunctive relief
restricting the methods by which Equitable Life increases premiums in
the future based on the common law and statutes of those states.
Although the outcome of any litigation cannot be predicted with
certainty, particularly in the early stages of an action, Equitable
Life's management believes that the ultimate resolution of those
litigations should not have a material adverse effect on the financial
position of the Company. Due to the early stage of such litigation,
Equitable Life's management cannot make an estimate of loss, if any, or
predict whether or not such litigation will have a material adverse
effect on the Company's results of operations in any particular period.
An action was instituted on April 6, 1995 against Equitable Life and its
wholly owned subsidiary, The Equitable of Colorado, Inc. ("EOC"), in New
York State Court, entitled Sidney C. Cole et al. v. The Equitable Life
Assurance Society of the United States and The Equitable of Colorado,
Inc., No. 95/108611 (N.Y. County). The action is brought by the holders
of a joint survivorship whole life policy issued by EOC. The action
purports to be on behalf of a class consisting of all persons who from
January 1, 1984 purchased life insurance policies sold by Equitable Life
and EOC based upon their allegedly uniform sales presentations and
policy illustrations. The complaint puts in issue various alleged sales
practices that plaintiffs assert, among other things, misrepresented the
stated number of years that the annual premium would need to be paid.
Plaintiffs seek damages in an unspecified amount, imposition of a
constructive trust, and seek to enjoin Equitable Life and EOC from
engaging in the challenged sales practices. Equitable Life and EOC
intend to defend vigorously and believe that they have meritorious
defenses which, if successful, would dispose of the action completely.
Equitable Life and EOC further do not believe that this case is an
appropriate class action. Although the outcome of any litigation cannot
be predicted with certainty, particularly in the early stages of an
action, Equitable Life's management believes that the ultimate
F-31
<PAGE>
resolution of this litigation should not have a material adverse effect
on the financial position of the Company. Due to the early stage of such
litigation, the Company's management cannot make an estimate of loss, if
any, or predict whether or not such litigation will have a material
adverse effect on the Company's results of operations in any particular
period.
Equitable Casualty Insurance Company ("Casualty"), a captive property
and casualty insurance company organized under the laws of Vermont,
which is an indirect wholly owned subsidiary of Equitable Life, is a
party to an arbitration proceeding that commenced in August 1995 with
the selection of three arbitrators. The arbitration will resolve a
dispute among Casualty, Houston General Insurance Company ("Houston
General"), and GEICO General Insurance Company ("GEICO General")
regarding the interpretation of a reinsurance agreement that was entered
into as part of a 1980 transaction whereby Equitable General Insurance
Company ("Equitable General"), formerly an indirect subsidiary of
Equitable Life and the predecessor of GEICO General, sold its commercial
lines business along with the stock of Houston General to subsidiaries
of Tokio Marine & Fire Insurance Company, Ltd. ("Tokio Marine").
Casualty and GEICO General maintain that, under the reinsurance
agreement, Houston General assumed liability for all losses insured
under commercial lines policies written by Equitable General and its
predecessors in order to effect the transfer of that business to Tokio
Marine's subsidiaries. Houston General contends that it did not assume
reinsurance liability for losses insured under certain of those
commercial lines policies. The arbitration panel determined to begin
hearing evidence in the arbitration in June 1996. The result of the
arbitration is expected to resolve two litigations that were commenced
by Houston General and that have been stayed by the presiding courts
pending the completion of the arbitration (in one case, Houston General
named as a defendant only GEICO General but Casualty intervened as a
defendant with GEICO General, and in the other case, Houston General
named GEICO General and Equitable Life). The arbitration is expected to
be completed during the second half of 1996. While the ultimate outcome
of the arbitration cannot be predicted with certainty, the Company's
management believes that the arbitrators will recognize that Houston
General's position is without merit and contrary to the way in which the
reinsurance industry operates and therefore the ultimate resolution of
this matter should not have a material adverse effect on the Company's
financial position or results of operations.
On July 25, 1995, a Consolidated and Supplemental Class Action Complaint
("Complaint") was filed against the Alliance North American Government
Income Trust, Inc. (the "Fund"), Alliance and certain other defendants
affiliated with Alliance, including the Holding Company, alleging
violations of Federal securities laws, fraud and breach of fiduciary
duty in connection with the Fund's investments in Mexican and Argentine
securities. A similar complaint was filed on November 7, 1995 and was
subsequently consolidated with the Complaint. The Complaint, which seeks
certification of a plaintiff class of persons who purchased or owned
Class A, B or C shares of the Fund from March 27, 1992 through December
23, 1994, seeks an unspecified amount of damages, costs, attorneys' fees
and punitive damages. The principal allegations of the Complaint are
that the Fund purchased debt securities issued by the Mexican and
Argentine governments in amounts that were not permitted by the Funds'
investment objective, and that there was no shareholder vote to change
the investment objective to permit purchases in such amounts. The
Complaint further alleges that the decline in the value of the Mexican
and Argentine securities held by the Fund caused the Fund's net asset
value to decline to the detriment of the Fund's shareholders. On
September 26, 1995, the defendants jointly filed a motion to dismiss the
Complaint which has not yet been decided by the Court. Alliance believes
that the allegations in the Complaint are without merit and intends to
vigorously defend against these claims. While the ultimate results of
this action cannot be determined, management of Alliance does not expect
that this action will have a material adverse effect on Alliance's
business.
On January 26, 1996, a purported purchaser of certain notes and warrants
to purchase shares of common stock of Rickel Home Centers, Inc.
("Rickel") filed a class action complaint against Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJSC"), a wholly owned subsidiary of
DLJ, and certain other defendants for unspecified compensatory and
punitive damages in the United States District Court for the Southern
District of New York. The suit was brought on behalf of the purchasers
of 126,457 units consisting of $126,457,000 aggregate principal amount
of 13 1/2% senior notes due 2001 and 126,457 warrants to purchase shares
of common stock of Rickel (the "Units") issued by Rickel in October
1994. The complaint alleges violations of Federal securities laws and
common law fraud against DLJSC, as the underwriter of
F-32
<PAGE>
the Units and as an owner of 7.3% of the common stock of Rickel, Eos
Partners, L.P., and General Electric Capital Corporation, each as owners
of 44.2% of the common stock of Rickel, and members of the Board of
Directors of Rickel, including a DLJSC Managing Director. The complaint
seeks to hold DLJSC liable for alleged misstatements and omissions
contained in the prospectus and registration statement filed in
connection with the offering of the Units, alleging that the defendants
knew of financial losses and a decline in value of Rickel in the months
prior to the offering and did not disclose such information. The
complaint also alleges that Rickel failed to pay its semi-annual
interest payment due on the Units on December 15, 1995 and that Rickel
filed a voluntary petition for reorganization pursuant to Chapter 11 of
the United States Bankruptcy Code on January 10, 1996. DLJSC intends to
defend itself vigorously against all of the allegations contained in the
complaint. Although there can be no assurance, DLJ does not believe the
outcome of this litigation will have a material adverse effect on its
financial condition. Due to the early stage of this litigation, based on
the information currently available to it, DLJ's management cannot make
an estimate of loss or predict whether or not such litigation will have
a material adverse effect on DLJ's results of operations in any
particular period.
On June 12, 1995, a purported purchaser of certain securities issued by
Spectravision, Inc. ("Spectravision") filed a class action complaint
against DLJSC and certain other defendants for unspecified damages in
the U.S. District Court for the Northern District of Texas. The suit was
brought on behalf of the purchasers of $260,795,000 of securities issued
by Spectravision in November 1992, and alleges violations of the Federal
securities laws and the Texas Securities Act, common law fraud and
negligent misrepresentation. The securities were issued by Spectravision
pursuant to a prepackaged bankruptcy reorganization plan. DLJSC served
as financial advisor to Spectravision in its reorganization and as
Dealer Manager for Spectravision's 1992 issuance of the securities.
DLJSC is also being sued as a seller of certain notes of Spectravision
acquired and resold by DLJSC. The complaint seeks to hold DLJSC liable
for various alleged misstatements and omissions contained in
prospectuses and other materials issued between July 1992 and June 1994.
DLJSC intends to defend itself vigorously against all of the allegations
contained in the complaint. On June 8, 1995, Spectravision filed a
Chapter 11 petition in the United States Bankruptcy Court for the
District of Delaware. On January 5, 1996, the district court in the
litigation involving DLJSC ordered a partial stay of discovery until
Spectravision has emerged from bankruptcy or six months from the date of
the stipulated stay (whichever comes first). Accordingly, discovery of
DLJSC has not yet occurred. Although there can be no assurance, DLJ does
not believe that the ultimate outcome of this litigation will have a
material adverse effect on its financial condition. Due to the early
stage of such litigation, based upon information currently available to
it, DLJ's management cannot make an estimate of loss or predict whether
or not such litigation will have a material adverse effect on DLJ's
results of operations in any particular period. Plaintiff's counsel in
the class action against DLJSC described above has also filed another
securities class action based on similar factual allegations. Such suit
names as defendants Spectravision and its directors, and was brought on
behalf of a class of purchasers of $209.0 million of stock and $77.0
million of notes issued by Spectravision in October 1993. DLJSC served
as the managing underwriter for both of these issuances. DLJSC has not
been named as a defendant in this suit, although it has been reported to
DLJSC that plaintiff's counsel is contemplating seeking to amend the
complaint to add DLJSC as a defendant in that action.
In October 1995, DLJSC was named as a defendant in a purported class
action filed in a Texas State Court on behalf of the holders of $550.0
million principal amount of subordinated redeemable discount debentures
of National Gypsum Corporation ("NGC") canceled in connection with a
Chapter 11 plan of reorganization for NGC consummated in July 1993. The
named plaintiff in the State Court action also filed an adversary
proceeding in the Bankruptcy Court for the Northern District of Texas
seeking a declaratory judgment that the confirmed NGC plan of
reorganization does not bar the class action claims. Subsequent to the
consummation of NGC's plan of reorganization, NGC's shares traded for
values substantially in excess of, and in 1995 NGC was acquired for a
value substantially in excess of, the values upon which NGC's plan of
reorganization was based. The two actions arise out of DLJSC's
activities as financial advisor to NGC in the course of NGC's Chapter 11
reorganization proceedings. The class action complaint alleges that the
plan of reorganization submitted by NGC was based upon projections by
NGC and DLJSC which intentionally understated forecasts, and provided
misleading and incorrect information in order to hide NGC's true value
and that defendants breached their fiduciary duties by, among other
things, providing false, misleading or incomplete information to
deliberately understate the value of NGC. The class action complaint
seeks compensatory and punitive damages purportedly sustained by the
class. The Texas State
F-33
<PAGE>
Court action has subsequently been removed to the Bankruptcy Court,
which removal is being opposed by the plaintiff. DLJSC intends to defend
itself vigorously against all of the allegations contained in the
complaint. Although there can be no assurance, DLJ does not believe that
the ultimate outcome of this litigation will have a material adverse
effect on its financial condition. Due to the early stage of such
litigation, based upon the information currently available to it, DLJ's
management cannot make an estimate of loss or predict whether or not
such litigation will have a material adverse effect on DLJ's results of
operations in any particular period.
In November and December 1995, DLJSC, along with various other parties,
was named as a defendant in a number of purported class actions filed in
the U.S. District Court for the Eastern District of Louisiana. The
complaints allege violations of the Federal securities laws arising out
of a public offering in 1994 of $435.0 million of first mortgage notes
of Harrah's Jazz Company and Harrah's Jazz Finance Corp. The complaints
seek to hold DLJSC liable for various alleged misstatements and
omissions contained in the prospectus dated November 9, 1994. DLJSC
intends to defend itself vigorously against all of the allegations
contained in the complaints. Although there can be no assurance, DLJ
does not believe that the ultimate outcome of this litigation will have
a material adverse effect on its financial condition. Due to the early
stage of this litigation, based upon the information currently available
to it, DLJ's management cannot make an estimate of loss or predict
whether or not such litigation will have a material adverse effect on
DLJ's results of operations in any particular period.
In addition to the matters described above, Equitable Life and its
subsidiaries and DLJ and its subsidiaries are involved in various legal
actions and proceedings in connection with their businesses. Some of the
actions and proceedings have been brought on behalf of various alleged
classes of claimants and certain of these claimants seek damages of
unspecified amounts. While the ultimate outcome of such matters cannot
be predicted with certainty, in the opinion of management no such matter
is likely to have a material adverse effect on the Company's
consolidated financial position or results of operations.
15) LEASES
The Company has entered into operating leases for office space and
certain other assets, principally data processing equipment and office
furniture and equipment. Future minimum payments under noncancelable
leases for 1996 and the succeeding four years are $114.8 million, $101.8
million, $90.0 million, $73.6 million, $57.7 million and $487.0 million
thereafter. Minimum future sublease rental income on these noncancelable
leases for 1996 and the succeeding four years are $11.0 million, $8.7
million, $6.9 million, $4.6 million, $2.9 million and $1.1 million
thereafter.
At December 31, 1995, the minimum future rental income on noncancelable
operating leases for wholly owned investments in real estate for 1996
and the succeeding four years are $292.9 million, $271.2 million, $248.1
million, $226.4 million, $195.5 million and $1,018.8 million thereafter.
F-34
<PAGE>
16) OTHER OPERATING COSTS AND EXPENSES
Other operating costs and expenses consisted of the following:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Compensation costs................................. $ 595.9 $ 690.0 $ 1,452.3
Commissions........................................ 314.3 313.0 551.1
Short-term debt interest expense................... 11.4 19.0 317.1
Long-term debt interest expense.................... 108.1 98.3 86.0
Amortization of policy acquisition costs........... 320.4 318.1 275.9
Capitalization of policy acquisition costs......... (391.0) (410.9) (397.8)
Rent expense, net of sub-lease income.............. 124.8 128.9 159.5
Other.............................................. 772.6 786.7 1,140.1
----------------- ---------------- -----------------
Total.............................................. $ 1,856.5 $ 1,943.1 $ 3,584.2
================= ================ =================
</TABLE>
During the years ended December 31, 1995, 1994 and 1993, the Company
restructured certain operations in connection with cost reduction
programs and recorded pre-tax provisions of $32.0 million, $20.4 million
and $96.4 million, respectively. The amounts paid during 1995,
associated with the 1995 and 1994 cost reduction programs, totaled $24.0
million. At December 31, 1995, the liabilities associated with the 1995
and 1994 cost reduction programs amounted to $37.8 million. The 1995
cost reduction program included relocation expenses, including the
accelerated amortization of building improvements associated with the
relocation of the home office. The 1994 cost reduction program included
costs associated with the termination of operating leases and employee
severance benefits in connection with the consolidation of 16 insurance
agencies. The 1993 cost reduction program primarily reflected severance
benefits of terminated employees in connection with the combination of a
wholly owned subsidiary of the Company with Alliance.
17) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Equitable Life is restricted as to the amounts it may pay as dividends
to the Holding Company. Under the New York Insurance Law, the New York
Superintendent has broad discretion to determine whether the financia1
condition of a stock life insurance company would support the payment of
dividends to its shareholders. For the years ended December 31, 1995,
1994 and 1993, statutory (loss) earnings totaled $(352.4) million, $67.5
million and $324.0 million, respectively. No amounts are expected to be
available for dividends from Equitable Life to the Holding Company in
1996.
At December 31, 1995, the Insurance Group, in accordance with various
government and state regulations, had $18.9 million of securities
deposited with such government or state agencies.
F-35
<PAGE>
Accounting practices used to prepare statutory financial statements for
regulatory filings of stock life insurance companies differ in certain
instances from GAAP. The following reconciles the Company's statutory
change in surplus and capital stock and statutory surplus and capital
stock determined in accordance with accounting practices prescribed by
the New York Insurance Department with net earnings and equity on a GAAP
basis.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Net change in statutory surplus and capital stock.. $ 78.1 $ 292.4 $ 190.8
Change in asset valuation reserves................. 365.7 (285.2) 639.1
----------------- ---------------- -----------------
Net change in statutory surplus, capital stock
and asset valuation reserves..................... 443.8 7.2 829.9
Adjustments:
Future policy benefits and policyholders'
account balances............................... (67.9) (11.0) (171.0)
Deferred policy acquisition costs................ 70.6 92.8 121.8
Deferred Federal income taxes.................... (150.0) (59.7) (57.5)
Valuation of investments......................... 189.1 45.2 202.3
Valuation of investment subsidiary............... (188.6) 396.6 (464.9)
Limited risk reinsurance......................... 416.9 74.9 85.2
Issuance of surplus notes........................ (538.9) - -
Sale of subsidiary and joint venture............. - - (366.5)
Contribution from the Holding Company............ - (300.0) -
Postretirement benefits.......................... (26.7) 17.1 23.8
Other, net....................................... 115.1 (44.0) 60.3
GAAP adjustments of Closed Block................. (3.1) 4.5 (16.0)
GAAP adjustments of discontinued GIC
Segment........................................ 37.3 42.8 (35.0)
----------------- ---------------- -----------------
Net Earnings....................................... $ 297.6 $ 266.4 $ 212.4
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Statutory surplus and capital stock................ $ 2,202.9 $ 2,124.8 $ 1,832.4
Asset valuation reserves........................... 1,345.9 980.2 1,265.4
----------------- ---------------- -----------------
Statutory surplus, capital stock and asset
valuation reserves............................... 3,548.8 3,105.0 3,097.8
Adjustments:
Future policy benefits and policyholders'
account balances............................... (1,017.4) (949.5) (938.5)
Deferred policy acquisition costs................ 3,083.3 3,221.1 2,858.8
Deferred Federal income taxes.................... (450.8) (26.8) (137.8)
Valuation of investments......................... 417.7 (794.1) (29.8)
Valuation of investment subsidiary............... (665.1) (476.5) (873.1)
Limited risk reinsurance......................... (429.0) (845.9) (920.8)
Issuance of surplus notes........................ (538.9) - -
Postretirement benefits.......................... (343.3) (316.6) (333.7)
Other, net....................................... 4.4 (79.2) (81.9)
GAAP adjustments of Closed Block................. 575.7 578.8 574.2
GAAP adjustments of discontinued GIC
Segment........................................ (184.6) (221.9) (264.6)
----------------- ---------------- -----------------
Total Shareholder's Equity......................... $ 4,000.8 $ 3,194.4 $ 2,950.6
================= ================ =================
</TABLE>
F-36
<PAGE>
18) BUSINESS SEGMENT INFORMATION
The Company has three major business segments: Individual Insurance and
Annuities; Investment Services and Group Pension.
Consolidation/elimination principally includes debt not specific to any
business segment. Attributed Insurance Capital represents net assets and
related revenues and earnings of the Insurance Group not assigned to the
insurance segments. Interest expense related to debt not specific to any
business segment is presented within Corporate interest expense.
Information for all periods is presented on a comparable basis.
The Individual Insurance and Annuities segment offers a variety of
traditional, variable and interest-sensitive life insurance products,
disability income, annuity products and mutual fund and other investment
products to individuals and small groups. This segment includes Separate
Accounts for certain individual insurance and annuity products.
The Investment Services segment provides investment fund management,
primarily to institutional clients. This segment includes Separate
Accounts which provide various investment options for group clients
through pooled or single group accounts.
Intersegment investment advisory and other fees of approximately $124.1
million, $135.3 million and $128.6 million for 1995, 1994 and 1993,
respectively, are included in total revenues of the Investment Services
segment. These fees, excluding amounts related to the discontinued GIC
Segment of $14.7 million, $27.4 million and $17.0 million for 1995, 1994
and 1993, respectively, are eliminated in consolidation.
The Group Pension segment administers traditional participating group
annuity contracts with conversion features, generally for corporate
qualified pension plans, and association plans which provide full
service retirement programs for individuals affiliated with professional
and trade associations.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Individual insurance and annuities................. $ 3,254.6 $ 3,110.7 $ 2,981.5
Group pension...................................... 292.0 359.1 426.6
Attributed insurance capital....................... 61.2 79.4 61.6
----------------- ---------------- -----------------
Insurance operations............................. 3,607.8 3,549.2 3,469.7
Investment services................................ 949.1 935.2 2,792.6
Consolidation/elimination.......................... (34.9) (24.7) (40.5)
----------------- ---------------- -----------------
Total.............................................. $ 4,522.0 $ 4,459.7 $ 6,221.8
================= ================ =================
Earnings (loss) before Federal income taxes
and cumulative effect of accounting change
Individual insurance and annuities................. $ 274.4 $ 245.5 $ 76.2
Group pension...................................... (13.3) 15.8 2.0
Attributed insurance capital....................... 18.7 69.8 49.0
----------------- ---------------- -----------------
Insurance operations............................. 279.8 331.1 127.2
Investment services................................ 161.2 177.5 302.1
Consolidation/elimination.......................... (3.1) .3 .5
----------------- ---------------- -----------------
Subtotal..................................... 437.9 508.9 429.8
Corporate interest expense......................... (27.9) (114.2) (126.1)
----------------- ---------------- -----------------
Total.............................................. $ 410.0 $ 394.7 $ 303.7
================= ================ =================
</TABLE>
F-37
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets
Individual insurance and annuities..................................... $ 50,328.8 $ 44,063.4
Group pension.......................................................... 4,033.3 4,222.8
Attributed insurance capital........................................... 2,391.6 2,609.8
---------------- -----------------
Insurance operations................................................. 56,753.7 50,896.0
Investment services.................................................... 12,842.9 12,127.9
Consolidation/elimination.............................................. (354.4) (1,614.4)
---------------- -----------------
Total.................................................................. $ 69,242.2 $ 61,409.5
================ =================
</TABLE>
19) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The quarterly results of operations for the years ended December 31,
1995, 1994 and 1993, are summarized below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED,
------------------------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
----------------- ----------------- ------------------ ------------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1995
----
Total Revenues................ $ 1,074.7 $ 1,158.4 $ 1,127.1 $ 1,161.8
================= ================= ================== ==================
Net Earnings.................. $ 59.0 $ 94.3 $ 91.2 $ 53.1
================= ================= ================== ==================
1994
----
Total Revenues................ $ 1,107.4 $ 1,075.0 $ 1,153.8 $ 1,123.5
================= ================= ================== ==================
Earnings before Cumulative
Effect of Accounting
Change...................... $ 64.0 $ 68.4 $ 89.1 $ 72.0
================= ================= ================== ==================
Net Earnings.................. $ 36.9 $ 68.4 $ 89.1 $ 72.0
================= ================= ================== ==================
1993
----
Total Revenues................ $ 1,502.2 $ 1,539.7 $ 1,679.4 $ 1,500.5
================= ================= ================== ==================
Net Earnings.................. $ 32.3 $ 47.1 $ 68.8 $ 64.2
================= ================= ================== ==================
</TABLE>
20) INVESTMENT IN DLJ
On December 15, 1993, the Company sold a 61% interest in DLJ to the
Holding Company for $800.0 million in cash and securities. The excess of
the proceeds over the book value in DLJ at the date of sale of $340.2
million has been reflected as a capital contribution. In 1995, DLJ
completed the initial public offering ("IPO") of 10.58 million shares of
its common stock, which included 7.28 million of the Holding Company's
shares in DLJ, priced at $27 per share. Concurrent with the IPO, the
Company contributed equity securities to DLJ having a market value of
$21.2 million. Upon completion of the IPO, the Company's ownership
percentage was reduced to 36.1%. The Company's ownership interest will
be further reduced upon the issuance of common stock after the vesting
of forfeitable restricted stock units acquired by and/or the exercise of
options granted to certain DLJ employees. At December 31, 1995, DLJ had
options
F-38
<PAGE>
outstanding to purchase approximately 9.2 million shares of DLJ common
stock at $27.00 per share. Options are exercisable over a period of up
to ten years. DLJ restricted stock units represents forfeitable rights
to receive approximately 5.2 million shares of DLJ common stock through
February 2000.
The results of operations and cash flows of DLJ through the date of sale
are included in the consolidated statements of earnings and cash flow
for the year ended December 31, 1993. For the period subsequent to the
date of sale, the results of operations of DLJ are accounted for on the
equity basis and are included in commissions, fees and other income in
the consolidated statements of earnings. The Company's carrying value of
DLJ is included in investment in and loans to affiliates in the
consolidated balance sheets.
Summarized balance sheets information for DLJ, reconciled to the
Company's carrying value of DLJ, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets:
Trading account securities, at market value............................ $ 10,911.4 $ 8,970.0
Securities purchased under resale agreements........................... 18,748.2 10,476.4
Broker-dealer related receivables...................................... 13,023.7 11,784.8
Other assets........................................................... 1,893.2 2,030.4
---------------- -----------------
Total Assets........................................................... $ 44,576.5 $ 33,261.6
================ =================
Liabilities:
Securities sold under repurchase agreements............................ $ 26,744.8 $ 18,356.7
Broker-dealer related payables......................................... 12,915.5 10,618.0
Short-term and long-term debt.......................................... 1,717.5 1,956.5
Other liabilities...................................................... 1,775.0 1,285.1
---------------- -----------------
Total liabilities...................................................... 43,152.8 32,216.3
Cumulative exchangeable preferred stock................................ 225.0 225.0
Total shareholders' equity............................................. 1,198.7 820.3
---------------- -----------------
Total Liabilities, Cumulative Exchangeable Preferred Stock and
Shareholders' Equity................................................. $ 44,576.5 $ 33,261.6
================ =================
DLJ's equity as reported............................................... $ 1,198.7 $ 820.3
Unamortized cost in excess of net assets acquired in 1985
and other adjustments................................................ 40.5 50.8
The Holding Company's equity ownership in DLJ.......................... (499.0) (532.1)
Minority interest in DLJ............................................... (324.3) -
---------------- -----------------
The Company's Carrying Value of DLJ.................................... $ 415.9 $ 339.0
================ =================
</TABLE>
F-39
<PAGE>
Summarized statements of earnings information for DLJ reconciled to the
Company's equity in earnings of DLJ is as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Commission, fees and other income...................................... $ 1,325.9 $ 953.5
Net investment income.................................................. 904.1 791.9
Dealer, trading and investment gains, net.............................. 528.6 263.3
---------------- -----------------
Total Revenues......................................................... 2,758.6 2,008.7
Total expenses including income taxes.................................. 2,579.5 1,885.7
---------------- -----------------
Net earnings........................................................... 179.1 123.0
Dividends on preferred stock........................................... 19.9 20.9
---------------- -----------------
Earnings Applicable to Common Shares................................... $ 159.2 $ 102.1
================ =================
DLJ's earnings applicable to common shares as reported................. $ 159.2 $ 102.1
Amortization of cost in excess of net assets acquired in 1985.......... (3.9) (3.1)
The Holding Company's equity in DLJ's earnings......................... (90.4) (60.9)
Minority interest in DLJ............................................... (6.5) -
---------------- -----------------
The Company's Equity in DLJ's Earnings................................. $ 58.4 $ 38.1
================ =================
</TABLE>
21) RELATED PARTY TRANSACTIONS
On August 31, 1993, the Company sold $661.0 million of primarily
privately placed below investment grade fixed maturities to EQ Asset
Trust 1993, a limited purpose business trust, wholly owned by the
Holding Company. The Company recognized a $4.1 million gain net of
related deferred policy acquisition costs, deferred Federal income tax
and amounts attributable to participating group annuity contracts. In
conjunction with this transaction, the Company received $200.0 million
of Class B Notes issued by EQ Asset Trust 1993. These notes have
interest rates ranging from 6.85% to 9.45%. The Class B Notes are
reflected in investments in and loans to affiliates on the consolidated
balance sheets.
F-40
<PAGE>
[Financial statements for Equitable and for the Separate Account for the period
ended September 30, 1996 to be filed]
<PAGE>
APPENDIX A
MANAGEMENT
Here is a list of our directors and, to the extent they are responsible for
variable life insurance operations, our principal officers and a brief statement
of their business experience for the past five years. Unless otherwise noted,
their address is 787 Seventh Avenue, New York, New York 10019.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ----------------------- -------------------------
DIRECTORS
<S> <C>
Claude Bebear Director of Equitable since July 1991. Chairman of the Board of the Holding Company
AXA S.A. (February 1996-present) and a Director of other affiliates of Equitable. Chairman and Chief
23, Avenue Matignon Executive Officer of AXA since February 1989. Chief Executive Officer of the AXA Group since
75008 Paris, France 1974 and Chairman or Director of numerous subsidiaries and affiliated companies of the AXA Group.
Christopher J. Brocksom Director of Equitable since July 1992. Chief Executive Officer, AXA Equity & Law Life
AXA Equity & Law Assurance Society ("AXA Equity & Law") and various directorships and officerships with AXA
Amersham Road Equity & Law affiliated companies.
High Wycombe
Bucks HP 13 5 AL, England
Francoise Colloc'h Director of Equitable since July 1992. Executive Vice President, Culture-- Management--
AXA S.A. Communications, AXA, and various positions with AXA affiliated companies.
23, Avenue Matignon
75008 Paris, France
Henri de Castries Director of Equitable since September 1993. Vice Chairman of the Board of the Holding
AXA S.A. Company since February 1996. Executive Vice President Financial Services and Life Insurance
23, Avenue Matignon Activities of AXA since 1993. Prior thereto, General Secretary from 1991 to 1993 and
75008 Paris, France Central Director of Finances from 1989 to 1991. Also Director or Officer of various
subsidiaries and affiliates of the AXA Group. Director of the Holding Company and of other
Equitable affiliates.
Joseph L. Dionne Director of Equitable since May 1982. Chairman (since April 1988) and Chief Executive
The McGraw-Hill Companies Officer (Since April 1983) of The McGraw-Hill Companies. Director of the Holding Company.
1221 Avenue of the Americas
New York, NY 10020
William T. Esrey Director of Equitable since July 1986. Chairman (since April 1990) and Chief Executive
Sprint Corporation Officer (since 1985) and President (1985 to February 1996) of Sprint Corporation. Director
P.O. Box 11315 of the Holding Company.
Kansas City, MO 64112
Jean-Rene Fourtou Director of Equitable since July 1992. Chairman and Chief Executive Officer, Rhone-Poulenc,
Rhone-Poulenc S.A. S.A. since 1986. Director of the Holding Company and AXA.
25 Quai Paul Doumer
92408 Courbevoie Cedex,
France
Norman C. Francis Director of Equitable since March 1989. President, Xavier University of Louisiana.
Xavier University of Louisiana
7325 Palmetto Street
New Orleans, LA 70125
Donald J. Greene Director of Equitable since July 1991. Partner, LeBoeuf, Lamb, Greene & MacRae since 1965.
LeBouef, Lamb, Greene & MacRae Director of the Holding Company.
125 West 55th Street
New York, NY 10019-4513
John T. Hartley Director of Equitable since August 1987. Retired Chairman and Chief Executive Officer of
Harris Corporation Harris Corporation (until July 1995); prior thereto, he held the positions of Chairman of
1025 NASA Boulevard Harris Corporation from 1987, Chief Executive Officer from 1986 and President from October
Melbourne, FL 32919 1987 to April 1993.
John H.F. Haskell, Jr. Director of Equitable since July 1992. Managing Director of Dillon, Read & Co., Inc. since
Dillon, Read & Co., Inc. 1975 and member of its Board of Directors.
535 Madison Avenue
New York, NY 10022
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ----------------------- -------------------------
DIRECTORS (continued)
<S> <C>
W. Edwin Jarmain Director of Equitable since July 1992. President of Jarmain Group Inc. since 1979; also an
Jarmain Group Inc. Officer or Director of several affiliated companies. Chairman and Director of FCA
121 King Street West International Ltd.; served as President, CEO and Director from 1992 through 1993. Director of
Suite 2525, Box 36 various AXA affiliated companies. Director of the Holding Company since July 1992.
Toronto, Ontario M5H 3T9,
Canada
G. Donald Johnston, Jr. Director of Equitable since January 1986. Retired Chairman and Chief Executive Officer, JWT
184-400 Ocean Road Group, Inc. and J. Walter Thompson Company.
John's Island
Vero Beach, FL 32963
Winthrop Knowlton Director of Equitable since October 1973. Chairman of the Board of Knowlton Brothers, Inc.
Knowlton Brothers, Inc. since May 1989; also President of Knowlton Associates, Inc. since September 1987; Director
530 Fifth Avenue of the Holding Company.
New York, NY 10036
Arthur L. Liman Director of Equitable since March 1984. Partner, Paul, Weiss, Rifkind, Wharton & Garrison
Paul, Weiss, Rifkind, Wharton since 1966.
and Garrison
1285 Avenue of the Americas
New York, NY 10019
George T. Lowy Director of Equitable since July 1992. Partner, Cravath, Swaine & Moore.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Didier Pineau-Valencienne Director of Equitable since February 1996. Chairman and Chief Executive Officer of
Schneider S.A. Schneider S.A. since 1981 and Chairman or Director of numerous subsidiaries and affiliated
64-70 Avenue Jean-Baptiste companies of Schneider. Director of AXA and the Holding Company.
Clament
96646 Boulogne-Billancourt
Cedex
France
George J. Sella, Jr. Director of Equitable since May 1987. Retired Chairman and Chief Executive Officer of
P.O. Box 397 American Cyanamid Company (until April 1993); prior thereto, Chairman from 1984, Chief
Newton, NJ 07860 Executive Officer from 1983 and President from 1979 to 1991.
Dave H. Williams Director of Equitable since March 1991. Chairman and Chief Executive Officer of Alliance
Alliance Capital Management since 1977 and Chairman or Director of numerous subsidiaries and affiliated companies of
Corporation Alliance. Director of the Holding Company.
1345 Avenue of the Americas
New York, NY 10105
OFFICERS -- DIRECTORS
James M. Benson Director of Equitable since February 1994. Chief Executive Officer (since February 1996)and
President of Equitable (since February 1994); prior thereto, Chief Operating Officer (February
1994 to February 1996) and Senior Executive Vice President of Equitable (April 1993 to February
1994). Previously, President, Chief Executive Officer and a Director of Equitable Variable Life
Insurance Company ("EVLICO"). Senior Executive Vice President of the Holding Company since
February 1994 and Chief Operating Officer since February 1996; Director of various Equitable
affiliated companies; Director of the Holding Company since February 1994.
William T. McCaffrey Director of Equitable since February 1996. Senior Executive Vice President and Chief Operating
Officer of Equitable (all since February 1996). Prior thereto, Executive Vice President (from
February 1986 to February 1996) and Chief Administrative Officer (from February 1988 to February
1996). Executive Vice President and Chief Administrative Officer (since February 1994) of the
Holding Company. Director of various Equitable affiliated companies, including EVLICO.
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ----------------------- -------------------------
OFFICERS -- DIRECTORS (continued)
<S> <C>
Joseph J. Melone Chairman of Equitable since February 1994 and a Director of Equitable since November 1990.
Chief Executive Officer of the Holding Company since February 1996 and President of the Holding
Company since May 1992. Previously, Chief Executive Officer of Equitable from February 1994, to
February 1996; prior to February 1994, President, Chief Executive Officer and Director of
Equitable from September 1992 to February 1994 and President, Chief Operating Officer and a
Director since November 1990. Former Chairman, Chief Executive Officer and Director of EVLICO.
Director of various Equitable and AXA affiliated companies.
OTHER OFFICERS
A. Frank Beaz Senior Vice President, Equitable; prior thereto, Vice President, Equitable (until March 1995).
Executive Vice President, EQ Financial Consultants, Inc. ("EQF") (May 1995-present).
Leon B. Billis Senior Vice President, Equitable; prior thereto, Vice President, Equitable (until November 1994);
Vice President, EVLICO (July 1996 to December 1996).
Harvey Blitz Senior Vice President and Deputy Chief Financial Officer, Equitable. Senior Vice President,
Holding Company; Director or Chairman of various Equitable affiliated companies; Director (October
1992 to December 1996) and Vice President, EVLICO (April 1995 to December 1996).
Kevin R. Byrne Vice President and Treasurer, Equitable; Vice President and Treasurer, Holding Company; Treasurer,
EVLICO (until December 1996) and Frontier Trust Company; Director or Officer of other Equitable
affiliated companies.
Jerry M. de St. Paer Executive Vice President, Equitable. Senior Executive Vice President (since May 1996) and Chief
Financial Officer (since May 1992) of the Holding Company. Executive Vice President and Chief
Operating Officer (since September 1994) of Equitable Investment Corporation. Previously held
various officerships with Equitable and its affiliates. Director and Senior Investment Officer,
EVLICO (until December 1996). Director of various Equitable affiliated companies.
Gordon G. Dinsmore Senior Vice President and Corporate Actuary, Equitable. Executive Vice President, Equico. Director
and Senior Vice President, EVLICO (until December 1996); Director of other Equitable
affiliated companies.
Alvin H. Fenichel Senior Vice President and Controller, Equitable. Senior Vice President and Controller, Holding
Company. Vice President and Controller (until December 1996), EVLICO; Vice President,
The Equitable of Colorado, Inc. ("Colorado").
Paul J. Flora Senior Vice President and Auditor, Equitable. Prior thereto, Vice President and Auditor
(February 1994 to March 1996). Vice President and Auditor, Holding Company (September 1994 to
present). Vice President/Auditor, National Westminster Bank (November 1984 to June 1994).
Robert E. Garber Executive Vice President and General Counsel, Equitable; Executive Vice President and General
Counsel, Holding Company. Prior thereto, Senior Vice President and General Counsel of Equitable
and the Holding Company (September 1993 to September 1994) and Senior Vice President and Deputy
General Counsel of Equitable (September 1989 to September 1993).
Donald R. Kaplan Vice President and Acting Chief Compliance Officer, Equitable. Prior thereto, Vice President and
Counsel (until June 1996).
Michael S. Martin Senior Vice President, Equitable. Chairman, EQF; Chairman and Chief Executive Officer, Equi-
Source of New York (January 1992 to October 1994) and Frontier (April 1992 to October 1994);
Vice President, Hudson River Trust ("HRT") (February 1993 to February 1995); Director,
Vice President and Treasurer, Equitable Distributors, Inc. (August 1993 to February 1995),
also Chairman, President, and Chief Executive Officer (December 1993 to February 1995); Director,
Equitable Underwriting and Sales Agency (Bahamas), Ltd. (May 1996 to present) and Colorado
(January 1995 to present).
</TABLE>
A-3
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ----------------------- -------------------------
OFFICERS -- DIRECTORS (continued)
<S> <C>
Peter D. Noris Executive Vice President and Chief Investment Officer, Equitable. Executive Vice President
(since May 1995) and Chief Investment Officer (since July 1995), Holding Company. Prior
thereto, Vice President/Manager, Insurance Companies Investment Strategies Group, Solomon
Brothers, Inc. (November 1992 to May 1995). Prior thereto, with Morgan Stanley & Co., Inc.,
from October 1984 to November 1992 as Principal, Fixed Income Insurance Group. Former
Director and Senior Vice President of EVLICO. Director of other Equitable affiliates.
Anthony C. Pasquale Senior Vice President, Equitable. Chairman and President, Equitable Realty Assets
Corporation (July 1995 to present). Director of other Equitable affiliates.
Michael J. Rich Senior Vice President, Equitable, since October 1994; prior thereto, Vice President of
Underwriting, John Hancock Mutual Life Insurance Co. since 1988. Director of EVLICO (May
1995 to December 1996).
Pauline Sherman Vice President, Secretary and Associate General Counsel, Equitable; prior thereto, Vice
President and Associate General Counsel (until September 1995). Vice President, Secretary and
Associate General Counsel, Holding Company (September 1995 to present).
Samuel Shlesinger Senior Vice President and Actuary, Equitable; prior thereto, Vice President and Actuary.
Previously, Director and Senior Vice President, EVLICO (February 1988 to December 1996).
Director, Chairman and Chief Executive Officer, Equitable of Colorado. Vice President, HRT.
Jose S. Suquet Executive Vice President and Chief Agency Officer, Equitable, since August 1994; prior thereto,
Agency Manager, Equitable (February 1985 to August 1994).
Stanley B. Tulin Senior Executive Vice President and Chief Financial Officer, Equitable; prior thereto, Chairman,
Insurance Consulting a nd Actuarial Practice, Coopers & Lybrand (until April 1996); Executive
Vice President, Holding Company.
</TABLE>
A-4
<PAGE>
VARIABLE LIFE INSURANCE POLICIES
FUNDED THROUGH SEPARATE ACCOUNT I
PROSPECTUS SUPPLEMENT DATED MAY 1, 1996
The Champion(TM) Basic Policy
SP-1(TM) Expanded Policy
Issued By
EQUITABLE VARIABLE
LIFE INSURANCE COMPANY
Principal Office Located at:
787 Seventh Avenue
New York, NY 10019
VM 520
- -------------------------------------------------------------------------------
THE HUDSON RIVER TRUST
PROSPECTUS DATED MAY 1, 1996
HRT 596
- -------------------------------------------------------------------------------
<PAGE>
VARIABLE LIFE INSURANCE POLICIES
FUNDED THROUGH SEPARATE ACCOUNT I
THE CHAMPION(TM) (85-11)
SP-1(TM) (85-09) ISSUED BY
BASIC POLICY (85-01) EQUITABLE VARIABLE
EXPANDED POLICY (85-02) LIFE INSURANCE COMPANY
PROSPECTUS SUPPLEMENT DATED MAY 1, 1996
INTRODUCTION. This Supplement updates certain information contained in the
prospectuses for:
o THE CHAMPION dated September 30, 1987 and December 18, 1986;
o SP-1 dated September 30, 1987, April 30, 1986 and January 1, 1984; and
o BASIC AND EXPANDED dated April 30, 1986 and March 26, 1985.
For your convenience, we have consolidated the prior updating supplements that
have been previously distributed. For this reason, you may already be familiar
with some of the information in this prospectus supplement, but we encourage you
to read it carefully anyway. You should attach this supplement to your
prospectus and retain it for future reference. Equitable Variable Life Insurance
Company (Equitable Variable) will send you an additional copy of any prospectus
without charge, on written request.
These Policies are no longer offered for sale.
EQUITABLE VARIABLE. The information under the heading EQUITABLE VARIABLE is
updated as follows: Equitable Variable was organized in 1972 in New York State
as a stock life insurance company. We are licensed to do business in all 50
states, Puerto Rico, the Virgin Islands and the District of Columbia. At
December 31, 1995, we had approximately $132.8 billion face amount of variable
life insurance in force.
EQUITABLE. The information under the heading OUR PARENT, EQUITABLE is updated as
follows: Equitable is a wholly-owned subsidiary of The Equitable Companies
Incorporated (the Holding Company). The largest stockholder of the Holding
Company is AXA S.A. (AXA), a French insurance holding company. AXA beneficially
owns 60.6% of the outstanding shares of common stock of the Holding Company plus
convertible preferred stock. Under its investment arrangements with Equitable
and the Holding Company, AXA is able to exercise significant influence over the
operations and capital structure of the Holding Company and its subsidiaries,
including Equitable and Equitable Variable. AXA is the principal holding company
for most of the companies in one of the largest insurance groups in Europe. The
majority of AXA's stock is controlled by a group of five French mutual insurance
companies. Equitable, the Holding Company and their subsidiaries managed
approximately $195.3 billion in assets as of December 31, 1995.
HUDSON RIVER TRUST INVESTMENT POLICIES. Net premiums under your policy can be
allocated to the investment funds of our Separate Account I ("Funds"). The funds
of Separate Account I in turn invest those net premiums in corresponding
portfolios of The Hudson River Trust, a mutual fund. Each portfolio has a
different investment objective which it tries to achieve by following separate
investment policies. The objectives and policies of each portfolio will affect
its return and its risks. There is no guarantee that these objectives will be
achieved. The policies and objectives of the Trust's portfolios are as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT POLICY OBJECTIVE
--------- ----------------- ---------
<S> <C> <C>
MONEY MARKET ............. Primarily high quality short-term money market High level of current income while
instruments. preserving assets and maintaining
liquidity.
INTERMEDIATE ............. Primarily debt securities issued or guaranteed High current income consistent with
GOVERNMENT by the U.S. Government, its agencies and relative stability of principal.
SECURITIES instrumentalities. Each investment will have a
final maturity of not more than 10 years or a
duration not exceeding that of a 10-year
Treasury note.
HIGH YIELD ............... Primarily a diversified mix of high yield, High return by maximizing current
fixed-income securities involving greater income and, to the extent
volatility of price and risk of principal and consistent with that objective,
income than high quality fixed-income capital appreciation.
securities. The medium and lower quality debt
securities in which the Portfolio may invest
are known as "junk bonds."
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
THIS SUPPLEMENT SHOULD BE RETAINED FOR FUTURE REFERENCES.
VM520 Copyright 1996 Equitable Variable Life Insurance Company.
All rights reserved.
2
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT POLICY OBJECTIVE
--------- ----------------- ---------
<S> <C> <C>
BALANCED ................. Primarily common stocks, publicly-traded debt High return through a combination
securities and high quality money market of current income and capital
instruments. The portfolio is generally appreciation.
expected to hold 50% of its assets in equity
securities and 50% in fixed income securities.
COMMON STOCK ............. Primarily common stock and other equity-type Long-term growth of capital and
instruments. increasing income.
AGGRESSIVE STOCK ......... Primarily common stock and other equity-type Long-term growth of capital.
securities issued by medium and other smaller
sized companies with strong growth potential.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
INVESTMENT PERFORMANCE. Footnote 7 to the Separate Account I financial
statements included herein contains information about the net return for each
Fund. The attached prospectus supplement for The Hudson River Trust contains
rates of return and other portfolio performance information of the Trust for
various periods ended December 31, 1995. Remember, the changes in the
Account/Cash Value of your policy depend not only on the performance of the
Trust portfolios, but also on the deductions and charges under your policy. To
obtain the current index values of the Separate Account Funds for Champion
policies, call (212)714-5015. The index values and the information contained in
Footnote 7 are computed using the gross rates of return for the corresponding
portfolios of the Trust, reduced by a daily asset charge for investment advisory
services of 0.25% and by the mortality and expense risk charge.
THE TRUST'S INVESTMENT ADVISER. The information about Alliance Capital
Management L.P. (Alliance), the Trust's investment adviser, is updated as
follows: As of December 31, 1995, Alliance was managing approximately $146.5
billion in assets. Alliance, a publicly traded limited partnership, is
indirectly majority-owned by Equitable.
For your convenience, we are restating the advisory fees payable by the Trust to
Alliance, which is based on the following annual percentages of the value of
each portfolio's daily average net assets, are as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
DAILY AVERAGE NET ASSETS
--------------------------------------------
FIRST NEXT OVER
PORTFOLIO $350 MILLION $400 MILLION $750 MILLION
--------- ------------ ------------ ------------
<S> <C> <C> <C>
Common Stock, Money Market and Balanced..................... .400% .375% .350%
Aggressive Stock and Intermediate Government Securities..... .500% .475% .450%
High Yield.................................................. .550% .525% .500%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Equitable Variable credits the Separate Account Funds daily to offset investment
advisory fees of the Trust which exceed a 0.25% effective annual rate.
LIVING BENEFIT OPTION AVAILABLE. Subject to regulatory approval in your state
and our underwriting guidelines, you may now be eligible for a Living Benefit
payment under your policy. The Living Benefit enables the policyowner to receive
a portion of the policy's death benefit (excluding death benefits payable under
certain riders) if the insured has a terminal illness. Certain eligibility
requirements apply when you submit a Living Benefit claim (for example,
satisfactory evidence of less than six month life expectancy). We will deduct an
administrative charge of up to $250 from the proceeds of the Living Benefit
payment. This charge may be less in some states.
When a Living Benefit claim is paid, Equitable Variable establishes a lien
against the policy. The amount of the lien is the sum of the Living Benefit
payment, any accrued interest on that payment and any unpaid scheduled premium.
Interest will be charged at a rate equal to the greater of: (i) the yield on a
90-day Treasury bill and (ii) the maximum adjustable policy loan interest rate
permitted in the state in which your policy was delivered.
Until a death benefit is paid, or the policy is surrendered, a portion of the
lien is allocated to the policy's net cash surrender value. This portion of the
liened amount will be transferred to the Money Market Fund. This portion of the
liened amount will not be available for loans. Any death benefit or Cash
Surrender Value payable upon policy surrender will be reduced by the amount of
the lien.
Unlike a death benefit received by a beneficiary after the death of an insured,
receipt of a Living Benefit payment may be taxable as a distribution under the
policy. See THE IMPACT OF TAXES or TAX EFFECTS in your prospectus and TAX
EFFECTS in this supplement for a discussion of the tax treatment of
distributions under the policy. Consult your tax adviser. Receipt of a Living
Benefit payment may also affect a policyowner's eligibility for certain
government benefits or entitlements. For additional information about this
benefit, please contact your Equitable agent.
3
<PAGE>
CASH/ACCOUNT VALUE TRANSFERS. You may transfer all or part of your Cash/Account
Value among the Funds of the Separate Account up to four times in a policy year.
A transfer will go into effect on the day we receive your signed request at our
Administrative Office. Your request should show the policy number and amount
(either in dollars or as a percentage) you want to transfer. We reallocate loans
if you transfer Cash/Account Value.
TELEPHONE TRANSFERS. In order to make a transfer by telephone, each policyowner
must first complete and return an authorization form. Authorization forms can be
obtained from your Equitable agent or our Administrative Office. The completed
form MUST be returned to our Administrative Office before requesting a telephone
transfer.
Telephone transfers may be requested on each day we are open to transact
business. You will receive the Fund's index value as of the close of business on
the day you call. We do not accept telephone transfer requests after 4:00 p.m.
Eastern Time. Only one telephone transfer request is permitted per day and it
may not be revoked at any time. Telephone transfer requests are automatically
recorded and are invalid if incomplete information is given, portions of the
request are inaudible, no authorization form is on file, or the request does not
comply with the transfer limitations described in your policy.
We have established reasonable procedures designed to confirm that instructions
communicated by telephone are genuine. Such procedures include requiring certain
personal identification information prior to acting on telephone instructions
and providing written confirmation of instructions communicated by telephone. If
we do not employ reasonable procedures to confirm that instructions communicated
by telephone are genuine, we may be liable for any losses arising out of any act
or any failure to act resulting from our own negligence, lack of good faith, or
willful misconduct. In light of the procedures established, we will not be
liable for following telephone instructions that we reasonably believe to be
genuine.
During times of extreme market activity it may be impossible to contact us to
make a telephone transfer. If this occurs, you should submit a written transfer
request to our Administrative Office. Our rules on telephone transfers are
subject to change and we reserve the right to discontinue telephone transfers in
the future.
TAX EFFECTS. The discussion of the tax effects on policy proceeds contained in
your prospectus and this supplement is based on our interpretation of Federal
income tax laws as of the date of such prospectus or supplement, as applied to
Policies owned by U.S. resident individuals. The tax effects on corporate
taxpayers, subject to the Federal alternative minimum tax, other non-natural
owners such as trusts, non-U.S. residents or non-U.S. citizens, may be
different. This discussion is general in nature and should not be considered tax
advice, for which you should consult your legal or tax adviser.
SPECIAL TAX RULES MAY APPLY IF YOU TRANSFER YOUR OWNERSHIP OF THE POLICY.
CONSULT YOUR TAX ADVISER BEFORE ANY TRANSFER OF YOUR POLICY.
POLICY PROCEEDS. A policy will be treated as "life insurance" for Federal income
tax purposes if it meets the definitional requirement of the Internal Revenue
Code (Code) and for as long as the portfolios of the Trust satisfy the
diversification requirements under the Code. We believe that the Policies will
meet these requirements, and that under Federal income tax law:
o the death benefit received by the beneficiary under your policy will not be
subject to Federal income tax; and
o as long as your policy remains in force, increases in the value of your
policy as a result of investment experience will not be subject to Federal
income tax unless and until there is a distribution from your policy.
The Federal income tax consequences of a distribution from your policy will
depend on whether your policy is determined to be a "modified endowment." Except
for SP-1 policies entered into after June 20, 1988, the Policies will generally
not be considered modified endowments. Also, SP-1 policies acquired after June
20, 1988 as a result of an exchange from a policy that is not a modified
endowment, will generally not be considered a modified endowment as long as no
additional premiums are paid and the death benefit of the new policy is not
reduced below that of the old policy. Although Champion policies should
generally not be considered modified endowments, a Champion policy entered into
after June 20, 1988 could become a modified endowment if it were issued in
exchange for a modified endowment or if the policy is allowed to lapse.
IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT, as long as it remains in force, a
loan under your policy will be treated as indebtedness and no part of the loan
will be subject to Federal income tax. Interest on loans is not deductible. If
your policy lapses, matures or is surrendered, the excess, if any, of your Cash
Surrender Value (which includes the amount of any unpaid policy loan and loan
interest) over your Basis will be subject to Federal income tax. Your Basis in
your policy generally will equal the premiums you have paid. Also, if your
policy provides for a policy split, a split of your policy into two policies
followed by a return of one for cash may result in taxable income to you.
IF YOUR POLICY IS A MODIFIED ENDOWMENT, any loan from your policy will be taxed
in a manner comparable to distributions from annuities (e.g., on an
"income-first" basis). A loan for this purpose includes any increase in the loan
amount to pay interest on an existing loan or an assignment or a pledge to
secure a loan. A loan will be considered taxable income to you to the extent
your Account Value exceeds your Basis in the policy at the time you make the
loan. For modified endowments, your Basis would be increased by the amount of
any prior loan under your policy that was considered taxable income to you.
A 10% penalty tax will also apply to the taxable portion of a loan under a
modified endowment. The penalty tax will not, however, apply to loans (i) to
taxpayers 59 1/2 years of age or older, (ii) in the case of a disability (as
defined in the Code) or (iii) received as part of a series of substantially
equal periodic annuity payments for the life (or life expectancy) of the
taxpayer or the joint lives (or joint life expectancies) of the taxpayer and his
beneficiary. In addition, if your policy lapses, matures or is
4
<PAGE>
surrendered, the excess, if any, of your Cash Surrender Value over your Basis
will be subject to Federal income tax and, unless one of the above exceptions
applies, the 10% penalty tax.
If a policy is a modified endowment, a policy distribution will be taxed as
described in the two preceding paragraphs. "Distributions" include loans, and
payments made upon surrender, maturity, lapse, or upon surrender of one of the
policies resulting from a policy split. In addition, a distribution from a
policy within two years before it becomes a modified endowment will be subject
to tax in this manner. The Secretary of the Treasury has been authorized to
prescribe rules which would treat similarly other loans made in anticipation of
a policy becoming a modified endowment.
For the purpose of determining the taxable income to you resulting from a
distribution under your policy, all modified endowments issued to you by the
same insurer or an affiliate during any calendar year will be aggregated and
treated as one policy. This provision applies to policies entered into after
June 20, 1988, but does not affect contracts purchased by certain qualified
plans. Under prior law, a "twelve-month period" rather than a calendar year
standard was used.
The paragraphs above described how certain 1988 Federal tax legislation changed
the tax consequences of distributions for "modified endowments", a newly
described category of life insurance policies.
DIVERSIFICATION. Under Section 817(h) of the Code, the Secretary of the Treasury
has the authority to set standards for diversification of the investments
underlying variable life insurance policies. The Treasury Department has issued
regulations regarding the diversification requirements. Failure by us to meet
these requirements would disqualify your policy as a life insurance policy under
Section 7702 of the Code. If this were to occur, you would be subject to Federal
income tax on the income under the policy. Equitable Variable Separate Account
I, through the Trust, intends to comply with these requirements.
In connection with the issuance of the temporary diversification regulations,
the Treasury Department stated that it anticipates the issuance of regulations
or rulings prescribing the circumstances in which the ability of a policyowner
to direct his investment to particular funds of a separate account may cause the
policyowner, rather than the insurance company, to be treated as the owner of
the assets in the account. If you were considered the owner of the assets of the
Separate Account, income and gains from the Separate Account would be included
in your gross income for Federal income tax purposes.
TAX CHANGES. The United States Congress may in the future enact legislation that
could change the tax treatment of life insurance policies. In addition, the
Treasury Department may amend existing regulations, issue new regulations, or
adopt new interpretations of existing laws. There is no way of predicting
whether, when or in what form any such change would be adopted. Any such change
could have a retroactive effect regardless of the date of enactment. State tax
laws or, if you are not a United States resident, foreign tax laws, may affect
the tax consequences to you, the insured person or your beneficiary. These laws
may change from time to time without notice.
DISTRIBUTION. Equico Securities Inc. ("Equico"), a wholly-owned subsidiary of
Equitable, is the principal underwriter of the Trust under a Distribution
Agreement. Equico is also the distributor of our variable life insurance
policies and Equitable's variable annuity contracts under a Distribution and
Servicing Agreement. Equico is registered with the SEC as a broker-dealer under
the Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. Equico's principal business address is 1755
Broadway, New York, NY 10019. Equico is paid a fee for its services as
distributor of our policies. In 1994 and 1995, Equitable and Equitable Variable
paid Equico fees of $216,920 and $325,380, respectively, for its services under
the Distribution and Servicing Agreement. On or about May 1, 1996, Equico will
change its name to EQ Financial Consultants, Inc.
The amounts paid and accrued to Equitable by us under our sales and services
agreements with Equitable totaled approximately $377.2 million in 1995, $380.5
million in 1994 and $355.7 million in 1993.
MANAGEMENT. A list of our directors and principal officers and a brief statement
of their business experience for the past five years is contained in Appendix A
to this supplement.
LONG-TERM MARKET TRENDS. Appendix B to this supplement presents historical
return trends for various types of securities which may be useful for
understanding how different investment strategies may affect long term results.
FINANCIAL STATEMENTS. The financial statements of Separate Account FP and
Equitable Variable included in this prospectus supplement have been audited for
the years ended December 31, 1995, 1994 and 1993 by the accounting firm of Price
Waterhouse LLP, independent accountants, to the extent stated in their reports.
The financial statements of Separate Account FP and Equitable Variable for the
years ended December 31, 1995, 1994 and 1993 included in this prospectus
supplement have been so included in reliance on the reports of Price Waterhouse
LLP, given on the authority of such firm as experts in accounting and auditing.
The financial statements of Equitable Variable contained in this prospectus
supplement should be considered only as bearing upon the ability of Equitable
Variable to meet its obligations under the policies. They should not be
considered as bearing upon the investment experience of the Funds of the
Separate Account.
5
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Equitable Variable Life Insurance Company
and Policyowners of Separate Account I
of Equitable Variable Life Insurance Company
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of Money Market Division,
Intermediate Government Securities Division, High Yield Division, Balanced
Division, Common Stock Division and Aggressive Stock Division, separate
investment divisions of Equitable Variable Life Insurance Company ("Equitable
Variable Life") Separate Account I at December 31, 1995 and the results of each
of their operations and changes in each of their net assets for the years
indicated, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of Equitable Variable Life's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of shares in The Hudson River Trust at December 31, 1995 with the
transfer agent, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, NY
February 7, 1996
FSA-1
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT HIGH
MARKET SECURITIES YIELD
DIVISION DIVISION DIVISION
------------- ------------- ------------
<S> <C> <C> <C>
ASSETS
Investments in shares of The Hudson River Trust --
at market value (Notes 2 and 7)
Cost: $ 68,810,062........................................................ $69,878,080
2,278,572........................................................ $2,270,685
8,122,292........................................................ $8,889,685
30,772,800........................................................
288,549,569........................................................
15,051,041........................................................
Receivable for sales of shares of The Hudson River Trust................... -- -- 4,028
Receivable for policy-related transactions................................. -- 122 --
----------- ---------- ----------
Total Assets............................................................... 69,878,080 2,270,807 8,893,713
----------- ---------- ----------
LIABILITIES
Payable for purchases of shares of The Hudson River Trust.................. 42,175 146 --
Payable for policy-related transactions.................................... 374,717 -- 75,483
Amount retained by Equitable Variable Life in Separate Account I (Note 4).. 556,502 108,596 584,394
----------- ---------- ----------
Total Liabilities.......................................................... 973,394 108,742 659,877
----------- ---------- ----------
NET ASSETS ATTRIBUTABLE TO POLICYOWNERS.................................... $68,904,686 $2,162,065 $8,233,835
=========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
COMMON AGGRESSIVE
BALANCED STOCK STOCK
DIVISION DIVISION DIVISION
------------ ------------ -----------
<S> <C> <C> <C>
ASSETS
Investments in shares of The Hudson River Trust --
at market value (Notes 2 and 7)
Cost: $ 68,810,062........................................................
2,278,572........................................................
8,122,292........................................................
30,772,800........................................................ $36,956,684
288,549,569........................................................ $466,189,272
15,051,041........................................................ $24,149,766
Receivable for sales of shares of The Hudson River Trust................... -- -- --
Receivable for policy-related transactions................................. -- -- --
----------- ------------ -----------
Total Assets............................................................... 36,956,684 466,189,272 24,149,766
----------- ------------ -----------
LIABILITIES
Payable for purchases of shares of The Hudson River Trust.................. 13,111 171,915 25,293
Payable for policy-related transactions.................................... 548,410 4,222,963 373,127
Amount retained by Equitable Variable Life in Separate Account I (Note 4).. 552,645 5,700,933 532,544
----------- ------------ -----------
Total Liabilities.......................................................... 1,114,166 10,095,811 930,964
----------- ------------ -----------
NET ASSETS ATTRIBUTABLE TO POLICYOWNERS.................................... $35,842,518 $456,093,461 $23,218,802
=========== ============ ===========
</TABLE>
See Notes to Financial Statements.
FSA-2
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MONEY MARKET DIVISION
--------------------------------------
1995 1994 1993
----------- ----------- ----------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust................................ $3,738,980 $2,684,291 $2,083,651
Expenses (Note 3):
Mortality and expense risk charges................................... 347,935 355,911 373,075
---------- ---------- ----------
NET INVESTMENT INCOME..................................................... 3,391,045 2,328,380 1,710,576
---------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2):
Realized gain (loss) on investments.................................. 31,732 52,117 65,261
Realized gain distribution from The Hudson River Trust............... -- -- --
---------- ---------- ----------
NET REALIZED GAIN (LOSS).................................................. 31,732 52,117 65,261
Unrealized appreciation/depreciation on investments:
Beginning of period.................................................. 920,431 844,597 812,147
End of period........................................................ 1,068,018 920,431 844,597
---------- ---------- ----------
Change in unrealized appreciation/depreciation during the period....... 147,587 75,834 32,450
---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... 179,319 127,951 97,711
---------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........... $3,570,364 $2,456,331 $1,808,287
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT
SECURITIES DIVISION
------------------------------------
1995 1994 1993
---------- ---------- --------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust................................ $145,274 $ 199,648 $115,827
Expenses (Note 3):
Mortality and expense risk charges................................... 11,943 11,365 8,896
-------- --------- --------
NET INVESTMENT INCOME..................................................... 133,331 188,283 106,931
-------- --------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2):
Realized gain (loss) on investments.................................. (94,891) (303,584) (3,141)
Realized gain distribution from The Hudson River Trust............... -- 157,383 157,383
-------- --------- --------
NET REALIZED GAIN (LOSS).................................................. (94,891) (146,201) 154,242
Unrealized appreciation/depreciation on investments:
Beginning of period.................................................. (267,346) (100,844) 8,264
End of period........................................................ (7,887) (267,346) (100,844)
-------- --------- --------
Change in unrealized appreciation/depreciation during the period....... 259,459 (166,502) (109,108)
-------- --------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... 164,568 (312,703) 45,134
-------- --------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........... $297,899 $(124,420) $152,065
======== ========= ========
</TABLE>
See Notes to Financial Statements.
FSA-3
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
HIGH YIELD DIVISION
--------------------------------------
1995 1994 1993
----------- ---------- ----------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust...................................... $ 862,089 $ 806,574 $ 763,325
Expenses (Note 3):
Mortality and expense risk charges......................................... 39,170 41,676 40,466
----------- --------- ----------
NET INVESTMENT INCOME........................................................... 822,919 764,898 722,859
----------- --------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2):
Realized gain (loss) on investments.......................................... (10,426) (94,683) 11,131
Realized gain distribution from The Hudson River Trust....................... -- -- 170,999
---------- --------- ----------
NET REALIZED GAIN (LOSS)........................................................ (10,426) (94,683) 182,130
Unrealized appreciation/depreciation on investments:
Beginning of period........................................................ 98,061 1,064,280 338,796
End of period.............................................................. 767,393 98,061 1,064,280
---------- ---------- ----------
Change in unrealized appreciation/depreciation during the period............. 669,332 (966,219) 725,484
---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.......................... 658,906 (1,060,902) 907,614
---------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................. $1,481,825 $ (296,004) $1,630,473
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
BALANCED DIVISION
--------------------------------------
1995 1994 1993
---------- ------------ ----------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust...................................... $1,126,871 $ 1,006,200 $ 963,517
Expenses (Note 3):
Mortality and expense risk charges......................................... 167,041 164,873 162,512
---------- ----------- ----------
NET INVESTMENT INCOME........................................................... 959,830 841,327 801,005
---------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2):
Realized gain (loss) on investments.......................................... (113,948) (379,076) (6,104)
Realized gain distribution from The Hudson River Trust....................... 1,008,186 -- 1,948,704
---------- ----------- ----------
NET REALIZED GAIN (LOSS)........................................................ 894,238 (379,076) 1,942,600
Unrealized appreciation/depreciation on investments:
Beginning of period........................................................ 2,080,968 5,526,191 4,624,699
End of period.............................................................. 6,183,884 2,080,968 5,526,191
---------- ----------- ----------
Change in unrealized appreciation/depreciation during the period............. 4,102,916 (3,445,223) 901,492
---------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.......................... 4,997,154 (3,824,299) 2,844,092
---------- ----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................. $5,956,984 $(2,982,972) $3,645,097
========== =========== ==========
</TABLE>
See Notes to Financial Statements.
FSA-4
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
COMMON STOCK DIVISION
-------------------------------------------
1995 1994 1993
-------------- ------------- ------------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust..................................... $ 5,978,397 $ 5,727,748 $ 5,678,972
Expenses (Note 3):
Mortality and expense risk charges........................................ 2,095,213 1,942,844 1,844,849
------------ ------------ ------------
NET INVESTMENT INCOME.......................................................... 3,883,184 3,784,904 3,834,123
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2):
Realized gain (loss) on investments......................................... 1,269,512 (328,604) 2,630,537
Realized gain distribution from The Hudson River Trust...................... 25,928,481 20,219,440 47,068,505
------------ ------------ ------------
NET REALIZED GAIN (LOSS)....................................................... 27,197,993 19,890,836 49,699,042
Unrealized appreciation/depreciation on investments:
Beginning of period....................................................... 92,693,149 126,545,990 98,769,799
End of period............................................................. 177,639,703 92,693,149 126,545,990
------------ ------------ ------------
Change in unrealized appreciation/depreciation during the period............ 84,946,554 (33,852,841) 27,776,191
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 112,144,547 (13,962,005) 77,475,233
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................ $116,027,731 $(10,177,101) $ 81,309,356
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE STOCK DIVISION
------------------------------------------
1995 1994 1993
----------- ------------- -------------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust..................................... $ 57,627 $ 22,268 $ 45,872
Expenses (Note 3):
Mortality and expense risk charges........................................ 102,259 89,577 82,479
---------- ----------- ----------
NET INVESTMENT INCOME.......................................................... (44,632) (67,309) (36,607)
---------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2):
Realized gain (loss) on investments......................................... 42,192 (226,938) (57,409)
Realized gain distribution from The Hudson River Trust...................... 2,691,238 -- 1,550,537
---------- ----------- ----------
NET REALIZED GAIN (LOSS)....................................................... 2,733,430 (226,938) 1,493,128
Unrealized appreciation/depreciation on investments:
Beginning of period....................................................... 6,102,433 6,618,938 5,529,963
End of period............................................................. 9,098,725 6,102,433 6,618,938
---------- ----------- ----------
Change in unrealized appreciation/depreciation during the period............ 2,996,292 (516,505) 1,088,975
---------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 5,729,722 (743,443) 2,582,103
---------- ----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................ $5,685,090 $ (810,752) $2,545,496
========== =========== ==========
</TABLE>
See Notes to Financial Statements.
FSA-5
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MONEY MARKET DIVISION
---------------------------------------
1995 1994 1993
---------- ------------- -----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................................................ $3,391,045 $ 2,328,380 $ 1,710,576
Net realized gain (loss)..................................................... 31,732 52,117 65,261
Change in unrealized appreciation (depreciation) on investments.............. 147,587 75,834 32,450
----------- ----------- -----------
Net increase (decrease) from operations...................................... 3,570,364 2,456,331 1,808,287
----------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................................................ 5,540,000 6,128,438 7,171,866
Benefits and other policy-related transactions............................... (8,585,006) (8,940,995) (10,608,028)
Net transfers among divisions................................................ (340,867) (1,904,223) (3,931,738)
----------- ----------- -----------
Net increase (decrease) from policy-related transactions..................... (3,385,873) (4,716,780) (7,367,900)
----------- ----------- -----------
NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE
IN SEPARATE ACCOUNT I (Note 4)............................................... (33,731) (22,105) (424)
----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS............................................... 150,760 (2,282,554) (5,560,037)
NET ASSETS, BEGINNING OF PERIOD................................................. 68,753,926 71,036,480 76,596,517
----------- ----------- -----------
NET ASSETS, END OF PERIOD....................................................... $68,904,686 $68,753,926 $71,036,480
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT
SECURITIES DIVISION
--------------------------------------
1995 1994 1993
----------- ------------- ----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................................................ $ 133,331 $ 188,283 $ 106,931
Net realized gain (loss)..................................................... (94,891) (146,201) 154,242
Change in unrealized appreciation (depreciation) on investments.............. 259,459 (166,502) (109,108)
---------- ----------- ----------
Net increase (decrease) from operations...................................... 297,899 (124,420) 152,065
---------- ----------- ----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................................................ 120,110 130,572 114,331
Benefits and other policy-related transactions............................... (292,199) (402,355) (135,104)
Net transfers among divisions................................................ (65,399) 606,857 557,742
---------- ----------- ----------
Net increase (decrease) from policy-related transactions..................... (237,488) 335,074 536,969
---------- ----------- ----------
NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE
IN SEPARATE ACCOUNT I (Note 4)............................................... (12,591) 4,561 (986)
---------- ---------- ----------
INCREASE (DECREASE) IN NET ASSETS............................................... 47,820 215,215 688,048
NET ASSETS, BEGINNING OF PERIOD................................................. 2,114,245 1,899,030 1,210,982
---------- ---------- ----------
NET ASSETS, END OF PERIOD....................................................... $2,162,065 $2,114,245 $1,899,030
========== ========== ==========
</TABLE>
See Notes to Financial Statements.
FSA-6
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
HIGH YIELD DIVISION
-----------------------------------------
1995 1994 1993
----------- ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................................................ $ 822,919 $ 764,898 $ 722,859
Net realized gain (loss)..................................................... (10,426) (94,683) 182,130
Change in unrealized appreciation (depreciation) on investments.............. 669,332 (966,219) 725,484
---------- ----------- -----------
Net increase (decrease) from operations...................................... 1,481,825 (296,004) 1,630,473
---------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................................................ 821,557 852,874 862,281
Benefits and other policy-related transactions............................... (1,690,910) (1,525,854) (1,494,464)
Net transfers among divisions................................................ 154,049 (38,627) 626,135
---------- ----------- -----------
Net increase (decrease) from policy-related transactions..................... (715,304) (711,607) (6,048)
---------- ----------- -----------
NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE
IN SEPARATE ACCOUNT I (Note 4)............................................... (96,346) 14,805 (5,206)
---------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS............................................... 670,175 (992,806) 1,619,219
NET ASSETS, BEGINNING OF PERIOD................................................. 7,563,660 8,556,466 6,937,247
---------- ----------- -----------
NET ASSETS, END OF PERIOD....................................................... $8,233,835 $ 7,563,660 $ 8,556,466
========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
BALANCED DIVISION
-----------------------------------------
1995 1994 1993
------------ ------------- -----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................................................ $ 959,830 $ 841,327 $ 801,005
Net realized gain (loss)..................................................... 894,238 (379,076) 1,942,600
Change in unrealized appreciation (depreciation) on investments.............. 4,102,916 (3,445,223) 901,492
----------- ----------- -----------
Net increase (decrease) from operations...................................... 5,956,984 (2,982,972) 3,645,097
----------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................................................ 3,295,027 3,487,888 3,674,964
Benefits and other policy-related transactions............................... (3,348,951) (3,823,829) (4,982,073)
Net transfers among divisions................................................ (376,087) (3,406) 1,192,337
----------- ----------- -----------
Net increase (decrease) from policy-related transactions..................... (430,011) (339,347) (114,772)
----------- ----------- -----------
NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE
IN SEPARATE ACCOUNT I (Note 4)............................................... (89,517) 42,214 (13,867)
----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS............................................... 5,437,456 (3,280,105) 3,516,458
NET ASSETS, BEGINNING OF PERIOD................................................. 30,405,062 33,685,167 30,168,709
----------- ----------- -----------
NET ASSETS, END OF PERIOD....................................................... $35,842,518 $30,405,062 $33,685,167
=========== =========== ===========
</TABLE>
See Notes to Financial Statements.
FSA-7
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
COMMON STOCK DIVISION
-----------------------------------------
1995 1994 1993
----------- -------------- -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................................................ $ 3,883,184 $ 3,784,904 $ 3,834,123
Net realized gain (loss)..................................................... 27,197,993 19,890,836 49,699,042
Change in unrealized appreciation (depreciation) on investments.............. 84,946,554 (33,852,841) 27,776,191
------------ ------------ ------------
Net increase (decrease) from operations...................................... 116,027,731 (10,177,101) 81,309,356
------------ ------------ ------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................................................ 22,520,480 24,056,215 25,806,986
Benefits and other policy-related transactions............................... (43,155,008) (44,688,333) (46,157,443)
Net transfers among divisions................................................ (27,413) 459,966 1,338,478
------------ ------------ ------------
Net increase (decrease) from policy-related transactions..................... (20,661,941) (20,172,152) (19,011,979)
------------ ------------ ------------
NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE
IN SEPARATE ACCOUNT I (Note 4)............................................... (1,859,326) 149,257 (1,173,722)
------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS............................................... 93,506,464 (30,199,996) 61,123,655
NET ASSETS, BEGINNING OF PERIOD................................................. 362,586,997 392,786,993 331,663,338
------------ ------------ ------------
NET ASSETS, END OF PERIOD....................................................... $456,093,461 $362,586,997 $392,786,993
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE STOCK DIVISION
-------------------------------------------
1995 1994 1993
----------- ------------- -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................................................ $ (44,632) $ (67,309) $ (36,607)
Net realized gain (loss)..................................................... 2,733,430 (226,938) 1,493,128
Change in unrealized appreciation (depreciation) on investments.............. 2,996,292 (516,505) 1,088,975
----------- ------------- ------------
Net increase (decrease) from operations...................................... 5,685,090 (810,752) 2,545,496
----------- ------------- -------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................................................ 1,509,349 1,480,535 1,490,827
Benefits and other policy-related transactions............................... (2,642,068) (1,982,576) (1,737,214)
Net transfers among divisions................................................ 655,717 1,279,484 565,989
----------- ------------- -------------
Net increase (decrease) from policy-related transactions..................... (477,002) 777,443 319,602
----------- ------------- -------------
NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE
IN SEPARATE ACCOUNT I (Note 4)............................................... (150,764) 20,425 (5,961)
----------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS............................................... 5,057,324 (12,884) 2,859,137
NET ASSETS, BEGINNING OF PERIOD................................................. 18,161,478 18,174,362 15,315,225
----------- ------------- -------------
NET ASSETS, END OF PERIOD....................................................... $23,218,802 $ 18,161,478 $ 18,174,362
=========== ============= =============
</TABLE>
See Notes to Financial Statements.
FSA-8
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. General
Equitable Variable Life Insurance Company (Equitable Variable Life), a
wholly-owned subsidiary of The Equitable Life Assurance Society of the
United States (Equitable Life), established Separate Account I (the Account)
under New York insurance law to support the operations of Equitable Variable
Life's scheduled and single premium variable life insurance policies
(Policies). The Account is a unit investment trust registered with the
Securities and Exchange Commission under the Investment Company Act of 1940.
The Account consists of six investment divisions: the Money Market Division,
the Intermediate Government Securities Division, the High Yield Division,
the Balanced Division, the Common Stock Division and the Aggressive Stock
Division. The assets in each Division are invested in shares of a designated
portfolio (Portfolio) of a mutual fund, The Hudson River Trust (the Trust).
Each Portfolio has separate investment objectives.
The assets of the Account are the property of Equitable Variable Life.
However, the portion of the Account's assets equal to the reserves and other
policy liabilities with respect to the Account will not be chargeable with
liabilities arising out of any other business Equitable Variable Life may
conduct. The net assets may not be less than the amount required under New
York insurance law to provide for death benefits (without regard to the
minimum death benefit guarantee) and other policy benefits. Additional
assets are held in Equitable Variable Life's General Account to cover the
contingency that the guaranteed minimum death benefit might exceed the death
benefit which would have been payable in the absence of such guarantee.
2. Significant Accounting Policies
The accompanying financial statements are prepared in conformity with
generally accepted accounting principles (GAAP). The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Investments made in shares of the Trust are valued at the net asset value
per share of the respective Portfolios. The net asset value is determined by
the Trust using the market or fair value of the underlying assets of the
Portfolios.
Investment transactions are recorded on the trade date. Realized gains and
losses include gains and losses on redemptions of the Trust's shares
(determined on the identified cost basis) and Trust distributions
representing the net realized gains on Trust investment transactions.
The operations of the Account are included in the consolidated Federal
income tax return of Equitable. Under the provisions of the Policies,
Equitable Variable Life has the right to charge the Account for Federal
income tax attributable to the Account. No charge is currently being made
against the Account for such tax since, under current tax law, Equitable
Variable Life pays no tax on investment income and capital gains reflected
in variable life insurance policy reserves. However, Equitable Variable Life
retains the right to charge for any Federal income tax incurred which is
attributable to the Account if the law is changed. Charges for state and
local taxes, if any, attributable to the Account may also be made.
Dividends are recorded as income at the end of each quarter on the
ex-dividend date. Capital gains are distributed by the Trust at the end of
each year.
3. Asset Charges
Under the policies, Equitable Variable Life assumes mortality and expense
risks and, to cover these risks, deducts a charge from the assets of the
Account at an annual rate of 0.50% of net assets attributable to
policyowners.
Equitable Variable Life makes certain deductions from net premiums before
amounts are allocated to the Account. The deductions are for (1) premiums
for optional benefits, (2) additional premiums for extra mortality risks,
(3) administrative expenses, (4) state premium taxes, and (5) except as to
single premium policies, a risk charge for the guaranteed minimum death
benefit.
4. Amounts Retained by Equitable Variable Life in Separate Account I
The amount retained by Equitable Variable Life in the Account arises
principally from (1) mortality and other gains and losses resulting from the
Account's operations, (2) contributions from Equitable Variable Life, and
(3) that portion, determined ratably, of the Account's investment results
applicable to those assets in the Account in excess of the net assets for
the Policies. Amounts retained by Equitable Variable Life are not subject to
charges for mortality and expense risks.
Amounts retained by Equitable Variable Life in the Account may be
transferred at any time by Equitable Variable Life to its General Account.
FSA-9
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995
The following table shows the surplus contributions (withdrawals) by
Equitable Variable Life by investment division:
<TABLE>
<CAPTION>
INVESTMENT DIVISION 1995 1994 1993
------------------- ---- ---- ----
<S> <C> <C> <C>
Common Stock $(1,975,000) -- --
Money Market -- -- $ 585,000
Balanced -- -- 375,000
Aggressive Stock (100,000) -- 460,000
High Yield -- -- 475,000
Short-Term World Income -- $(119,356) --
Intermediate Government Securities -- -- 90,000
----------- --------- ----------
$(2,075,000) $(119,356) $1,985,000
=========== ========= ==========
</TABLE>
Equitable Variable Life credits the values of the Policies participating in
the Account to compensate policyowners for their share of the Trust expenses
in excess of (1) fees for advisory services at an annual rate equivalent to
0.25% of the average daily value of the aggregate net assets of the
Portfolios, and (2) the Trust income taxes, if any. For Money Market and
Common Stock Divisions, fees for advisory services in excess of an annual
rate equivalent to 0.25% of the average daily value of the aggregate net
assets of the related Trust Portfolios are refunded to the Divisions. Excess
fees for advisory services for Intermediate Government Securities, High
Yield, Balanced and Aggressive Stock Divisions are absorbed by Equitable
Variable Life's surplus account.
5. Distribution and Servicing Agreement
Equitable Variable Life has entered into a Distribution and Servicing
Agreement with Equitable Life and Equico Securities Inc., (Equico), whereby
registered representatives of Equico, authorized as variable life insurance
agents under applicable state insurance laws, sell the Policies. The
registered representatives are compensated on a commission basis by
Equitable Life.
Equitable Variable Life also has entered into an agreement with Equitable
Life under which Equitable Life performs the administrative services related
to the Policies, including underwriting and issuance, billings and
collections, and policyowner services. There is no charge to the Account
related to this agreement.
6. Share Substitution
On February 22, 1994, Equitable Variable Life, the Account and the Trust
substituted shares of the Trust's Intermediate Government Securities
Portfolio for shares of the Trust's Short-Term World Income Portfolio. The
amount transferred to Intermediate Government Securities Portfolio was
$390,705. The statements of operations and statements of changes in net
assets for the Intermediate Government Securities Portfolio is combined with
the Short-Term World Income Portfolio for periods prior to the merger on
February 22, 1994. The Short-Term World Income Division is not available for
future investment.
7. Investment Returns
The tables on the following page show the gross and net investment returns
with respect to the Divisions for the periods shown. The net return for each
Division is based upon net assets for a policy which commences with the
beginning date of such period and is not based on the average net assets in
the Division during such period. Gross return is equal to the total return
earned by the underlying Trust investment.
FSA-10
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
RATES OF RETURN:
YEAR ENDED DECEMBER 31,
MONEY MARKET ----------------------------------------------------------------------------------------------------
DIVISION(A)(C) 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- -------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 5.74% 4.02% 3.16% 3.75% 6.38% 8.44% 9.44% 7.56% 6.85% 6.86%
Net return................ 5.41% 3.68% 2.62% 3.23% 5.85% 7.90% 8.85% 7.02% 6.32% 6.31%
</TABLE>
<TABLE>
<CAPTION>
APRIL 1(B) TO
INTERMEDIATE YEAR ENDED DECEMBER 31, DECEMBER 31,
GOVERNMENT ------------------------------------ --------------------
SECURITIES DIVISION 1995 1994 1993 1992 1991
- ------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross return.............. 13.33% (4.37)% 10.87% 5.88% 12.51%
Net return................ 13.12% (4.54)% 10.29% 5.35% 12.09%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
HIGH YIELD DIVISION 1995 1994 1993 1992 1991 1990 1989 1988 1987
- ------------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 19.92% (2.79)% 23.60% 12.69% 24.91% (0.75)% 5.52% 10.55% 5.30%
Net return................ 19.74% (2.94)% 22.99% 12.13% 24.29% (1.25)% 4.99% 9.73% 4.77%
BALANCED DIVISION
- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 19.75% (8.02)% 12.44% (2.68)% 41.52% 0.43 % 26.08% 13.84% (0.65)%
Net return................ 19.33% (8.35)% 11.91% (3.17)% 40.81% (0.07)% 25.45% 12.99% (1.15)%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
COMMON STOCK ---------------------------------------------------------------------------------------------------
DIVISION(A)(C) 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- -------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 32.45% (2.14)% 24.99% 3.36% 38.10% (7.95)% 25.82% 22.69% 7.71% 17.59%
Net return................ 31.97% (2.50)% 24.36% 2.84% 37.41% (8.41)% 25.19% 22.08% 7.17% 17.00%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
AGGRESSIVE --------------------------------------------------------------------------------------------
STOCK DIVISION 1995 1994 1993 1992 1991 1990 1989 1988 1987
- -------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return............. 31.63% (3.81)% 17.05% (2.91)% 87.41% 8.49% 43.93% 1.78% 7.69%
Net return............... 31.29% (4.07)% 16.45% (3.40)% 86.47% 7.95% 43.21% 1.02% 7.15%
<FN>
(a) The net returns for periods prior to March 22, 1985 are those of the
respective Separate Accounts I and II reorganized on that date into a unit
investment trust. The reorganization was accounted for under the continuing
entity basis of accounting.
(b) Date as of which net premiums under the Policies were first allocated to
the Division. The gross return and the net return for the periods indicated
are not annual rates of return.
(c) Subsequent to March 22, 1985, the date the Account commenced investing in
the Trust, the advisory fees have been deducted prior to calculating the
gross return.
</FN>
</TABLE>
FSA-11
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
----------------- ----------------
ASSETS (IN MILLIONS)
<S> <C> <C>
Investments:
Fixed maturities:
Available for sale, at estimated fair value........................................ $ 4,366.3 $ 2,138.8
Held to maturity, at amortized cost................................................ -- 2,008.5
Policy loans......................................................................... 1,300.1 1,185.2
Mortgage loans on real estate........................................................ 771.5 888.5
Equity real estate................................................................... 525.4 641.0
Other equity investments............................................................. 200.5 239.1
Other invested assets................................................................ 120.9 107.8
----------------- ----------------
Total investments.................................................................. 7,284.7 7,208.9
Cash and cash equivalents............................................................... 277.6 182.3
Deferred policy acquisition costs....................................................... 2,037.8 2,077.1
Other assets............................................................................ 250.6 240.7
Separate Accounts assets................................................................ 4,611.6 3,345.3
----------------- ----------------
TOTAL ASSETS............................................................................ $ 14,462.3 $ 13,054.3
================= ================
LIABILITIES
Policyholders' account balances......................................................... $ 7,045.9 $ 7,340.0
Future policy benefits and other policyholders' liabilities............................. 570.8 509.4
Other liabilities....................................................................... 521.4 441.1
Separate Accounts liabilities........................................................... 4,586.5 3,314.9
----------------- ----------------
Total liabilities.................................................................. 12,724.6 11,605.4
----------------- ----------------
Commitments and contingencies (Notes 7, 9, 10 and 11)
SHAREHOLDER'S EQUITY
Common stock, par value $1 per share;
5.0 million shares authorized, 1.5 million shares issued and outstanding............. 1.5 1.5
Capital in excess of par value.......................................................... 1,480.7 1,355.7
Retained earnings....................................................................... 221.6 165.5
Net unrealized investment gains (losses)................................................ 44.6 (72.6)
Minimum pension liability............................................................... (10.7) (1.2)
----------------- ----------------
Total shareholder's equity......................................................... 1,737.7 1,448.9
----------------- ----------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.............................................. $ 14,462.3 $ 13,054.3
================= ================
<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
F-1
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
REVENUES
<S> <C> <C> <C>
Universal life and investment-type product policy fee income...... $ 584.5 $ 552.6 $ 485.2
Premiums.......................................................... 33.7 40.1 46.9
Net investment income............................................. 529.1 526.8 557.6
Investment (losses) gains, net.................................... (.5) (4.6) 1.5
Other income...................................................... 2.1 2.9 3.0
----------------- ---------------- -----------------
Total revenues.................................................. 1,148.9 1,117.8 1,094.2
----------------- ---------------- -----------------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances.............. 376.1 389.3 439.2
Policyholders' benefits........................................... 267.5 242.3 251.0
Other operating costs and expenses................................ 419.5 413.8 356.7
----------------- ---------------- -----------------
Total benefits and other deductions............................. 1,063.1 1,045.4 1,046.9
----------------- ---------------- -----------------
Earnings before Federal income taxes and cumulative
effect of accounting change....................................... 85.8 72.4 47.3
Federal income tax expense........................................... 29.7 25.0 20.5
----------------- ---------------- -----------------
Earnings before cumulative effect of accounting change............... 56.1 47.4 26.8
Cumulative effect of accounting change, net of Federal income taxes. -- (11.4) --
----------------- ---------------- -----------------
Net Earnings......................................................... $ 56.1 $ 36.0 $ 26.8
================= ================ =================
<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
F-2
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
COMMON STOCK AT PAR VALUE, beginning and end of year................. $ 1.5 $ 1.5 $ 1.5
----------------- ---------------- -----------------
CAPITAL IN EXCESS OF PAR VALUE, beginning of year.................... 1,355.7 1,305.7 1,055.7
Additional capital in excess of par value............................ 125.0 50.0 250.0
----------------- ---------------- -----------------
Capital in excess of par value, end of year.......................... 1,480.7 1,355.7 1,305.7
----------------- ---------------- -----------------
RETAINED EARNINGS, beginning of year................................. 165.5 129.5 102.7
Net earnings......................................................... 56.1 36.0 26.8
----------------- ---------------- -----------------
Retained earnings, end of year....................................... 221.6 165.5 129.5
----------------- ---------------- -----------------
NET UNREALIZED INVESTMENT (LOSSES) GAINS, beginning of year.......... (72.6) 22.3 11.1
Change in unrealized investment gains (losses)....................... 117.2 (94.9) 11.2
----------------- ---------------- -----------------
Net unrealized investment gains (losses), end of year................ 44.6 (72.6) 22.3
----------------- ---------------- -----------------
MINIMUM PENSION LIABILITY, beginning of year......................... (1.2) (6.3) --
Change in minimum pension liability.................................. (9.5) 5.1 (6.3)
----------------- ---------------- -----------------
Minimum pension liability, end of year............................... (10.7) (1.2) (6.3)
----------------- ---------------- -----------------
TOTAL SHAREHOLDER'S EQUITY, END OF YEAR.............................. $ 1,737.7 $ 1,448.9 $ 1,452.7
================= ================ =================
<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
F-3
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
NET EARNINGS......................................................... $ 56.1 $ 36.0 $ 26.8
ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH (USED) PROVIDED
BY OPERATING ACTIVITIES:
Interest credited to policyholders' account balances.............. 376.1 389.3 439.2
General Account policy charges.................................... (618.7) (572.8) (496.7)
Investment losses (gains), net.................................... .5 4.6 (1.5)
Other, net........................................................ 63.8 (17.2) 117.2
----------------- ---------------- -----------------
Net cash (used) provided by operating activities..................... (122.2) (160.1) 85.0
----------------- ---------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities and repayments......................................... 640.7 511.8 1,165.8
Sales............................................................. 2,667.0 2,119.0 2,844.2
Return of capital from joint ventures and limited partnerships.... 23.9 14.2 56.3
Purchases......................................................... (3,065.9) (2,251.7) (4,414.0)
Other, net........................................................ (114.8) (102.2) (98.8)
----------------- ---------------- -----------------
Net cash provided (used) by investing activities..................... 150.9 291.1 (446.5)
----------------- ---------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Policyholders' account balances:
Deposits........................................................ 581.1 602.8 612.9
Withdrawals..................................................... (636.6) (697.7) (506.2)
Capital contribution from Equitable Life.......................... 125.0 50.0 250.0
Other, net........................................................ (2.9) (1.8) 2.0
----------------- ---------------- -----------------
Net cash provided (used) by financing activities..................... 66.6 (46.7) 358.7
----------------- ---------------- -----------------
Change in cash and cash equivalents.................................. 95.3 84.3 (2.8)
Cash and cash equivalents, beginning of year......................... 182.3 98.0 100.8
----------------- ---------------- -----------------
Cash and Cash Equivalents, End of Year............................... $ 277.6 $ 182.3 $ 98.0
================= ================ =================
Supplemental cash flow information
Interest Paid..................................................... $ -- $ 5.7 $ 2.1
================= ================ =================
Income Taxes Refunded............................................. $ -- $ 8.4 $ .3
================= ================ =================
<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
F-4
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
Equitable Variable Life Insurance Company ("Equitable Variable Life") was
incorporated on September 11, 1972 as a wholly owned subsidiary of The
Equitable Life Assurance Society of the United States ("Equitable Life").
Equitable Variable Life's operations consist principally of the sale of
interest-sensitive life insurance and annuity products.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements are prepared in conformity
with generally accepted accounting principles ("GAAP").
The accompanying consolidated financial statements include the accounts of
Equitable Variable Life and its subsidiaries, (collectively "EVLICO").
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
All significant intercompany transactions and balances have been eliminated
in consolidation.
Certain reclassifications have been made in the amounts presented for prior
periods to conform these periods with the 1995 presentation.
Accounting Changes
In the first quarter of 1995, EVLICO adopted Statement of Financial
Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for
Impairment of a Loan." This statement applies to all loans, including loans
restructured in a troubled debt restructuring involving a modification of
terms. This statement addresses the accounting for impairment of a loan by
specifying how allowances for credit losses should be determined. Impaired
loans within the scope of this statement are measured based on the present
value of expected future cash flows discounted at the loan's effective
interest rate, at the loan's observable market price or the fair value of the
collateral if the loan is collateral dependent. EVLICO provides for
impairment of loans through an allowance for possible losses. The adoption of
this statement did not have a material effect on the level of these
allowances or on EVLICO's consolidated statements of earnings and
shareholder's equity.
In the fourth quarter of 1994 (effective as of January 1, 1994), EVLICO
adopted SFAS No. 112, "Employers' Accounting for Postemployment Benefits,"
which required employers to recognize the obligation to provide
postemployment benefits. Implementation of this statement resulted in a
charge for the cumulative effect of accounting change of $11.4 million, net
of a Federal income tax benefit of $6.2 million.
At December 31, 1993, EVLICO adopted SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," which expanded the use of fair
value accounting for those securities that a company does not have positive
intent and ability to hold to maturity. Implementation of this statement
increased consolidated shareholder's equity by $7.2 million, net of deferred
policy acquisition costs and deferred Federal income tax. Beginning
coincident with issuance of SFAS No. 115 implementation guidance in November
1995, the Financial Accounting Standards Board ("FASB") permitted companies a
one-time opportunity, through December 31, 1995, to reassess the
appropriateness of the classification of all securities held at that time. On
December 1, 1995, EVLICO transferred $1,806.7 million of securities
classified as held to maturity to the available for sale portfolio. As a
result, consolidated shareholder's equity increased by $17.9 million, net of
deferred policy acquisition costs and deferred Federal income tax.
New Accounting Pronouncements
In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which
requires that long-lived assets and certain identifiable intangibles be
reviewed for impairment whenever events or changes in circumstances indicate
the carrying amount of such assets may not be recoverable. EVLICO will
implement this statement as of January 1, 1996. EVLICO currently provides
allowances for possible losses for assets under the scope of this statement.
Management has not yet determined the impact of this statement on these
assets.
Valuation of Investments
Fixed maturities which have been identified as available for sale are
reported at estimated fair value. At December 31, 1994, fixed maturities
which EVLICO had both the ability and the intent to hold to maturity, were
stated principally at amortized cost. The amortized cost of fixed maturities
is adjusted for impairments in value deemed to be other than temporary.
F-5
<PAGE>
Mortgage loans on real estate are stated at unpaid principal balances, net of
unamortized discounts and valuation allowances. Effective with the adoption
of SFAS No. 114 on January 1, 1995, the valuation allowances are based on the
present value of expected future cash flows discounted at the loan's original
effective interest rate or the collateral value if the loan is collateral
dependent. However, if foreclosure is or becomes probable, the measurement
method used is collateral value. Prior to the adoption of SFAS No. 114, the
valuation allowances were based on losses expected by management to be
realized on transfers of mortgage loans to real estate (upon foreclosure or
in-substance foreclosure), on the disposition or settlement of mortgage loans
and on mortgage loans management believed may not be collectible in full. In
establishing valuation allowances, management previously considered, among
other things, the estimated fair value of the underlying collateral.
Real estate, including real estate acquired in satisfaction of debt, is
stated at depreciated cost less valuation allowances. At the date of
foreclosure (including in-substance foreclosure), real estate acquired in
satisfaction of debt is valued at estimated fair value. Valuation allowances
on real estate held for the production of income are computed using the
forecasted cash flows of the respective properties discounted at a rate equal
to EVLICO's cost of funds; valuation allowances on real estate available for
sale are computed using the lower of current estimated fair value, net of
disposition costs, or depreciated cost.
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which EVLICO does not have
control and a majority economic interest are reported on the equity basis of
accounting and are included with either equity real estate or other equity
investments, as appropriate.
Common stocks are carried at estimated fair value and are included in other
equity investments.
Short-term investments are stated at amortized cost which approximates fair
value and are included with other invested assets.
Cash and cash equivalents includes cash on hand, amounts due from banks and
highly liquid debt instruments purchased with an original maturity of three
months or less.
All securities are recorded in the consolidated financial statements on a
trade date basis.
Investment Results and Unrealized Investment Gains (Losses)
Realized investment gains and losses are determined by specific
identification and are presented as a component of revenue. Valuation
allowances are netted against the asset categories to which they apply and
changes in the valuation allowances are included in investment gains or
losses.
Unrealized investment gains and losses on fixed maturities available for sale
and equity securities held by EVLICO are accounted for as a separate
component of shareholder's equity, net of related deferred Federal income
taxes and deferred policy acquisition costs related to universal life and
investment-type products.
Recognition of Insurance Income and Related Expenses
Premiums from universal life and investment-type contracts are reported as
deposits to policyholders' account balances. Revenues from these contracts
consist of amounts assessed during the period against policyholders' account
balances for mortality charges, policy administration charges and surrender
charges. Policy benefits and claims that are charged to expenses include
benefit claims incurred in the period in excess of related policyholders'
account balances.
Premiums from life and annuity policies with life contingencies generally are
recognized as income when due. Benefits and expenses are matched with such
income so as to result in the recognition of profits over the life of the
contracts. This match is accomplished by means of the provision for
liabilities for future policy benefits and the deferral and subsequent
amortization of policy acquisition costs.
Deferred Policy Acquisition Costs
The costs of acquiring new business, principally commissions, underwriting,
agency and policy issue expenses, all of which vary with and are primarily
related to the production of new business, are deferred. Deferred policy
acquisition costs are subject to recoverability testing at the time of policy
issue and loss recognition testing at the end of each accounting period.
For universal life products and investment-type products, deferred policy
acquisition costs are amortized over the expected average life of the
contracts (periods ranging from 15 to 35 years and 5 to 17 years,
respectively) as a constant percentage of estimated gross profits arising
principally from investment results, mortality and expense margins and
surrender charges based on historical and anticipated future experience,
updated at the end of each accounting period. The effect on the amortization
of deferred policy acquisition costs of revisions to estimated gross profits
is reflected in earnings in the period such estimated gross profits are
revised. The effect on the deferred policy acquisition cost asset that would
result from realization of unrealized gains (losses) is recognized with an
offset to unrealized gains (losses) in consolidated shareholder's equity as
of the balance sheet date.
Amortization charged to income amounted to $199.0 million, $200.2 million and
$135.5 million for the years ended December 31, 1995, 1994 and 1993,
respectively.
F-6
<PAGE>
Policyholders' Account Balances and Future Policy Benefits
EVLICO's insurance contracts primarily are universal life and investment-type
contracts. Policyholders' account balances are equal to the policy account
values. The policy account values represent an accumulation of gross premium
payments plus credited interest less expense and mortality charges and
withdrawals.
The future policy benefit liabilities for the remainder of EVLICO's insurance
contracts, consisting primarily of supplementary contracts with life
contingencies and various policy riders, are computed by various valuation
methods based on assumed interest rates and mortality and morbidity
assumptions reflecting EVLICO's experience and industry standards.
Federal Income Taxes
EVLICO is included in a consolidated Federal income tax return with Equitable
Life and its other eligible subsidiaries. In accordance with an agreement
between EVLICO and Equitable Life, the amount of current income taxes as
determined on a separate return basis will be paid to, or received from,
Equitable Life. Benefits for losses, which are paid to EVLICO to the extent
they are utilized by Equitable Life, may not have been received in the
absence of such agreement. Deferred income tax assets and liabilities are
recognized based on the difference between financial statement carrying
amounts and income tax bases of assets and liabilities using the enacted
income tax rates and laws.
Separate Accounts
Separate Accounts are established in conformity with the New York State
Insurance Law and generally are not chargeable with liabilities that arise
from any other business of EVLICO. Separate Accounts assets are subject to
General Account claims only to the extent the value of such assets exceeds
the Separate Accounts liabilities.
Assets and liabilities of the Separate Accounts, representing net deposits
and accumulated net investment earnings less fees, held primarily for the
benefit of contractholders are shown as separate captions in the consolidated
balance sheets. Assets held in the Separate Accounts are carried at quoted
market values or, where quoted values are not available, at estimated fair
values as determined by management.
The investment results of Separate Accounts are reflected directly in
Separate Accounts liabilities. For the years ended December 31, 1995, 1994
and 1993, investment results of Separate Accounts were $342.2 million, $135.9
million and $344.1 million, respectively.
Deposits to Separate Accounts are reported as increases in Separate Accounts
liabilities and are not reported in revenues. Mortality, policy
administration and surrender charges of the Separate Accounts are included in
revenues.
F-7
<PAGE>
3. INVESTMENTS
The following tables provide additional information relating to fixed
maturities and equity securities:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
---------------- ----------------- ----------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
December 31, 1995
-----------------
Fixed Maturities:
Available for Sale:
Corporate................................. $ 3,053.5 $ 101.0 $ 22.0 $ 3,132.5
Mortgage-backed........................... 573.9 7.7 .4 581.2
U.S. Treasury securities and U.S.
government and agency securities....... 569.2 9.2 2.6 575.8
States and political subdivisions......... 4.3 .1 -- 4.4
Foreign governments....................... 16.2 .8 -- 17.0
Redeemable preferred stock................ 56.8 3.7 5.1 55.4
---------------- ----------------- ----------------- ---------------
Total Available for Sale.................... $ 4,273.9 $ 122.5 $ 30.1 $ 4,366.3
================ ================= ================= ===============
Equity Securities:
Common stock................................ $ 36.2 $ 10.3 $ 4.7 $ 41.8
================ ================= ================= ===============
December 31, 1994
-----------------
Fixed Maturities:
Available for Sale:
Corporate................................. $ 1,622.3 $ 5.1 $ 112.6 $ 1,514.8
Mortgage-backed........................... 221.9 .5 16.4 206.0
U.S. Treasury securities and U.S.
government and agency securities....... 365.4 1.4 20.7 346.1
States and political subdivisions......... 4.8 -- .6 4.2
Foreign governments....................... 14.8 .2 -- 15.0
Redeemable preferred stock................ 58.0 .1 5.4 52.7
---------------- ----------------- ----------------- ---------------
Total Available for Sale.................... $ 2,287.2 $ 7.3 $ 155.7 $ 2,138.8
================ ================= ================= ===============
Held to Maturity:
Corporate................................. $ 1,812.4 $ 11.9 $ 93.1 $ 1,731.2
U.S. Treasury securities and U.S.
government and agency securities....... 180.4 -- 21.7 158.7
States and political subdivisions......... 14.4 -- .9 13.5
Foreign governments....................... 1.3 .1 -- 1.4
---------------- ----------------- ----------------- ---------------
Total Held to Maturity...................... $ 2,008.5 $ 12.0 $ 115.7 $ 1,904.8
================ ================= ================= ===============
Equity Securities:
Common stock................................ $ 42.0 $ 10.1 $ 9.4 $ 42.7
================ ================= ================= ===============
</TABLE>
For publicly traded fixed maturities and equity securities, estimated fair
value is determined using quoted market prices. For fixed maturities without
a readily ascertainable market value, EVLICO has determined an estimated fair
value using a discounted cash flow approach, including provisions for credit
risk, generally based upon the assumption that such securities will be held
to maturity. Estimated fair value for equity securities, substantially all of
which do not have a readily ascertainable market value, has been determined
by EVLICO. Such estimated fair values do not necessarily represent the values
for which these securities could have been sold at the dates of the
consolidated balance sheets. At December 31, 1995 and 1994, respectively,
securities without a readily ascertainable market value having an amortized
cost of $1,233.7 million and $1,571.5 million, respectively, had estimated
fair values of $1,291.1 million and $1,512.2 million, respectively.
F-8
<PAGE>
The contractual maturity of bonds at December 31, 1995 are shown below:
<TABLE>
<CAPTION>
AVAILABLE FOR SALE
------------------------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
----------------- ----------------
(IN MILLIONS)
<S> <C> <C>
Due in one year or less............................................................. $ 133.3 $ 133.4
Due in years two through five....................................................... 1,416.4 1,444.9
Due in years six through ten........................................................ 1,361.5 1,391.8
Due after ten years................................................................. 732.0 759.6
Mortgage-backed securities.......................................................... 573.9 581.2
----------------- ----------------
Total............................................................................... $ 4,217.1 $ 4,310.9
================= ================
</TABLE>
Bonds not due at a single maturity date have been included in the above table
in the year of final maturity. Actual maturities will differ from contractual
maturities because borrowers may have the right to call or prepay obligations
with or without call or prepayment penalties.
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balances, beginning of year.................................... $ 68.5 $ 87.3 $ 147.2
Additions charged to income.................................... 31.0 12.7 44.4
Deductions for writedowns and asset dispositions............... (33.8) (31.5) (104.3)
----------------- ----------------- -----------------
Balances, End of Year.......................................... $ 65.7 $ 68.5 $ 87.3
================= ================= =================
Balances, end of year comprise:
Mortgage loans on real estate............................... $ 15.9 $ 24.0 $ 46.7
Equity real estate.......................................... 49.8 44.5 40.6
----------------- ----------------- -----------------
Total.......................................................... $ 65.7 $ 68.5 $ 87.3
================= ================= =================
</TABLE>
Deductions for writedowns and asset dispositions for 1993 include a $20.2
million writedown of fixed maturity investments at December 31, 1993 as a
result of adopting a new accounting statement for the valuation of these
investments that requires specific writedowns instead of valuation
allowances.
At December 31, 1995, the carrying values of investments held for the
production of income which were non-income producing for the twelve months
preceding the consolidated balance sheet date were $21.5 million of fixed
maturities and $29.1 million of mortgage loans on real estate.
EVLICO's fixed maturity investment portfolio includes corporate high yield
securities consisting of public high yield bonds, redeemable preferred stocks
and directly negotiated debt in leveraged buyout transactions. EVLICO seeks
to minimize the higher than normal credit risks associated with such
securities by monitoring the total investments in any single issuer or total
investment in a particular industry group. Certain of these corporate high
yield securities are classified as other than investment grade by the various
rating agencies, i.e., a rating below Baa or an NAIC (National Association of
Insurance Commissioners) designation of 3 (medium grade), 4 or 5 (below
investment grade) or 6 (in or near default). At December 31, 1995,
approximately 11.0% of the $4,217.2 million aggregate amortized cost of bonds
held by EVLICO were considered to be other than investment grade.
In addition to its holding of corporate high yield securities, EVLICO is an
equity investor in limited partnership interests which primarily invest in
securities considered to be other than investment grade.
EVLICO has restructured or modified the terms of certain fixed maturity
investments. The fixed maturity portfolio, based on amortized cost, includes
$13.7 million and $13.3 million at December 31, 1995 and 1994, respectively,
of such restructured securities. The December 31, 1994 amount includes fixed
maturities which are in default as to principal and/or interest payments, are
to be restructured pursuant to commenced negotiations or where the borrowers
went into bankruptcy subsequent to acquisition (collectively, "problem fixed
maturities") of $5.6 million. Gross interest income that would have been
recorded in accordance with the original terms of restructured fixed
maturities amounted to $1.4 million, $1.1 million and $2.2 million in 1995,
1994 and 1993, respectively. Gross interest income on these fixed maturities
included in net investment income aggregated $1.4 million, $1.0 million and
$1.5 million in 1995, 1994 and 1993, respectively.
F-9
<PAGE>
At December 31, 1995 and 1994, mortgage loans on real estate with scheduled
payments 60 days (90 days for agricultural mortgages) or more past due or in
foreclosure (collectively, "problem mortgage loans on real estate") had an
amortized cost of $36.0 million (4.6% of total mortgage loans on real estate)
and $35.2 million (3.9% of total mortgage loans on real estate),
respectively.
The payment terms of mortgage loans on real estate may from time to time be
restructured or modified. The investment in restructured mortgage loans on
real estate, based on amortized cost, amounted to $173.5 million and $130.8
million at December 31, 1995 and 1994, respectively. Gross interest income on
restructured mortgage loans on real estate that would have been recorded in
accordance with the original terms of such loans amounted to $16.1 million,
$12.3 million and $13.9 million in 1995, 1994 and 1993, respectively. Gross
interest income on these loans included in net investment income aggregated
$14.0 million, $11.4 million and $11.5 million in 1995, 1994 and 1993,
respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
DECEMBER 31, 1995
------------------
(IN MILLIONS)
Impaired mortgage loans with provision for losses.... $ 99.0
Impaired mortgage loans with no provision for losses. 24.5
------------------
Recorded investment in impaired mortgage loans....... 123.5
Provision for losses................................. 14.5
------------------
Net Impaired Mortgage Loans.......................... $ 109.0
==================
Impaired mortgage loans with no provision for losses are loans where the fair
value of the collateral or the net present value of the loan equals or
exceeds the recorded investment. Interest income earned on loans where the
collateral value is used to measure impairment is recorded on a cash basis.
Interest income on loans where the present value method is used to measure
impairment is accrued on the net carrying value amount of the loan at the
interest rate used to discount the cash flows. Changes in the present value
attributable to changes in the amount or timing of expected cash flows are
reported as investment gains or losses.
During the year ended December 31, 1995, EVLICO's average recorded investment
in impaired mortgage loans was $99.2 million. Interest income recognized on
these impaired mortgage loans totaled $8.2 million for the year ended
December 31, 1995, including $2.2 million recognized on a cash basis.
EVLICO's investment in equity real estate is through direct ownership and
through investments in real estate joint ventures. At December 31, 1995 and
1994, the carrying value of equity real estate available for sale amounted to
$55.6 million and $138.4 million, respectively. For the years ended December
31, 1995, 1994 and 1993, respectively, real estate of $12.2 million, $59.0
million and $92.1 million was acquired in satisfaction of debt. At December
31, 1995 and 1994, EVLICO owned $196.6 million and $230.5 million,
respectively, of real estate acquired in satisfaction of debt.
Depreciation on real estate is computed using the straight-line method over
the estimated useful lives of the properties, which generally range from 40
to 50 years. Accumulated depreciation on real estate was $51.0 million and
$51.1 million at December 31, 1995 and 1994, respectively. Depreciation
expense on real estate totaled $12.8 million, $12.7 million and $11.6 million
for the years ended December 31, 1995, 1994 and 1993, respectively.
F-10
<PAGE>
4. JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information of real estate joint ventures (10
and 12 individual ventures as of December 31, 1995 and 1994, respectively)
and of other limited partnership interests accounted for under the equity
method, in which EVLICO has an investment of $10.0 million or greater and an
equity interest of 10% or greater is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------
1995 1994
------------------- ------------------
(IN MILLIONS)
<S> <C> <C>
FINANCIAL POSITION
Investments in real estate, at depreciated cost............................... $ 966.3 $ 1,047.0
Investments in securities, generally at estimated fair value.................. 648.5 3,061.2
Cash and cash equivalents..................................................... 99.2 46.4
Other assets.................................................................. 90.8 261.9
------------------- ------------------
Total assets.................................................................. 1,804.8 4,416.5
------------------- ------------------
Borrowed funds -- third party.................................................. 74.4 1,233.6
Other liabilities............................................................. 132.4 611.0
------------------- ------------------
Total liabilities............................................................. 206.8 1,844.6
------------------- ------------------
Partners' Capital............................................................. $ 1,598.0 $ 2,571.9
=================== ==================
Equity in partners' capital included above.................................... $ 243.8 $ 327.3
Equity in limited partnership interests not included above.................... 82.3 50.4
(Deficit) excess of equity in partners' capital over
investment cost and equity earnings........................................ (.4) 3.7
------------------- ------------------
Carrying Value................................................................ $ 325.7 $ 381.4
=================== ==================
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures............................ $ 152.3 $ 180.1 $ 136.6
Revenues of other limited partnership interests................... 86.9 102.5 318.9
Interest expense -- third party.................................... (23.1) (88.1) (79.7)
Interest expense -- The Equitable.................................. (5.6) -- --
Other expenses.................................................... (131.8) (172.4) (132.7)
----------------- ---------------- -----------------
Net Earnings...................................................... $ 78.7 $ 22.1 $ 243.1
================= ================ =================
Equity in net earnings included above............................. $ 14.4 $ 11.7 $ 34.0
Equity in net earnings of limited partnership
interests not included above................................... 12.9 6.3 12.0
Reduction of earnings in joint ventures
over equity ownership percentage and
amortization of differences in bases........................... -- (1.1) (.1)
----------------- ----------------- -----------------
Total Equity in Net Earnings...................................... $ 27.3 $ 16.9 $ 45.9
================= ================ =================
</TABLE>
F-11
<PAGE>
5. NET INVESTMENT INCOME AND INVESTMENT (LOSSES) GAINS
The sources of net investment income are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................................. $ 319.5 $ 331.4 $ 319.9
Mortgage loans on real estate.................................... 70.3 86.7 105.7
Equity real estate............................................... 66.2 67.0 69.8
Policy loans..................................................... 86.8 79.5 76.1
Other equity investments......................................... 22.4 13.4 38.5
Other investment income.......................................... 30.5 24.5 17.0
----------------- ---------------- -----------------
Gross investment income.......................................... 595.7 602.5 627.0
Investment expenses.............................................. 66.6 75.7 69.4
----------------- ---------------- -----------------
Net Investment Income............................................ $ 529.1 $ 526.8 $ 557.6
================= ================ =================
</TABLE>
Investment (losses) gains, net, including changes in valuation allowances,
are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................................. $ 23.7 $ (6.8) $ 45.1
Mortgage loans on real estate.................................... (7.0) (13.3) (32.0)
Equity real estate............................................... (18.9) (5.3) (13.4)
Other equity investments......................................... 1.7 20.8 1.8
----------------- ---------------- -----------------
Investment (Losses) Gains, Net................................... $ (.5) $ (4.6) $ 1.5
================= ================ =================
</TABLE>
Writedowns of fixed maturities amounted to $11.1 million, $8.2 million and
$1.4 million for the years ended December 31, 1995, 1994 and 1993,
respectively.
For the years ended December 31, 1995 and 1994, respectively, proceeds
received on sales of fixed maturities classified as available for sale
amounted to $2,551.6 million and $2,065.1 million. Gross gains of $49.6
million and $22.1 million and gross losses of $18.7 million and $24.4
million, respectively, were realized on these sales. The change in unrealized
investment gains (losses) related to fixed maturities classified as available
for sale for the years ended December 31, 1995 and 1994, amounted to $240.8
million and $(215.2) million, respectively.
Gross gains of $66.2 million and gross losses of $66.5 million were realized
on sales of investments in fixed maturities held for investment and available
for sale for the year ended December 31, 1993.
F-12
<PAGE>
Net unrealized investment gains (losses), included in the consolidated
balance sheets as a component of equity, and the changes for the
corresponding years are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year....................................... $ (72.6) $ 22.3 $ 11.1
Changes in unrealized investment gains (losses).................. 244.7 (241.8) 3.4
Effect of adopting SFAS No. 115.................................. -- -- 72.2
Changes in unrealized investment (gains) losses attributable to:
Deferred policy acquisition costs............................. (64.4) 95.8 (58.2)
Deferred Federal income taxes................................. (63.1) 51.1 (6.2)
----------------- ---------------- -----------------
Balance, End of Year............................................. $ 44.6 $ (72.6) $ 22.3
================= ================ =================
Balance, end of year comprises:
Unrealized investment gains (losses) on:
Fixed maturities............................................ $ 92.4 $ (148.4) $ 66.8
Other equity investments.................................... 5.6 .7 25.6
Other....................................................... (2.7) (1.7) --
----------------- ---------------- -----------------
Total......................................................... 95.3 (149.4) 92.4
Amounts of unrealized investment (gains) losses attributable to:
Deferred policy acquisition costs........................... (26.8) 37.6 (58.2)
Deferred Federal income taxes............................... (23.9) 39.2 (11.9)
----------------- ---------------- -----------------
Total............................................................ $ 44.6 $ (72.6) $ 22.3
================= ================ =================
</TABLE>
6. FEDERAL INCOME TAXES
A summary of the Federal income tax expense in the consolidated statements of
earnings is shown below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Federal income tax expense (benefit):
Current....................................................... $ -- $ (1.4) $ (3.4)
Deferred...................................................... 29.7 26.4 23.9
----------------- ---------------- -----------------
Total............................................................ $ 29.7 $ 25.0 $ 20.5
================= ================ =================
</TABLE>
The Federal income taxes attributable to consolidated operations are
different from the amounts determined by multiplying the earnings before
Federal income taxes and cumulative effect of accounting change by the
expected Federal income tax rate of 35%.
The sources of the difference and the tax effects of each are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Expected Federal income tax expense.............................. $ 30.0 $ 25.3 $ 16.6
Tax rate adjustment.............................................. -- -- 4.0
Other............................................................ (.3) (.3) (.1)
----------------- ---------------- -----------------
Federal Income Tax Expense....................................... $ 29.7 $ 25.0 $ 20.5
================= ================ =================
</TABLE>
F-13
<PAGE>
The components of the net deferred Federal income tax account are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
--------------------------------- ---------------------------------
ASSETS LIABILITIES ASSETS LIABILITIES
--------------- --------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Deferred policy acquisition costs, reserves and
reinsurance....................................... $ -- $ 253.8 $ -- $ 250.6
Investments.......................................... -- 20.5 38.4 --
Compensation and related benefits.................... 44.3 -- 52.2 --
Other................................................ 7.9 -- 25.6 --
--------------- --------------- --------------- ---------------
Total................................................ $ 52.2 $ 274.3 $ 116.2 $ 250.6
=============== =============== =============== ===============
</TABLE>
The deferred Federal income tax expense (benefit) impacting operations
reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes. The sources of these temporary
differences and the tax effects of each are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Deferred policy acquisition costs, reserves and
reinsurance................................................... $ 3.2 $ (11.4) $ (6.8)
Investments...................................................... (4.2) 26.1 11.4
Compensation and related benefits................................ 13.0 (2.8) 1.9
Other............................................................ 17.7 14.5 17.4
----------------- ---------------- -----------------
Deferred Federal Income Tax Expense.............................. $ 29.7 $ 26.4 $ 23.9
================= ================ =================
</TABLE>
At December 31, 1995, EVLICO had net operating loss carryforwards of
approximately $10.2 million. These loss carryforwards are available to offset
future tax payments to Equitable Life under the tax sharing agreement.
7. REINSURANCE AGREEMENTS
EVLICO cedes reinsurance to other insurance companies. EVLICO evaluates the
financial condition of its reinsurers to minimize its exposure to significant
losses from reinsurer insolvencies. The effect of reinsurance is summarized
as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
----------------- ----------------
(IN MILLIONS)
<S> <C> <C>
Direct premiums..................................................................... $ 34.1 $ 40.2
Reinsurance ceded................................................................... (.4) (.1)
----------------- ----------------
Premiums............................................................................ $ 33.7 $ 40.1
================= ================
Universal Life and Investment-type Product Policy Fee Income Ceded.................. $ 31.0 $ 24.9
================= ================
Policyholders' Benefits Ceded....................................................... $ 18.7 $ 8.3
================= ================
</TABLE>
EVLICO reinsures mortality risks in excess of $5.0 million on any single
life. EVLICO also reinsures the entire risk on certain substandard
underwriting risks as well as in certain other cases.
F-14
<PAGE>
8. RELATED PARTY TRANSACTIONS
Under a cost sharing agreement, EVLICO reimburses Equitable Life for its use
of Equitable Life's personnel, property and facilities in carrying out
certain of its operations. Reimbursement for intercompany services is based
on the allocated cost of the services provided. The incurred balances of
these intercompany transactions, which are included in other operating costs
and expenses are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Personnel and facilities......................................... $ 249.8 $ 257.9 $ 252.7
Agent commissions and fees....................................... 127.4 122.6 103.0
</TABLE>
These cost allocations include various employee related obligations for
pensions and postretirement benefits. At December 31, 1995 and 1994, EVLICO
recorded as a reduction of shareholder's equity its allocated portion of an
additional minimum pension liability of $10.7 million and $1.2 million, net
of Federal income taxes, respectively, representing the excess of the
accumulated benefit obligation over the fair value of plan assets and accrued
pension liability.
During 1995, 1994 and 1993, Equitable Life restructured certain operations in
connection with cost reduction programs. EVLICO recorded provisions of $6.7
million, $6.9 million and $17.3 million in 1995, 1994 and 1993, respectively,
relating primarily to allocated lease obligations (net of sub-lease rentals)
and severance liabilities.
EVLICO incurred investment advisory and asset management fee expenses of
$17.6 million, $19.2 million and $16.0 million during 1995, 1994 and 1993,
respectively.
EVLICO and Equitable Life have an agreement whereby certain Equitable Life
policyholders may purchase EVLICO's policies without presenting evidence of
insurability. Under the agreement, Equitable Life pays EVLICO a conversion
charge for the extra mortality risk associated with issuing these policies.
EVLICO received payments of $2.9 million, $3.0 million and $3.1 million in
1995, 1994 and 1993, respectively, which were reported as other income.
On August 31, 1993, EVLICO sold $250.0 million of primarily privately placed
below investment grade fixed maturities to EQ Asset Trust 1993 (the "Trust").
EVLICO realized a $1.1 million gain, net of related deferred policy
acquisition costs and deferred Federal income taxes. In conjunction with this
transaction, EVLICO received $75.4 million of Class B notes issued by the
Trust. These notes have interest rates ranging from 6.85% to 9.45%. The Class
B notes are classified as other invested assets on the consolidated balance
sheets.
Net amounts payable to Equitable Life were $190.2 million and $226.7 million
at December 31, 1995 and 1994, respectively.
9. DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivatives
EVLICO primarily uses derivatives for asset/liability risk management and for
hedging individual securities. Derivatives mainly are utilized to reduce
EVLICO's exposure to interest rate fluctuations. Accounting for interest rate
swap transactions is on an accrual basis. Gains and losses related to
interest rate swap transactions are amortized as yield adjustments over the
remaining life of the underlying hedged security. Income and expense
resulting from interest rate swap activities are reflected in net investment
income. The notional amount of matched interest rate swaps outstanding at
December 31, 1995 was $444.8 million. The average unexpired terms at December
31, 1995 is 3.0 years. At December 31, 1995, the cost of terminating
outstanding matched swaps in a loss position was $10.1 million and the
unrealized gain on outstanding matched swaps in a gain position was $3.4
million. EVLICO has no intention of terminating these contracts prior to
maturity.
Fair Value of Financial Instruments
EVLICO defines fair value as the quoted market prices for those instruments
that are actively traded in financial markets. In cases where quoted market
prices are not available, fair values are estimated using present value or
other valuation techniques. The fair value estimates are made at a specific
point in time, based on available market information and judgments about the
financial instrument, including estimates of timing, amount of expected
future cash flows and the credit standing of counterparties. Such estimates
do not reflect any premium or discount that could result from offering for
sale at one time EVLICO's entire holdings of a particular financial
instrument, nor do they consider the tax impact of the realization of
unrealized gains or losses. In many cases, the fair value estimates cannot be
substantiated by comparison to independent markets, nor can the disclosed
value be realized in immediate settlement of the instrument.
Certain financial instruments are excluded, particularly insurance
liabilities other than financial guarantees and investment contracts. Fair
market value of off-balance-sheet financial instruments of EVLICO was not
material at December 31, 1995 and 1994.
F-15
<PAGE>
Fair value for mortgage loans on real estate are estimated by discounting
future contractual cash flows using interest rates at which loans with
similar characteristics and credit quality would be made. Fair values for
foreclosed mortgage loans and problem mortgage loans are limited to the
estimated fair value of the underlying collateral if lower.
The estimated fair values for single premium deferred annuities ("SPDA") are
estimated using projected cash flows discounted at current offering rates.
The estimated fair values for supplementary contracts not involving life
contingencies ("SCNILC") and annuities certain are derived using discounted
cash flows based upon the estimated current offering rate.
The following table discloses carrying value and estimated fair value for
financial instruments not otherwise disclosed in Note 3:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------------------------
1995 1994
-------------------------------- --------------------------------
CARRYING ESTIMATED CARRYING ESTIMATED
VALUE FAIR VALUE VALUE FAIR VALUE
--------------- --------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Consolidated Financial Instruments:
-----------------------------------
Mortgage loans on real estate....................... $ 771.5 $ 809.4 $ 888.5 $ 865.3
Other joint ventures................................ 158.7 158.7 196.4 196.4
Policy loans........................................ 1,300.1 1,374.0 1,185.2 1,138.7
Policyholders' account balances:
SPDA............................................. 1,265.8 1,272.0 1,744.3 1,732.7
Annuities certain and SCNILC..................... 188.0 188.1 159.0 151.3
</TABLE>
10. COMMITMENTS AND CONTINGENT LIABILITIES
EVLICO is the obligor under certain structured settlement agreements which
it had entered into with unaffiliated insurance companies and beneficiaries.
To satisfy its obligations under these agreements, EVLICO has purchased
single premium annuities from Equitable Life and directed Equitable Life to
make payments directly to the beneficiaries. A contingent liability exists
with respect to these agreements should Equitable Life be unable to meet its
obligations. Management believes the need to satisfy such obligations is
remote.
11. LITIGATION
A number of lawsuits have been filed against life and health insurers in the
jurisdictions in which EVLICO does business involving insurers' sales
practices, alleged agent misconduct, failure to properly supervise agents,
and other matters. Some of the lawsuits have resulted in the award of
substantial judgments against other insurers, including material amounts of
punitive amounts, or in substantial settlements. In some states juries have
substantial discretion in awarding punitive damages. EVLICO, like other life
and health insurers, from time to time is involved in such litigation as
well as other legal actions and proceedings in connection with its
businesses. Some of these litigations have been brought on behalf of various
alleged classes of claimants and certain of these claimants seek damages of
unspecified amounts. While the ultimate outcome of such matters cannot be
predicted with certainty, in the opinion of management no such matter is
likely to have a material adverse effect on EVLICO's financial position or
results of operations.
12. STATUTORY FINANCIAL INFORMATION
EVLICO is restricted as to the amounts it may pay as dividends to Equitable
Life. Under the New York Insurance Law, the New York Superintendent has
broad discretion to determine whether the financial condition of a stock
life insurance company would support the payment of dividends to its
shareholders. For the years ended December 31, 1995, 1994 and 1993,
statutory (loss) earnings totaled $(102.5) million, $27.3 million and
$(88.4) million, respectively. No amounts are expected to be available for
dividends from EVLICO to Equitable Life in 1996.
At December 31, 1995, EVLICO, in accordance with various government and
state regulations, had $4.2 million of securities deposited with such
government or state agencies.
Accounting practices used to prepare statutory financial statements for
regulatory filings of stock life insurance companies differ in certain
instances from GAAP. The following reconciles EVLICO's net change in
statutory surplus and capital stock and statutory surplus and capital stock
determined in accordance with accounting practices prescribed by the New
York Insurance Department with net earnings and equity on a GAAP basis.
F-16
<PAGE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Net change in statutory surplus and capital stock................ $ (56.6) $ 64.8 $ 184.4
Change in asset valuation reserves............................... 57.8 18.5 26.0
----------------- ---------------- -----------------
Net change in statutory surplus, capital stock
and asset valuation reserves.................................. 1.2 83.3 210.4
Adjustments:
Future policy benefits and policyholders' account balances.... (12.9) (13.5) (22.5)
Initial fee liability......................................... (34.2) (20.3) (11.6)
Deferred policy acquisition costs............................. 25.1 34.7 62.2
Deferred Federal income taxes................................. (29.7) (20.2) (23.9)
Valuation of investments...................................... 38.3 19.9 25.9
Limited risk reinsurance...................................... 146.9 .1 (5.4)
Contribution from Equitable Life.............................. (125.0) (50.0) (250.0)
Other, net.................................................... 46.4 2.0 41.7
----------------- ---------------- -----------------
Net Earnings..................................................... $ 56.1 $ 36.0 $ 26.8
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Statutory surplus and capital stock.............................. $ 720.9 $ 777.6 $ 712.7
Asset valuation reserves......................................... 146.1 88.3 69.8
----------------- ---------------- -----------------
Statutory surplus, capital stock and asset valuation reserves.... 867.0 865.9 782.5
Adjustments:
Future policy benefits and policyholders' account balances.... (367.4) (354.5) (341.1)
Initial fee liability......................................... (234.7) (200.5) (180.3)
Deferred policy acquisition costs............................. 2,037.8 2,077.1 1,946.7
Deferred Federal income taxes................................. (222.1) (134.4) (159.5)
Valuation of investments...................................... 68.4 (219.2) 4.4
Limited risk reinsurance...................................... (231.7) (378.6) (378.7)
Postretirement and other pension liabilities.................. (111.6) (105.8) (122.7)
Other, net.................................................... (68.0) (101.1) (98.6)
----------------- ---------------- -----------------
Shareholder's Equity............................................. $ 1,737.7 $ 1,448.9 $ 1,452.7
================= ================ =================
</TABLE>
F-17
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Equitable Variable Life
Insurance Company
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, of shareholder's equity and of cash
flows present fairly, in all material respects, the financial position of
Equitable Variable Life Insurance Company and its subsidiaries ("EVLICO") at
December 31, 1995 and 1994, and the results of their operations and their
cash flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of EVLICO's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in Note 2 to the consolidated financial statements, EVLICO
changed its methods of accounting for loan impairments in 1995, for
postemployment benefits in 1994 and for investment securities in 1993.
PRICE WATERHOUSE LLP
New York, New York
February 7, 1996
F-18
<PAGE>
APPENDIX A
MANAGEMENT
Here is a list of our directors and principal officers and a brief statement of
their business experience for the past five years. Unless otherwise noted, the
following persons have been involved in the management of Equitable and its
subsidiaries in various positions for the last five years. Unless otherwise
noted, their address is 787 Seventh Avenue, New York, New York 10019.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ----------------------- -------------------------
<S> <C>
DIRECTORS
Michel Beaulieu...................... Director of Equitable Variable since February 1992. Senior Vice President, Equitable, since
September 1991; prior thereto, Chief Life Actuary AXA group 1989 to 1991; Managing Director
Blondeau & CIE (France) 1986 to 1989. Director, Equity & Law (London).
Laurent Clamagirand.................. Director of Equitable Variable since February 1995; Vice President, Financial Reporting,
Equitable, since March 1996; prior thereto, Director from November 1994 to March 1996; prior
thereto, International Controller, AXA, January 1990 to October 1994; Director, Equitable of
Colorado, since March 1995.
William T. McCaffrey................. Director of Equitable Variable since February 1987; Senior Executive Vice President and
Chief Operating Officer, Equitable Life, since February 1996; prior thereto, Executive Vice
President, since February 1986 and Chief Administrative Officer since February 1988;
Director, Equitable Life, since February 1996 and Equitable Foundation since September 1986.
Michael J. Rich...................... Director of Equitable Variable since May 1995. Senior Vice President, Equitable, since
October 1994; prior thereto, Vice President of Underwriting, John Hancock Mutual Life
Insurance Co. since 1988.
Jose S. Suquet....................... Director of Equitable Variable since January 1995. Executive Vice President and Chief Agency
Officer, Equitable, since August 1994; prior thereto, Agency Manager, Equitable, since
February 1985.
OFFICERS -- DIRECTORS
James M. Benson...................... President and Chief Executive Officer, Equitable Variable since March 1996; prior thereto,
President from December 1993 to March 1996; Vice Chairman of the Board, Equitable Variable,
July 1993 to December 1993. President & Chief Executive Officer, Equitable Life, since
February 1996; President and Chief Operating Officer, Equitable, February 1994 to present;
Senior Executive Vice President, April 1993 to February 1994. Prior thereto, President,
Management Compensation Group, 1983 to February 1993. Director, Alliance Capital, October
1993 to present; National Mutual Association of Australasia, September 1995 to present and
AXA Re Life Insurance Co., January 1995 to present.
Harvey Blitz......................... Vice President, Equitable Variable since April 1995; Director of Equitable Variable since
October 1992. Senior Vice President, Equitable, since September 1987. Senior Vice President,
The Equitable Companies Incorporated, since July 1992. Director, Equico Securities, Inc.,
since September 1992; Equitable of Colorado, since September 1992; Equisource and its
subsidiaries since October 1992, and Chairman of the Board Frontier Trust since September
1995 and Director of Equitable Distributors, Inc. since February 1995.
Gordon Dinsmore...................... Senior Vice President, Equitable Variable, since February 1991. Senior Vice President,
Equitable, since September 1989; prior thereto, various other Equitable positions. Director
and Senior Vice President, March 1991 to present, Equitable of Colorado; Director, FHJV
Holdings, Inc., December 1990 to present; Director, Equitable Distributors, Inc., August
1993 to present, and Director, Equitable Foundation, May 1991 to present.
Jerry de St. Paer.................... Senior Investment Officer, Equitable Variable, since April 1995; Director of Equitable
Variable since April 1992. Senior Executive Vice President & Chief Financial Officer,
Equitable Life, since February 1996; prior thereto, Executive Vice President & Chief
Financial Officer, Equitable, since April 1992; Executive Vice President since December
1990; Senior Vice President & Treasurer June 1990 to December 1990; Senior Vice President,
Equitable Investment Corporation, January 1987 to January 1991; Executive Vice President &
Chief Financial Officer, The Equitable Companies Incorporated, since May 1992; Director,
Economic Services Corporation & various Equitable subsidiaries.
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ----------------------- -------------------------
<S> <C>
OFFICERS -- DIRECTORS (Continued)
Joseph J. Melone..................... Chairman of the Board, Equitable Variable since March 1996; Chairman of the Board and Chief
Executive Officer, Equitable Variable, November 1990 to March 1996; Chairman of the Board,
Equitable Life, since February 1996; prior thereto, Chairman of the Board and Chief
Executive Officer, Equitable, February 1994 to February 1996; President and Chief Executive
Officer, September 1992 to February 1994; President and Chief Operating Officer from
November 1990 to September 1992. President & Chief Executive Officer of The Equitable
Companies Incorporated since February 1996; prior thereto, President and Chief Operating
Officer since July 1992. Prior thereto, President, The Prudential Insurance Company of
America, since December 1984. Director, Equity & Law (United Kingdom) and various other
Equitable subsidiaries.
Peter D. Noris....................... Executive Vice President and Chief Investment Officer, Equitable Variable, since September
1995. Director of Equitable Variable since June 1995. Executive Vice President and Chief
Investment Officer, Equitable, since May 1995; prior thereto, Vice President, Salomon
Brothers, Inc., 1992 to 1995; Principal of Equity Division, Morgan Stanley & Co. Inc., from
1984 to 1992. Director, various Equitable subsidiaries.
Samuel B. Shlesinger................. Senior Vice President, Equitable Variable, since February 1988. Senior Vice President and
Actuary, Equitable; prior thereto, Vice President and Actuary. Director, Chairman and CEO,
Equitable of Colorado.
Dennis D. Witte...................... Senior Vice President, Equitable Variable, since February 1991; Senior Vice President,
Equitable, since July 1990; prior thereto, various other Equitable positions; Director,
Equitable Distributors, Inc. since February 1995.
OFFICERS
Kevin R. Byrne....................... Treasurer, Equitable Variable, since September 1990; Vice President and Treasurer,
Equitable, since September 1993; prior thereto, Vice President from March 1989 to September
1993. Vice President and Treasurer, The Equitable Companies Incorporated, September 1993 to
present; Frontier Trust since August 1990; Equisource and its subsidiaries October 1990 to
present.
Stephen Hogan........................ Vice President and Controller, Equitable Variable, February 1994 to present. Vice President,
135 West 50th Street Equitable, January 1994 to present; prior thereto, Controller, John Hancock subsidiaries,
New York, New York 10020 from 1987 to December 1993.
J. Thomas Liddle, Jr................. Senior Vice President and Chief Financial Officer, Equitable Variable, since February 1986.
Senior Vice President, Equitable, since April 1991; prior thereto, Vice President and
Actuary, Equitable; Director, Equitable of Colorado since December 1985.
William A. Narducci.................. Vice President and Chief Claims Officer, Equitable Variable, since February 1989. Vice
200 Plaza Drive President, Equitable, since February 1988; prior thereto, Assistant Vice President.
Secaucus, New Jersey 07096
John P. Natoli....................... Vice President and Chief Underwriting Officer, Equitable Variable, since February 1988. Vice
President, Equitable.
</TABLE>
A-2
<PAGE>
APPENDIX B
COMMUNICATING PERFORMANCE DATA
In reports or other communications to policyowners or in advertising material,
we may describe general economic and market conditions affecting the Separate
Account and the Trust and may compare the performance or ranking of the Separate
Account Funds and Trust portfolios with (1) that of other insurance company
separate accounts or mutual funds included in the rankings prepared by Lipper
Analytical Services, Inc., Morningstar, Inc. or similar investment services that
monitor the performance of insurance company separate accounts or mutual funds,
(2) other appropriate indices of investment securities and averages for peer
universes of funds, or (3) data developed by us derived from such indices or
averages. Advertisements or other communications furnished to present or
prospective policyowners may also include evaluations of a Separate Account Fund
or Trust portfolio by financial publications that are nationally recognized such
as Barron's, Morningstar's Variable Annuities / Life, Business Week, Forbes,
Fortune, Institutional Investor, Money, Kiplinger's Personal Finance, Financial
Planning, Investment Adviser, Investment Management Weekly, Money Management
Letter, Investment Dealers Digest, National Underwriter, Pension & Investments,
USA Today, Investor's Daily, The New York Times, The Wall Street Journal, the
Los Angeles Times and the Chicago Tribune.
Performance data for peer universes of funds with similar investment objectives
are compiled by Lipper Analytical Services, Inc. (Lipper) in its Lipper Variable
Insurance Products Performance Analysis Service (Lipper Survey) and Morningstar,
Inc. in the Morningstar Variable Annuity / Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 funds
underlying variable annuity and life insurance products. The Lipper Survey
divides these actively managed funds into 25 categories by portfolio objectives.
The Lipper Survey contains two different universes, which differ in terms of the
types of fees reflected in performance data. The "Separate Account" universe
reports performance data net of investment management fees, direct operating
expenses and asset-based charges applicable under variable insurance and annuity
contracts. The "Mutual Fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects
asset-based charges that relate only to the underlying mutual fund.
The Morningstar Report consists of over 700 variable life and annuity funds, all
of which report their data net of investment management fees, direct operating
expenses and separate account level charges.
LONG-TERM MARKET TRENDS
As a tool for understanding how different investment strategies may affect
long-term results, it may be useful to consider the historical returns on
different types of assets. The following chart presents historical return trends
for various types of securities. The information presented, while not directly
related to the performance of the Funds of the Separate Account or the Trust
portfolios, may help to provide a perspective on the potential returns of
different asset classes over different periods of time. By combining this
information with your knowledge of your own financial needs, you may be able to
better determine how you wish to allocate your Incentive Life Plus premiums.
Historically, the investment performance of common stocks over the long term has
generally been superior to that of long or short-term debt securities, although
common stocks have been subject to more dramatic changes in value over short
periods of time. The Common Stock Fund of the Separate Account may, therefore,
be a desirable selection for policyowners who are willing to accept such risks.
Policyowners who have a need to limit short-term risk, may find it preferable to
allocate a smaller percentage of their net premiums to those funds that invest
primarily in common stock. Any investment in securities, whether equity or debt,
involves varying degrees of potential risk, in addition to offering varying
degrees of potential reward.
The chart on page A-2 illustrates the average annual compound rates of return
over selected time periods between December 31, 1925 and December 31, 1995 for
common stocks, long-term government bonds, long-term corporate bonds,
intermediate-term government bonds and Treasury Bills. The Consumer Price Index
is shown as a measure of inflation for comparison purposes. The average annual
returns assume the reinvestment of dividends, capital gains and interest.
The information presented is an historical record of unmanaged groups of
securities and is neither an estimate nor a guarantee of future results. In
addition, investment management fees and expenses and charges associated with a
variable life insurance policy, are not reflected.
The rates of return illustrated do not represent returns of the Separate Account
or the Trust and do not constitute a representation that the performance of the
Separate Account funds or the Trust portfolios will correspond to rates of
return such as those illustrated in the chart. For a comparative illustration of
performance results of The Hudson River Trust, see page A-1 of the Trust's
prospectus.
B-1
<PAGE>
AVERAGE ANNUAL RATES OF RETURN
<TABLE>
<CAPTION>
FOR THE
FOLLOWING LONG-TERM LONG-TERM INTERMEDIATE U.S. CONSUMER
PERIODS ENDING COMMON GOVERNMENT CORPORATE TERM GOV'T TREASURY PRICE
12/31/95: STOCKS BONDS BONDS BONDS BILLS INDEX
- -------- ------ ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
1 year.................. 37.43 31.67 26.39 16.80 5.60 2.74
3 years................. 15.26 12.82 10.47 7.22 4.13 2.72
5 years................. 16.57 13.10 12.07 8.81 4.29 2.83
10 years................. 14.84 11.92 11.25 9.08 5.55 3.48
20 years................. 14.59 10.45 10.54 9.69 7.28 5.23
30 years................. 10.68 7.92 8.17 8.36 6.72 5.39
40 years................. 10.78 6.38 6.75 7.02 5.73 4.46
50 years................. 11.94 5.35 5.75 5.87 4.80 4.36
60 years................. 11.34 5.20 5.46 5.34 4.01 4.10
Since 1926............... 10.54 5.17 5.69 5.25 3.72 3.12
Inflation Adjusted
Since 1926............... 7.20 1.99 2.49 2.07 0.58 0.00
- ----------------------------
</TABLE>
*Source: Ibbotson, Roger G. and Rex A. Sinquefield, STOCKS, BONDS, BILLS, AND
INFLATION (SBBI), 1982, updated in STOCKS, BONDS, BILLS, AND INFLATION 1996
YEARBOOK,(TM) Ibbotson Associates, Inc., Chicago. All rights reserved.
Common Stocks (S&P 500) -- Standard and Poor's Composite Index, an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies.
Long-term Government Bonds -- Measured using a one-bond portfolio constructed
each year containing a bond with approximately a twenty year maturity and a
reasonably current coupon.
Long-term Corporate Bonds -- For the period 1969-1995, represented by the
Salomon Brothers Long-Term, High-Grade Corporate Bond Index; for the period
1946-1968, the Salomon Brothers' Index was backdated using Salomon Brothers'
monthly yield data and a methodology similar to that used by Salomon for
1969-1995; for the period 1926-1945, the Standard and Poor's monthly High-Grade
Corporate Composite yield data were used, assuming a 4 percent coupon and a
twenty year maturity.
Intermediate-term Government Bonds -- Measured by a one-bond portfolio
constructed each year containing a bond with approximately a five year
maturity.
U.S. Treasury Bills -- Measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month.
Inflation -- Measured by the Consumer Price Index for all Urban Consumers
(CPI-U), not seasonally adjusted.
B-2
<PAGE>
VM-520
- --------------------------------------------------------------------------------
--------------
EQUITABLE VARIABLE LIFE Bulk Rate
INSURANCE COMPANY U.S. Postage
Mailing Address: Paid
2 Penn Plaza Permit No. 148
New York, New York 10121 Brooklyn, N.Y.
--------------
VARIABLE LIFE INSURANCE POLICY
[THE CHAMPION LOGO]
ISSUED BY
[EQUITABLE VARIABLE LIFE INSURANCE COMPANY LOGO]
VM 372 PROSPECTUS DATED SEPTEMBER 30, 1987
- --------------------------------------------------------------------------------
THE HUDSON RIVER TRUST
PRINCIPAL OFFICE LOCATED AT:
787 SEVENTH AVENUE
NEW YORK, N.Y. 10019
HRT 102 PROSPECTUS DATED SEPTEMBER 30, 1987
<PAGE>
[THE CHAMPION LOGO]
A VARIABLE LIFE INSURANCE POLICY
ISSUED BY
[EQUITABLE VARIABLE LIFE INSURANCE LOGO]
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
NEW YORK, N.Y.
PROSPECTUS DATED SEPTEMBER 30, 1987
- --------------------------------------------------------------------------------
In this prospectus, "Equitable Variable", "we", "our", and "us" mean Equitable
Variable Life Insurance Company. We are a wholly-owned subsidiary of The
Equitable Life Assurance Society of the United States, a New York mutual life
insurance company (Equitable).
"You" and "your" mean the policyowner. We refer to the person who is covered by
the policy as the "insured", because the policyowner may be someone other than
the insured.
- --------------------------------------------------------------------------------
The Champion(TM) (Policy Form No. 85-11) is a scheduled premium variable whole
life insurance policy with a level face amount. The Death Benefit, Account Value
and Cash Surrender Value of a policy may vary based on the investment experience
of the assets supporting the policy; however, a policy's Death Benefit will
never be less than its face amount.
You direct the allocation of your premiums, net of certain deductions, among one
or more of the investment divisions of Equitable Variable's Separate Account I.
The assets in each division are invested in corresponding portfolios of The
Hudson River Trust. The Trust is the successor to The Hudson River Fund, Inc.
pursuant to an Agreement and Plan of Reorganization dated September 30, 1987.
The prospectus for the Trust, attached to this prospectus, describes the
investment objectives, policies and risks of each of the Trust's Portfolios.
Currently, High Yield, Aggressive Stock, Common Stock, Balanced and Money Market
Portfolios are available under the Champion.
This is a permanent life insurance policy which provides insurance coverage and
requires periodic premium payments over time. When purchasing this policy, you
should consider your ability to pay these premiums on a periodic schedule.
During the policy's early years, if you fail to pay premiums or surrender your
policy you will incur a significant surrender charge.
A policy is serviced through the regional Life Insurance Center listed on page 3
of the policy when issued. Equitable Variable's Home Office is 787 Seventh
Avenue, New York, N.Y. 10019, telephone (212) 714-5289.
You have the right to examine this policy and return it to us for a refund.
Read this prospectus carefully and keep it for future reference. This prospectus
is not valid unless attached to a current prospectus for The Hudson River Trust.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Replacing existing insurance with the policy described in this prospectus may
not be to your advantage. We recommend that you consult with your Equitable
agent or financial adviser to determine if replacement would be to your
advantage.
- --------------------------------------------------------------------------------
M-372
Copyright 1987 Equitable Variable Life Insurance Company. All rights reserved.
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
- --------------------------------------------------------------------------------
PART 1 -- SUMMARY 1
- --------------------------------------------------------------------------------
FEATURES OF THE CHAMPION 1
-------------------------------------------------------------------------
USING YOUR ACCOUNT VALUE 1
-------------------------------------------------------------------------
INVESTMENT CHOICES OF THE CHAMPION 2
-------------------------------------------------------------------------
DEDUCTIONS AND CHARGES 2
-------------------------------------------------------------------------
ADDITIONAL INFORMATION 3
-------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION 4
-------------------------------------------------------------------------
HYPOTHETICAL ILLUSTRATIONS 5
- --------------------------------------------------------------------------------
PART 2 -- DETAILED INFORMATION ABOUT EQUITABLE VARIABLE AND THE TRUST 6
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE 6
-------------------------------------------------------------------------
EQUITABLE 6
-------------------------------------------------------------------------
Equitable's Investment In Equitable Variable 6
----------------------------------------------------------------------
Donaldson, Lufkin & Jenrette, Inc. 6
-------------------------------------------------------------------------
INVESTMENT CHOICES 6
-------------------------------------------------------------------------
THE SEPARATE ACCOUNT AND ITS DIVISIONS 6
-------------------------------------------------------------------------
A Unit Investment Trust 6
----------------------------------------------------------------------
The Investment Divisions Of The Separate Account 6
----------------------------------------------------------------------
Other Policies Use The Separate Account 7
----------------------------------------------------------------------
We Own The Assets Of The Separate Account 7
-------------------------------------------------------------------------
THE TRUST 7
-------------------------------------------------------------------------
PREDECESSORS OF THE TRUST 7
-------------------------------------------------------------------------
INVESTMENT OBJECTIVES OF THE PORTFOLIOS 8
-------------------------------------------------------------------------
THE TRUST'S INVESTMENT ADVISER 8
- --------------------------------------------------------------------------------
PART 3 -- DETAILED INFORMATION ABOUT THE CHAMPION 9
- --------------------------------------------------------------------------------
PREMIUMS 9
- --------------------------------------------------------------------------------
You Direct The Investment Of Your Premiums 9
----------------------------------------------------------------------
Premium Reductions For Non-Smokers 9
----------------------------------------------------------------------
Illustration Of Premium Rates 9
-------------------------------------------------------------------------
DEDUCTIONS FROM PREMIUMS 10
-------------------------------------------------------------------------
Annual Administrative Charge 10
----------------------------------------------------------------------
Additional First Year Administrative Charge 10
----------------------------------------------------------------------
Risk Charge 10
----------------------------------------------------------------------
Front-End Sales Load 10
----------------------------------------------------------------------
State Premium Tax Charge 10
----------------------------------------------------------------------
Example of Deductions From Premiums 11
-------------------------------------------------------------------------
SURRENDER CHARGE 11
-------------------------------------------------------------------------
CHARGES AGAINST THE SEPARATE ACCOUNT 12
-------------------------------------------------------------------------
Cost of Insurance 12
----------------------------------------------------------------------
Charges For Mortality And Expense Risks 12
----------------------------------------------------------------------
Expenses Of The Trust 12
-------------------------------------------------------------------------
DEATH BENEFITS 12
-------------------------------------------------------------------------
VARIABLE ADJUSTMENT AMOUNT 13
-------------------------------------------------------------------------
The Variable Adjustment Amount Is Cumulative 14
----------------------------------------------------------------------
Net Return 14
----------------------------------------------------------------------
How The Death Benefit Varies 14
-------------------------------------------------------------------------
ACCOUNT VALUES AND CASH SURRENDER VALUES 15
-------------------------------------------------------------------------
How We Determine Account Value 15
----------------------------------------------------------------------
How We Determine Cash Surrender Value 15
-------------------------------------------------------------------------
POLICY LOANS 15
-------------------------------------------------------------------------
How To Request A Loan 16
----------------------------------------------------------------------
Repayment 16
----------------------------------------------------------------------
Policy Loan Interest 16
----------------------------------------------------------------------
The Effect Of A Policy Loan 16
----------------------------------------------------------------------
Additional Information About Adjustable Rates 17
-------------------------------------------------------------------------
OTHER POLICY TRANSACTIONS 17
-------------------------------------------------------------------------
Returning The Policy For Cash 17
----------------------------------------------------------------------
Transfers Among Investment Choices 18
----------------------------------------------------------------------
When A Division Becomes Inactive 18
-------------------------------------------------------------------------
YOUR RIGHT TO EXAMINE THE POLICY 18
-------------------------------------------------------------------------
YOUR RIGHT TO EXCHANGE THE POLICY 18
-------------------------------------------------------------------------
YOUR POLICY CAN LAPSE 19
-------------------------------------------------------------------------
OPTIONS ON LAPSE 19
-------------------------------------------------------------------------
Payment Of Cash Option 19
----------------------------------------------------------------------
Continued Insurance Option 19
----------------------------------------------------------------------
Reinstatement Option 20
-------------------------------------------------------------------------
POLICY PERIODS, ANNIVERSARIES, DATES AND AGES 20
-------------------------------------------------------------------------
LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY 21
-------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT THE CHAMPION 21
-------------------------------------------------------------------------
When We Pay Proceeds 21
----------------------------------------------------------------------
Your Payment Options 21
----------------------------------------------------------------------
Additional Benefits You May Get By Rider 22
----------------------------------------------------------------------
Beneficiary 23
----------------------------------------------------------------------
Assignment 23
----------------------------------------------------------------------
Premium Payments By Salary Allotment 23
----------------------------------------------------------------------
Employee Benefit Plans 23
----------------------------------------------------------------------
You Will Receive Periodic Reports 23
----------------------------------------------------------------------
Dividends 23
- --------------------------------------------------------------------------------
PART 4 -- ADDITIONAL INFORMATION 24
- --------------------------------------------------------------------------------
TAX EFFECTS 24
-------------------------------------------------------------------------
Policy Proceeds 24
----------------------------------------------------------------------
Pension And Profit Sharing Plans 24
----------------------------------------------------------------------
Our Income Taxes 25
----------------------------------------------------------------------
Tax Reform 25
----------------------------------------------------------------------
Income Tax Withholding 25
-------------------------------------------------------------------------
YOUR VOTING PRIVILEGES 25
-------------------------------------------------------------------------
General 25
----------------------------------------------------------------------
Voting Privileges Of Others 26
----------------------------------------------------------------------
Determining Your Vote 26
----------------------------------------------------------------------
Law Changes May Affect Your Voting Privileges 27
-------------------------------------------------------------------------
OUR RIGHTS 27
-------------------------------------------------------------------------
Substitution of Trust Shares 27
-------------------------------------------------------------------------
SALES AND OTHER AGREEMENTS 27
-------------------------------------------------------------------------
Sales By Agents Of Equitable 27
----------------------------------------------------------------------
Commission Schedule 28
----------------------------------------------------------------------
Sales By Brokers 28
----------------------------------------------------------------------
Applications 28
----------------------------------------------------------------------
Joint Services Agreement 28
-------------------------------------------------------------------------
REGULATION 28
-------------------------------------------------------------------------
LEGAL PROCEEDINGS 28
-------------------------------------------------------------------------
LEGAL MATTERS 28
-------------------------------------------------------------------------
FINANCIAL AND ACTUARIAL EXPERTS 29
-------------------------------------------------------------------------
ADDITIONAL INFORMATION 29
-------------------------------------------------------------------------
MANAGEMENT 29
- --------------------------------------------------------------------------------
PART 5 -- ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH
SURRENDER VALUES, AND ACCUMULATED PREMIUMS 32
- --------------------------------------------------------------------------------
PART 6 -- FINANCIAL STATEMENTS 39
- --------------------------------------------------------------------------------
THE PURPOSE OF THE POLICY WE ARE OFFERING IS TO PROVIDE INSURANCE PROTECTION FOR
A POLICY'S BENEFICIARY. WE DO NOT CLAIM THAT THE POLICY IS IN ANY WAY SIMILAR TO
OR COMPARABLE TO A MUTUAL FUND'S SYSTEMATIC INVESTMENT PLAN.
- --------------------------------------------------------------------------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFERING OF THE CHAMPION OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS OR ANY SUPPLEMENT HERETO OR IN ANY SUPPLEMENTAL
SALES MATERIAL AUTHORIZED BY EQUITABLE VARIABLE.
- --------------------------------------------------------------------------------
i
<PAGE>
- --------------------------------------------------------------------------------
PART 1 -- SUMMARY
- --------------------------------------------------------------------------------
The summary contained in this Part 1 is qualified in its entirety by the more
detailed information and financial statements appearing elsewhere in this
prospectus. Unless indicated otherwise, this prospectus assumes that all
premiums are paid on time and there is no outstanding policy loan. The
description of The Champion in this prospectus is subject to the terms of the
policy you buy and any supplement or endorsement to it. You may review a copy of
our policy and any supplement or endorsement to it on request.
- --------------------------------------------------------------------------------
FEATURES OF
THE CHAMPION
PREMIUMS. This policy requires premium payments on a regular basis (monthly,
quarterly, semi-annually or annually) for life. We guarantee that a premium will
not increase once it has been determined. The size of an annual premium depends
on the initial face amount and the insured's risk class, age and sex. The
initial face amount must be at least $50,000. Failure to pay premiums will
result in the lapse of your policy. See "Surrender Charge" in Part 3.
For non-smokers who meet our requirements we reduce our premiums by
approximately 7% for policies with face amounts under $200,000 and approximately
9% for larger policies.
DEATH BENEFIT. The Death Benefit under the policy may increase or decrease if
the investment experience of the division or divisions of the Separate Account
into which you choose to put your net annual premiums varies from the assumed
investment return of 4-1/2%. The Death Benefit is adjusted annually on each
policy anniversary. However, if the Account Value at the date of death,
considered as a single premium, can buy more Death Benefit, then the Death
Benefit will be this higher amount. The guaranteed minimum Death Benefit is the
face amount of the policy regardless of the investment experience of the
divisions of the Separate Account. See "Death Benefits" in Part 3.
ACCOUNT VALUE. We put your annual premiums, net of certain deductions, in one or
more of the investment divisions of Equitable Variable's Separate Account I (the
Separate Account). You decide whether your policy's net annual premium will be
put entirely in one division or whether you want a percentage in two or more
divisions.
The Account Value of a policy may vary daily to reflect the investment
experience of the divisions of the Separate Account in which you have value. The
Account Value is the tabular Account Value specified in the policy (based on a
constant net investment return of 4-1/2% a year), adjusted for investment
experience. Unlike the Death Benefit, which has a guaranteed minimum, we do not
guarantee a minimum Account Value. You will bear the entire market risk for
Account Value. You may request that all or part of your Account Value be
transferred among the divisions of the Separate Account. See "Other Policy
Transactions -- Transfers Among Investment Choices" in Part 3.
- --------------------------------------------------------------------------------
USING YOUR
ACCOUNT VALUE
POLICY LOANS. You may borrow up to 90% of your policy's loan value during the
first ten years and 100% thereafter. The loan value is based on your adjusted
Cash Surrender Value. The Cash Surrender Value is the difference between the
Account Value and the surrender charge which applies during the first ten policy
years. Loans are available at a fixed interest rate of 5-1/2% or at an
adjustable rate. The portion of your Cash Surrender Value equal to the amount
you borrow is transferred out of the Separate Account and, therefore, is not
affected by investment experience. You will, however, earn interest on amounts
set aside to secure your loan. For a loan at a fixed interest rate of 5-1/2%, we
will credit the assumed interest rate of 4-1/2%. For a loan at an adjustable
rate, we will credit the adjustable loan interest rate less 0.75% (and less any
charge for taxes) on the borrowed amounts. See "Policy Loans" in Part 3.
SURRENDERING YOUR POLICY FOR CASH. If you surrender your policy for cash, we
will pay you the Cash Surrender Value less any outstanding loan and loan
interest due. Subject to certain conditions, you may split your policy into two
policies and return one for cash. See "Other Policy Transactions -- Returning
The Policy For Cash" in Part 3.
TRANSFERS AMONG INVESTMENT CHOICES. You may transfer your Account Value among
the divisions of the Separate Account up to four times in a policy year. See
"Other Policy Transactions -- Transfers Among Investment Choices" in Part 3.
- --------------------------------------------------------------------------------
1
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT CHOICES
OF THE CHAMPION
THE TRUST. Each division of the Separate Account invests in a corresponding
portfolio (Portfolio) of The Hudson River Trust (the Trust), a "series" type
mutual fund. Each Portfolio has different investment objectives. Currently, the
following Portfolios are available for investment by the corresponding divisions
of the Separate Account:
o High Yield
o Aggressive Stock
o Common Stock
o Balanced
o Money Market
INVESTMENT ADVISERS. Equitable Capital Management Corporation (Equitable
Capital) is the investment adviser of the Trust. Equitable Capital is registered
with the Securities and Exchange Commission (SEC) as an investment adviser under
the Investment Advisers Act of 1940. The maximum effective annual rate at which
the Trust pays advisory fees is 0.55% of the average daily value of a
Portfolio's aggregate net assets. HOWEVER, WE CREDIT THE CHAMPION POLICIES SO
THAT THE TRUST'S ADVISORY FEES DO NOT EXCEED A 0.25% EFFECTIVE ANNUAL RATE.
For a full description of the Trust, see the attached Trust prospectus and the
Trust's Statement of Additional Information referred to therein.
- --------------------------------------------------------------------------------
DEDUCTIONS AND
CHARGES
DEDUCTIONS FROM PREMIUMS. Your net annual premium is put into the Separate
Account each year. Deductions are made from your payments for any optional
insurance benefits, a front-end sales load at a maximum of 5% per year, state
premium taxes, annual administrative expenses and a risk charge for the
guaranteed minimum Death Benefit. In the first policy year we also deduct a
fixed charge for expenses incurred in issuing the policy. See "Deductions From
Premiums" in Part 3.
Commissions and other sales expenses in any year are paid by Equitable Variable.
They do not represent a charge against your premiums. During the early policy
years, these sales expenses will be considerably higher than the sales charges
that will be collected for those years. See "Sales And Other Agreements" in Part
4.
CHARGES AGAINST THE SEPARATE ACCOUNT. The amount in the divisions of the
Separate Account credited to your policy is decreased by the cost of your
insurance protection. Also, the investment experience of the Separate Account
reflects a daily charge we make at an effective annual rate of 0.50% of the
value of the policy assets of the Separate Account for certain mortality and
expense risks. In addition, we reserve the right to make a charge in the future
for taxes or provisions made for taxes. Any charges against the divisions will
have an impact on whether the divisions earn more than the assumed rate of
4-1/2% and whether your policy's Death Benefit increases above the guaranteed
minimum. See "Charges Against The Separate Account" in Part 3.
EXPENSES OF THE TRUST. Shares of the Trust are purchased and redeemed at their
net asset value which reflects management fees and other expenses already
deducted from the assets of the Trust. The Trust does not impose a sales charge.
See "The Trust" in Part 2.
SURRENDER CHARGE. If you surrender your policy or allow it to lapse before its
tenth anniversary you will incur a surrender charge. The charge is a maximum of
22-1/2% of the premiums paid if the surrender is during the first policy year.
Thereafter the percentage of total premiums declines until it reaches zero at
the end of the tenth policy year. See "Surrender Charge" and "Your Policy Can
Lapse" in Part 3.
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
ADDITIONAL
INFORMATION
YOUR RIGHT TO EXAMINE THE POLICY. You have a limited right to return your policy
for cancellation and a full refund of premiums paid. Your request must be
postmarked by the latest of
o 10 days after you receive your policy; or
o 10 days after we mail a written Notice of Withdrawal Right; or
o 45 days after Part 1 of the policy application was signed.
Also, within 24 months of a policy's issue date, you may exchange it for a fixed
whole life policy issued by us on the life of the insured without submitting
proof of insurability.
INCOME TAXES. Generally, the Death Benefit paid to the beneficiary of this
policy is not subject to Federal income tax. In addition, under current Federal
tax law, you do not have to pay income tax on any increase in your Account Value
unless the policy is surrendered or allowed to lapse. See "Tax Effects" in Part
4.
YOUR POLICY CAN LAPSE. This policy will remain in force for the life of the
insured person unless you fail to pay premiums or unless the unpaid portion of
any policy loan plus unpaid loan interest exceeds the Cash Surrender Value of
your policy. See "Your Policy Can Lapse" in Part 3.
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
CONDENSED
FINANCIAL
INFORMATION
The effective annual net rates of return for the Common Stock Division from the
date on which premiums were first allocated to its predecessor, January 13,
1976, to December 31, 1986 was 14.36%. For the same period ended December 31,
1986, the average annual increase for the Standard and Poor's 500 Stock Index
with dividends reinvested was 14.06%. (Standard and Poor's is an unmanaged index
of groups of common stocks.)
The effective annual net rates of return for the Money Market Division from the
date on which premiums were first allocated to its predecessor, August 21, 1981,
to December 31, 1986 was 9.60%.
The tables below show the actual net returns of the Common Stock and Money
Market Divisions of the Separate Account, as if the Reorganization discussed
under "Predecessors Of The Trust" in Part 2 had always been in effect. The
tables show the actual net returns of the predecessors of the Common Stock and
Money Market Divisions operating as management investment companies prior to the
Reorganization. The same results would have been achieved if the Separate
Account had operated as a unit investment trust investing in the Trust for all
the periods shown with the operations of the Trust having been as currently
reported in the Trust's separate Prospectus and Statement of Additional
Information. The tables break the net return into its component parts. The
tables reflect mortality and expense risk charges but do not reflect cost of
insurance charges. See "Charges Against the Separate Account."
When you examine the tables, remember that the percentages apply to a policy
with its policy year starting on the first day of the periods shown and apply to
a policy that would have been in force throughout the periods shown. Because
they are determined each December 31, the percentages do not reflect the average
net assets in the Common Stock and Money Market Divisions during those periods.
To get a more complete picture of the Separate Account and its divisions, refer
to the financial statements and related notes in the Statement of Additional
Information for the Trust.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK DIVISION January 13,
Year Ended December 31, 1976 to
---------------------------------------------------------------------------------------------- December 31,
1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976(a)(b)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET RETURN:
Income(c) 1.55 % 2.92 % 3.22 % 2.65 % 4.64 % 4.02 % 4.35 % 3.91 % 4.06 % 3.49 % 2.63 %
Net realized and
unrealized gain
(loss) on
investments 16.04 % 30.91 % (4.68)% 24.06 % 13.58 % (9.40)% 46.48 % 26.56 % 4.72 % (12.26)% 7.00 %
----- ----- ---- ----- ----- ---- ----- ----- ---- ----- ----
Gross Return 17.59 % 33.83 % (1.46)% 26.71 % 18.22 % (5.38)% 50.83 % 30.47 % 8.78 % (8.77)% 9.63 %
Expense charges(c) (.59)% (.74)% (.74)% (.94)% (.95)% (.70)% (1.13)% (.98)% (.81)% (.69)% (.77)%
----- ----- ---- ----- ----- ---- ----- ----- ---- ----- ----
Net Return 17.00 % 33.09 % (2.20)% 25.77 % 17.27 % (6.08)% 49.70 % 29.49 % 7.97 % (9.46)% 8.86 %
===== ===== ==== ===== ===== ==== ===== ===== ==== ===== ====
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET DIVISION Year Ended December 31, August 21, 1981
------------------------------------------ to December 31,
1986 1985(d) 1984 1983 1982 1981(a)(b)
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET RETURN:
Income(c) 6.83 % 8.65 % 11.00 % 9.56 % 13.53% 5.46 %
Net realized and unrealized gain (loss) on investments 0.03 % (.09)% .42 % (.06)% .03% .06 %
---- ---- ----- ---- ----- ----
Gross Return 6.86 % 8.56 % 11.42 % 9.50 % 13.56% 5.52 %
Expense charges(c) (.55)% (.60)% (.84)% (.83)% (.84)% (.35)%
---- ---- ----- ---- ----- ----
Net Return 6.31 % 7.96 % 10.58 % 8.67 % 12.72% 5.17 %
==== ==== ===== ==== ===== ====
- --------------------------------------------------------------------------------
<FN>
S(a) Date as of which net premiums under variable life policies were first
allocated to the predecessor of the division.
(b) The gross return and the net return for the periods indicated are not annual
rates of return.
(c) Subsequent to March 22, 1985, the advisory service fees have been deducted
in arriving at income rather than as an expense charge.
(d) Net return for 1985 has been adjusted to reflect a recalculation of the net
return of the division.
</FN>
</TABLE>
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
HYPOTHETICAL
ILLUSTRATIONS
The following illustrations are based on the assumptions that since January 1,
1976 The Champion policy had been available and the Separate Account and the
Trust had been operating in the same manner as they now operate.
Each of these examples of past investment performance is for a specific age,
sex, risk class, premium amount and policy anniversary. The benefits illustrated
under this policy are calculated on the policy anniversary and do not represent
the average net investment performance of our pre-Reorganization Separate
Accounts during the policy year. The guaranteed minimum Death Benefit is the
face amount of the policy and does not vary based on investment performance. The
difference between the Account Value and the Cash Surrender Value is the
surrender charge. These examples assume that net premiums and related Account
Values and Cash Surrender Values are 100% in the respective divisions of the
Separate Account for the entire period illustrated. PAST INVESTMENT RESULTS
SHOULD NOT BE DEEMED A REPRESENTATION OF FUTURE INVESTMENT EXPERIENCE OF THE
DIVISIONS OF THE SEPARATE ACCOUNT OR INVESTMENT PERFORMANCE OF THE TRUST.
For illustrations based on various constant hypothetical annual investment
returns, see "Illustrations Of Death Benefits, Account Values And Cash Surrender
Values, And Accumulated Premiums" in Part 5.
COMMON STOCK DIVISION. The following example shows how the net return of the
Common Stock Division would have affected the Death Benefits, Account Values and
Cash Surrender Values of an annual premium policy dated January 1, 1976. Assume
a premium of $500 and that the insured was a 25 year old male on January 1,
1976.
THE CHAMPION
- --------------------------------------------------------------------------------
VARIABLE WHOLE LIFE INSURANCE POLICY
($53,427 Face Amount Standard Risk)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Cash Guaranteed
Policy Anniversary Account Surrender Death Minimum
on January 1 of Value Value Benefit Death Benefit
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1977 $ 184 $ 81 $53,496 $53,427
1978 448 310 53,427 53,427
1979 859 686 53,427 53,427
1980 1,510 1,307 54,732 53,427
1981 2,881 2,651 60,033 53,427
1982 3,006 2,758 58,209 53,427
1983 3,817 3,560 59,947 53,427
1984 5,316 5,095 64,871 53,427
1985 5,465 5,341 62,905 53,427
1986 7,783 7,783 70,973 53,427
1987 9,625 9,625 76,259 53,427
- -------------------------------------------------------------------------------------------------
</TABLE>
This example reflects net investment income credited at the assumed rate of
4-1/2% from January 1, 1976 to January 12, 1976, and an actual rate of return
for the Common Stock Division assuming the investment performance of the Trust's
Common Stock Portfolio was the same as that of our pre-Reorganization Separate
Account I starting January 13, 1976.
MONEY MARKET DIVISION. The following example shows how the net return of the
Money Market Division would have affected the Death Benefits, Account Values and
Cash Surrender Values of an annual premium policy dated January 1, 1982. Assume
a premium of $500 and that the insured was a 25 year old male on January 1,
1982.
THE CHAMPION
- --------------------------------------------------------------------------------
VARIABLE WHOLE LIFE INSURANCE POLICY
($53,427 Face Amount Standard Risk)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Cash Guaranteed
Policy Anniversary Account Surrender Death Minimum
on January 1 of Value Value Benefit Death Benefit
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1983 $ 195 $ 91 $53,562 $53,427
1984 573 436 53,721 53,427
1985 1,004 831 54,076 53,427
1986 1,444 1,242 54,357 53,427
1987 1,890 1,660 54,548 53,427
- -------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
PART 2 -- DETAILED INFORMATION ABOUT EQUITABLE VARIABLE
AND THE TRUST
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE
Equitable Variable, a wholly-owned subsidiary of Equitable, was organized in
1972 in New York State as a stock life insurance company. We are licensed to do
business in all 50 states, Puerto Rico, the Virgin Islands and the District of
Columbia.
We sell both traditional and innovative forms of life insurance designed to give
policyowners maximum choice and flexibility. In 1976 we began selling variable
life insurance policies with death benefits that varied with the experience of
each policy's investment account. In 1983 we began selling variable life
insurance policies which could be purchased with a single premium payment. In
1986, we began selling an individual flexible premium variable life policy
designed to provide insurance coverage with flexibility in death benefits and
premium payments. We also sell single premium annuity contracts, fixed life
insurance, term life insurance and universal life insurance.
At the end of 1986, we had approximately $9.7 billion face amount of variable
life insurance in force and $47.1 billion face amount of fixed life insurance in
force. We also had $1.9 billion of fixed annuity payment obligations.
Our financial statements and those of the Separate Account are in Part 6.
- --------------------------------------------------------------------------------
EQUITABLE
Equitable is a New York mutual life insurance company that has its home office
at 787 Seventh Avenue, New York, New York 10019.
Equitable has been in business since 1859. Its total assets make it the third
largest life insurance company in the United States. On December 31, 1986, these
assets were approximately $55 billion. Equitable is also one of the largest
managers of pension fund assets in the United States. On December 31, 1986,
Equitable and its subsidiaries were managing pension fund assets of $66.2
billion and total assets of $102.7 billion. These assets include amounts in our
General Account, Equitable's General Account and separate accounts, and other
accounts managed by Equitable and Equitable Capital.
On December 31, 1986, Equitable Capital was managing approximately $30 billion
in assets. Equitable Capital acts as an investment adviser to various separate
accounts and general accounts of Equitable and other affiliated insurance
companies. Equitable Capital also provides management and consulting services to
mutual funds, endowment funds, insurance companies, foreign entities, and
non-tax-qualified corporate funds, pension and profit-sharing plans, foundations
and tax-exempt organizations.
EQUITABLE'S INVESTMENT IN EQUITABLE VARIABLE. Between the time Equitable
Variable was organized and December 31, 1986, Equitable invested over $570
million in us. We have used the money to help meet operational costs and policy
reserve requirements. Equitable will probably invest more money in us in the
future, although it has no legal obligation to do so. Equitable's assets do not
back the benefits that we pay under our policies.
DONALDSON, LUFKIN & JENRETTE, INC. Donaldson, Lufkin & Jenrette, Inc. (DLJ) is a
wholly-owned subsidiary of Equitable. DLJ and its subsidiaries offer investment
banking and securities services, market independently originated research to
institutions and supply correspondent services, including order execution,
securities clearance and other centralized financial services, to approximately
300 independent regional securities firms and 100 banks. To the extent permitted
by law, we and our separate accounts, Equitable and its separate accounts, and
companies affiliated with us, including the Trust, may engage in securities or
other transactions with DLJ and its subsidiaries, including buying shares of
affiliated investment companies.
- --------------------------------------------------------------------------------
INVESTMENT
CHOICES
After making certain deductions from premiums, we put your net annual premiums
in one or more of the divisions of the Separate Account. You decide how your
policy's net annual premiums will be allocated. See "Premiums -- You Direct The
Investment Of Your Premiums" in Part 3. The Separate Account also invests income
or capital gains dividends received from the Fund in shares of the Fund.
- --------------------------------------------------------------------------------
THE SEPARATE
ACCOUNT AND ITS
DIVISIONS
A UNIT INVESTMENT TRUST. The Separate Account is registered as a unit investment
trust with the SEC under the Investment Company Act of 1940. This registration
does not involve any supervision by the SEC of the management or investment
policy of the Separate Account. A unit investment trust is a type of investment
company.
THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT. The Separate Account has five
investment divisions, each of which invests in shares of a corresponding
Portfolio of the Trust. Currently, the Separate Account consists of High Yield,
Aggressive Stock, Common Stock, Balanced and Money Market Divisions.
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
THE SEPARATE
ACCOUNT AND ITS
DIVISIONS
(continued)
OTHER POLICIES USE THE SEPARATE ACCOUNT. Owners of policies other than The
Champion who have our variable life policies on a single premium basis, as well
as on a periodic premium basis, also have monies placed in the Separate Account.
We may also permit charges owed to us to stay in the Separate Account. Thus, we
may also participate proportionately in the Separate Account. These accumulated
amounts belong to us and we may transfer them from the Separate Account to our
General Account.
WE OWN THE ASSETS OF THE SEPARATE ACCOUNT. Under New York law, we own the assets
of the Separate Account and use them to support your policy and other variable
life policies. The portion of the Separate Account's assets supporting these
policies may not be used to satisfy liabilities arising out of any other
business of ours. Under certain unlikely circumstances, one division of the
Separate Account may be liable for claims relating to the operations of another
division.
- --------------------------------------------------------------------------------
THE TRUST
The Trust is an open-end diversified management investment company, more
commonly called a mutual fund. As a "series" type of mutual fund, it issues
several different "series" of stock, each of which relates to a different Trust
Portfolio. The Trust does not impose a sales charge or "load" for buying and
selling its shares. The Trust's shares are bought and sold by the Separate
Account at net asset value. The Trust's custodian is The Chase Manhattan Bank,
N.A.
The Trust sells its shares to separate accounts of insurance companies, both
affiliated and not affiliated with Equitable. We currently do not foresee any
disadvantages to our policyowners arising out of this. However, if we ever
believe that any of the Trust's Portfolios is so large as materially to impair
the investment performance of a Portfolio or the Trust, we will examine other
investment options.
More detailed information about the Trust, its investment policies, risks,
expenses and all other aspects of its operations, appears in its prospectus,
which is attached to this prospectus, and in its Statement of Additional
Information referred to therein.
- --------------------------------------------------------------------------------
PREDECESSORS OF
THE TRUST
Pursuant to a Plan of Reorganization (Reorganization) approved at a meeting of
our policyowners held on February 14, 1985, effective as of March 22, 1985, we
restructured our Separate Accounts I and II into one separate account in unit
investment trust form. To accomplish this restructuring, we converted our then
existing Separate Account I, a Common Stock Account, and Separate Account II, a
Money Market Account, into our continuing Separate Account I with two investment
divisions: the Common Stock Division and the Money Market Division.
Our pre-Reorganization Separate Account I was established on June 28, 1973 and
our pre-Reorganization Separate Account II was established on December 12, 1980.
Both pre-Reorganization Separate Accounts were established under the insurance
law of New York State as separate investment accounts.
On March 22, 1985, all of the assets and related liabilities of our former
Separate Accounts I and II were transferred to the Common Stock and Money Market
Portfolios of The Hudson River Fund, Inc., respectively, in exchange for shares
in the Portfolios, and we ceased to be an investment adviser of our continuing
Separate Account. The Separate Account no longer requires an investment adviser.
The Reorganization did not change the policy values of then outstanding
policies.
On September 30, 1987, pursuant to an Agreement and Plan of Reorganization
approved by policyowners, The Hudson River Fund, Inc., a Maryland corporation,
was reorganized as a Massachusetts business trust and its name was changed to
The Hudson River Trust. Refer to the prospectus for the Trust for further
information.
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT
OBJECTIVES OF THE
PORTFOLIOS
Each Portfolio has a different investment objective which it tries to achieve by
following separate investment policies. The objectives and policies of each
Portfolio will affect its return and its risks. Remember that the investment
experience of the divisions of the Separate Account depends on the performance
of the corresponding Portfolios. The policies and objectives of the Portfolios
corresponding to the divisions available for investment under The Champion are
as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Investment Policy Objective
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
High Yield Primarily a diversified mix of high yield, High return by maximizing current income and, to
fixed income securities involving greater the extent consistent with that objective, capital
volatility of price and risk of principal and appreciation
income than high quality fixed income securities
Aggressive Stock Primarily common stocks and other Long-term growth of capital
equity-type securities issued by medium and
smaller sized companies with strong growth
potential
Common Stock Primarily common stock and other equity-type Long-term growth of capital and increasing income
instruments
Balanced Common stocks, publicly-traded debt securities High return through a combination of current
and high quality money market instruments income and capital appreciation
Money Market Primarily high quality short-term money market High level of current income while preserving
instruments assets and maintaining liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
There is no guarantee that these objectives will be achieved.
- --------------------------------------------------------------------------------
THE TRUST'S
INVESTMENT ADVISER
The Trust is advised by Equitable Capital, a wholly-owned subsidiary of
Equitable. Equitable Capital is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940. Equitable Capital's address is 1285
Avenue of the Americas, New York, New York 10019.
We credit the divisions of the Separate Account daily to offset investment
advisory fees of the Trust which exceed a 0.25% effective annual rate and all
other Trust expenses except (a) all brokers' commissions, transfer taxes and
other fees and expenses for services relating to purchases and sales of
Portfolio investments and (b) any Trust income tax liabilities. Equitable
capital provides services pursuant to an investment advisory agreement for a fee
based on the following maximum effective annual percentages of the average daily
value of the aggregate net assets of each of the Portfolios. These annual
percentages for the Portfolios corresponding to the divisions available for
investment under The Champion are: 0.40% for the Common Stock, Balanced and
Money Market Portfolios, 0.50% for the Aggressive Stock Portfolio and 0.55% for
the High Yield Portfolio.
- --------------------------------------------------------------------------------
8
<PAGE>
PART 3 -- DETAILED INFORMATION ABOUT THE CHAMPION
- --------------------------------------------------------------------------------
PREMIUMS
The size and frequency of your premium payments depend on the initial face
amount, the mode of payment selected, and your risk class, age and sex. We will
charge an additional premium if an extra mortality risk is involved or if you
want certain optional insurance benefits. In general, premium rates for females
will be lower than those for males. In Montana there will be no distinctions
based on sex. The minimum face amount of a policy you may apply for is $50,000.
The policy may be issued to age 75. Before issuing any policy, we require
satisfactory evidence of insurability. If we do not issue a policy, we will
refund any premium that has been paid. (Equitable guarantees the refund.)
Your premium is due on or before the due date shown in the policy and may be
paid annually, semiannually, quarterly or monthly. Monthly payments may be made
through a direct automatic payment plan arranged with your bank. You may request
a change in the frequency of your premium payment by writing to your regional
Life Insurance Center. Regardless of the frequency of your premium payment, your
net annual premium is put into the Separate Account on your policy anniversary.
Premiums are payable over time for the insured's lifetime. However, we guarantee
that your premium will not increase once it has been determined. Premiums are
not affected by the investment experience of the Separate Account. If you fail
to pay your premiums your policy will lapse. See "Your Policy Can Lapse".
YOU DIRECT THE INVESTMENT OF YOUR PREMIUMS. You direct how your net annual
premiums will be applied to the divisions of the Separate Account. You can put
your whole net annual premiums in one or more divisions of the Separate Account.
Percentages cannot be fractions and must add up to 100.
You make your initial decision on the application for your policy. You may write
to your regional Life Insurance Center at any time requesting to change your
decision. Regardless of when you make your request, changes go into effect only
on the next policy anniversary because we allocate net annual premiums to the
Separate Account only on policy anniversaries. It may not always be possible to
make a change that is received less than seven days before a policy
anniversary. In this case, the change will not go into effect until the policy
anniversary following the entire next policy year.
PREMIUM REDUCTIONS FOR NON-SMOKERS. We offer premium reductions that vary with
age, sex and face amount if the insured is a standard risk and meets additional
requirements as to smoking habits. The reduction will be approximately 7% for
policies with face amounts under $200,000 and approximately 9% for larger
policies. Non-smoker rates are available for ages 20 and over.
ILLUSTRATION OF PREMIUM RATES. The following table shows premium rates for each
$1,000 of face amount for a $50,000 policy, which is the minimum, and for a
$200,000 policy, which is the amount where our rates per $1,000 go down.
- --------------------------------------------------------------------------------
ILLUSTRATIVE TABLE OF ANNUAL PREMIUM
FOR EACH $1,000 FACE AMOUNT
- --------------------------------------------------------------------------------
Male $50,000 FACE AMOUNT $200,000 FACE AMOUNT
Issue ---------------------------- ----------------------------
Age Standard Risk Non-Smoker Standard Risk Non-Smoker
- --------------------------------------------------------------------------------
10 $ 5.73 n.a. $ 5.00 n.a.
25 9.41 $ 8.80 8.68 $ 7.92
40 17.63 16.43 16.88 15.38
- --------------------------------------------------------------------------------
9
<PAGE>
PREMIUMS
(continued)
Premiums for semi-annual, quarterly and monthly periods will be higher per year
than the annual premium. This is due to a charge for loss of interest and added
billing and collection costs. The following table compares annual and monthly
premiums for standard risks:
- --------------------------------------------------------------------------------
COMPARATIVE TABLE OF ANNUAL AND MONTHLY PREMIUMS
FOR EACH $1,000 FACE AMOUNT
- --------------------------------------------------------------------------------
Male
Issue % Excess Of Total
Age Initial Monthly Premiums
(Standard Face Annual Monthly For Policy Year Over
Risk) Amount Basis Basis Annual Premiums
- --------------------------------------------------------------------------------
10 $ 50,000 $ 5.73 $ .52 8.9%
200,000 5.00 .44 5.6
25 50,000 9.41 .84 7.1
200,000 8.68 .76 5.1
40 50,000 17.63 1.55 5.5
200,000 16.88 1.46 3.8
- --------------------------------------------------------------------------------
DEDUCTIONS FROM
PREMIUMS
ANNUAL ADMINISTRATIVE CHARGE. We charge $40 in each policy year for
administrative expenses. The charge is designed to cover the continuing costs of
maintaining your policy, such as premium billing and collection, claim
processing, policy transactions, recordkeeping, communicating with policyowners,
and other expenses and overhead.
ADDITIONAL FIRST YEAR ADMINISTRATIVE CHARGE. In the first policy year we make a
one-time administrative charge of $3.00 for each $1,000 of initial face amount
of a policy with a face amount under $200,000. This charge is $.50 for each
$1,000 of initial face amount for larger policies. This first year
administrative charge is applied to the cost of processing applications,
conducting medical examinations, establishing policy records, and determining
insurability and assigning the insured to a risk class.
RISK CHARGE. We charge 2% of the basic annual premium to provide for the
possibility that an insured will die at a time when, based on the investment
experience of the Separate Account, the Death Benefit that would ordinarily be
paid is less than the guaranteed minimum Death Benefit of the policy. The basic
annual premium is the total annual premium for a standard mortality risk policy
minus the $40 annual administrative charge and minus the premiums for any
optional insurance benefits you take.
FRONT-END SALES LOAD. We make a charge that can be considered a "sales load".
Our front-end sales load will not be more than 5% of the basic annual premium
for each year. Commissions and other sales expenses in any year are paid by
Equitable Variable. They do not represent a charge against premiums. During the
early policy years, these sales expenses are considerably higher than the
front-end sales load charged against the premium for that year. See "Sales And
Other Agreements" in Part 4. We expect to recover our total sales expenses over
the lifetimes of the insureds partly from the front-end sales load and partly
from the surrender charge. To the extent sales expenses are not covered by such
sources, we will cover them from other funds.
STATE PREMIUM TAX CHARGE. We deduct 2% of the annual premium for the risk class
of the insured to cover state premium taxes payable by us. These taxes vary from
state to state and the 2% rate is an average.
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
DEDUCTIONS FROM
PREMIUMS
(continued)
EXAMPLE OF DEDUCTIONS FROM PREMIUMS. The following example (using the policies
shown in "Illustrations Of Death Benefits, Account Values And Cash Surrender
Values, And Accumulated Premiums" in Part 5) shows what amount of net annual
premium would be put into the Separate Account at the start of each policy year.
The net annual premium is the basic annual premium less the additional first
year administrative charge, risk charge, front-end sales load and state premium
tax charge.
- --------------------------------------------------------------------------------
ILLUSTRATIVE TABLE OF DEDUCTIONS FROM PREMIUMS
- --------------------------------------------------------------------------------
Male Male Male
Beginning of Issue Age 10 Issue Age 25 Issue Age 40
Policy Year Standard Risk Standard Risk Standard Risk
- --------------------------------------------------------------------------------
$300 Annual $500 Annual $1,000 Annual
Premium Premium Premium
------- ------- -------
POLICIES UNDER $200,000
(Initial Face Amount) ($52,739) ($53,427) ($57,041)
1st Year 78.58 258.59 702.75
2nd Year and later 236.80 418.87 873.87
$1,000 Annual $2,000 Annual $4,000 Annual
Premium Premium Premium
------- ------- -------
POLICIES $200,000 AND OVER
(Initial Face Amount) ($200,000) ($231,133) ($237,411)
1st Year 774.00 1,668.78 3,485.19
2nd Year and later 874.00 1,784.35 3,603.90
- --------------------------------------------------------------------------------
SURRENDER CHARGE
There is a difference between the Account Value and the Cash Surrender Value of
our policy in the first ten policy years. This difference is a surrender charge,
a contingent deferred sales load against your Account Value. It is designed to
recover expenses of distributing policies which are terminated in their early
years.
The surrender charge does not affect Account Value transfers among divisions of
the Separate Account, Separate Account investment experience, Death Benefits or
the 24-month exchange right to fixed life insurance.
The surrender charge is a maximum of 22-1/2% of the basic annual premiums (as
defined in "Deductions From Premiums -- Risk Charge") paid if the policy lapses
or is surrendered during the first policy year. Thereafter, the surrender charge
is a percentage of all basic annual premiums paid. This percentage declines
until it reaches zero at the end of the tenth policy year. The following table
shows the maximum surrender charge assuming the surrender occurs at the end of a
policy year.
- --------------------------------------------------------------------------------
TABLE OF SURRENDER CHARGES
- --------------------------------------------------------------------------------
End of Maximum End of Maximum
Policy Year Surrender Charge Policy Year Surrender Charge
- --------------------------------------------------------------------------------
1 22-1/2% 6 9%
2 15 7 8
3 12-1/2 8 6
4 11 9 3
5 10 10 0
- --------------------------------------------------------------------------------
If you surrender your policy or allow it to lapse in the first ten years and
receive its net Cash Surrender Value, you will incur the surrender charge.
Options available on lapse of a policy, whether taken as cash or placed on an
insurance option on lapse, are also based on its net Cash Surrender Value.
Since the loan of value of the policy is based on the amount of Cash Surrender
Value rather than on the Account Value, the surrender charge has the effect of
reducing the amount available for a policyowner to borrow under a policy.
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
CHARGES AGAINST
THE SEPARATE
ACCOUNT
We support the operations of a policy by putting the net annual premium (see
"Deductions From Premiums") into the division or divisions of the Separate
Account which the policyowner chooses. We do this when the policy is issued and,
after that, at the beginning of each policy year. Even though the gross premium
will be higher for an insured who is a high risk than the gross premium for an
insured who is a standard risk, any Account Value that may build up on a policy
covering a high risk insured will be the same as the Account Value that would
build up on a policy covering a standard risk insured of the same age and sex,
for the same amount, and having the same date of issue and allocation to the
divisions of the Separate Account. This is also true for an insured who is a
non-smoker, even though the gross premium for a non-smoker insured will be lower
than the gross premium for an insured who is a standard risk but not a
non-smoker.
The policy is designed so that the net annual premium put in the divisions of
the Separate Account does not vary with the risk class of the insured.
Therefore, we charge a higher gross premium for an insured who is a high risk to
cover the extra risk of mortality. We charge a lower gross premium for
non-smokers because of the expected lower mortality.
COST OF INSURANCE. Once the net annual premium is placed into the divisions of
the Separate Account we charge for the cost of insurance based on the sex and
attained age for the amount at risk without regard to differences in risk class.
The amount at risk on policy anniversaries is the Death Benefit payable less the
amounts in the divisions of the Separate Account in which a policy participates
(adjusted for any loans). The cost of insurance is based on the 1980
Commissioner's Standard Ordinary Mortality Table, and generally increases with
attained age. The cost of insurance differs in each year because, based on this
mortality table, the probability of death generally increases with attained age
and the amount at risk is different year by year. The dollar amount of the cost
of insurance also depends on investment experience of the divisions of the
Separate Account in which a policy participates. The cost of insurance for
females will generally be less than that for males. In Montana, there will be no
distinctions based on sex.
The amount in the divisions of the Separate Account in which your policy
participates is further decreased (after the cost of your insurance protection)
by the following charges.
CHARGES FOR MORTALITY AND EXPENSE RISKS. We charge the Separate Account for the
mortality and expense risks we assume. The mortality risk we assume is that
insureds may live for shorter periods of time than we estimated. If this occurs,
we have to pay a greater amount of Death Benefits than we expected in relation
to the premiums we received. The expense risk we assume is that our costs of
issuing and administering policies may be more than we estimated.
The charge is made daily at an effective annual rate of 0.50% of the value of
the assets of each division of the Separate Account that are attributable to
variable life policies. The money we collect from this charge may exceed the
amount needed to cover benefits and expenses and would be our gain.
EXPENSES OF THE TRUST. The Separate Account purchases shares of the Trust at
their net value which reflects the management fees and other expenses deducted
from the assets of the Trust. The Trust does not impose a sales charge. See "The
Trust" in Part 2.
- --------------------------------------------------------------------------------
DEATH BENEFITS
We pay a Death Benefit (net of indebtedness) to the beneficiary of this policy
when the insured dies. All or part of the Death Benefit can be paid in cash or
applied under one or more of our payment options described under "Additional
Information About The Champion -- Your Payment Options".
The Death Benefit will at least equal the face amount of the policy. Whether the
Death Benefit is higher than this guaranteed minimum depends on the investment
experience of the divisions of the Separate Account in which a policy
participates. See "Illustrations Of Death Benefits, Account Values And Cash
Surrender Values, And Accumulated Premiums" in Part 5.
- --------------------------------------------------------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
DEATH BENEFITS
(continued)
The Death Benefit will be the greater of (i) the guaranteed minimum Death
Benefit, plus the sum (if positive) of the variable adjustment amounts
(determined annually) in the divisions of the Separate Account in which you have
Account Value, or (ii) the insurance coverage that can be purchased by the
Account Value at the date of death.
The percentage change in the Death Benefit for any year is not the same as the
net return for the preceding year and it is not necessarily related to current
or future rates of inflation. In any year that the sum of the variable
adjustment amounts increases (and is positive), the Death Benefit will increase.
If the sum of the variable adjustment amounts is negative, investment experience
cannot increase the Death Benefit above the guaranteed minimum until it has
increased the variable adjustment amount of at least one division of the
Separate Account so that the sum is positive. In any year that the sum of the
variable adjustment amounts for the divisions decreases, the Death Benefit will
decrease, unless it is already at the guaranteed minimum. See "Variable
Adjustment Amount".
There is no guarantee that the investment experience of a division of the
Separate Account, which will reflect the investment performance of the
corresponding Portfolio of the Fund, will be sufficient to result in an increase
in Death Benefits. However, the historical pattern of stock market investment
performance has been one of long-range growth, and money market investments in
recent years have returned more than 4-1/2%.
The amount of Death Benefit actually paid to the insured's beneficiary will be
adjusted as of the date of the insured's death to reflect:
o any policy loans together with accrued interest;
o part of any unpaid premium due if the insured dies during the grace period;
o any premium paid for a period beyond the policy month in which the insured
dies; and
o any insurance added to the policy by a rider.
In addition, we may challenge the validity of the policy based on material
misstatement in the application or if the insured commits suicide within two
years after the policy's date of issue. See "Limits On Our Right To Challenge
The Policy".
If you have submitted an application and paid the first premium, we may, subject
to certain conditions, provide a limited amount of temporary insurance on the
person proposed to be insured. You may review a copy of our Temporary Insurance
Agreement on request. Except as stated in the Temporary Insurance Agreement, no
insurance will take effect: (a) until a policy is delivered and the full first
premium for it is paid while the person proposed to be insured is living; (b)
before the register date; and (c) unless the information in the application
continues to be true and complete, without material change, as of the time the
premium is paid.
- --------------------------------------------------------------------------------
VARIABLE
ADJUSTMENT
AMOUNT
The variable adjustment amount for each division of the Separate Account is the
amount of the Death Benefit that results from all past investment experience of
that division. In the first policy year, the variable adjustment amount in each
division of the Separate Account is zero. After that, the variable adjustment
amount is the amount of insurance purchased by the difference between the actual
rate of return and 4-1/2%. Therefore, a division's variable adjustment amount
will not change in any year that the division's gross return minus the charges
to that division results in a net return of 4-1/2%. If the net return is more
than 4-1/2%, the variable adjustment amount will increase. The variable
adjustment amount will increase because additional amounts of paid-up life
insurance are purchased. If the net return is less than 4-1/2%, it will
decrease. The variable adjustment amount will decrease because these additional
amounts of paid-up life insurance are lost. The rates at which these additional
amounts of paid-up life insurance are purchased or lost are based on sex and
attained age and are guaranteed. These rates are specified in your policy when
issued and generally increase with the attained age of the insured. The rates
for females are generally lower than those for males; however, there will be no
distinctions based on sex in Montana.
- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
VARIABLE
ADJUSTMENT
AMOUNT
(continued)
The variable adjustment amount for each division of the Separate Account is set
on each policy anniversary. Once set, it remains the same for the following
policy year. If it is set above the guaranteed minimum, we will be responsible
for keeping it at that level until the next policy anniversary. You will bear
the risk that it could drop on the next policy anniversary (but not below the
guaranteed minimum).
THE VARIABLE ADJUSTMENT AMOUNT IS CUMULATIVE. Increases and decreases in the
variable adjustment amount are carried into each succeeding year. The variable
adjustment amount for a division of the Separate Account can be positive or
negative. If it is positive, good investment experience will produce a larger
variable adjustment amount. If it is negative, good investment experience must
first offset the current negative variable adjustment amount before there can be
a positive amount.
EXAMPLE: You were a 25 year old male when your policy was issued, and you have a
variable whole life policy with a $500 annual premium (standard rates). Assume a
hypothetical gross annual investment return of 0% for the first 9 policy years.
This results in a negative variable adjustment amount. A net return of
approximately 31.3% in the 10th policy year would affect the cumulative negative
variable adjustment amount so that it would equal zero. Any net return above
that would produce a positive variable adjustment amount. On the other hand, the
negative variable adjustment amount may be offset over a number of years. Thus,
if the gross return in the 10th policy year was 8% (net return of 7.19%), a net
return of 7.19% in each of the seven following policy years would be required to
produce a positive variable adjustment amount by the 18th policy year.
For a given net return, the greater the Account Value is in a division of the
Separate Account, the greater the effect of investment experience on the
variable adjustment amount. Therefore, in later policy years, when your total
Account Value may be greater, investment experience may have a greater effect on
the Death Benefit.
NET RETURN. The Death Benefit based on the net return of a division of the
Separate Account is set on each policy anniversary. The net return depends on
the division's investment experience from the first day of that policy year to
the first day of the next policy year. It takes into account investment income,
capital gains and capital losses (whether realized or unrealized) with respect
to Trust shares owned by the division of the Separate Account and gains
resulting from the reimbursement by us to the division of amounts corresponding
to certain Trust expenses. The charges against the division are then deducted to
determine the net return. The net return on a date during a policy year depends
on the investment experience of the division from the first day of that policy
year to that date and can effect Account Values, Cash Surrender Values and Death
Benefits.
The net return of each division of the Separate Account is determined at the end
of each business day. Generally, a business day is any day that we are open and
the New York Stock Exchange is open. However, we are closed on Martin Luther
King Day and the Friday after Thanksgiving Day.
The assets of each division of the Separate Account are valued by multiplying
the number of Trust shares in each Division by the net asset value of such
shares and is adjusted by the charge for mortality and expense risks. See the
financial statements for the Separate Account in this prospectus.
The net return for a policy year is not the same as for a calendar year unless
the policy anniversary is January 1.
A statement of the method we use to calculate net return is an exhibit to the
Registration Statement we filed with the SEC. It will be furnished on request.
HOW THE DEATH BENEFIT VARIES. The following example shows how the Death Benefit
varies from the guaranteed minimum as a result of investment experience. Assume
that the insured was a 25 year old male when the policy was issued, that he has
a variable whole life policy
- --------------------------------------------------------------------------------
14
<PAGE>
- --------------------------------------------------------------------------------
VARIABLE
ADJUSTMENT
AMOUNT
(continued)
with a $500 annual premium (standard rates) and that the gross annual return for
each of the first six policy years was 8% for each division or their combination
(which is equal to a net return of 7.19%). Use the amounts from the
"Illustrations Of Death Benefits, Account Values And Cash Surrender Values, And
Accumulated Premiums" in Part 5.
- --------------------------------------------------------------------------------
Variable
Guaranteed Adjustment Death
Minimum + Amount = Benefit
- --------------------------------------------------------------------------------
End of policy year 5 $53,427 $ 775 $54,202
Increase -- 322 322(0.6%)
- --------------------------------------------------------------------------------
End of policy year 6 $53,427 $ 1,097 $54,524
- --------------------------------------------------------------------------------
If the gross annual return in the sixth policy year had been 0% (equal to a net
return of -.75%), the Death Benefit would have been $53,373 (a 1.2% decrease).
This reflects a decrease in the variable adjustment amount of $629.
- --------------------------------------------------------------------------------
ACCOUNT VALUES
AND CASH
SURRENDER VALUES
HOW WE DETERMINE ACCOUNT VALUE. Your Account Value is the sum on any date of
your Account Values in each division of the Separate Account in which your
policy participates. There is no guaranteed minimum Account Value. If no premium
is due and unpaid, your Account Value in a division equals the tabular Account
Value (stated in the policy as of the end of each policy year) multiplied by the
allocation percentage in effect, increased or decreased by the aggregate net
single premium specified in the policy for the variable adjustment amount for
that division.
The tabular Account Value is what the Account Value for the policy would be if
all of the divisions of the Separate Account in which you had funds had a
constant net investment return of 4-1/2% a year. The premium allocation
percentage is the percentage of your current net annual premium allocated to
each of the divisions. The net single premium is the one-time net cost at your
sex and attained age to purchase one dollar of Death Benefit, as specified in
your policy.
Adjustments during a year reflect a division's investment experience, the cost
of insurance, premium payments, any indebtedness and any Account Value
transfers. The Account Values for substandard risk policies and non-smoker
policies are the same as for comparable standard risk policies.
HOW WE DETERMINE CASH SURRENDER VALUE. Your policy's Cash Surrender Value will
vary daily with investment experience. There is no guaranteed minimum Cash
Surrender Value. Cash Surrender Value is the same as Account Value except in the
first ten years of the policy. During the first ten policy years the Cash
Surrender Value on any date will equal the tabular cash value (which is stated
in your policy) increased or decreased by the net single premium for the
variable adjustment amount for that division of the Separate Account. After the
tenth policy year, the Cash Surrender Value will equal the Account Value. The
difference between the Cash Surrender Value and the Account Value is a surrender
charge. See "Surrender Charge".
- --------------------------------------------------------------------------------
POLICY LOANS
You may borrow money, using only your policy as security, up to the loan value
of your policy. The loan value is a percentage of your Cash Surrender Value on
the next premium due date with two adjustments. The first adjustment assumes
that the net investment return is exactly 4-1/2% a year from the date of the
loan to the next premium due date. The second adjustment is a discount at 5-1/2%
a year from that due date back to the loan date.
The maximum percentage of your adjusted Cash Surrender Value that you may borrow
is 90% during the first ten policy years. It is 100% after the tenth policy
year. If the policy has lapsed and is continued under either the fixed or
variable reduced paid-up option on lapse, you may borrow up to 100% of the
adjusted cash value.
If you borrow your policy's entire loan value, you increase your risk of having
your policy end. This might happen if the combination of policy loan interest
(as it builds up), the cost of
- --------------------------------------------------------------------------------
15
<PAGE>
POLICY LOANS
(continued)
insurance, asset charges against the Separate Account, and investment experience
of the divisions of the Separate Account where you have Cash Surrender Value
uses up the remaining value. See "Your Policy Can Lapse".
Unless it is being used to pay premiums, we will not grant a loan that is not at
least $100 more than any outstanding loan with accrued interest. The amount of
your premium will not be affected by the fact you have a loan or by how you
repay the loan. If a loan is made after the due date of a premium, that premium
will be subtracted from the loan proceeds. If you request a loan in order to pay
a premium, we will charge loan interest from the date we make the loan even if
it is before the premium due date.
HOW TO REQUEST A LOAN. You may request a loan by contacting our regional Life
Insurance Center. We allocate a loan based on the net Cash Surrender Value in
each division of the Separate Account on the date the loan is made. We
reallocate loans if you transfer Account Value. Whenever the loan with accrued
interest from one division equals or exceeds the Account Value in that division,
that division will become inactive for your policy. We will transfer the total
Account Value and loan allocation to the other divisions. See "Other Policy
Transactions -- When A Division Becomes Inactive".
REPAYMENT. You may repay all or part of any outstanding loan with accrued
interest at any time while the policy is in effect and the insured is alive.
Your repayment, whether full or partial, will be allocated among the divisions
of the Separate Account in proportion to the loan allocation to each division at
the time of repayment. The amount of any outstanding loan with accrued interest
will be deducted from the Death Benefit or Cash Surrender Value proceeds.
POLICY LOAN INTEREST. You decide whether interest on your policy loan will be
charged at a fixed rate of 5-1/2% or an adjustable loan interest rate. The
adjustable rate is determined as of the beginning of each policy year, and will
apply to any new or outstanding loan during that year. The adjustable rate will
be the greater of (i) 5-1/2%, or (ii) the Monthly Average Corporate yield shown
in the Corporate Bond Yield Averages published by Moody's Investors Services,
Inc., for the month ending two months before the beginning of the policy year.
However, if you have elected an adjustable loan interest rate, it will be the
same for a policy year after the first as it was for the immediately preceding
policy year if the formula above would produce a change of less than 1/2 of 1%
from the rate applicable to your policy for the preceding year.
Interest is charged daily and is payable by the policyowner on each anniversary.
However, if it is not paid, it will be compounded on the policy anniversary
because it will be added to the loan principal. As to the deductibility of loan
interest, see "Tax Effects -- Policy Proceeds" in Part 4.
THE EFFECT OF A POLICY LOAN. A loan against your policy will have a permanent
effect on your Death Benefit, Account Value and Cash Surrender Value under this
policy, even if the loan is repaid. When you take out a loan, we transfer part
of the Cash Surrender Value equal to the amount of the loan from the divisions
of the Separate Account in which your policy participates to our General
Account. This amount is set aside as security for your loan. In addition, unpaid
interest on the policy loan will be transferred to our General Account from time
to time. The amount taken out of the divisions of the Separate Account will
neither be affected by the divisions' investment experience nor be subject to
the charges described in "Charges Against The Separate Account", while the loan
is outstanding. However, you will earn a return on this amount.
If you have chosen the fixed interest rate alternative, we will credit your
policy with a 4-1/2% annual return on any amount transferred to our General
Account as a result of your policy loan. This can protect Cash Surrender Value
and Death Benefits from decreasing if investment experience is below 4-1/2%. It
will also prevent them from increasing if investment experience is above 4-1/2%.
If you have chosen an adjustable loan interest rate, we will credit your policy
with a rate of return which is 0.75% below the interest rate that is charged as
a result of your policy loan,
- --------------------------------------------------------------------------------
16
<PAGE>
POLICY LOANS
(continued)
minus any charges for taxes or amounts set aside as a provision for taxes. (We
are not making charges for taxes or provisions for taxes now but we may make
such charges in the future. See "Tax Effects -- Our Income Taxes" in Part 4.)
For example, if the adjustable loan interest rate were 10%, the credit rate
would be 9.25%. If the adjustable loan interest rate were below 5-1/2%, the
actual interest rate would be 5-1/2% and the credit rate would be 4.75%. Any
amounts credited over 4-1/2% will increase your policy's Death Benefit, Account
Value and Cash Surrender Value. If you elect the adjustable loan interest rate,
you will bear the additional risk connected with changes in the annual credit
rate. If the adjustable loan interest rate less 0.75% (and less any charge for
taxes or provision for taxes) is greater than the net return for that year of
the divisions of the Separate Account in which you have Account Value, then the
Death Benefit and Cash Surrender Value for that year will be greater than if no
loan were made. The reverse would also be true.
EXAMPLE: You were a 25 year old male when your policy was issued, and you have a
variable whole life insurance policy with a $500 annual premium (standard
rates). Use the illustration in Part 5, and assume an 8% gross annual investment
return for each Division or their combination (which is a net return of 7.19%).
Assume that at the beginning of the 10th policy year the Adjustable Loan
Interest Rate is 9.79% (the actual rate for June, 1986). If you take a loan for
$3,000 at the beginning of the 10th policy year, it will affect the Death
Benefit, Account Value and Cash Surrender Value (before subtracting the amount
of the loan with loan interest) in the 10th policy year as follows:
- --------------------------------------------------------------------------------
With Loan With Loan
Without Loan (Fixed Rate) (Applicable Rate)
- --------------------------------------------------------------------------------
Death Benefit $56,372 $55,999 $56,628
Account Value 4,615 4,534 4,670
Cash Surrender Value 4,615 4,534 4,670
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT ADJUSTABLE RATES. We will notify you of the initial
interest rate at the time a loan is made under the adjustable loan interest rate
election. Initial loan interest rates are also available on request. We will
also notify you in advance of each policy anniversary of the interest rate for
the following policy year.
You may cancel your election of the adjustable loan interest rate in writing at
any time, but the request will not take effect until the next policy
anniversary. When the cancellation takes effect, the loan rate will revert to
the fixed rate of 5-1/2%. Election or re-election of the adjustable loan
interest rate may be made in writing at any time but will not take effect until
the next policy anniversary even if no loan is outstanding.
Not all states have laws permitting adjustable policy loan interest rates. Some
states permit adjustable rates but set maximums. Some states do not permit
cancellation of an adjustable loan interest rate provision, and there are other
variations from state to state. For details about the policy loan interest rate
laws in your state, contact your agent or your regional Life Insurance Center.
- --------------------------------------------------------------------------------
OTHER POLICY
TRANSACTIONS
RETURNING THE POLICY FOR CASH. During the insured's lifetime, and subject to our
rules, your policy can be returned for payment of the Cash Surrender Value net
of any indebtedness. The amount payable will be based on the net Cash Surrender
Value next computed after we receive your signed request for payment of the Cash
Surrender Value at your regional Life Insurance Center, accompanied by your
policy. The insurance coverage will end on the date you send us the policy and
your request.
As an alternative to surrendering your policy, you may request to split your
policy into two policies. You may then return one policy for cash and continue
the other based on the new initial face amount.
If you split a policy, each policy we continue must have a face amount of at
least $50,000. The premium for the policy that continues will be based on the
new initial face amount but the same age, sex and risk class as the original
policy.
These are our current procedures, which may change.
- --------------------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------------------
OTHER POLICY
TRANSACTIONS
(continued)
TRANSFERS AMONG INVESTMENT CHOICES. You may transfer Account Value among the
divisions by contacting our regional Life Insurance Center. You may transfer all
or part of your Account Value among the divisions of the Separate Account up to
four times in a policy year. A transfer will go into effect on the day we
receive your request. When Account Value is transferred a portion of the net
annual premium is transferred as well. We reallocate loans if you transfer
Account Value.
WHEN A DIVISION BECOMES INACTIVE. If you have a policy loan allocated to a
division of the Separate Account and your Account Value plus remaining net
annual premium less your loan (including accrued loan interest) in that division
reaches zero, that division will become inactive for your policy. We will
reallocate the loan to the other divisions of the Separate Account based on the
proportions that your unloaned amounts in each of the other divisions bears to
the unloaned amount of your total Account Value. A division will also become
inactive for your policy if you transfer its entire Account Value to the other
divisions. We will notify you when a division becomes inactive.
If a division of the Separate Account becomes inactive, the future variable
adjustment amount, Account Value and net return will be affected. We will assume
that you do not want to put any part of future net annual premiums into the
inactive division. You can request us to put any part of a future net annual
premium into the inactive division effective on the next policy anniversary
after your request is received. You may also transfer Account Value into an
inactive division from the other divisions.
- --------------------------------------------------------------------------------
YOUR RIGHT TO
EXAMINE THE
POLICY
You have a right to examine the policy. If for any reason you are not satisfied
with it, you may cancel it by returning the policy to your regional Life
Insurance Center with a written request for cancellation. We will give you a
full refund (guaranteed by Equitable) of the premiums paid if your request and
policy are postmarked by the latest of the following:
o 10 days after you receive your policy; or
o 10 days after we mail a written Notice of Withdrawal Right; or
o 45 days after Part 1 of the policy application was signed.
Insurance coverage ends when you send your request.
- --------------------------------------------------------------------------------
YOUR RIGHT TO
EXCHANGE THE
POLICY
You may exchange The Champion policy for a fixed whole life insurance policy on
the life of the insured. The new policy will be our Life Account(TM) policy on a
level premium whole life plan with premiums payable for life. You have this
right for 24 months from the date your policy is issued, but only if no premium
remains due and unpaid. The exchange will be effective when we receive your
request, accompanied by your policy and an application for the fixed policy.
We will not require evidence of the insured's insurability before an exchange.
The new policy's face amount will be the same as the initial face amount of The
Champion policy. It will also have the same register date, date of issue and
risk class. The premium for the new policy will be that in effect on the
register date for the same sex, age and risk class.
There will be a cash adjustment on exchange. The adjustment will reflect the
difference in premiums between the two policies. Since the exchange is based on
premiums, the surrender charge will have no effect. There will also be an
adjustment for the difference in the rates of return credited to the two
policies because the Life Account policy has declared rates of return. We will
refund or bill you for any amount due. We have filed a description of the method
we use to calculate the adjustment with the appropriate state insurance
officials.
Any policy loan with accrued interest must be repaid before the exchange. The
exchange is also subject to limits described in the policy.
- --------------------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------------------
YOUR POLICY
CAN LAPSE
Your policy can lapse if you fail to pay premiums or if the unpaid portion of
any amount you have borrowed under your policy plus any unpaid loan interest
exceeds the Cash Surrender Value of your policy. If your policy lapses within
the first ten policy years you will incur a surrender charge. See "Surrender
Charge".
We allow a grace period of 31 days to pay each premium after the first one.
Insurance will continue during the grace period, but we will deduct one month's
premium from the Death Benefit if the insured dies during the grace period. If a
premium has not been paid by the end of the 31-day grace period, the policy will
lapse as of the date the premium was due. When a policy lapses, any riders will
end. All insurance may end unless the policy's net Cash Surrender Value is used
under a continued insurance option on lapse.
Whenever the unpaid portion of any amount you have borrowed under your policy
plus unpaid loan interest exceeds the Cash Surrender Value of your policy, we
will send a notice to you and to anyone to whom you told us you assigned the
policy. The policy will end 31 days after we send the notice unless you make a
repayment during the 31-day period that is large enough to reduce your
outstanding loan with accrued interest to below the total Cash Surrender Value
of your policy.
- --------------------------------------------------------------------------------
OPTIONS ON
LAPSE
If a policy lapses because a premium remains due and unpaid beyond its 31-day
grace period, you may use one of the following options. A key element in these
options is your policy's net Cash Surrender Value on any day for a period of up
to three months after the unpaid premium was due. If you elect the reduced
paid-up variable insurance option, the Cash Surrender Value used is on the date
of lapse. Net Cash Surrender Value is Cash Surrender Value minus any policy
loans with accrued interest on the date an option is used. If your policy has no
net Cash Surrender Value, you cannot use the options.
PAYMENT OF CASH OPTION. You can withdraw the net Cash Surrender Value and
receive payment in cash.
CONTINUED INSURANCE OPTION. Within three months from the date a policy lapses
(which is the date the unpaid premium was due), you can use its net Cash
Surrender Value to obtain one of two types of fixed life insurance plans. These
are fixed reduced paid-up insurance or extended term insurance. If it is at
least $5,000, you may also use your policy's net Cash Surrender Value to obtain
a variable life insurance plan. This plan is variable reduced paid-up insurance.
You will not have to pay any additional premium on any option because you are,
in effect, using the net Cash Surrender Value of your variable life policy to
buy continued life coverage.
If we do not receive a written request to use the fixed or variable reduced
paid-up insurance option within three months after lapse, extended term
insurance will automatically go into effect. The extended term insurance option
may not be available under your policy if the insured's risk class is not at
least standard. If so, that fact will be stated on page 3 of the policy and
fixed reduced paid-up insurance will apply instead. If the insured dies after
the grace period but within three months of the date of lapse, the fixed
continued insurance option that would provide the greater benefit will
automatically apply, regardless of any restriction stated on page 3 of the
policy.
Here are details on the three types of plans offered under our continued
insurance option.
o REDUCED PAID-UP VARIABLE INSURANCE. You may use the net Cash Surrender Value
to buy reduced paid-up variable whole life insurance. The net Cash Surrender
Value available to purchase this option must be at least $5,000. The net Cash
Surrender Value determines the face amount that can be purchased at the
insured's age at the time of purchase.
Reduced paid-up variable insurance has cash value. The cash value and death
benefit will go up or down depending on the investment experience of the
divisions of the Separate Account where you have cash value. The death benefit
under this option has no guaranteed minimum. You may use the net cash value
during the insured's lifetime for a loan or for cash payment. You may transfer
cash value among the divisions up to four times in one year.
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19
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OPTIONS ON
LAPSE
(continued)
EXAMPLE: You are a 30 year old male. Your variable life policy was issued when
you were 25 and you have paid five $2,000 annual premiums. Use the illustration
in Part 5, and assume a 4% gross annual investment return for each division of
the Separate Account or their combination. At the end of the fifth policy year,
your net Cash Surrender Value could buy reduced paid-up variable whole life
insurance with an initial face amount of $36,318. After the fifth policy year,
the face amount will continue to vary depending on the investment experience of
the divisions in which the cash value is invested. There is no guaranteed
minimum Death Benefit or Cash Value.
o REDUCED PAID-UP FIXED INSURANCE. You may use the net Cash Surrender Value to
buy reduced paid-up fixed whole life insurance. The net Cash Surrender Value
determines the face amount that can be purchased at the insured's age at the
time of purchase. Paid-up insurance has cash value. You may use the net cash
value during the insured's lifetime for a loan or for cash payment.
EXAMPLE: You are a 30 year old male. Your variable life policy was issued when
you were 25 and you have paid five $500 annual premiums. Use the illustration in
Part 5, and assume a 4% gross annual investment return for each division of the
Separate Account or their combination. At the end of the fifth policy year, your
net Cash Surrender Value could buy reduced paid-up fixed whole life insurance
with a face amount of $7,705 for life.
o EXTENDED TERM INSURANCE. If the insured's risk class is at least standard, you
may use the net Cash Surrender Value to buy extended term insurance. The face
amount will equal the Death Benefit under your variable life policy on the
date of lapse minus any unpaid loan with accrued interest. The net Cash
Surrender Value determines how long coverage will last at the insured's then
attained age. It will last at least 90 days if the premium has been paid on
the variable life policy for three months before lapse and there is no policy
loan. Extended term coverage has cash value, but it cannot be used for a loan.
EXAMPLE: Assume the same facts as in the previous example. At the end of the
fifth policy year, your net Cash Surrender Value could buy fixed extended term
insurance with a face amount of $53,427 for a term of 11 years and 125 days.
REINSTATEMENT OPTION. You may request that we reinstate the policy during the
insured's lifetime. You must make this request within five years after lapse. We
will not reinstate the policy if it has been returned for its net Cash Surrender
Value.
Before we will reinstate, we must receive evidence satisfactory to us of the
insured's insurability. We must also receive the larger of all due and unpaid
premiums with interest at 6% a year; or an amount equal to:
o the Cash Surrender Value just after reinstatement, MINUS
o the cash value of the option just before reinstatement, and further MINUS
o any policy loan with accrued interest at the annual loan interest rate
compounded daily to the date of reinstatement, TIMES
o 110%.
If we do reinstate, the policy will have the same variable adjustment amount and
premium allocation between the divisions of the Separate Account as if there had
been no lapse.
If a policy has enough Cash Surrender Value at the time it lapses, it might be
possible to reinstate it by requesting a policy loan for that purpose.
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POLICY PERIODS,
ANNIVERSARIES,
DATES AND AGES
Policy years and policy anniversaries are measured from the register date shown
on page 3 of the policy when issued.
The register date is the day the net annual premiums you allocate to the
divisions of the Separate Account first become subject to charges and begin to
vary with the investment experience of the divisions. As to when insurance
coverage under a policy starts, see "Death Benefits". The time between
submission of an application and the register date will vary, depending on the
underwriting and other requirements for issuing a particular policy. The
register date will be the application date if the full first premium is paid
with the application and no medical evidence is required. Otherwise the register
date will normally be the date we receive the latest of the application, the
full first premium and any required medical evidence.
The issue date, shown on page 3 of the policy when issued, is the date your
policy is actually issued. Both the contestibility and suicide exclusion periods
are measured from the issue date. See "Limits On Our Right To Challenge The
Policy".
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20
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LIMITS ON OUR
RIGHT TO
CHALLENGE
THE POLICY
We can challenge the validity of your insurance policy based on material
misstatements in the application. However, we cannot challenge the validity of
the policy after it has been in effect during the insured's lifetime for two
years from the date of issue or reinstatement (unless another date is required
by law). We can challenge at any time any rider that provides benefits in the
event of total disability. If death occurs within the time we can challenge
validity, our payment will generally be delayed while we determine whether to
make such a challenge.
If the insured's age or sex is misstated in the policy application, the Death
Benefit will be what the premium paid would have purchased based on the
insured's true age and sex.
If the insured commits suicide within two years from the date the policy was
issued or reinstated (or less where required by law), the Death Benefit will be
limited to the sum of all premiums paid minus outstanding policy loans with loan
interest.
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ADDITIONAL
INFORMATION ABOUT
THE CHAMPION
WHEN WE PAY PROCEEDS. Payment of the Death Benefit, Cash Surrender Value (net of
indebtedness) or loan proceeds will be made within seven days after we receive
the required form or request (and other documents that may be required for
payment of the Death Benefit) at your regional Life Insurance Center. The Death
Benefit is determined as of the date of death and will not be affected by the
subsequent investment experience of the divisions of the Separate Account. We
pay interest from the date of death to the date of payment at an annual rate
greater than or equal to the rate we are paying under the deposit option
described in "Payment Options" below. If an Equitable agent is assisting the
beneficiary in preparing the documents required for payment of the Death
Benefit, we will send the check to the agent within seven days after we receive
all required documents. The agent will then deliver the check to the
beneficiary. But we can delay payment if:
o we contest the policy;
o it is not reasonably practicable to determine the amount because the New York
Stock Exchange is closed, trading is restricted by the SEC, or the SEC
declares that an emergency exists; or
o the SEC, by order, permits us to delay to protect our policyowners.
If your policy is being continued as fixed reduced paid-up or extended term
insurance, we can delay payment of a loan or cash value for up to six months.
We will pay at least 3% interest a year if we delay paying the Cash Surrender
Value or loan proceeds more than 30 days.
YOUR PAYMENT OPTIONS. The Death Benefit or the Cash Surrender Value may be paid
(net of indebtedness) in one sum or you may choose another form of payment for
all or part of the money. Payments under these options are not affected by the
investment experience of any investment division of the Separate Account.
Instead, interest accrues pursuant to the options chosen. If you do not arrange
for a specific form of payment before the insured dies, the beneficiary will
have this choice. However, if you do make an arrangement with us for how the
money will be paid, the beneficiary cannot change the choice after the insured
dies. Payment options will also be subject to our rules at the time of
selection. Currently, these alternate payment options are only available if the
proceeds applied are $2500 or more and if any periodic payment will be at least
$25.
You have the following payment options:
o DEPOSIT OPTION: The money will stay on deposit with us for a period agreed
upon. You will receive interest on the money at a declared interest rate.
o INSTALLMENT PAYMENT OPTIONS: There are two ways that we pay installments:
FIXED PERIOD: We will pay the amount applied in equal installments plus
applicable interest, for a specific number of years (not more than 30).
FIXED AMOUNT: We will pay the sum in installments in an amount agreed upon.
We will pay the installments until we pay the original amount, together with
any interest earned.
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21
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ADDITIONAL
INFORMATION ABOUT
THE CHAMPION
(continued)
o MONTHLY LIFE INCOME OPTION: We will pay the money as monthly income for life.
You may choose any one of three ways to receive the income: We will guarantee
payments for at least 10 years (called "10 Years Certain"); at least 20 years
(called "20 Years Certain"); or until the payments we make equal the original
sum (called "Refund Certain").
o OTHER: You may ask us to apply the money under any option that we make
available at the time the Death Benefit or Cash Surrender Value is paid.
We guarantee interest under the Deposit Option at the rate of 3% a year, and
under either Installment Option at 3-1/2% a year. We may also credit interest
under the Deposit Option and under either Installment Option at a rate that is
above the guaranteed rate.
The beneficiary or any other person who is entitled to receive payment may name
a successor to receive any amount that we would otherwise pay to that person's
estate if that person died. The person who is entitled to receive payment may
change the successor at any time.
We must approve any arrangements that involve more than one of the payment
options, or a payee who is not a natural person (for example, a corporation), or
a payee who is a fiduciary. Also, the details of all arrangements will be
subject to our rules at the time the arrangements take effect. This includes
rules on the minimum amount we will pay under an option, minimum amounts for
installment payments, withdrawal or commutation rights (your rights to receive
payments over time, for which we may offer a lump sum payment), the naming of
people who are entitled to receive payment and their successors, and the ways of
proving age and survival.
You will make a choice of payment option (or any later changes) and your choice
will take effect in the same way as it would if you were changing a beneficiary.
(See "Beneficiary" below). Any amounts that we pay under the payment options
will not be subject to the claims of creditors or to legal process, to the
extent that the law provides.
ADDITIONAL BENEFITS YOU MAY GET BY RIDER. Your policy can include additional
benefits that we approve based on our standards for issuing insurance and
classifying risks. An additional benefit requires an additional premium. An
additional benefit is provided by a rider that is subject to the terms of the
policy. The following riders are available.
o WAIVER OF PREMIUM RIDER. With this rider, we will waive the premium if the
insured person becomes totally disabled and the disability continues for six
months. The disability must start before the policy anniversary nearest the
insured's 60th birthday. If disability starts after that, we will waive the
premium only up to the policy anniversary nearest the insured's 65th birthday.
o ACCIDENTAL DEATH BENEFIT RIDER. With this rider, we will pay a benefit if the
insured dies from an accidental bodily injury before the policy anniversary
nearest his or her 70th birthday.
o OPTION TO PURCHASE ADDITIONAL INSURANCE RIDER. With this rider, you have the
right to buy additional insurance on the life of the insured at certain future
dates. We will not require evidence of the insured's insurability when you use
your right to buy additional insurance.
o SUPPLEMENTAL PROTECTIVE BENEFIT RIDER. With this rider, we will waive the
premium if the insured is a child under age 15 on the date of issue and:
the person who applied for the policy dies; or
the person who applied for the policy is totally disabled for at least six
months before the policy anniversary nearest his or her 60th birthday.
We will waive the premium only while the disability continues. In any case, we
will not waive the premium that is due after the policy anniversary nearest the
insured's 25th birthday.
o TERM INSURANCE RIDER. Several types of riders are available that provide for
term insurance on the life of the insured or an additional insured.
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22
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ADDITIONAL
INFORMATION ABOUT
THE CHAMPION
(continued)
BENEFICIARY. You name your beneficiary when you apply for your policy. You may
change the beneficiary during the insured's lifetime by writing to your regional
Life Insurance Center. If no beneficiary is living when the insured dies, the
Death Benefit will be paid in equal shares to the insured's surviving children.
If there is no surviving child, the Death Benefit will be paid to the insured's
estate.
ASSIGNMENT. You may assign the policy as collateral for a loan or other
obligation. We are not responsible for any payment we make or action we take
before we receive a copy of the assignment at your regional Life Insurance
Center.
PREMIUM PAYMENTS BY SALARY ALLOTMENT. If your employer permits you to pay
insurance premiums by deduction from your salary, and you choose to do so, we
may offer you temporary fixed insurance in the amount applied for (subject to a
maximum of $250,000). This insurance will be without charge (except that a
premium will be deducted from any fixed death benefit). Once we receive the
first payment from your employer, the fixed insurance will be discontinued and
The Champion policy will begin.
EMPLOYEE BENEFIT PLANS. Employers and employee organizations should consider, in
consultation with counsel, the impact of Title VII of the Civil Rights Act of
1964 on the purchase of The Champion in connection with an employment-related
insurance or benefit plan. The United States Supreme Court held, in a 1983
decision, that, under Title VII, optional annuity benefits under a deferred
compensation plan could not vary on the basis of sex.
YOU WILL RECEIVE PERIODIC REPORTS. As a policyowner, you will receive an annual
statement about your policy giving you the status as of the first day of the
current policy year of:
o the way the net annual premium is divided among the divisions of the Separate
Account;
o the Death Benefit;
o the Account Value and Cash Surrender Value; and
o your outstanding policy loans.
Notice will also be sent to your for policy issuance, transfers of funds among
divisions of the Separate Account and certain other policy transactions.
We will not send you an annual statement for any year your policy is in effect
under extended term insurance or reduced paid-up fixed insurance.
You will receive a billing notice each year showing accrued interest for the
past policy year if you have a policy loan outstanding.
We will also send you semiannual and annual reports with financial information
on the Separate Account and the Trust (including a list of the investments held
by each Portfolio in which the divisions of the Separate Account invest) as
required by the 1940 Act.
DIVIDENDS. No dividends will be paid on The Champion policy.
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23
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PART 4 -- ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
TAX EFFECTS
POLICY PROCEEDS. The Tax Reform Act of 1984 (1984 Act) includes a definition of
life insurance for tax purposes. Generally, The Champion policy meets this
definition of life insurance and receives the same Federal income tax treatment
as fixed benefit life insurance. Thus:
o Death Benefits under The Champion policy will generally be excludable from the
gross income of the beneficiary under Section 101(a)(1) of the Internal
Revenue Code (Code) and
o the policyowner will not generally be considered to have received any
increases in the Account Value due to interest or investment experience before
a surrender or lapse of the policy.
In general, if you surrender your policy or allow it to lapse, you will not be
taxed on the amount you receive, except for the portion that, together with any
unpaid loan and loan interest, exceeds the premiums you have paid.
A split of the policy into two policies followed by a return of one for cash, or
an exchange referred to under "Your Right To Exchange The Policy" in Part 3, may
result in taxable income to the policyowner depending on the circumstances. We
suggest you consult your tax adviser.
The 1984 Act also gives the Secretary of the Treasury authority to set standards
for diversification of the investments underlying variable life insurance
policies in order for such policies to be treated as life insurance. On
September 15, 1986, Treasury issued temporary regulations regarding the
diversification requirements. Failure to meet these diversification requirements
would disqualify The Champion as a variable life insurance policy under Section
7702 of the Code. If this were to occur, you would be taxed on the amount your
Account Value exceeds the premiums you have paid. We believe that the
investments underlying The Champion are in compliance with the requirements. We
do not anticipate any problems with the investments continuing to meet the
requirements.
You will not be taxed on amounts transferred among investment choices within
your Policy Account. We also believe that loans received under the policies will
be treated as indebtedness of the policyowner, and that no part of any loan
under a policy will constitute income to the owner. Generally, a portion of the
interest on loans under life insurance policies (other than single premium
policies) is deductible subject to certain limitations. For future years, most
policy loan interest will no longer be deductible. See "Tax Reform" below.
Death Benefits under The Champion policy will generally be includable in the
estate of the insured for purposes of Federal estate tax. Federal estate tax is
integrated with Federal gift tax under a unified gift rate schedule. Federal
estate tax is imposed on distributions at graduated rates from 37% to 55% (with
the maximum rate applying to distributions in excess of $3,000,000). In general,
estates not in excess of $600,000 are exempt from Federal estate tax. In
addition, an unlimited marital deduction applies for Federal estate tax
purposes.
The individual situation of each policyowner or beneficiary will determine how
ownership or receipt of policy proceeds will be treated for purposes of Federal
estate tax as well as state and local estate, inheritance and other taxes.
Again, we suggest you consult your tax adviser.
See the prospectus for the Trust for a discussion of the Trust's tax aspects,
including the diversification requirements.
PENSION AND PROFIT-SHARING PLANS. If policies are purchased by a trust which
forms part of a pension or profit sharing plan qualified under Section 401(a) of
the Code for the benefit of participants covered under the plan, the Federal
income tax treatment of such policies will be somewhat different from that
described above. We suggest you consult your legal or tax adviser.
If purchased as part of a pension or profit-sharing plan, the current cost of
insurance for the net amount at risk is treated as a "current fringe benefit"
and is required to be included annually in the plan participant's gross income.
This cost (generally referred to as the "P.S. 58" cost) is reported to the
participant annually as an addition to wages and salaries on the Form W-2
furnished by the employer who is maintaining the plan.
Second, if the plan participant dies while covered by the plan and the policy
proceeds are paid to the participant's beneficiary, then the excess of the Death
Benefits over the Account Value will not be subject to Federal income tax.
However, the Account Value will be taxable to the extent it exceeds the sum of
$5,000 plus the participant's cost basis in the policy. The participant's cost
basis will include the costs of insurance previously reported on the
participant's Form W-2. Special rules may apply if the participant had borrowed
from his policy or was an owner-employee under the plan.
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24
<PAGE>
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There are limits on the amount of life insurance that may be purchased on behalf
of a participant in a pension or profit-sharing plan. Complex rules, in addition
to those discussed above, apply whenever life insurance is purchased by a tax
qualified plan. We suggest you consult your legal or tax adviser prior to
purchase of this policy by a pension or profit-sharing plan.
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TAX EFFECTS
(continued)
OUR INCOME TAXES. Under the life insurance company tax provisions of the Code,
as amended by the 1984 Act, variable life insurance is treated in a manner
consistent with fixed life insurance. The operations of the Separate Account are
included in the Federal income tax return of Equitable Variable. Under current
tax law, Equitable Variable pays no tax on investment income and capital gains
reflected in variable life insurance policy reserves. Consequently, no charge is
currently being made to the divisions of the Separate Account for our Federal
income taxes. We reserve the right, however, to make such a charge in the
future, if the law changes and we incur Federal income tax which is attributable
to the Separate Account. If such a charge is made, it would be set aside as a
provision for taxes which we would keep in the affected Division rather than in
our general account. We anticipate that our variable life policyowners will
benefit from any investment earnings that are not needed to maintain this
provision.
We may have to pay state and local taxes (in addition to premium taxes) in
several states. At present, these taxes are not substantial. If they increase,
however, charges may be made for such taxes when they are attributable to the
Separate Account.
TAX REFORM. Under the Tax Reform Act of 1986, the deduction for policy loan
interest is being phased out over a five year period (35% of such interest would
not be deductible in 1987, 60% in 1988, 80% in 1989, 90% in 1990 and 100% in
1991). Interest on loans taken under policies purchased or carried as part of a
trade or business is subject to special rules.
INCOME TAX WITHHOLDING. Federal tax law requires us to withhold income tax from
any portion of your surrender proceeds that is subject to tax, unless you
request us not to withhold.
If you surrender your policy and do not advise us in writing that you do not
want us to withhold Federal income tax before the date payment must be made, we
are required by law to withhold tax from the surrender payment.
If you elect not to have tax withheld from the surrender payment, or if the
mount of Federal income tax withheld is insufficient, you may be responsible for
payment of tax. You may incur penalties under the tax rules if your withholding
and estimated tax payments are not sufficient. You may wish to consult you tax
adviser.
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YOUR VOTING
PRIVILEGES
GENERAL. As we have already said, all assets held in the divisions of the
Separate Account are invested in shares of the corresponding Portfolios of the
Trust. We are the legal owners of those shares and as such have the right to
vote upon certain matters at any meeting of the Trust's shareholders that may be
held. Among other things, we may vote on any matters described in the Trust's
prospectus or Statement of Additional Information that require a shareholder
vote or requiring a vote by shareholders under the Investment Company Act of
1940.
However, in accordance with our view of current Federal securities law
requirements, we will offer you the opportunity to instruct us as to how Trust
shares allocable to your policy and held by us in the Separate Account will be
voted on these matters. We will vote the shares of the Trust at meetings of
shareholders of the Trust in accordance with your instructions. Thus, you will
have the right to have a voice in the affairs of the Trust. Trust shares held in
each division of the Separate Account for which no timely instructions from
policyowners are received will be voted by us in the same proportion as shares
in that division for which instructions are received. We will also vote any
Trust shares that we are entitled to vote directly due to amounts we have
accumulated in the Separate Account in the same proportions that all
policyowners vote, including those who participate in other Separate Accounts.
See "Your Voting Privileges -- Voting Privileges of Others".
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25
<PAGE>
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YOUR VOTING
PRIVILEGES
(continued)
Each policy having a voting interest will be sent proxy material and a form for
giving voting instructions. If required by state insurance officials, we may
disregard voting instructions if those instructions would require shares to be
voted so as to cause a change in the investment objectives or policies of one or
more of the Trust's Portfolios, or to approve or disapprove an investment policy
or investment adviser of one or more of the Trust's Portfolios. In addition, we
may disregard voting instructions in favor of changes initiated by a policyowner
or the Trust's Board of Trustees in the investment policy or the investment
adviser of a Portfolio, provided that our disapproval of the change is
reasonable and is based on a good faith determination that the change would be
contrary to state law, the proposed advisory fee would be higher than we are
permitted to pay by the terms of our variable life policies, or the charge would
lead to an adverse effect on our general account because it would result in
unsound or overly speculative investments. We will advise policyowners if we do
disregard voting instructions, and give our reasons for such actions in the next
semiannual report we send to policyowners.
All Trust shares of whatever class are entitled to one vote, and the votes of
all classes are cast on an aggregate basis, except on matters where the
interests of the Portfolios differ. In such a case, the voting is on a
Portfolio-by-Portfolio basis. Approval or disapproval by the shareholders in one
Portfolio on such a matter would not generally be a prerequisite of approval or
disapproval by shareholders in another Portfolio; and shareholders in a
Portfolio not affected by a matter generally would not be entitled to vote on
that matter. Examples of matters which would require a Portfolio-by-Portfolio
vote are changes in the fundamental investment policy or restrictions of a
particular Portfolio and approval of the investment advisory agreement.
VOTING PRIVILEGES OF OTHERS. Currently, we control the Trust. Trust shares are
held by other separate accounts of ours and by separate accounts of insurance
companies affiliated or unaffiliated with us. Shares held by these separate
accounts will probably be voted according to the instructions of the owners of
insurance policies and contracts issued by those insurance companies. While this
will dilute the effect of the voting instructions of owners of The Champion, we
currently do not foresee any disadvantages to our policyowners arising out of
this. The Trust's Board of Trustees intends to monitor events in order to
identify any material irreconcilable conflicts that possibly may arise and to
determine what action, if any, should be taken in response. If we believe that
the Trust's response to any of those events insufficiently protects our
policyowners, we will see to it that appropriate action is taken to protect our
policyowners.
DETERMINING YOUR VOTE. If all your Account Value is in one division of the
Separate Account, you can only participate in the voting of the shares in the
Portfolio that corresponds to that division. If your Account Value is divided
among the divisions, you are entitled to participate in the voting of the shares
of each of the Portfolios which correspond to those divisions.
The number of Trust shares held in each division of the Separate Account
attributable to your policy for purposes of your voting privilege will be
determined by dividing your policy's Account Value (less any policy
indebtedness) allocable to that division by the net asset value of one share of
the corresponding Portfolio as of the record date for the Trust's shareholder
meeting. The record date for this purpose will not be more than 90 days before
the meeting of the Trust. Fractional shares are counted.
EXAMPLE: Your policy has an Account Value of $3,000, 50% of which is
attributable to the Common Stock Division and 50% of which is attributable to
the Money Market Division. Assuming the net asset value of one share in each
Trust Portfolio is $100, you would have the privilege of voting 30 shares. You
will have the privilege of instructing us regarding 15 votes in each of these
divisions.
EXAMPLE (ASSUMING AN OUTSTANDING LOAN): Assuming the same facts as in the
preceding example and also that you have a $1,000 loan (including interest)
equally allocated between the Common Stock and Money Market Divisions, you would
be entitled to 10 votes in each of these Divisions, or an aggregate of 10 fewer
votes.
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26
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YOUR VOTING
PRIVILEGES
(continued)
LAW CHANGES MAY AFFECT YOUR VOTING PRIVILEGES. The Separate Account is required
by Federal securities laws or regulations as currently interpreted to have
policyowners instruct us as to the Trust's voting rights. However, if amendments
to or interpretations of those laws or regulations change what must be voted on,
or restrict the matters for which policyowners are given the opportunity to
provide voting instructions, we will in turn change what is submitted to
policyowners.
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OUR RIGHTS
We reserve the right to take certain actions in connection with our operations
and the operations of the Separate Account. We will always attempt to comply
with applicable laws before we take any of these actions. If necessary, we will
seek approval by policyowners.
Specifically, we reserve the right to:
o add divisions to or remove divisions from the Separate Account;
o combine any two or more divisions within the Separate Account;
o transfer assets of the variable life policy offered by this prospectus, as
well as the assets of our other variable life policies, from one division to
another (if we do, we will withdraw proportional amounts of each investment in
the division, but we will also make whatever adjustments are needed to avoid
odd lots and fractions);
o operate the Separate Account as a management investment company under the 1940
Act, or in any other form the law allows (if we do, we may invest the assets
in any legal investments and we or one of our affiliates, such as Equitable
Capital, will serve as investment adviser and charge the Separate Account an
advisory fee);
o end the registration of the Separate Account under the 1940 Act;
o operate the Separate Account under the general supervision of a committee made
up of individuals all of whom may be, under the 1940 Act, interested persons
of us or of Equitable or discharge such committee.
SUBSTITUTION OF TRUST SHARES. Although we believe it to be highly unlikely, it
is possible that, in our judgment, one or more of the Portfolios of the Trust
may become unsuitable for investment by the Separate Account because, for
example, of a change in investment policy, or a change in the tax laws, or
because the shares are no longer available for investment. For those or other
reasons, we may seek to substitute the shares of another Portfolio or of an
entirely different mutual fund. Before we can do this, we would obtain the
approval of the SEC, and possibly one or more state insurance departments, to
the extent legally required.
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SALES AND OTHER
AGREEMENTS
Equitable Variable and Integrity Life Insurance Company, a wholly-owned
subsidiary of Equitable, are the principal underwriters for the Trust pursuant
to a Distribution Agreement. Under the Distribution Agreement, we have entered
into a Sales Agreement with Equitable by which Equitable will distribute our
policies.
Both Equitable Variable and Equitable are registered with the SEC as
broker-dealers under the Securities Exchange Act of 1934 and we are each a
member of the National Association of Securities Dealers, Inc. We are also the
principal underwriter for our policies funded through our Separate Account I and
our other policies funded through our Separate Account FP, which is also a
registered investment company. (Equitable may also be deemed a principal
underwriter for our policies.)
SALES BY AGENTS OF EQUITABLE. We sell The Champion policy through agents who are
licensed by state insurance officials to sell our variable life policies. These
agents are also registered representatives of Equitable.
Under the Sales Agreement, agents receive commissions from Equitable for selling
our policies. We reimburse Equitable for these commissions. We also reimburse
Equitable for other expenses incurred in marketing and selling our policies.
These expenses include agency and district managers' compensation, agents'
training allowance, deferred compensation, insurance benefits of agents and
agency and district managers, and agency clerical and advertising expenses.
- --------------------------------------------------------------------------------
27
<PAGE>
- --------------------------------------------------------------------------------
SALES AND OTHER
AGREEMENTS
(continued)
COMMISSION SCHEDULE. Agents receive the equivalent of up to 50% of the premium
payable in the first policy year. In the second policy year, agents receive up
to 10% of the premium paid for that year. In the third, fourth and fifth policy
years, agents receive up to 8% of the premium paid in each year. In the sixth
through tenth policy years, agents receive up to 5% of the premium paid in each
year. After that, agents receive up to 2% of the premium paid in each year.
Agents with less than three full years of service with Equitable may be paid
differently.
Agents who meet certain production and persistency standards in selling our
policies and Equitable policies will be eligible for added compensation. Agents
who meet certain lifetime production standards will be eligible to receive
increased fees for servicing our policies. Agents also are eligible for added
compensation for servicing our policies when there is no assigned soliciting
agent.
SALES BY BROKERS. We also sell The Champion policy through independent brokers
who are licensed by state insurance officials to sell our variable life
policies. They will also be registered representatives either of Equitable or of
another company registered with the SEC as a broker-dealer under the Securities
Exchange Act of 1934. The commissions for independent brokers will be no more
than those for agents. Commissions will be paid through the registered
broker-dealer.
APPLICATIONS. When an application for The Champion policy is completed, it is
submitted to us. Based on the information in the application and our standards
for issuing insurance and classifying risks, a policy may be issued. If a policy
is not issued, we will refund any premium that has been paid. (Equitable
guarantees the refund.)
JOINT SERVICES AGREEMENT. In addition to acting as distributor for The Champion
policy, Equitable performs certain other sales and administrative duties for us.
Equitable does this pursuant to a written agreement. The agreement is
automatically renewed each year, unless either party terminates.
Under this agreement, we pay Equitable for salary costs and other services and
an amount for indirect costs incurred through our use of Equitable personnel and
facilities. We also reimburse Equitable for sales expenses related to business
other than variable life policies. The amounts paid or accrued to Equitable by
us under sales and joint services agreements totalled approximately $249.4
million in 1986, $225.7 million in 1985 and $164.8 million in 1984.
- --------------------------------------------------------------------------------
REGULATION
We are regulated and supervised by the New York State Insurance Department. In
addition, we are subject to insurance laws and regulations in every jurisdiction
where we sell our policies. We submit annual reports on our operations and
finances to insurance officials in these jurisdictions. The officials are
responsible for reviewing our reports to be sure we are financially sound and
that we are complying with applicable laws and regulations.
The Champion has been approved in each of the 50 states, Puerto Rico and the
Virgin Islands.
We are also subject to various Federal securities laws and regulations.
- --------------------------------------------------------------------------------
LEGAL PROCEEDINGS
We are not involved in any material legal proceedings.
- --------------------------------------------------------------------------------
LEGAL MATTERS
The legal validity of the policies described in this prospectus has been passed
on by Herbert P. Shyer, who is Executive Vice President and General Counsel of
Equitable.
The Washington, D.C. law firm of Freedman, Levy, Kroll & Simonds has advised
Equitable Variable with respect to certain matters relating to Federal
securities laws.
- --------------------------------------------------------------------------------
28
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL AND
ACTUARIAL EXPERTS
The financial statements of the Separate Account and of Equitable Variable in
this prospectus have been examined by the accounting firm of Deloitte Haskins &
Sells, our independent auditors, to the extent stated in their opinions, and
their opinions on them are part of this prospectus. We have relied on the
opinions of Deloitte Haskins & Sells given upon their authority as experts in
accounting and auditing.
Actuarial matters in this prospectus have been examined by Joseph O. North, Jr.,
F.S.A., M.A.A.A., who is Vice President and Actuary of Equitable Variable and a
Vice President and Actuary of Equitable. His opinion on actuarial matters is
filed as an exhibit to the Registration Statement we filed with the SEC.
- --------------------------------------------------------------------------------
ADDITIONAL
INFORMATION
We have filed with the SEC a Registration Statement relating to the Separate
Account and the variable life policy described in this prospectus. The
Registration Statement, which is required by the Securities Act of 1933,
includes additional information that is not required in this prospectus under
the rules and regulations of the SEC. If you would like the additional
information, you may obtain copies of that document from the SEC's main office
in Washington, D.C. You will have to pay a fee for the material.
- --------------------------------------------------------------------------------
MANAGEMENT
Here is a list of our directors and officers and a brief statement of their
business experience for the past five years. Unless otherwise noted, the
following persons have been involved in the management of Equitable and its
subsidiaries in various positions for the last five years. Unless otherwise
noted, their address is 787 Seventh Avenue, New York, New York 10019.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Harry Douglas Garber...................... Vice Chairman of the Board, Equitable, since February 1984; prior thereto, Executive
Vice President and Chief Financial Officer. Director, Equitable Investment Corporation
(EIC) and Genesco, Inc. Former Chairman and Chief Executive Officer, Equitable Variable.
Glenn Howard Gettier, Jr. ................ Executive Vice President and Chief Financial Officer, Equitable, since December 1984;
prior thereto, Partner, Peat, Marwick, Mitchell & Co.
Richard Hampton Jenrette.................. Vice Chairman, Chief Investment Officer and Director, Equitable. Chairman, Donaldson,
Lufkin and Jenrette, Inc., since February 1985; prior thereto, Chairman and Chief
Executive Officer. Director, Equitable Capital Management Corporation (Equitable
Capital) and various other Equitable subsidiaries.
William Thomas McCaffrey.................. Executive Vice President, Equitable, since March 1986; prior thereto, various other
Equitable positions.
Francis Helmut Schott..................... Senior Vice President and Chief Economist, Equitable.
Leo Martin Walsh, Jr. .................... Senior Executive Vice President, Director and Chief Operating Officer, Equitable, since
July 1986; prior thereto, Executive Vice President, Director and Chief Investment
Officer. Chairman, EIC since July 1986; prior thereto, President and Chief Executive
Officer. Director, Equitable Capital and various other Equitable subsidiaries.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Peter Rawlinson Wilde..................... Executive Vice President, Equitable, since July 1984. Director, Integrity Life
Insurance Company (Integrity) and National Integrity Life Insurance Company (National
Integrity). Chairman and Chief Executive Officer, Equitable Variable, from November
1984 to December 1986. Chief Financial Officer, CIGNA Corporation, from April 1983 to
June 1984; prior thereto, Senior Vice President.
Brian Fredrick Wruble..................... Chairman, President and Chief Executive Officer, Equitable Capital. Executive Vice
President, Equitable, since September 1984; prior thereto, various other Equitable
positions.
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICER -- DIRECTORS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Robert Wayne Barth........................ Chairman and Chief Executive Officer, Equitable Variable, since December 1986;
President and Chief Operating Officer, from December 1985 to December 1986. Executive
Vice President, Equitable, since June 1985; Senior Vice President since September 1984;
prior thereto, Vice President since April 1984.
Thomas Michael Kirwan..................... President and Chief Operating Officer, Equitable Variable, since December 1986.
Executive Vice President and Chief Financial Officer, EIC, since March 1985; prior
thereto, President, Columbia Group -- CBS, Inc. Director, Equitable Capital and various
other Equitable subidiaries.
Robert Seymour Jones...................... Senior Vice President, Equitable Variable, since February 1986. Senior Vice President,
Equitable, since June 1985; prior thereto, Vice President.
Michael Searle Martin..................... Senior Vice President, Equitable Variable, since February 1986. Senior Vice President,
Equitable, since June 1985; prior thereto, Vice President.
Stanley Julian Rispler.................... Senior Vice President, Equitable Variable, since February 1986. Senior Vice President,
Equitable, since October 1984; prior thereto, Vice President.
Samuel Barry Shlesinger................... Senior Vice President and Actuary, Equitable Variable, since February 1986. Senior Vice
President and Actuary, Equitable; prior thereto Vice President and Actuary.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
James Thomas Liddle, Jr. ................. Senior Vice President and Chief Financial Officer, Equitable Variable, since February
1986. Vice President and Actuary, Equitable.
Richard Marshall Stenson.................. Senior Vice President, Equitable Variable, since December 1981. Senior Vice President,
Equitable, since October 1984; prior thereto, Vice President and Actuary, Integrity.
William Arnold Canfield................... Vice President and Chief Underwriting Officer, Equitable Variable. Vice President,
2 Penn Plaza Equitable.
New York, New York 10121
Franklin Kennedy, III..................... Vice President, Equitable Variable, since August 1981. Senior Vice President, Equitable
1221 Avenue of the Americas Capital since January 1987. Managing Director and Chief Investment Officer, Equitable
New York, New York 10020 Investment Management Corporation, from November 1983 to January 1987. Vice President,
Equitable.
Donald Anthony King....................... Vice President, Equitable Variable, since February 1986. Vice President, Integrity,
1285 Avenue of the Americas since April 1984. Vice President, Equitable, since January 1976. Executive Vice
New York, New York 10020 President, Equitable Capital.
Joseph Oswell North, Jr. ................. Vice President and Actuary, Equitable Variable, since February 1984. Vice President and
2 Penn Plaza Actuary, Equitable, since October 1984; prior thereto, Assistant Vice President and
New York, New York 10121 Actuary, since April 1982.
Stephen Anthony Scarpati.................. Vice President and Controller, Equitable Variable, since June 1986. Vice President,
2 Penn Plaza Equitable, since December 1985. Vice President and Controller, EIC, from November 1984
New York, New York 10121 to December 1985; prior thereto, Division Controller, Colgate-Palmolive Company.
Larry Kenneth Mills....................... Treasurer, Equitable Variable, Integrity and National Integrity, since February 1986.
Vice President and Treasurer, Equitable, since March 1986; prior thereto, Vice
President.
Theodore Edward Plucinski, M.D. .......... Chief Medical Director, Equitable Variable, Integrity and National Integrity. Chief
2 Penn Plaza Medical Director, Equitable since September 1985; prior thereto, Chief Medical
New York, New York 10121 Director, MONY.
Kevin Brian Keefe......................... Secretary, Equitable Variable, Integrity, National Integrity and The Hudson River
Trust, Vice President and Assistant Secretary, Equitable, since June 1986; prior
thereto, Assistant Vice President and Assistant Secretary.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
31
<PAGE>
- --------------------------------------------------------------------------------
PART 5 -- ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER
VALUES, AND ACCUMULATED PREMIUMS
To help you get a picture of how the key financial elements of our policy work,
we have prepared a series of tables.
The tables show how Death Benefits, Account Values and Cash Surrender Values of
policies with premiums of $300, $500, $1,000 (for policies with face amounts
under $200,000) and $1,000, $2,000, and $4,000 (for policies with face amounts
at least $200,000) could vary over an extended period of time if the divisions
of the Separate account had CONSTANT hypothetical gross annual investment
returns of 0%, 4%, 8% or 12% over the years covered by each table. The Death
Benefits, Account Values and Cash Surrender Values would differ from those shown
in the tables if the annual investment returns did not remain absolutely
constant. Thus, the figures would be different if the return AVERAGED 0%, 4%, 8%
or 12% over a period of years but went above or below those figures in
individual policy years. The Death Benefits, Account Values and Cash Surrender
Values would also differ, depending on the investment allocations made to the
divisions, if the actual rates of investment return averaged 0%, 4%, 8% or 12%,
but went above or below those figures for individual divisions. The tables are
for standard policies. The difference between the Account Value and the Cash
Surrender Value in the first ten years is the surrender charge.
The Account Values and Cash Surrender Values in the tables are related to the
annual premiums shown in "Premiums -- Illustration of Premium Rates" in Part 3.
The amounts of Death Benefits, Account Values and Cash Surrender Values shown in
the tables for the end of each policy year take into account a daily charge
against each division of the Separate Account that is equivalent to an annual
charge of 0.75% at the beginning of each year. This charge is the 0.50% charge
against the Separate Account for mortality and expense risks and a 0.25% charge
for investment advisory services. The effect of these adjustments is that on a
0% actual rate of return the net rate of return would be -0.75%, on 4% it would
be 3.22%, on 8% it would be 7.19% and on 12% it would be 11.16%.
The hypothetical returns shown in the tables do not reflect any charges for
Trust expenses in addition to the 0.25% investment advisory fee charge, because
the divisions of the Separate Account will generally be reimbursed for such
expenses. See "The Trust's Investment Adviser" in Part 2.
The tables reflect the fact that we do not currently charge the divisions of the
Separate Account for Federal income tax. However, if we do make such a charge in
the future, it would take a higher rate of return to produce after-tax returns
of 0%, 4%, 8% or 12% than it does now.
The second and third columns of each table show what would happen if an amount
equal to the total premium were invested to earn interest, after taxes, of 4% or
5% compounded annually. These tables show that if a policy is returned in its
very early years for payment of its Cash Surrender Value, the Cash Surrender
Value will be low in comparison to the premium accumulated with interest. This
means that the cost of owning your policy for a relatively short time will be
high.
If you request, we will furnish you with a comparable illustration based on the
proposed insured's sex and age and an initial face amount or premium amount of
your choice. A specific illustration will assume that the insured is a standard
risk and that the premium will be paid on an annual basis. In addition, if you
do purchase a policy, we will deliver a specific illustration that reflects how
the premium will actually be paid and to what risk class the insured has been
assigned.
We have also prepared special illustrations showing the effects of policy loans
on a planned basis. These are available on request.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
OF ILLUSTRATIONS
Page
----
$ 300 annual premium Male Age 10 33
$ 500 annual premium Male Age 25 34
$1,000 annual premium Male Age 40 35
$1,000 annual premium Male Age 10 36
$2,000 annual premium Male Age 25 37
$4,000 annual premium Male Age 40 38
The first three illustrations show values based on policies with face amounts
under $200,000 and the second three for policies with face amounts at least
$200,000.
- --------------------------------------------------------------------------------
32
<PAGE>
THE CHAMPION
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
VARIABLE WHOLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $52,739
(GUARANTEED MINIMUM DEATH BENEFIT) MALE AGE 10 ANNUAL PREMIUM $300(2)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
DEATH BENEFIT(1)
PREMIUMS(2) ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY -------------------------- ------------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 312 $ 315 $52,739 $52,739 $ 52,761 $ 52,793
2 636 646 52,739 52,739 52,838 52,985
3 974 993 52,739 52,739 52,968 53,319
4 1,325 1,358 52,739 52,739 53,152 53,796
5 1,690 1,741 52,739 52,739 53,387 54,420
6 2,070 2,143 52,739 52,739 53,673 55,193
7 2,464 2,565 52,739 52,739 54,006 56,118
8 2,875 3,008 52,739 52,739 54,388 57,199
9 3,302 3,473 52,739 52,739 54,816 58,441
10 3,746 3,962 52,739 52,739 55,291 59,849
11 4,208 4,475 52,739 52,739 55,811 61,431
12 4,688 5,014 52,739 52,739 56,377 63,197
13 5,188 5,580 52,739 52,739 56,991 65,155
14 5,707 6,174 52,739 52,739 57,651 67,316
15 6,247 6,797 52,739 52,739 58,360 69,694
16 6,809 7,452 52,739 52,739 59,117 72,298
17 7,394 8,140 52,739 52,739 59,924 75,144
18 8,001 8,862 52,739 52,739 60,782 78,245
19 8,633 9,620 52,739 52,739 61,690 81,617
20 9,291 10,416 52,739 52,739 62,651 85,275
55 (Age 65) 59,642 85,905 52,739 52,739 135,015 640,103
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(1) CASH SURRENDER VALUE(1)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
- ------------------------------------------------------- -------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
- ------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 38 $ 41 $ 44 $ 47 $ 0 $ 0 $ 2 $ 5
232 246 261 275 153 168 183 197
419 453 487 523 322 355 390 426
599 659 723 792 485 545 609 677
769 864 967 1,081 639 734 837 950
929 1,066 1,219 1,392 789 926 1,079 1,252
1,080 1,266 1,480 1,728 935 1,120 1,335 1,583
1,223 1,464 1,751 2,091 1,098 1,339 1,626 1,966
1,360 1,663 2,035 2,488 1,289 1,593 1,965 2,418
1,494 1,866 2,335 2,922 1,494 1,866 2,335 2,922
1,625 2,074 2,654 3,401 1,625 2,074 2,654 3,401
1,757 2,289 2,995 3,931 1,757 2,289 2,995 3,931
1,891 2,513 3,361 4,518 1,891 2,513 3,361 4,518
2,028 2,747 3,755 5,172 2,028 2,747 3,755 5,172
2,165 2,990 4,178 5,896 2,165 2,990 4,178 5,896
2,307 3,245 4,635 6,702 2,307 3,245 4,635 6,702
2,450 3,510 5,126 7,597 2,450 3,510 5,126 7,597
2,596 3,787 5,653 8,591 2,596 3,787 5,653 8,591
2,742 4,074 6,217 9,692 2,742 4,074 6,217 9,692
2,889 4,371 6,822 10,912 2,889 4,371 6,822 10,912
5,619 17,920 74,624 362,630 5,619 17,920 74,624 362,630
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE
ILLUSTRATION TABLE ABOVE:]
<FN>
(1) Assumes no policy loan has been made.
(2) If premiums are paid more frequently than annually the payments would be
$153 semi-annually, $77 quarterly or $27 monthly. The Death Benefits,
Account Values and Cash Surrender Values shown would not be affected by the
more frequent premium payments, nor would such amounts be affected by the
insured's risk classification.
</FN>
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
33
<PAGE>
THE CHAMPION
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
VARIABLE WHOLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $53,427
(GUARANTEED MINIMUM DEATH BENEFIT) MALE AGE 25 ANNUAL PREMIUM $500(2)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
DEATH BENEFIT(1)
PREMIUMS(2) ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY -------------------------- ------------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 520 $ 525 $53,427 $53,427 $53,471 $53,537
2 1,061 1,076 53,427 53,427 53,570 53,787
3 1,623 1,655 53,427 53,427 53,725 54,184
4 2,208 2,263 53,427 53,427 53,936 54,734
5 2,816 2,901 53,427 53,427 54,202 55,444
6 3,449 3,571 53,427 53,427 54,524 56,322
7 4,107 4,275 53,427 53,427 54,902 57,374
8 4,791 5,013 53,427 53,427 55,337 58,608
9 5,503 5,789 53,427 53,427 55,826 60,031
10 6,243 6,603 53,427 53,427 56,372 61,653
11 7,013 7,459 53,427 53,427 56,974 63,481
12 7,813 8,356 53,427 53,427 57,631 65,526
13 8,646 9,299 53,427 53,427 58,344 67,797
14 9,512 10,289 53,427 53,427 59,112 70,307
15 10,412 11,329 53,427 53,427 59,936 73,066
16 11,349 12,420 53,427 53,427 60,815 76,087
17 12,323 13,566 53,427 53,427 61,750 79,384
18 13,336 14,770 53,427 53,427 62,741 82,971
19 14,389 16,033 53,427 53,427 63,788 86,864
20 15,485 17,360 53,427 53,427 64,890 91,079
40 (Age 65) 49,413 63,420 53,427 53,427 99,610 283,063
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(1) CASH SURRENDER VALUE(1)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
- ------------------------------------------------------- -------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
- ------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 160 $ 170 $ 180 $ 190 $ 56 $ 66 $ 76 $ 87
481 514 549 583 343 376 411 446
801 871 945 1,022 628 698 772 849
1,121 1,241 1,370 1,510 918 1,039 1,168 1,307
1,439 1,623 1,827 2,052 1,209 1,393 1,596 1,821
1,755 2,017 2,315 2,652 1,507 1,769 2,067 2,404
2,068 2,422 2,836 3,317 1,810 2,165 2,578 3,059
2,377 2,839 3,392 4,052 2,156 2,618 3,171 3,831
2,682 3,266 3,984 4,863 2,558 3,142 3,860 4,740
2,982 3,704 4,615 5,760 2,982 3,704 4,615 5,760
3,277 4,151 5,284 6,748 3,277 4,151 5,284 6,748
3,566 4,609 5,995 7,838 3,566 4,609 5,995 7,838
3,848 5,075 6,749 9,038 3,848 5,075 6,749 9,038
4,124 5,549 7,548 10,358 4,124 5,549 7,548 10,358
4,392 6,031 8,394 11,811 4,392 6,031 8,394 11,811
4,651 6,520 9,288 13,405 4,651 6,520 9,288 13,405
4,902 7,016 10,233 15,158 4,902 7,016 10,233 15,158
5,144 7,517 11,231 17,083 5,144 7,517 11,231 17,083
5,378 8,025 12,286 19,196 5,378 8,025 12,286 19,196
5,603 8,539 13,399 21,516 5,603 8,539 13,399 21,516
8,079 19,251 52,618 157,225 8,079 19,251 52,618 157,225
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE
ILLUSTRATION TABLE ABOVE:]
<FN>
(1) Assumes no policy loan has been made.
(2) If premiums are paid more frequently than annually the payments would be
$255 semi-annually, $129 quarterly or $44 monthly. The Death Benefits,
Account Values and Cash Surrender Values shown would not be affected by the
more frequent premium payments, nor would such amounts be affected by the
insured's risk classification.
</FN>
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
34
<PAGE>
THE CHAMPION
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
VARIABLE WHOLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $57,041
(GUARANTEED MINIMUM DEATH BENEFIT) MALE AGE 40 ANNUAL PREMIUM $1,000(2)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
DEATH BENEFIT(1)
PREMIUMS(2) ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY -------------------------- ------------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 1,040 $ 1,050 $57,041 $57,041 $57,111 $ 57,214
2 2,122 2,153 57,041 57,041 57,250 57,566
3 3,246 3,310 57,041 57,041 57,459 58,103
4 4,416 4,526 57,041 57,041 57,735 58,828
5 5,633 5,802 57,041 57,041 58,078 59,747
6 6,898 7,142 57,041 57,041 58,486 60,866
7 8,214 8,549 57,041 57,041 58,961 62,194
8 9,583 10,027 57,041 57,041 59,500 63,737
9 11,006 11,578 57,041 57,041 60,104 65,505
10 12,486 13,207 57,041 57,041 60,772 67,506
11 14,026 14,917 57,041 57,041 61,503 69,752
12 15,627 16,713 57,041 57,041 62,299 72,253
13 17,292 18,599 57,041 57,041 63,158 75,021
14 19,024 20,579 57,041 57,041 64,080 78,070
15 20,825 22,658 57,041 57,041 65,066 81,414
16 22,697 24,840 57,041 57,041 66,115 85,066
17 24,645 27,132 57,041 57,041 67,227 89,045
18 26,671 29,539 57,041 57,041 68,402 93,366
19 28,778 32,066 57,041 57,041 69,641 98,048
20 30,969 34,719 57,041 57,041 70,944 103,113
25 (Age 65) 43,312 50,114 57,041 57,041 78,433 134,982
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(1) CASH SURRENDER VALUE(1)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
- ------------------------------------------------------ -------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
- ------ ------- ------- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 521 $ 549 $ 577 $ 605 $ 305 $ 333 $ 361 $ 389
1,196 1,280 1,366 1,455 908 992 1,078 1,167
1,854 2,022 2,199 2,386 1,494 1,662 1,839 2,026
2,493 2,773 3,076 3,403 2,070 2,350 2,653 2,980
3,115 3,535 4,001 4,518 2,634 3,055 3,521 4,038
3,717 4,305 4,975 5,738 3,198 3,786 4,457 5,220
4,303 5,085 6,002 7,075 3,765 4,548 5,465 6,538
4,870 5,875 7,084 8,538 4,409 5,414 6,623 8,077
5,419 6,674 8,225 10,140 5,160 6,415 7,966 9,881
5,951 7,481 9,426 11,894 5,951 7,481 9,426 11,894
6,464 8,297 10,690 13,814 6,464 8,297 10,690 13,814
6,958 9,119 12,019 15,912 6,958 9,119 12,019 15,912
7,430 9,944 13,413 18,204 7,430 9,944 13,413 18,204
7,880 10,772 14,874 20,704 7,880 10,772 14,874 20,704
8,305 11,598 16,402 23,429 8,305 11,598 16,402 23,429
8,706 12,424 18,000 26,398 8,706 12,424 18,000 26,398
9,084 13,247 19,671 29,633 9,084 13,247 19,671 29,633
9,440 14,069 21,419 33,157 9,440 14,069 21,419 33,157
9,773 14,889 23,247 36,997 9,773 14,889 23,247 36,997
10,087 15,708 25,159 41,182 10,087 15,708 25,159 41,182
11,304 19,694 36,009 68,254 11,304 19,694 36,009 68,254
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE
ILLUSTRATION TABLE ABOVE:]
<FN>
(1) Assumes no policy loan has been made.
(2) If premiums are paid more frequently than annually the payments would be
$509 semi-annually, $257 quarterly or $87 monthly. The Death Benefits,
Account Values and Cash Surrender Values shown would not be affected by the
more frequent premium payments, nor would such amounts be affected by the
insured's risk classification.
</FN>
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
35
<PAGE>
THE CHAMPION
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
VARIABLE WHOLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $200,000
(GUARANTEED MINIMUM DEATH BENEFIT) MALE AGE 10 ANNUAL PREMIUM $1,000(2)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
DEATH BENEFIT(1)
PREMIUMS(2) ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY --------------------------- --------------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ -------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
1 $ 1,040 $ 1,050 $200,000 $200,000 $200,218 $ 200,542
2 2,122 2,153 200,000 200,000 200,642 201,612
3 3,246 3,310 200,000 200,000 201,268 203,226
4 4,416 4,526 200,000 200,000 202,094 205,398
5 5,633 5,802 200,000 200,000 203,114 208,138
6 6,898 7,142 200,000 200,000 204,324 211,458
7 8,214 8,549 200,000 200,000 205,718 215,368
8 9,583 10,027 200,000 200,000 207,292 219,888
9 11,006 11,578 200,000 200,000 209,042 225,034
10 12,486 13,207 200,000 200,000 210,966 230,830
11 14,026 14,917 200,000 200,000 213,066 237,310
12 15,627 16,713 200,000 200,000 215,340 244,506
13 17,292 18,599 200,000 200,000 217,792 252,456
14 19,024 20,579 200,000 200,000 220,422 261,204
15 20,825 22,658 200,000 200,000 223,236 270,796
16 22,697 24,840 200,000 200,000 226,234 281,280
17 24,645 27,132 200,000 200,000 229,420 292,710
18 26,671 29,539 200,000 200,000 232,798 305,142
19 28,778 32,066 200,000 200,000 236,370 318,636
20 30,969 34,719 200,000 200,000 240,140 333,254
55 (Age 65) 198,805 286,348 200,000 200,000 520,190 2,527,266
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(1) CASH SURRENDER VALUE(1)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
- --------------------------------------------------------- ---------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
- ------ ------- -------- ---------- ------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 620 $ 650 $ 680 $ 712 $ 404 $ 434 $ 464 $ 496
1,328 1,418 1,512 1,608 1,040 1,130 1,224 1,320
2,016 2,196 2,386 2,586 1,656 1,836 2,026 2,226
2,668 2,968 3,292 3,642 2,246 2,546 2,870 3,220
3,288 3,736 4,232 4,784 2,808 3,256 3,752 4,304
3,872 4,494 5,202 6,012 3,354 3,976 4,684 5,494
4,420 5,244 6,208 7,340 3,882 4,706 5,670 6,802
4,938 5,986 7,250 8,776 4,478 5,526 6,790 8,316
5,434 6,734 8,346 10,342 5,174 6,474 8,086 10,082
5,920 7,496 9,504 12,064 5,920 7,496 9,504 12,064
6,400 8,272 10,732 13,956 6,400 8,272 10,732 13,956
6,880 9,078 12,046 16,050 6,880 9,078 12,046 16,050
7,366 9,918 13,456 18,372 7,366 9,918 13,456 18,372
7,862 10,792 14,974 20,950 7,862 10,792 14,974 20,950
8,364 11,704 16,606 23,812 8,364 11,704 16,606 23,812
8,880 12,662 18,364 26,998 8,880 12,662 18,364 26,998
9,404 13,658 20,254 30,532 9,404 13,658 20,254 30,532
9,936 14,696 22,284 34,456 9,936 14,696 22,284 34,456
10,468 15,772 24,458 38,804 10,468 15,772 24,458 38,804
11,004 16,886 26,784 43,618 11,004 16,886 26,784 43,618
20,922 67,682 287,900 1,432,354 20,922 67,682 287,900 1,432,354
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE
ILLUSTRATION TABLE ABOVE:]
<FN>
(1) Assumes no policy loan has been made.
(2) If premiums are paid more frequently than annually the payments would be
$509 semi-annually, $257 quarterly or $87 monthly. The Death Benefits,
Account Values and Cash Surrender Values shown would not be affected by the
more frequent premium payments, nor would such amounts be affected by the
insured's risk classification.
</FN>
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
36
<PAGE>
THE CHAMPION
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
VARIABLE WHOLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $231,133
(GUARANTEED MINIMUM DEATH BENEFIT) MALE AGE 25 ANNUAL PREMIUM $2,000(2)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
DEATH BENEFIT(1)
PREMIUMS(2) ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY --------------------------- --------------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ -------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
1 $ 2,080 $ 2,100 $231,133 $231,133 $231,419 $ 231,842
2 4,243 4,305 231,133 231,133 231,941 233,164
3 6,493 6,620 231,133 231,133 232,702 235,129
4 8,833 9,051 231,133 231,133 233,703 237,764
5 11,266 11,604 231,133 231,133 234,944 241,099
6 13,797 14,284 231,133 231,133 236,425 245,165
7 16,428 17,098 231,133 231,133 238,150 249,993
8 19,166 20,053 231,133 231,133 240,114 255,616
9 22,012 23,156 231,133 231,133 242,319 262,072
10 24,973 26,414 231,133 231,133 244,765 269,394
11 28,052 29,834 231,133 231,133 247,450 277,627
12 31,254 33,426 231,133 231,133 250,377 286,810
13 34,584 37,197 231,133 231,133 253,543 296,989
14 38,047 41,157 231,133 231,133 256,950 308,213
15 41,649 45,315 231,133 231,133 260,595 320,535
16 45,395 49,681 231,133 231,133 264,480 334,007
17 49,291 54,265 231,133 231,133 268,606 348,694
18 53,342 59,078 231,133 231,133 272,972 364,656
19 57,556 64,132 231,133 231,133 277,581 381,965
20 61,938 69,439 231,133 231,133 282,432 400,694
40 (Age 65) 197,653 253,680 231,133 231,133 434,432 1,250,452
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(1) CASH SURRENDER VALUE(1)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
- ------------------------------------------------------- -------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
- ------ ------- -------- -------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1,238 $ 1,305 $ 1,370 $ 1,437 $ 797 $ 864 $ 929 $ 996
2,595 2,782 2,976 3,175 2,008 2,195 2,389 2,588
3,952 4,317 4,703 5,112 3,217 3,582 3,968 4,377
5,304 5,905 6,559 7,266 4,442 5,043 5,697 6,404
6,649 7,546 8,547 9,661 5,669 6,566 7,567 8,681
7,985 9,240 10,673 12,312 6,927 8,182 9,615 11,253
9,305 10,978 12,941 15,245 8,207 9,880 11,843 14,147
10,613 12,767 15,365 18,492 9,672 11,827 14,425 17,552
11,903 14,602 17,945 22,075 11,374 14,073 17,415 21,546
13,174 16,484 20,691 26,037 13,174 16,484 20,691 26,037
14,422 18,407 23,607 30,400 14,422 18,407 23,607 30,400
15,645 20,372 26,707 35,213 15,645 20,372 26,707 35,213
16,842 22,373 29,994 40,512 16,842 22,373 29,994 40,512
18,007 24,412 33,477 46,344 18,007 24,412 33,477 46,344
19,140 26,480 37,159 52,753 19,140 26,480 37,159 52,753
20,238 28,581 41,058 59,803 20,238 28,581 41,058 59,803
21,296 30,708 45,172 67,541 21,296 30,708 45,172 67,541
22,320 32,864 49,524 76,045 22,320 32,864 49,524 76,045
23,307 35,044 54,117 85,378 23,307 35,044 54,117 85,378
24,257 37,251 58,968 95,624 24,257 37,251 58,968 95,624
34,646 83,235 229,933 695,234 34,646 83,235 229,933 695,234
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE
ILLUSTRATION TABLE ABOVE:]
<FN>
(1) Assumes no policy loan has been made.
(2) If premiums are paid more frequently than annually the payments would be
$1,019 semi-annually, $515 quarterly or $173 monthly. The Death Benefits,
Account Values and Cash Surrender Values shown would not be affected by the
more frequent premium payments, nor would such amounts be affected by the
insured's risk classification.
</FN>
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
37
<PAGE>
THE CHAMPION
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
VARIABLE WHOLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $237,411
(GUARANTEED MINIMUM DEATH BENEFIT) MALE AGE 40 ANNUAL PREMIUM $4,000(2)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
DEATH BENEFIT(1)
PREMIUMS(2) ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY --------------------------- ------------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 4,160 $ 4,200 $237,411 $237,411 $237,757 $238,272
2 8,486 8,610 237,411 237,411 238,393 239,882
3 12,986 13,241 237,411 237,411 239,315 242,258
4 17,665 18,103 237,411 237,411 240,516 245,423
5 22,532 23,208 237,411 237,411 241,995 249,400
6 27,593 28,568 237,411 237,411 243,747 254,217
7 32,857 34,196 237,411 237,411 245,772 259,903
8 38,331 40,106 237,411 237,411 248,066 266,491
9 44,024 46,312 237,411 237,411 250,627 274,019
10 49,945 52,827 237,411 237,411 253,455 282,526
11 56,103 59,669 237,411 237,411 256,548 292,055
12 62,507 66,852 237,411 237,411 259,905 302,656
13 69,168 74,395 237,411 237,411 263,526 314,379
14 76,094 82,314 237,411 237,411 267,410 327,278
15 83,298 90,630 237,411 237,411 271,557 341,413
16 90,790 99,361 237,411 237,411 275,968 356,847
17 98,582 108,530 237,411 237,411 280,643 373,646
18 106,685 118,156 237,411 237,411 285,581 391,884
19 115,112 128,264 237,411 237,411 290,783 411,639
20 123,877 138,877 237,411 237,411 296,250 432,997
25 (Age 65) 173,247 200,454 237,411 237,411 327,643 567,305
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(1) CASH SURRENDER VALUE(1)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
- ------------------------------------------------------- -------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
- ------ ------- -------- -------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 2,727 $ 2,865 $ 3,003 $ 3,143 $ 1,837 $ 1,975 $ 2,112 $ 2,253
5,500 5,894 6,298 6,713 4,313 4,707 5,111 5,526
8,202 8,964 9,771 10,624 6,716 7,478 8,285 9,137
10,830 12,079 13,435 14,904 9,088 10,336 11,692 13,162
13,382 15,232 17,295 19,588 11,402 13,252 15,315 17,608
15,856 18,420 21,357 24,714 13,717 16,281 19,218 22,575
18,259 21,651 25,642 30,331 16,041 19,434 23,425 28,114
20,590 24,921 30,160 36,480 18,688 23,019 28,259 34,578
22,846 28,230 34,918 43,215 21,777 27,162 33,850 42,147
25,030 31,575 39,932 50,589 25,030 31,575 39,932 50,589
27,133 34,951 45,207 58,654 27,133 34,951 45,207 58,654
29,161 38,353 50,753 67,476 29,161 38,353 50,753 67,476
31,098 41,772 56,572 77,111 31,098 41,772 56,572 77,111
32,943 45,198 62,671 87,621 32,943 45,198 62,671 87,621
34,685 48,619 69,048 99,076 34,685 48,619 69,048 99,076
36,333 52,040 75,724 111,561 36,333 52,040 75,724 111,561
37,878 55,449 82,697 125,160 37,878 55,449 82,697 125,160
39,336 58,854 89,995 139,979 39,336 58,854 89,995 139,979
40,701 62,249 97,623 156,126 40,701 62,249 97,623 156,126
41,986 65,639 105,607 173,720 41,986 65,639 105,607 173,720
46,957 82,139 150,910 287,568 46,957 82,139 150,910 287,568
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE
ILLUSTRATION TABLE ABOVE:]
<FN>
(1) Assumes no policy loan has been made.
(2) If premiums are paid more frequently than annually the payments would be
$2,036 semi-annually, $1,027 quarterly or $345 monthly. The Death Benefits,
Account Values and Cash Surrender Values shown would not be affected by the
more frequent premium payments, nor would such amounts be affected by the
insured's risk classification.
</FN>
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
38
<PAGE>
[EDGARIZER'S NOTE:]
[THE CHAMPION PROSPECTUS ENDS HERE; THE SP-1 PROSPECTUS FOLLOWS]
<PAGE>
- --------------------------------------------------------------------------------
SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
LEVEL FACE AMOUNT
[SP-1 LOGO]
ISSUED BY
[EQUITABLE VARIABLE LIFE INSURANCE COMPANY LOGO - 1987 VERSION]
- --------------------------------------------------------------------------------
VM 371 Prospectus Dated September 30, 1987
- --------------------------------------------------------------------------------
THE HUDSON RIVER TRUST
PRINCIPAL OFFICE LOCATED AT:
787 Seventh Avenue, New York, New York 10019
- --------------------------------------------------------------------------------
HRT 102 PROSPECTUS DATED SEPTEMBER 30, 1987
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
LEVEL FACE AMOUNT
[VARIABLE LIFE INSURANCE LOGO]
[SP LOGO]
- --------------------------------------------------------------------------------
PROSPECTUS DATED
SEPTEMBER 30, 1987
ISSUED BY
[EQUITABLE VARIABLE LIFE INSURANCE COMPANY LOGO - 1987 VERSION]
- --------------------------------------------------------------------------------
This prospectus describes a variable life insurance policy being offered by
Equitable Variable. Your net premium is invested among one or more of the
Divisions of Equitable Variable's Separate Account I.
Each policy owner decides in which Divisions the premium for his or her policy
will be put, after certain deductions have been made.
The Separate Account has the following Divisions:
o Aggressive Stock
o High Yield
o Common Stock
o Balanced
o Money Market
The assets in each Division are invested in shares of corresponding Portfolios
of The Hudson River Trust. The Trust is the successor to The Hudson River Fund,
Inc. pursuant to an Agreement and Plan of Reorganization dated September 30,
1987.
The prospectus for the Trust, which is attached to this prospectus, describes
the investment objectives and policies of each of the Trust Portfolios, as well
as the risks relating to investments in the Trust.
The Death Benefit, Account Value, and Cash Surrender Value of a policy will vary
up or down depending on investment experience of the Divisions, which in turn
depends on the investment performance of the corresponding Portfolios. While
there is no guaranteed minimum Account Value or Cash Surrender Value for a
policy, Equitable Variable guarantees that a policy's Death Benefit will never
be less than its face amount as long as there is no outstanding policy loan.
A policy is serviced through a regional Life Insurance Center. This is the
Administrative Office shown on page 3 of a policy when it is issued. Equitable
Variable's Home Office is 787 Seventh Avenue, New York, New York. Telephone
(212) 714-4643.
REPLACING EXISTING INSURANCE WITH THE POLICY DESCRIBED IN THIS PROSPECTUS MAY
NOT BE TO YOUR ADVANTAGE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PLEASE READ THIS PROSPECTUS FOR DETAILS ON THE POLICY BEING OFFERED AND KEEP IT
FOR FUTURE REFERENCE. IT IS NOT VALID UNLESS ATTACHED TO A CURRENT PROSPECTUS
FOR THE HUDSON RIVER TRUST.
- --------------------------------------------------------------------------------
VM-371
Copyright 1987 Equitable Variable Life Insurance Company. All rights reserved.
<PAGE>
- --------------------------------------------------------------------------------
THE PURPOSE OF THE POLICY WE ARE OFFERING IS TO PROVIDE INSURANCE PROTECTION FOR
A POLICY'S BENEFICIARY.
WE DO NOT CLAIM THAT THE POLICY IS IN ANY WAY SIMILAR TO OR COMPARABLE TO A
MUTUAL FUND.
Because we want you to have as much information as possible about our variable
life policy before you buy one, we urge you to examine this prospectus
carefully, and we also urge you to read the attached Trust prospectus. Unless
otherwise stated, this prospectus assumes that there is no outstanding policy
loan.
The first Part of this prospectus contains a summary that will introduce us and
our variable life policy to you. You will find more detailed information in Part
2 and financial statements in Part 3.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PART 1 -- SUMMARY
- --------------------------------------------------------------------------------
THE ISSUING COMPANY
We are Equitable Variable Life Insurance Company (Equitable Variable) a New York
stock life insurance company.
- --------------------------------------------------------------------------------
OUR PARENT, EQUITABLE
We are a wholly-owned subsidiary of The Equitable Life Assurance Society of the
United States (Equitable), a New York mutual life insurance company.
- --------------------------------------------------------------------------------
THE POLICY
By this prospectus we are offering a single premium variable life insurance
policy with a level face amount. This is SP-1(TM), Policy Number 85-09.
We also offer, through separate prospectuses, three periodic premium variable
life policies and a flexible premium variable life policy. The net premiums for
SP-1 are invested in our Separate Account I (Separate Account), which in turn
buys shares in The Hudson River Trust (Trust).
- --------------------------------------------------------------------------------
WHY VARIABLE LIFE VARIES
This variable life policy is first and foremost a whole life insurance policy
with Death Benefits, Account Values, Cash Surrender Values and loan privileges
traditionally associated with whole life insurance. It is called "variable"
because, unlike the fixed death benefits of an ordinary single premium whole
life policy, the Death Benefits, Account Values and Cash Surrender Values may
increase or decrease. They do so because your net premium is put into one or
more of the Divisions of our Separate Account. The assets in each Division buy
shares in a corresponding Trust Portfolio. The Separate Account's investment
experience will vary over the years reflecting the investment performance of the
Trust's Portfolios in which it invests.
When the Separate Account's net investment return is greater than the assumed
investment return of 4%, additional amounts of paid-up life insurance are
purchased. This results in additional Death Benefit, Account Value and Cash
Surrender Value. If the Separate Account's net investment return is less than
the assumed investment return, this additional paid-up life insurance may be
lost, resulting in smaller Account Value, Cash Surrender Value and Death
Benefit, but the Death Benefit will never be less than the guaranteed minimum.
- --------------------------------------------------------------------------------
THE SEPARATE ACCOUNT, ITS
INVESTMENTS AND ITS INVESTMENT
EXPERIENCE
Our Separate Account is 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. For state law purposes the
Separate Account is treated as part of us.
After making certain deductions from premiums, we put the net premium in one or
more of the Divisions of the Separate Account. You decide in which Divisions
your policy's net premium will be put. The Separate Account has the following
Divisions:
o Aggressive Stock
o High Yield
o Common Stock
o Balanced
o Money Market
Each Division invests in shares of a corresponding investment portfolio
(Portfolio) of the Trust. Each Portfolio has a different investment policy.
Throughout this prospectus we will discuss the investment experience of the
Separate Account and the Divisions. On these occasions you should keep in mind
that THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT AND THE DIVISIONS DEPENDS
ON THE INVESTMENT PERFORMANCE OF THE TRUST AND THE CORRESPONDING PORTFOLIOS.
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
THE TRUST
The Hudson River Trust is a "series" type of mutual fund registered with the SEC
under the 1940 Act as an open-end diversified management investment company. In
addition to the Portfolios available for investment by Divisions of the Separate
Account, the Trust has a Global Portfolio which currently is not available. The
Trust does not impose a sales charge.
The Trust serves as an investment medium for variable life policies issued by
us, and by insurers affiliated or unaffiliated with Equitable. We are currently
in control of the Trust; however, purchasers of each of these contracts will
also have voting privileges in the Trust. See YOUR VOTING PRIVILEGES.
For a full description of the Trust, including the investment policies and
objectives of the Portfolios, see its prospectus which is attached to this
prospectus and its Statement of Additional Information referred to therein.
- --------------------------------------------------------------------------------
THE TRUST'S INVESTMENT ADVISER
The Trust is advised by Equitable Capital Management Corporation (Equitable
Capital), a wholly-owned subsidiary of Equitable. Equitable Capital is
registered with the SEC as an investment adviser under the Investment Advisers
Act of 1940. The Trust pays advisory fees to Equitable Capital based on maximum
annual rates of between 0.40% and 0.55% of the average daily value of the
aggregate net assets of each Portfolio. However, we credit the values of our
SP-1 policies to offset completely the effect on such values of the portion of
the Trust's advisory fees which exceeds a 0.25% annual rate.
- --------------------------------------------------------------------------------
DEATH BENEFITS
The Death Benefit under the policy can go up or down depending on the investment
experience of the Division or Divisions into which you choose to put your net
premium. The guaranteed minimum Death Benefit is the face amount of the policy
regardless of the investment experience of the Divisions. The Death Benefit is
the guaranteed minimum Death Benefit, plus the sum (if positive) of the variable
adjustment amounts (determined annually) in the Divisions in which you have
Account Value.
However, if the Account Value at the date of death, considered as a single
premium, can buy more Death Benefit, then the Death Benefit will be this higher
amount.
See THE VARIABLE ADJUSTMENT AMOUNT, THE GUARANTEED MINIMUM DEATH BENEFIT, and
DEATH BENEFIT BASED ON ACCOUNT VALUE in Part 2.
- --------------------------------------------------------------------------------
ACCOUNT VALUE
Our policy is a whole life policy and it will have both an Account Value and a
Cash Surrender Value. The Account Value of a policy may increase or decrease
daily to reflect the investment experience of the Divisions in which your policy
participates. The Account Value is your net single premium, minus the cost of
insurance and the Separate Account asset charges, plus or minus investment
experience. Unlike the Death Benefit, which has a guaranteed minimum, we do not
guarantee a minimum amount of Account Value. You will bear the entire market
risk for Account Value.
You can request that all or part of your Account Value be transferred between
the Divisions. See YOU CAN TRANSFER ACCOUNT VALUE BETWEEN DIVISIONS in Part 2.
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
CASH SURRENDER VALUE
Our policy also has a Cash Surrender Value. The Cash Surrender Value will be
less than the Account Value during the first ten policy years, and will equal
the Account Value thereafter. The difference between the Cash Surrender Value
and the Account Value is considered a contingent deferred sales load. Any
contingent deferred sales load will not be more than 9% of your single premium.
The Cash Surrender Value is not guaranteed.
See CONTINGENT DEFERRED SALES LOAD in Part 2.
- --------------------------------------------------------------------------------
COMMISSIONS
The agent or broker who sells you one of our single premium policies will
receive a commission for the sale equivalent to a maximum of 3% of the single
premium that is payable. (You do not pay any sales charge for shares of the
Trust purchased by the Separate Account). The agent or broker will not receive
commissions in later policy years.
- --------------------------------------------------------------------------------
CHARGES AGAINST PREMIUM
Your total premium after deduction for state premium taxes and a $200
administrative expense charge is put into our Separate Account. The
administrative charge is used to pay administrative expenses.
- --------------------------------------------------------------------------------
CHARGES AGAINST THE
SEPARATE ACCOUNT
The amount in the Divisions credited to your policy is decreased by the cost of
your insurance protection. Also, the investment experience of the Separate
Account reflects a daily charge we make at an effective annual rate of 0.50% of
the value of the assets of the Separate Account for certain mortality and
expense risks.
Any charges against the Divisions will have an impact on whether the Divisions
earn more than the assumed rate of 4% and whether your policy's Death Benefit
increases above the guaranteed minimum.
For more information on the cost of insurance, see HOW WE SUPPORT THE OPERATIONS
OF A POLICY in Part 2.
- --------------------------------------------------------------------------------
CONTINGENT DEFERRED SALES LOAD
We charge a contingent deferred sales load if you surrender your policy before
its 10th anniversary. The charge will be a percentage of the Account Value which
will vary by issue age and sex. The rate will never be more than 9% of the
Account Value and will diminish to zero over the first 10 policy years. In any
event the rate will never be more than 9% of your single premium.
This charge affects your Cash Surrender Value and the amount available for
policy loans. It does not affect Account Value transfers, Separate Account
investment experience or Death Benefits.
See CONTINGENT DEFERRED SALES LOAD in Part 2.
- --------------------------------------------------------------------------------
POLICY LOANS
As a policy owner, you may borrow up to 90% of your policy's Cash Surrender
Value at 5% interest but borrowed amounts are transferred out of the Divisions
and, therefore, not affected by investment experience. We will credit the
assumed interest rate of 4% on the borrowed amounts.
See TAKING A POLICY LOAN in Part 2.
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
PREMIUM
You may choose to purchase a policy based on a single premium or an initial face
amount. The size of the initial face amount depends on the single premium, and
the insured's age and sex. The minimum premium for this policy is $2,500.
- --------------------------------------------------------------------------------
CANCELLATION AND
EXCHANGE RIGHTS
You have a limited right to return your policy for cancellation and a full
refund of premium paid. Your request must be postmarked by the latest of
o 10 days after you receive your policy; or
o 10 days after we mail a written Notice of Withdrawal Right; or
o 45 days after Part 1 of the policy application was signed.
Also, within 24 months of a policy's issue date, it may be exchanged for a fixed
single premium whole life insurance policy on the life of the insured without
submitting proof of insurability.
- --------------------------------------------------------------------------------
INCOME TAXES
Any Death Benefit paid under our policy will be fully excludable from the gross
income of the beneficiary for Federal income tax purposes.
We may, in the future, charge the Divisions for any of our income taxes
attributable to the Separate Account.
See THE IMPACT OF TAXES in Part 2.
- --------------------------------------------------------------------------------
MORE INFORMATION
For further information, including illustrations of how the investment
experience of the Separate Account Divisions and the investment performance of
the Trust could cause Death Benefits, Account Values and Cash Surrender Values
to vary, please see Part 2 of this prospectus and the Trust's current
prospectus. Our financial statements are in Part 3 of this prospectus. The
Trust's prospectus contains Condensed Financial Information for the Trust and
its Statement of Additional Information contains its financial statements.
- --------------------------------------------------------------------------------
CONDENSED FINANCIAL
INFORMATION
SEPARATE ACCOUNT I
The tables below show the actual net returns of the Common Stock and Money
Market Divisions of our Separate Account as if the Reorganization discussed
under GENERAL INFORMATION -- PREDECESSORS OF THE TRUST in Part 2 had always been
in effect. The tables show the actual net returns of the predecessors of the
Common Stocks and Money Market Divisions operating as management investment
companies prior to the Reorganization. The same results would have been achieved
if the Separate Account had operated as a unit investment trust investing in The
Hudson River Trust, for all the periods shown, the operations of the Trust
having been as currently reported in the Trust's separate Prospectus and
Statement of Additional Information. The net returns for each Division for the
periods shown assume the Common Stock Division and the Money Market Division
would have received initial policy premium allocations on January 13, 1976 and
August 21, 1981, respectively, the dates on which the predecessors of these
Divisions first received premium allocations under variable life policies. The
tables break the net return into its component parts.
When you examine the tables, remember that the percentages apply to a policy
with its policy year starting on the first day of the periods shown and apply to
a policy that would have been in force throughout the periods shown. Because
they are determined each December 31, the percentages do not reflect the average
net assets in the Divisions during those periods. To get a more complete picture
of the Separate Account and its Divisions you may want to refer to the financial
statements and related notes in the Statement of Additional Information for The
Hudson River Trust.
- --------------------------------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
COMMON STOCK DIVISION
<TABLE>
<CAPTION>
January 13,
Year Ended December 31, 1976 to
----------------------------------------------------------------------------------------------- December 31,
1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976(a)(b)
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET RETURN:
Income(c) 1.55 % 2.92 % 3.22 % 2.65 % 4.64 % 4.02 % 4.35 % 3.91 % 4.06 % 3.49 % 2.63 %
Net realized
and
unrealized
gain (loss)
on invest-
ments 16.04 % 30.91 % (4.68)% 24.06 % 13.58 % (9.40)% 46.48 % 26.56 % 4.72 % (12.26)% 7.00 %
----- ----- ---- ----- ----- ---- ----- ----- ---- ----- ----
Gross
Return 17.59 % 33.83 % (1.46)% 26.71 % 18.22 % (5.38)% 50.83 % 30.47 % 8.78 % (8.77)% 9.63 %
Expense
charges(c) (.59)% (.74)% (.74)% (.94)% (.95)% (.70)% (1.13)% (.98)% (.81)% (.69)% (.77)%
----- ----- ---- ----- ----- ---- ----- ----- ---- ----- ----
Net Return 17.00 % 33.09 % (2.20)% 25.77 % 17.27 % (6.08)% 49.70 % 29.49 % 7.97 % (9.46)% 8.86 %
===== ===== ==== ===== ===== ==== ===== ===== ==== ===== ====
- --------------------------------------------------------------------------------
<FN>
(a) Date as of which net premiums under the policies were first allocated to
the predecessor of the Division.
(b) The gross return and the net return for the periods indicated are not
annual rates of return.
(c) Subsequent to March 22, 1985, the advisory service fees have been deducted
in arriving at income rather than as an expense charge.
</FN>
</TABLE>
The effective annual net rate of return for the Common Stock Division from
January 13, 1976 to December 31, 1986 was 14.36%. For the same period ended
December 31, 1986, the average annual increase for the Standard and Poor's 500
Stock Index with dividends reinvested was 14.06%. (Standard and Poor's is an
unmanaged index of groups of common stocks.)
- --------------------------------------------------------------------------------
MONEY MARKET DIVISION
<TABLE>
<CAPTION>
Year Ended December 31, August 21, 1981
------------------------------------------------------ to December 31,
1986 1985(d) 1984 1983 1982 1981(a)(b)
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET RETURN:
Income(c) 6.83 % 8.65 % 11.00 % 9.56 % 13.53 % 5.46 %
Net realized and unrealized gain
(loss) on investments 0.03 % (.09)% .42 % (.06)% .03 % .06 %
---- ---- ----- ---- ----- ----
Gross Return 6.86 % 8.56 % 11.42 % 9.50 % 13.56 % 5.52 %
Expense charges(c) (.55)% (.60)% (.84)% (.83)% (.84)% (.35)%
---- ---- ----- ---- ----- ----
Net Return 6.31 % 7.96 % 10.58 % 8.67 % 12.72 % 5.17 %
==== ==== ===== ==== ===== ====
- --------------------------------------------------------------------------------
<FN>
(a) Date as of which net premiums under the policies were first allocated to
the predecessor of the Division.
(b) The gross return and the net return for the periods indicated are not
annual rates of return.
(c) Subsequent to March 22, 1985, the advisory service fees have been deducted
in arriving at income rather than as an expense charge.
(d) Net return for 1985 has been adjusted to reflect a recalculation of the net
return of the Division.
</FN>
</TABLE>
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
HYPOTHETICAL
ILLUSTRATIONS
The following illustrations are based on the assumption that the Separate
Account and the Trust had been operating since January 1, 1976 in the same
manner as they operate as a result of the implementation of the Reorganization
described under GENERAL INFORMATION -- PREDECESSORS OF THE TRUST in Part 2. For
illustrations based on various constant hypothetical annual investment returns,
see ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER VALUES,
AND ACCUMULATED PREMIUM in Part 2.
- --------------------------------------------------------------------------------
ILLUSTRATION OF VARIATIONS OF THE
DEATH BENEFIT, THE ACCOUNT VALUE
AND THE CASH SURRENDER VALUE IN
RELATION TO INVESTMENT EXPERIENCE
OF THE COMMON STOCK DIVISION
The following example shows how the net return of the Common Stock Division
would have affected the Death Benefits, Account Values and Cash Surrender Values
of a single premium policy dated January 1, 1976. Assume a single premium of
$25,000 and that the insured was a 40 year old male on January 1, 1976.
- --------------------------------------------------------------------------------
SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
($81,932 Face Amount)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Cash Guaranteed
Policy Anniversary on Surrender Minimum
January 1 in Year: Value Account Value Death Benefit Death Benefit
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1977* $24,171 $26,224 $ 85,615 $81,932
1978 21,713 23,353 81,932 81,932
1979 23,835 25,410 81,932 81,932
1980 29,920 31,618 93,868 81,932
1981 46,298 48,487 139,540 81,932
1982 43,575 45,227 126,201 81,932
1983 49,898 51,320 138,888 81,932
1984 63,970 65,188 171,147 81,932
1985 62,235 62,829 160,066 81,932
1986 83,742 83,742 207,077 81,932
1987 98,819 98,819 237,244 81,932
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
* Reflects net investment income credited at the assumed rate of 4% from January
1, 1976 to January 12, 1976, and an actual rate of return for the Common Stock
Division assuming the investment performance of the Trust's Common Stock
Portfolio was the same as our pre-Reorganization Separate Account I starting
January 13, 1976. Net annual premiums under variable life policies were first
put into our pre-Reorganization Separate Account I on January 13, 1976.
</FN>
</TABLE>
Remember, this example of past investment performance is for a specific age,
sex, premium amount and policy anniversary. Also, the policy described in this
prospectus was not available in 1976. The benefits illustrated under this policy
are calculated on the policy anniversary and do not represent the average net
investment performance of our pre-Reorganization Separate Account I during the
policy year. Past investment performance should not be deemed a representation
of future investment experience of the Division or investment performance of the
Trust.
The difference between the Account Value and the Cash Surrender Value is the
contingent deferred sales load.
This example assumes that the net single premium and related Account Values and
Cash Surrender Values are 100% in the Common Stock Division for the entire
period.
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
ILLUSTRATION OF VARIATIONS OF THE
DEATH BENEFIT, THE ACCOUNT VALUE
AND THE CASH SURRENDER VALUE IN
RELATION TO INVESTMENT EXPERIENCE
OF THE MONEY MARKET DIVISION
The following example shows how the net return of the Money Market Division
would have affected the Death Benefits, Account Values and Cash Surrender Values
of a single premium policy dated January 1, 1982. Assume a single premium of
$25,000 and that the insured was a 40 year old male on January 1, 1982.
- --------------------------------------------------------------------------------
SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
($81,932 Face Amount)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Cash Guaranteed
Policy Anniversary on Surrender Minimum
January 1 in Year: Value Account Value Death Benefit Death Benefit
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1983 $25,074 $27,204 $ 88,814 $81,932
1984 27,305 29,366 92,864 81,932
1985 30,227 32,225 98,726 81,932
1986 32,674 34,527 102,505 81,932
1987 34,784 36,429 104,839 81,932
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This example reflects Money Market Division investment experience assuming the
investment performance of the Trust's Money Market Portfolio was the same as our
pre-Reorganization Separate Account II starting January 1, 1982. Net premiums
under variable life policies were first put into our pre-Reorganization Separate
Account II on August 21, 1981.
Remember, this example of past investment performance is for a specific age,
sex, premium amount and policy anniversary. Also, the policy described in this
prospectus was not available in 1982. The benefits illustrated under this policy
are calculated on the policy anniversary and do not represent the average net
investment performance of our pre-Reorganization Separate Account II during the
policy year. Past investment performance should not be deemed a representation
of future investment experience of the Division or future investment performance
of the Trust.
The difference between the Account Value and the Cash Surrender Value is the
contingent deferred sales load.
This example assumes that the net premium and related Account Values and Cash
Surrender Values are 100% in the Money Market Division for the entire period.
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
PART 2 -- DETAILED INFORMATION
- --------------------------------------------------------------------------------
GENERAL INFORMATION
ABOUT US
We are Equitable Variable. We were organized in 1972 in New York State as a
stock life insurance company and are authorized to sell life insurance and
annuities there. We also are authorized to sell life insurance and annuities in
other jurisdictions. In January of 1976 we began selling periodic premium
variable life policies, and two years later, in January of 1978, we began
selling fixed annuity contracts.
In 1983 we began selling a form of fixed life insurance policy, the Equitable
Life Account. In 1983 we also began selling single premium variable life
policies. In 1986 we began selling an individual flexible premium variable life
policy designed to provide insurance coverage with flexibility in death benefits
and premium payments. We also sell two types of term insurance policies, fixed
single premium life insurance policies and universal life insurance policies. At
the end of 1986 we had approximately $9.7 billion face amount of variable life
insurance in force and $47.1 billion of fixed life insurance in force (and about
$1.9 billion of fixed annuity payment obligations).
Policy owners who have our variable life policies on a single premium basis, as
well as on a periodic premium basis, have monies placed in our Separate Account.
Our financial statements including those of our continuing Separate Account are
in Part 3.
- --------------------------------------------------------------------------------
EQUITABLE
Equitable is a New York mutual life insurance company that has its home office
at 787 Seventh Avenue, New York, N.Y. 10019.
Equitable has been in business since 1859. Equitable's total assets make it the
third largest life insurance company in the United States. At December 31, 1986
these assets were approximately $55 billion. Equitable is also one of the
largest managers of retirement fund assets. At December 31, 1986, Equitable and
its subsidiaries were managing pension fund assets of $66.2 billion and total
assets of $102.7 billion. These assets include amounts in our General Account,
Equitable's General Account and separate accounts, and other accounts managed by
Equitable and Equitable Capital.
On December 31, 1986, Equitable Capital was managing approximately $30 billion
in assets. Equitable Capital acts as an investment adviser to various separate
accounts and general accounts of Equitable and other affiliated insurance
companies. Equitable Capital also provides management and consulting services to
mutual funds, endowment funds, insurance companies, foreign entities, and
non-tax-qualified corporate funds, pension and profit-sharing plans, foundations
and tax-exempt organizations.
Between the time we were organized and the end of December 1986, Equitable
invested over $570 million in us. This money has been used to help us meet
operational costs and policy reserve requirements.
Equitable probably will invest more money in us in the future although it has no
legal obligation to do so. Its assets do not back benefits that may be paid
under the policy discussed in this prospectus.
In December, 1984, Equitable acquired Donaldson, Lufkin & Jenrette, Inc. (DLJ).
A DLJ subsidiary, Donaldson, Lufkin & Jenrette Securities Corporation, is one of
the nation's largest investment banking and securities firms. Another DLJ
subsidiary, Autranet, Inc., is a securities broker that markets independently
originated research to institutions. Through the Pershing Division of Donaldson,
Lufkin & Jenrette Securities Corporation, DLJ supplies correspondent services,
including order execution, securities clearance and other centralized financial
services, to approximately 300 independent regional securities firms and 100
banks. To the extent permitted by law, Equitable, Equitable Variable and their
separate accounts and affiliated companies, several of which are registered
investment companies (including the Trust), may engage in securities and other
transactions with the various entities mentioned in the preceding paragraph or
may invest in shares of investment companies with which those entities have
affiliations.
- --------------------------------------------------------------------------------
REGULATION
We are regulated and supervised by the New York State Insurance Department. In
addition, we are subject to insurance laws and regulations in every jurisdiction
where we sell our policies. We submit annual reports on our operations and
finances to insurance officials in these jurisdictions. The officials are
responsible for reviewing our reports to be sure we are financially sound and
that we are complying with applicable laws and regulations.
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9
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Our single premium variable life policy has been approved in 50 states and the
Virgin Islands.
We are also subject to various Federal securities laws and regulations.
- --------------------------------------------------------------------------------
THE TRUST
The Hudson River Trust currently issues six series or classes of shares, each of
which represents an interest in one of the Trust's Portfolios. Shares of the
Aggressive Stock, High Yield, Common Stock, Balanced and Money Market Portfolios
are purchased and redeemed by the corresponding Separate Account Division. The
Global Portfolio is not available for investment under SP-1. The Trust sells and
redeems its shares at net asset value. It does not impose a sales charge.
The Trust serves as an investment medium for variable life policies issued by us
and by insurers affiliated or unaffiliated with Equitable. We currently do not
foresee any disadvantages to our policy owners arising out of this. However, the
Trust's Board of Trustees intends to monitor events in order to identify any
material irreconcilable conflicts that possibly may arise and to determine what
action, if any, should be taken in response. If we believe that the Trust's
response to any of those events insufficiently protects our policy owners, we
will see to it that appropriate action is taken to protect our policy owners.
Also, if we ever believe that any of the Trust's Portfolios is so large as to
materially impair the investment performance of a Portfolio or the Trust, we
will examine other investment options.
The Trust's shares will be sold only to separate accounts of insurance
companies. Since we are the only insurance company now investing in the Trust,
we are currently in control of the Trust. We owned approximately $475 million
worth of the Trust's shares as of December 31, 1986, and will continue to
control the Trust at least until other insurance companies, selling significant
amounts of variable insurance products, have made substantial investments in
Trust shares.
The Trust's address is 787 Seventh Avenue, New York, New York 10019. The
custodian of the securities and other assets of the Trust is The Chase Manhattan
Bank, N.A.
The Trust, its investment objectives and policies, its risks, expenses,
organization and other aspects of its operations are described in more detail in
its prospectus, which is attached to this prospectus, and in a Statement of
Additional Information which may be obtained free of charge by written request
to the Trust at 787 Seventh Avenue, New York, New York 10019. Please carefully
read the Trust's prospectus.
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PREDECESSORS OF THE TRUST
Pursuant to a Plan of Reorganization (Reorganization) approved at a meeting of
our policy owners held on February 14, 1985, effective as of March 22, 1985, we
restructured our Separate Accounts I and II into one separate account in unit
investment trust form. To accomplish this restructuring, we converted our then
existing Separate Account I, a Common Stock Account, and Separate Account II, a
Money Market Account, into our continuing Separate Account I with two investment
divisions: the Common Stock Division and the Money Market Division. On March 22,
1985, all of the assets and related liabilities of our former Separate Accounts
I and II were transferred to the Common Stock and Money Market Portfolios of The
Hudson River Fund, Inc. respectively, in exchange for shares in the Portfolios,
and we ceased to be an investment adviser of our continuing Separate Account.
The Reorganization did not change the policy values of then outstanding
policies.
On September 30, 1987, pursuant to an Agreement and Plan of Reorganization
approved by policyowners, The Hudson River Fund, Inc., a Maryland corporation,
was reorganized as a Massachusetts business trust and its name was changed to
The Hudson River Trust. Refer to the Prospectus for the Trust for further
information.
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INVESTMENT OBJECTIVES OF
THE PORTFOLIOS
Each Portfolio of the Trust has a different investment objective which it tries
to achieve by following separate investment policies. The objectives and
policies of each Portfolio will affect its return and its risks. The policies
and objectives of the Portfolios available for investment under SP-1 are as
follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Investment Policy Objective
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
HIGH YIELD Primarily a diversified mix of high yield, High return by maximizing current income
fixed income securities involving greater and, to the extent consistent with that
volatility of price and risk of principal objective, capital appreciation
and income than high quality fixed income
securities
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Investment Policy Objective
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AGGRESSIVE STOCK Primarily common stocks and other equity-type Long-term growth of capital
securities issued by medium and smaller sized
companies with strong growth potential
COMMON STOCK Primarily common stock and other equity-type Long-term growth of capital and increasing
instruments income
BALANCED Common stocks, publicly-traded debt High return through a combination of
securities and high quality money market current income and capital appreciation
instruments
MONEY MARKET Primarily high quality short-term money High level of current income while
market instruments preserving assets and maintaining liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
There is no guarantee that these objectives will be achieved.
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THE TRUST'S INVESTMENT
ADVISER
The Trust is advised by Equitable Capital, a wholly-owned subsidiary of
Equitable. Equitable Capital is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940. Equitable Capital's address is 1285
Avenue of the Americas, New York, New York 10019.
We make a daily credit to the values of the divisions of the Separate Account to
offset completely the effect on such values of the portion of the Trust's
investment advisory fees which exceed a 0.25% effective annual rate and all
other Trust expenses except (a) all brokers' commissions, transfer taxes and
other fees and expenses for services relating to purchases and sales of
Portfolio investments and (b) any Trust income tax liabilities. Equitable
Capital provides services pursuant to an investment advisory agreement for a fee
based on the following maximum effective annual percentages of the average daily
value of the aggregate net assets of each of the Portfolios. These annual
percentages for the Portfolios corresponding to the Divisions available for
investment under SP-1 are: 0.40% for the Common Stock, Balanced and Money Market
Portfolios, 0.50% for the Aggressive Stock Portfolio and 0.55% for the High
Yield Portfolio.
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DEDUCTIONS FROM PREMIUM
The amount of premium for a standard mortality risk policy put into the Separate
Account's Divisions is the total single premium minus a $200 administrative
charge and a charge for state premium taxes. This is the net single premium that
is then put into the Separate Account. We do this as of the date of your
application if the application and the premium are received at our Regional
Service Center within 10 days after you sign the application. If the application
and the premium are received more than 10 days from the date you sign the
application, the net single premium will be put into the Separate Account when
received.
A summary of the charges against the single premium follows.
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ADMINISTRATIVE EXPENSE CHARGE
We charge $200 for administrative expenses. These include:
o processing applications;
o establishing policy records;
o conducting medical examinations;
o determining insurability;
o processing claims, paying Cash Surrender Values, and making policy changes;
o record keeping;
o communicating with policy owners; and
o other expenses and overhead.
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11
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STATE PREMIUM TAX CHARGE
We deduct an amount from your single premium to cover state and local premium
taxes payable by us. These taxes vary from state to state and also vary in some
areas by municipalities and counties. Taxes currently range up to 4%.
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EXAMPLE OF DEDUCTIONS FROM
PREMIUM
The following (using the policies shown in the ILLUSTRATIONS OF DEATH BENEFITS,
ACCOUNT VALUES AND CASH SURRENDER VALUES, AND ACCUMULATED PREMIUM) shows what
amount of net single premium would be put into the Separate Account at the start
of the first policy year. A policy's actual Account Value and Cash Surrender
Value are related to the policy's net single premium.
- --------------------------------------------------------------------------------
NET SINGLE PREMIUMS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
State Male or Female Male or Female Male or Female Male or Female
Premium Issue Age 5 Issue Age 25 Issue Age 40 Issue Age 55
Tax ($10,000 Premium) ($20,000 Premium) ($25,000 Premium) ($50,000 Premium)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0% $9,800 $19,800 $24,800 $49,800
1% 9,700 19,600 24,550 49,300
2% 9,600 19,400 24,300 48,800
3% 9,500 19,200 24,050 48,300
4% 9,400 19,000 23,800 47,800
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
There is no sales load deducted from the single premium. There will never be a
sales load deducted unless you surrender your policy for its Cash Surrender
Value in the first 10 policy years or exchange your policy for a fixed life
policy. See CONTINGENT DEFERRED SALES LOAD.
To the extent sales expenses are not covered by the sales loads, we will recover
them from funds other than premium deductions.
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CONTINGENT DEFERRED
SALES LOAD
There is a difference between the Account Value and the Cash Surrender Value of
our policy in the first ten policy years. This difference is a contingent
deferred sales load against your Account Value decreasing from between 8% and 9%
in the first policy year to zero in the 10th policy year. The initial percentage
depends on the insured's age and sex. The percentage decreases evenly over the
first 10 policy years. This charge is designed to recover expenses of
distributing policies which are terminated by surrender in their early years. It
will never be greater than 9% of your single premium.
We charge the contingent deferred sales load if you surrender your policy in the
first ten years and receive its net Cash Surrender Value.
Since the loan value of the policy is based on the amount of Cash Surrender
Value rather than on the Account Value, the contingent deferred sales load has
the effect of reducing the amount available for a policy owner to borrow under a
policy.
The contingent deferred sales load is not imposed on Account Value transfers
between Divisions, Separate Account investment experience, Death Benefits or
exchanges to fixed benefit policies.
- --------------------------------------------------------------------------------
OUR SEPARATE ACCOUNT
AND ITS DIVISIONS
Our Separate Account is registered with the SEC as a unit investment trust,
which is a type of investment company. This does not involve any supervision by
the SEC of the management or investment policy or practices of the Separate
Account. For state law purposes the Separate Account is treated as a part of us.
After making certain deductions from premiums, we put your net premium in one or
more Divisions of our Separate Account. You decide in which Divisions your
policy's net premium will be put. (Also, you have certain voting privileges with
respect to the Trust shares held in the Divisions. See YOUR VOTING PRIVILEGES.)
Each Division invests in shares of a corresponding investment Portfolio of the
Trust. The Separate Account also invests income or capital gains dividends
received from the Trust in shares of the Trust.
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12
<PAGE>
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The Separate Account purchases and redeems shares of the Trust at their net
asset value per share. The Separate Account's assets are allocated among the
Divisions in accordance with the allocations of the net premium invested in the
Separate Account and the earnings on those assets. Also, liabilities of the
Separate Account will be allocated to the Division to which they relate. Accrued
liabilities that are not allocable to one Division will be allocated to the
Divisions in proportion to their relative net assets. In the unlikely event that
any Division incurred liabilities in excess of its assets, the other Divisions
could be liable for such excess.
Each Portfolio has a different investment policy (see THE TRUST). You should
keep in mind that the investment experience of the Separate Account and the
Divisions depends on the investment performance of the Trust and the
corresponding Portfolios. Also, values of SP-1 policies are increased to
compensate policy owners for their share of Trust expenses in excess of the sum
of (1) expenses for brokers' commissions, transfer taxes and other fees relating
to purchases and sale of Portfolio investments, (2) fees for advisory services
at an annual rate equivalent to 0.25% of the average daily value of the
aggregate net assets of the Portfolios and (3) Trust income taxes, if any.
The Common Stock Division of our Separate Account superseded our
pre-Reorganization Separate Account I, which was established on June 28, 1973.
The Money Market Division of our Separate Account superseded our
pre-Reorganization Separate Account II, which was established on December 12,
1980. Both pre-Reorganization Separate Accounts were established under the
insurance law of New York State as separate investment accounts. Assets that
were used to provide money to pay benefits under our variable life policies were
allocated to the pre-Reorganization Separate Accounts from time to time. As a
result of the Reorganization, those assets and additional assets to be received
from premiums under in-force policies and future policies, will be allocated to
the Separate Account Divisions from time to time and used to provide money to
pay benefits under our variable life policies.
Any increase or decrease in a policy's Death Benefit, Account Value or Cash
Surrender Value will reflect the investment experience of the Division where you
have Account Value, which in turn will depend upon the investment performance of
the corresponding Portfolio of the Trust. (It will not be affected by the
experience of the other Divisions unless you have Account Value in other
Separate Account Divisions.)
- --------------------------------------------------------------------------------
HOW WE SUPPORT THE OPERATIONS
OF A POLICY
We support the operations of a policy by putting the net single premium (which
is the single premium less the charges described under DEDUCTIONS FROM PREMIUM)
into the Separate Account Division or Divisions as the policy owner chooses. We
do this when the policy is issued.
Once the net single premium is placed into the Divisions we charge for the cost
of insurance based on the attained sex and age for the amount at risk. The
amount at risk on policy anniversaries is the Death Benefit payable less the
Account Value in the Divisions (adjusted for any loans). The cost of insurance
deducted from the amount in the Divisions is based on the 1980 Commissioners'
Standard Ordinary Mortality Table, and generally increases with attained age.
The cost of insurance differs in each year because, based on this mortality
table, the probability of death generally increases with attained age and the
amount at risk is different year by year. The dollar amount of the cost of
insurance also depends on investment experience of the Divisions in which a
policy participates.
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT ASSETS ARE OUR
PROPERTY
The assets of the Separate Account are our property. However, New York Insurance
Law provides that the portion of Separate Account's assets that relates to
variable life policies may not be used to satisfy any obligations that may arise
out of any other business we conduct, although under certain circumstances one
Division could be liable for claims arising out of the other Divisions'
operations.
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13
<PAGE>
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We permit money from charges owed to us to stay in the Divisions and accumulate.
These accumulated amounts are in excess of each Division's net assets attributed
to variable life policies. These amounts belong to us.
There probably will be more assets in the Separate Account than those that apply
to our variable life policies. We expect to transfer part or all of the excess
to our General Account. These transfers will be in cash, but before we make them
we will consider whether the transfer could have any adverse effect on the
Separate Account. In 1986 we made no such transfer to our General Account.
- --------------------------------------------------------------------------------
CHARGES AGAINST THE
SEPARATE ACCOUNT
The amount in the Separate Account Divisions in which your policy participates
is further decreased (after the following charges) by the cost of your insurance
protection. See HOW WE SUPPORT THE OPERATIONS OF A POLICY.
- --------------------------------------------------------------------------------
CHARGES FOR MORTALITY AND
EXPENSE RISKS
We charge the Separate Account for the mortality and expense risks we assume.
The charge is made daily at an effective annual rate of 0.50% of the value of
each Division's assets that are attributable to variable life policies.
The mortality risk we assume is that insureds may live for shorter periods of
time than we estimated. If this occurs, we have to pay a greater amount of death
benefits than we expected in relation to the premiums we received.
The expense risk we assume is that our costs of issuing and administering
policies may be more than we estimated.
The money we collect from this charge may exceed the amount needed to cover
benefits and expenses and would be our gain.
- --------------------------------------------------------------------------------
OTHER CHARGES
The Separate Account purchases shares of the Trust at their net asset value. The
net asset value of those shares reflects management fees and other expenses
already deducted from the assets of the Trust that are briefly described under
THE TRUST. More detailed information about the Trust is in its prospectus and
its Statement of Additional Information.
- --------------------------------------------------------------------------------
YOUR VOTING
PRIVILEGES
GENERAL
As we have already said, all assets held in the Divisions are invested in shares
of the corresponding Portfolios of the Trust. We are the legal owners of those
shares and as such have the right to vote upon certain matters at any meeting of
the Trust's shareholders that may be held. Among other things, we may vote on
any matters described in the Trust's prospectus or Statement of Additional
Information or requiring a vote by shareholders under the 1940 Act.
However, in accordance with our view of current Federal securities law
requirements, we will offer you the opportunity to instruct us as to how Trust
shares allocable to your policy and held by us in the Separate Account will be
voted on these matters. We will vote the shares of the Trust at meetings of
shareholders of the Trust in accordance with your instructions. Thus, you will
have the right to have a voice in the affairs of the Trust. Trust shares held in
each Division of the Separate Account for which no timely instructions from
policy owners are received will be voted by us in the same proportion as shares
in that Division for which instructions are received. We will also vote any
Trust shares that we are entitled to vote directly due to amounts we have
accumulated in the Separate Account in the same proportions that all policy
owners vote, including those who participate in other separate accounts. See
YOUR VOTING PRIVILEGES -- VOTING INSTRUCTIONS OF OTHER SEPARATE ACCOUNT
PARTICIPANTS.
Each policy having a voting interest will be sent proxy material and a form for
giving voting instructions. If required by state insurance officials, we may
disregard voting instructions if those instructions would require shares to be
voted so as to cause a change in the investment objectives or policies of one or
more of the Trust's Portfolios, or to approve or disapprove an investment policy
or investment adviser of one or more of the Trust's Portfolios. In addition, we
may disregard voting instructions in favor of changes initiated by a policy
owner or the Trust's Board of
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14
<PAGE>
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Trustees in the investment policy or the investment adviser of a Portfolio,
provided that our disapproval of the change is reasonable and is based on a good
faith determination that the change would be contrary to state law, the proposed
advisory fee would be higher than we are permitted to pay by the terms of our
variable life policies, or the charge would lead to an adverse effect on our
general account because it would result in unsound or overly speculative
investments. We will advise policy owners if we do disregard voting
instructions, and give our reasons for such actions in the next semiannual
report we send to policy owners.
All Trust shares of whatever class are entitled to one vote, and the votes of
all classes are cast on an aggregate basis, except on matters where the
interests of the Portfolios differ. In such a case, the voting is on a
Portfolio-by-Portfolio basis. Approval or disapproval by the shareholders in one
Portfolio on such a matter would not generally be a prerequisite of approval or
disapproval by shareholders in another Portfolio; and shareholders in a
Portfolio not affected by a matter generally would not be entitled to vote on
that matter. Examples of matters which would require a Portfolio-by-Portfolio
vote are changes in the fundamental investment policy or restrictions of a
particular Portfolio and approval of the investment advisory agreement.
- --------------------------------------------------------------------------------
VOTING INSTRUCTIONS OF OTHER
SEPARATE ACCOUNT PARTICIPANTS
Net premiums for our individual flexible premium variable life policy and
premiums from our variable life insurance policy with additional premium option
are invested in our Separate Account FP, which, in turn, invests in the Trust.
In addition, Trust shares are held by other separate accounts established by us
and other insurance companies affiliated and unaffiliated with us. We expect
that those shares will be voted through those separate accounts in accordance
with instructions of their participants. This will dilute the effect of the
voting instructions of policy owners whose net premiums are invested in the
Separate Account.
- --------------------------------------------------------------------------------
DETERMINING THE TRUST PORTFOLIO
FOR WHICH YOU CAN GIVE VOTING
INSTRUCTIONS
If all your Account Value is in one Division, you can participate in the voting
only for the shares in the Trust Portfolio that corresponds to that Division. If
your Account Value is divided among the Divisions, you are entitled to
participate in the voting of the shares of the Trust Portfolios that correspond
to each Division in which you have Account value.
The number of Trust shares held in each Division attributable to your policy for
purposes of your voting privilege will be determined by dividing your policy's
Account Value (less any policy indebtedness) allocable to that Division by the
net asset value of one share of the corresponding Trust Portfolio as of the
record date for the Trust's shareholder meeting. The record date for this
purpose will not be more than 90 days before the meeting of the Trust.
Fractional shares are counted.
EXAMPLE: Your policy has an Account Value of $3,000, 50% of which is
attributable to the Common Stock Division and 50% of which is attributable to
the Money Market Division. Assuming the net asset value of one share in each
Trust Portfolio is $100, you would have the privilege of voting 30 shares. You
will have the privilege of instructing us regarding 15 votes in each Division.
EXAMPLE (ASSUMING AN OUTSTANDING LOAN): Your policy has an Account Value of
$3,000, which entitles you to 30 votes. If you have a $1,000 loan (including
interest due) equally allocated between each Division, you would be entitled to
10 votes in each Division, or an aggregate of 10 fewer votes.
- --------------------------------------------------------------------------------
LAW CHANGES MAY AFFECT
YOUR VOTING PRIVILEGES
Our Separate Account is required by Federal securities laws or regulations as
currently interpreted to have policy owners instruct us as to the Trust's voting
rights. However, if amendments to or interpretations of those laws or
regulations change what must be voted on, or restrict the matters for which
policy owners are given the opportunity to provide voting instructions, we will
in turn change what is submitted to policy owners.
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15
<PAGE>
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OUR RIGHTS
We reserve the right to take certain actions in connection with our operations
and the operations of the Separate Account. We will always attempt to comply
with applicable laws before we take any of these actions. If necessary, we will
seek approval by policy owners.
Specifically we reserve the right to:
o add Divisions to or remove Divisions from the Separate Account;
o combine any two or more Divisions within the Separate Account;
o transfer assets of the variable life policy offered by this prospectus, as
well as the assets of our other variable life policies, from one Division to
another (if we do, we will withdraw proportional amounts of each investment
in the Division, but we will also make whatever adjustments are needed to
avoid odd lots and fractions);
o operate the Separate Account as a management investment company under the
1940 Act, or in any other form the law allows (if we do, we may invest the
assets in any legal investments and we or one of our affiliates, such as
Equitable Capital, will serve as investment adviser);
o end the registration of the Separate Account under the 1940 Act; or
o operate the Separate Account under the general supervision of a Committee
made up of individuals all of whom may be, under the 1940 Act, interested
persons of us or of Equitable or discharge such Committee.
- --------------------------------------------------------------------------------
SUBSTITUTION OF TRUST SHARES
Although we believe it to be highly unlikely, it is possible that, in our
judgment, one or more of the Portfolios of the Trust may become unsuitable for
investment by the Separate Account because, for example, of a change in the
investment policy, or a change in the tax laws, or because the shares are no
longer available for investment. For those or other reasons, we may seek to
substitute the shares of another Portfolio or of an entirely different mutual
fund. Before we can do this, we would obtain the approval of the SEC, and
possibly one or more state insurance departments, to the extent legally
required.
- --------------------------------------------------------------------------------
DEATH BENEFITS UNDER
OUR POLICIES
The Death Benefit is the amount payable to the named beneficiary when the
insured dies. All or part of the Death Benefit can be paid in cash or applied
under one or more of our payment options described under PAYMENT OPTIONS.
The Death Benefit will at least equal the guaranteed minimum of insurance.
Whether the Death Benefit is higher than the guaranteed minimum depends on the
investment experience of the Divisions in which a policy participates. See the
ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER VALUES, AND
ACCUMULATED PREMIUM.
The Death Benefit is the higher of the guaranteed minimum Death Benefit, plus
the sum (if positive) of the variable adjustment amounts (determined annually)
in the Divisions in which you have Account Value, or the insurance coverage that
can be purchased by the Account Value at the date of death.
The amount of Death Benefit actually paid to the insured's beneficiary will be
adjusted as of the date of the insured's death to reflect:
o any policy loans together with accrued interest;
o the insured's suicide within 2 years after the policy's date of issue. See
LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY; and
o any material misstatement in the application for insurance, including a
misstatement of the insured's age or sex. See LIMITS ON OUR RIGHT TO
CHALLENGE THE POLICY.
Interest will be paid from the date of death to the date the Death Benefit is
paid at the annual rate that we are paying under the deposit option described in
PAYMENT OPTIONS.
If you sign an application and send us money, and if the person proposed to be
insured dies between the application date and the date we act on the
application, we have a special rule. Should we decide the proposed insured was
insurable and accept the application, we will pay the initial face amount to the
proposed beneficiary.
- --------------------------------------------------------------------------------
THE GUARANTEED MINIMUM DEATH
BENEFIT
The guaranteed minimum Death Benefit equals a policy's initial face amount
regardless of the investment experience of the Divisions in which a policy
participates.
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16
<PAGE>
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THE VARIABLE ADJUSTMENT AMOUNT
The variable adjustment amount for each Division is the amount of the Death
Benefit that results from all past investment experience of that Division. In
the first policy year, the variable adjustment amount in each Division is zero.
After that, the variable adjustment amount is the amount of insurance purchased
by the difference between the actual rate of return and 4%. Therefore, a
Division's variable adjustment amount will not change in any year that the
Division's gross return minus the charges to the Division results in a net
return of 4%. If the net return is more than 4%, that variable adjustment amount
will increase. The variable adjustment amount will increase because additional
amounts of paid-up life insurance are purchased. If the net return is less than
4%, it will decrease. The variable adjustment amount will decrease because these
additional amounts of paid-up life insurance are lost. The rates at which these
additional amounts of paid-up life insurance are purchased or lost are based on
sex and attained age and are guaranteed.
The percentage change in the Death Benefit for any year is not the same as the
net return for the preceding year and it is not necessarily related to current
or future rates of inflation. The Death Benefit is equal to the guaranteed
minimum Death Benefit plus the sum (if positive) of the variable adjustment
amounts for each Division in which you have funds. However, even if the sum of
the variable adjustment amounts is negative, the Death Benefit will never be
less than the guaranteed minimum.
In any year that the sum of the variable adjustment amounts increases (and is
positive), the Death Benefit will increase. If the sum of the variable
adjustment amounts is negative, investment experience can not increase the Death
Benefit above the guaranteed minimum until it has increased the variable
adjustment amount of at least one Division so that the sum is positive. In any
year that the sum of the variable adjustment amounts for the Divisions in which
the policy participates decreases, the Death Benefit will decrease, unless it is
already at the guaranteed minimum.
The variable adjustment amount for each Division is set on each policy
anniversary. Once set, it remains the same for the following policy year. If it
is set above the guaranteed minimum, we will be responsible for keeping it at
that level until the next policy anniversary. You will bear the risk that it
could drop on the next policy anniversary (but not below the guaranteed
minimum). In addition, if the Account Value at the date of death, considered as
a single premium, can buy more Death Benefit than what was calculated at the
beginning of the policy year, this increased Death Benefit will be paid.
There is no guarantee that a Division's investment experience, which will
reflect the investment performance of the corresponding Portfolio of the Trust,
will be sufficient to result in an increase in Death Benefits. However, the
historical pattern of stock performance has been one of long-range growth, and
money market investments in recent years have returned more than 4%.
THE VARIABLE ADJUSTMENT AMOUNT IS CUMULATIVE. Increases and decreases in the
variable adjustment amount are carried into each succeeding year. The variable
adjustment amount for a Division can be positive or negative. If it is positive,
good investment experience will produce a larger variable adjustment amount. If
it is negative, good investment experience must first offset the current
negative variable adjustment amount before there can be a positive amount.
EXAMPLE: You were a 40 year old male when your policy was issued. Assume a
hypothetical gross annual investment return of 0% for the first 4 policy years.
This results in a negative variable adjustment amount. A net return of
approximately 25.4% in the 5th policy year would offset the cumulative negative
variable adjustment amount so that it would equal zero. Any net return above
that would produce a positive variable adjustment amount. On the other hand, the
negative variable adjustment amount may be offset over a number of years. Thus,
if the gross return in the 5th policy year were 8%, (equivalent to 7.19% net), a
gross return of 8% in each of the 6 following policy years would be required to
produce a positive variable adjustment amount by the 12th policy year.
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17
<PAGE>
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For a given net return, the greater the Account Value in a Division, the greater
the effect of investment experience on the variable adjustment amount.
Therefore, in later policy years, when your total Account Value may be greater,
investment experience may have a greater effect on the Death Benefit.
- --------------------------------------------------------------------------------
THE DEATH BENEFIT
BASED ON ACCOUNT
VALUE
If the Account Value increases at an annual rate of more than 4% between the
beginning of the policy year and the date of death, the Death Benefit will be
greater than the amount determined at the beginning of the policy year. This is
because we see how much insurance the Account Value would buy if it were
considered as a single premium.
- --------------------------------------------------------------------------------
NET RETURN
The Death Benefit based on a Division's net return is set on each policy
anniversary. The net return depends on the investment experience of the Division
from the first day of that policy year to the first day of the next policy year.
It takes into account investment income, capital gains and capital losses
(whether realized or unrealized), with respect to Trust shares owned by the
Division and gains resulting from the reimbursement by us to the Division of
amounts corresponding to certain Trust expenses. The charges against the
Division are then deducted to determine the net return. The net return on a date
during a policy year depends on the investment experience of the Division from
the first day of that policy year to that date and can affect Account Values,
Cash Surrender Values and Death Benefits.
The net return of each Division is determined at the close of trading on each
day in which the degree of trading in the corresponding Portfolio of the Trust
might materially affect the net return of that Division. We call this a
"business day". Normally this would be each day that the New York Stock Exchange
is open. However, because we are closed on Martin Luther King Day and the Friday
after Thanksgiving Day, no determination will be made on those days.
The assets of each Division are valued by multiplying the number of Trust shares
in each Division by the net asset value of such shares and is adjusted by the
charge for mortality and expense risks. See the financial statements for the
Separate Account in this prospectus.
The net return for a policy year is not the same as for a calendar year unless
the policy anniversary is January 1.
A statement of the method we use to calculate net return is an exhibit to the
Registration Statement we filed with the SEC. It will be furnished on request.
- --------------------------------------------------------------------------------
HOW THE DEATH BENEFIT VARIES
FROM THE GUARANTEED MINIMUM
The following example shows how the Death Benefit varies from the guaranteed
minimum as a result of investment experience. Assume that the insured was a 40
year old male when the policy was issued, and the hypothetical gross annual
return for each of the first 6 policy years was 8% for each Division or their
combination (which is equal to a net return of 7.19%). Use the amounts from the
ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER VALUES, AND
ACCUMULATED PREMIUM.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Variable
Guaranteed Adjustment Death
Minimum + Amount = Benefit
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
End of policy year 5 $81,932 $13,468 $95,400
Increase -- 2,951 2,951 (3.1% increase)
- ------------------------------------------------------------------------------------------------------------------------------------
End of policy year 6 $81,932 $16,419 $98,351
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
If the gross annual return was 0% (equal to a net return of -.75%), the Death
Benefit at the end of policy year 6 would have been $91,006 (a 4.6% decrease).
This reflects a decrease in the variable adjustment amount of $4,394.
- --------------------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------------------
ACCOUNT VALUES, CASH
SURRENDER VALUES AND
LOAN PRIVILEGES UNDER
OUR POLICIES
HOW WE DETERMINE ACCOUNT VALUE
When your policy is issued, your total Account Value is your total single
premium net of deductions. See DEDUCTIONS FROM PREMIUM. On dates other than at
issue, the total Account Value is the sum of the funds allocated to each
Division. The funds in each Division, on any date other than a policy
anniversary, are the sum of (1) the portion of the tabular Account Value for
that date attributable to that Division, (2) the aggregate net single premium on
that date for the variable adjustment amount, (3) adjustments to reflect
investment experience of the Division from the last policy anniversary to that
date and (4) adjustments to reflect charges to the Separate Account, cost of
insurance charges and transfers to and from that Division from the last policy
anniversary to that date. The tabular Account Value is what the Account Value
for the policy would be if each Division in which you had funds had a constant
net investment return of 4% a year. On each policy anniversary, the policy's net
investment return in excess of 4% per year is used as a net single premium to
purchase additional paid up variable life insurance (see THE VARIABLE ADJUSTMENT
AMOUNT and NET RETURN). The net single premium is the one time net cost for your
sex and attained age to purchase one dollar of Death Benefit, as specified in
your policy. On each policy anniversary, the process begins again.
- --------------------------------------------------------------------------------
HOW WE DETERMINE CASH
SURRENDER VALUE
Account Value minus any contingent deferred sales load equals Cash Surrender
Value. The policy's Cash Surrender Value will vary daily with investment
experience. Cash Surrender Value is the same as Account Value except in the
first ten years of the policy. During the first ten policy years the Cash
Surrender Value on any date will equal the product of the Account Value on that
date and the tabular cash value (which is stated in your policy) divided by the
tabular Account Value for that date. After the tenth policy year, the Cash
Surrender Value will equal the Account Value. The difference between the Cash
Surrender Value and the Account Value is a contingent deferred sales load.
See CONTINGENT DEFERRED SALES LOAD.
- --------------------------------------------------------------------------------
THERE IS NO GUARANTEED MINIMUM
ACCOUNT VALUE OR CASH SURRENDER
VALUE
Daily increases or decreases in Account Value or Cash Surrender Value depend on
the investment experience of the Divisions. There is no guaranteed minimum
Account Value or Cash Surrender Value.
- --------------------------------------------------------------------------------
RETURNING THE POLICY FOR CASH
During the insured's lifetime, and subject to our rules, your policy can be
returned for payment of the Cash Surrender Value net of any indebtedness. The
amount payable will be based on the net Cash Surrender Value next computed after
we receive your signed request for payment of the Cash Surrender Value at your
Regional Service Center, accompanied by your policy. The insurance coverage will
end on the date you send us the policy and your request.
SPLITTING THE POLICY. You can request to split your policy into two policies. In
addition, you may return one for cash. Any policy that continues will be based
on the new initial face amount.
If you split a policy, each continued policy must have a face amount that is at
least equal to what the face amount of the $2,500 premium policy would be at the
time of the split. This face amount will also be based on the same age and sex
as the original policy.
These are our current procedures, which may change.
- --------------------------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------------------
INCOME TAX WITHHOLDING
Federal tax law requires us to withhold income tax from any portion of your
surrender proceeds that is subject to tax, unless you request us not to
withhold.
If you surrender your policy and do not advise us in writing that you do not
want us to withhold Federal income tax before the date payment must be made, we
are required by law to withhold tax from the surrender payment.
If you elect not to have tax withheld from the surrender payment, or if the
amount of Federal income tax withheld is insufficient, you may be responsible
for payment of tax. You may incur penalties under the estimated tax rules if
your withholding and estimated tax payments are not sufficient. You may wish to
consult your tax adviser.
- --------------------------------------------------------------------------------
YOU CAN TRANSFER ACCOUNT VALUE
AMONG DIVISIONS
You may transfer Account Value among the Divisions by contacting our regional
Life Insurance Center. You can request to transfer part or all of your Account
Value among the Divisions. You may do this up to four times in a policy year. A
transfer will go into effect on the day we receive your request. We reallocate
loans if you transfer Account Value.
- --------------------------------------------------------------------------------
WHEN A DIVISION
BECOMES INACTIVE
If you have a policy loan allocated to a Division and your Account Value less
your loan (including accrued loan interest) in that Division reaches zero, that
Division will become inactive for your policy. We will reallocate the loan to
the other Divisions based on the proportion that your Account Value in each
Division has to your total Account Value. A Division will also become inactive
for your policy if you transfer its entire Account Value to the other Divisions.
We will notify you when a Division becomes inactive.
If a Division becomes inactive, the future variable adjustment amount, Account
Value and net return will be affected. You may transfer Account Value into an
inactive Division from the other Divisions. See YOU CAN TRANSFER ACCOUNT VALUE
AMONG DIVISIONS.
- --------------------------------------------------------------------------------
TAKING A POLICY LOAN
You may borrow up to 90% of your policy's Cash Surrender Value (net of previous
loans) using the policy as security. We will not grant a loan that is not at
least $100 more than any outstanding loan with accrued interest.
Borrowing money against your policy will have a permanent effect on your
policy's Account Value and Cash Surrender Value, and the amount by which the
Death Benefit may increase above the guaranteed minimum. This effect remains
even though the loan is repaid in whole or in part.
Whenever the loan with accrued interest from one Division equals or exceeds the
Account Value in that Division, that Division will become inactive for your
policy. We will transfer the total Account Value and loan allocation to the
other Divisions. See WHEN A DIVISION BECOMES INACTIVE.
IF LOANS EXCEED THE CASH SURRENDER VALUE OF YOUR POLICY. Whenever the loan with
accrued interest exceeds the Cash Surrender Value of your policy, we will send a
notice to you and to anyone to whom you told us you assigned the policy. The
policy will end 31 days after we send the notice unless you make a repayment
during the 31-day period that is large enough to reduce your outstanding loan
with accrued interest to below the total Cash Surrender Value of your policy.
If you borrow the maximum of 90% of your policy's Cash Surrender Value, you
increase your risk of having your policy end. This might happen if the
combination of policy loan interest as it builds up, the cost of insurance,
asset charges against the Separate Account, and investment experience of the
Divisions where you have Cash Surrender Value uses up the remaining 10%.
- --------------------------------------------------------------------------------
20
<PAGE>
- --------------------------------------------------------------------------------
INTEREST. Interest on loans is 5% a year. Interest is charged daily and is
payable by the policy owner on each anniversary. However, if it is not paid, it
will be compounded on the policy anniversary because it will be added to the
loan principal. This unpaid interest is transferred out of each Division where
you have your loan into our general account. This interest is not deductible for
Federal income tax purposes.
REPAYMENT. You can repay all or part of any outstanding loan with accrued
interest at any time while the policy is in effect and the insured is alive.
Your repayment, whether full or partial, will be allocated to the Divisions in
proportion to the loan allocation to each Division at the time of repayment.
The amount of any outstanding loan with accrued interest will be deducted from
the Death Benefit or Cash Surrender Value proceeds.
WHAT DIVISION WE CHARGE LOANS AGAINST. We allocate a loan based on the net Cash
Surrender Value in each Division on the date the loan is made. We reallocate
loans if you transfer Account Value.
THE PERMANENT EFFECT OF A LOAN. When you take out a loan, we transfer part of
the Cash Surrender Value equal to the amount of the loan from the Divisions to
our general account. In addition, unpaid interest on the policy loan will be
transferred to our general account from time to time. The amount taken out of
the Divisions will not be affected by the Divisions' investment experience while
the loan is outstanding. Since the amount is not in the Divisions, it cannot
contribute to any possible increase in your policy's Death Benefit, Account
Value or Cash Surrender Value.
We will credit your policy with a 4% annual return on any amount transferred to
our general account as a result of your policy loan. This can protect Cash
Surrender Value and Death Benefits from decreasing if investment experience is
below 4%. It will also prevent them from increasing if investment experience is
above 4%.
EXAMPLE: You were a 40 year old male when your policy was issued, and you have a
Single Premium Variable Life Insurance policy. Use the illustration on page 25
and assume an 8% hypothetical gross annual investment return for each Division
or their combination (which is a net return of 7.19%). If you take a loan for
$22,000 at the end of the 9th policy year, it will affect the Death Benefit,
Account Value, and Cash Surrender Value (before subtracting the amount of the
loan with loan interest) in the 10th policy year as follows:
- --------------------------------------------------------------------------------
Without Loan With Loan
- --------------------------------------------------------------------------------
Death Benefit $111,106 $109,370
Account Value 44,931 44,229
Cash Surrender Value 44,931 44,229
- --------------------------------------------------------------------------------
The difference results from the transfer of the portion of the Cash Surrender
Value equal to the loan from the Division to the general account. The return on
the amount transferred is reduced to 4% a year, rather than the Division's net
return of 7.19%.
See DEATH BENEFITS UNDER OUR POLICIES for adjustments that are made as of the
date of the insured's death.
- --------------------------------------------------------------------------------
21
<PAGE>
- --------------------------------------------------------------------------------
ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER VALUES, AND
ACCUMULATED PREMIUM
To help you get a picture of how the key financial elements of our policy work,
we have prepared a series of tables.
The tables show how Death Benefits, Account Values and Cash Surrender Values of
policies with single premiums of $10,000, $20,000, $25,000 and $50,000 could
vary over an extended period of time if the Divisions had CONSTANT hypothetical
gross annual investment returns of 0%, 4%, 8%, and 12% over the years covered by
each table. The Death Benefits, Account Values and Cash Surrender Values would
differ from those shown in the tables if the annual investment returns did not
remain absolutely constant. Thus, the figures would be different if the return
AVERAGED 0%, 4%, 8%, or 12% over a period of years but went above or below
those figures in individual policy years. The Death Benefits, Account Values and
Cash Surrender Values would also differ, depending on the investment allocations
made to the Divisions, if the actual investment experience averaged 0%, 4%, 8%,
or 12%, but went above or below those figures for individual Divisions. The
difference between the Account Value and the Cash Surrender Value in the first
ten years is the contingent deferred sales load.
The amounts of Death Benefits, Account Values and Cash Surrender Values shown in
the tables for the end of each policy year take into account a daily charge
against each Division that is equivalent to an annual charge of 0.75% at the
beginning of each year. This charge is the 0.50% charge against the Separate
Account for mortality and expense risks and the effect on each Division's
investment experience of the charge to the Trust assets for investment advisory
services (equivalent to an annual rate of 0.25% of the aggregate average daily
net assets of the Portfolios). The effect of these adjustments is that on a 0%
actual rate of return the return would be -0.75%, on 4% it would be 3.22%, on 8%
it would be 7.19% and on 12% it would be 11.16%.
The hypothetical returns shown in the tables do not reflect any charges for
Trust expenses in addition to the 0.25% investment advisory fee charge, because
the Divisions in general will be reimbursed for their share of such expenses, as
previously discussed under THE SEPARATE ACCOUNT, ITS INVESTMENTS AND ITS
INVESTMENT EXPERIENCE and THE TRUST.
The tables reflect the fact that we do not currently charge the Divisions for
Federal income tax. However, if we do make such a charge in the future, it would
take a higher rate of return to produce after-tax returns of 0%, 4%, 8%, and 12%
than it does now.
The second and third columns of each table show what would happen if an amount
equal to the total premium were invested to earn interest, after taxes, of 4% or
5% compounded annually. These tables show that if a policy is returned in its
very early years for payment of its Cash Surrender Value, the Cash Surrender
Value will be low in comparison to the premium accumulated with interest. This
means that the cost of owning your policy for a relatively short time will be
high.
If you request, we will furnish you with a comparable illustration based on the
proposed insured's sex, age and an initial face amount or premium amount of your
choice. In addition, if you do purchase a policy, we will deliver a specific
illustration that reflects your actual premium paid.
We have also prepared special illustrations showing the effects of policy loans
on a planned basis. These are available on request.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
OF ILLUSTRATIONS
Page
----
$10,000 Single premium Male Age 5 23
$20,000 Single premium Male Age 25 24
$25,000 Single premium Male Age 40 25
$50,000 Single premium Male Age 55 26
$10,000 Single premium Female Age 5 27
$20,000 Single premium Female Age 25 28
$25,000 Single premium Female Age 40 29
$50,000 Single premium Female Age 55 30
- --------------------------------------------------------------------------------
22
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $98,654 MALE AGE 5 SINGLE PREMIUM $10,000(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT(2)
PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY --------------------------- --------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ -------- -------- ------- ------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
1 $ 10,400 $ 10,500 $98,654 $98,654 $101,705 $ 105,501
2 10,816 11,025 98,654 98,654 104,848 112,820
3 11,249 11,576 98,654 98,654 108,087 120,642
4 11,699 12,155 98,654 98,654 111,423 128,999
5 12,167 12,763 98,654 98,654 114,861 137,934
6 12,653 13,401 98,654 98,654 118,404 147,482
7 13,159 14,071 98,654 98,654 122,056 157,694
8 13,686 14,775 98,654 98,654 125,823 168,616
9 14,233 15,513 98,654 98,654 129,708 180,303
10 14,802 16,289 98,654 98,654 133,716 192,810
11 15,395 17,103 98,654 98,654 137,853 206,196
12 16,010 17,959 98,654 98,654 142,120 220,524
13 16,651 18,856 98,654 98,654 146,523 235,857
14 17,317 19,799 98,654 98,654 151,063 252,260
15 18,009 20,789 98,654 98,654 155,745 269,806
16 18,730 21,829 98,654 98,654 160,570 288,570
17 19,479 22,920 98,654 98,654 165,544 308,634
18 20,258 24,066 98,654 98,654 170,669 330,082
19 21,068 25,270 98,654 98,654 175,951 353,011
20 21,911 26,533 98,654 98,654 181,394 377,520
60 (Age 65) 105,196 186,792 98,654 98,654 614,156 5,545,865
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
---------------------------------------------------------- ----------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
------ ------- -------- ---------- ------ ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$9,447 $ 9,827 $ 10,208 $ 10,590 $8,691 $ 9,041 $ 9,392 $ 9,743
9,302 10,067 10,863 11,689 8,634 9,344 10,083 10,849
9,165 10,320 11,567 12,910 8,585 9,666 10,834 12,093
9,038 10,585 12,324 14,268 8,544 10,007 11,650 13,487
8,915 10,862 13,135 15,773 8,505 10,363 12,533 15,049
8,797 11,149 14,004 17,444 8,471 10,737 13,486 16,797
8,680 11,443 14,930 19,288 8,436 11,123 14,511 18,748
8,561 11,740 15,909 21,321 8,400 11,519 15,611 20,920
8,436 12,037 16,943 23,552 8,356 11,923 16,783 23,329
8,308 12,331 18,030 25,998 8,308 12,331 18,030 25,998
8,173 12,620 19,169 28,673 8,173 12,620 19,169 28,673
8,034 12,907 20,366 31,600 8,034 12,907 20,366 31,600
7,892 13,191 21,622 34,805 7,892 13,191 21,622 34,805
7,751 13,478 22,950 38,326 7,751 13,478 22,950 38,326
7,611 13,770 24,358 42,198 7,611 13,770 24,358 42,198
7,474 14,070 25,856 46,468 7,474 14,070 25,856 46,468
7,342 14,380 27,453 51,183 7,342 14,380 27,453 51,183
7,216 14,704 29,162 56,401 7,216 14,704 29,162 56,401
7,096 15,042 30,990 62,175 7,096 15,042 30,990 62,175
6,981 15,396 32,950 68,576 6,981 15,396 32,950 68,576
3,509 37,715 370,342 3,344,211 3,509 37,715 370,342 3,344,211
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION
TABLE ABOVE:]
<FN>
(1) Assumes a 2% premium tax.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
23
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $106,799 MALE AGE 25 SINGLE PREMIUM $20,000(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT(2)
PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY --------------------------- --------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- -------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
1 $20,800 $ 21,000 $106,799 $106,799 $110,101 $ 114,209
2 21,632 22,050 106,799 106,799 113,503 122,131
3 22,497 23,153 106,799 106,799 117,010 130,598
4 23,397 24,310 106,799 106,799 120,623 139,649
5 24,333 25,526 106,799 106,799 124,347 149,326
6 25,306 26,802 106,799 106,799 128,185 159,671
7 26,319 28,142 106,799 106,799 132,141 170,733
8 27,371 29,549 106,799 106,799 136,218 182,560
9 28,466 31,027 106,799 106,799 140,422 195,206
10 29,605 32,578 106,799 106,799 144,756 208,727
11 30,789 34,207 106,799 106,799 149,223 223,187
12 32,021 35,917 106,799 106,799 153,830 238,649
13 33,301 37,713 106,799 106,799 158,578 255,185
14 34,634 39,599 106,799 106,799 163,475 272,870
15 36,019 41,579 106,799 106,799 168,523 291,784
16 37,460 43,658 106,799 106,799 173,728 312,014
17 38,958 45,840 106,799 106,799 179,096 333,653
18 40,516 48,132 106,799 106,799 184,631 356,799
19 42,137 50,539 106,799 106,799 190,339 381,557
20 43,822 53,066 106,799 106,799 196,225 408,040
40 (Age 65) 96,020 140,800 106,799 106,799 361,588 1,568,889
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
--------------------------------------------------------- ---------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
------- ------- -------- -------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$19,096 $19,866 $ 20,637 $ 21,407 $17,579 $18,288 $ 18,996 $ 19,705
18,808 20,355 21,964 23,633 17,465 18,902 20,396 21,947
18,530 20,863 23,384 26,099 17,363 19,549 21,910 24,455
18,263 21,390 24,903 28,832 17,268 20,225 23,547 27,260
18,005 21,936 26,527 31,857 17,180 20,932 25,313 30,398
17,753 22,500 28,263 35,206 17,096 21,669 27,218 33,904
17,506 23,081 30,115 38,910 17,017 22,436 29,273 37,822
17,264 23,679 32,090 43,007 16,940 23,234 31,486 42,198
17,026 24,292 34,195 47,536 16,864 24,061 33,871 47,085
16,792 24,922 36,439 52,542 16,792 24,922 36,439 52,542
16,558 25,565 38,826 58,070 16,558 25,565 38,826 58,070
16,327 26,223 41,367 64,177 16,327 26,223 41,367 64,177
16,096 26,895 44,068 70,915 16,096 26,895 44,068 70,915
15,866 27,577 46,937 78,346 15,866 27,577 46,937 78,346
15,636 28,271 49,981 86,540 15,636 28,271 49,981 86,540
15,405 28,976 53,213 95,570 15,405 28,976 53,213 95,570
15,172 29,690 56,635 105,511 15,172 29,690 56,635 105,511
14,940 30,415 60,265 116,463 14,940 30,415 60,265 116,463
14,707 31,147 64,112 128,519 14,707 31,147 64,112 128,519
14,473 31,890 68,184 141,786 14,473 31,890 68,184 141,786
9,750 47,521 218,040 946,055 9,750 47,521 218,040 946,055
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION
TABLE ABOVE:]
<FN>
(1) Assumes a 2% premium tax.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
24
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $81,932 MALE AGE 40 SINGLE PREMIUM $25,000(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT(2)
PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY --------------------------- --------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
1 $26,000 $26,250 $81,932 $81,932 $ 84,462 $ 87,612
2 27,040 27,563 81,932 81,932 87,072 93,688
3 28,122 28,941 81,932 81,932 89,763 100,187
4 29,246 30,388 81,932 81,932 92,538 107,139
5 30,416 31,907 81,932 81,932 95,400 114,575
6 31,633 33,502 81,932 81,932 98,351 122,530
7 32,898 35,178 81,932 81,932 101,394 131,039
8 34,214 36,936 81,932 81,932 104,532 140,142
9 35,583 38,783 81,932 81,932 107,769 149,879
10 37,006 40,722 81,932 81,932 111,106 160,296
11 38,486 42,758 81,932 81,932 114,547 171,440
12 40,026 44,896 81,932 81,932 118,096 183,362
13 41,627 47,141 81,932 81,932 121,757 196,118
14 43,292 49,498 81,932 81,932 125,532 209,767
15 45,024 51,973 81,932 81,932 129,427 224,373
16 46,825 54,572 81,932 81,932 133,444 240,002
17 48,697 57,300 81,932 81,932 137,587 256,729
18 50,645 60,165 81,932 81,932 141,861 274,628
19 52,671 63,174 81,932 81,932 146,269 293,783
20 54,778 66,332 81,932 81,932 150,817 314,282
25 (Age 65) 66,646 84,659 81,932 81,932 175,799 440,537
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
------------------------------------------------------------ ----------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
------- ------- -------- -------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$23,941 $24,906 $ 25,870 $ 26,836 $22,066 $22,956 $ 23,845 $ 24,734
23,580 25,519 27,534 29,627 21,925 23,727 25,602 27,547
23,219 26,142 29,299 32,702 21,779 24,520 27,483 30,674
22,857 26,772 31,170 36,087 21,630 25,335 29,497 34,150
22,494 27,410 33,149 39,812 21,478 26,172 31,652 38,014
22,130 28,055 35,246 43,911 21,322 27,031 33,959 42,307
21,767 28,708 37,466 48,420 21,164 27,912 36,427 47,078
21,403 29,368 39,815 53,378 21,004 28,819 39,070 52,380
21,040 30,036 42,301 58,830 20,842 29,752 41,901 58,274
20,678 30,711 44,931 64,823 20,678 30,711 44,931 64,823
20,316 31,393 47,712 71,410 20,316 31,393 47,712 71,410
19,953 32,078 50,649 78,639 19,953 32,078 50,649 78,639
19,589 32,767 53,747 86,572 19,589 32,767 53,747 86,572
19,224 33,456 57,012 95,268 19,224 33,456 57,012 95,268
18,856 34,144 60,447 104,791 18,856 34,144 60,447 104,791
18,487 34,830 64,062 115,217 18,487 34,830 64,062 115,217
18,115 35,514 67,863 126,629 18,115 35,514 67,863 126,629
17,744 36,195 71,860 139,113 17,744 36,195 71,860 139,113
17,373 36,875 76,063 152,773 17,373 36,875 76,063 152,773
17,003 37,554 80,481 167,713 17,003 37,554 80,481 167,713
15,154 40,845 106,009 265,648 15,154 40,845 106,009 265,648
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION
TABLE ABOVE:]
<FN>
(1) Assumes a 2% premium tax.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
25
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $104,488 MALE AGE 55 SINGLE PREMIUM $50,000(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT(2)
PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------------- -------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
1 $ 52,000 $ 52,500 $104,488 $104,488 $107,731 $111,766
2 54,080 55,125 104,488 104,488 111,075 119,556
3 56,243 57,881 104,488 104,488 114,526 127,892
4 58,493 60,775 104,488 104,488 118,085 136,812
5 60,833 63,814 104,488 104,488 121,755 146,358
6 63,266 67,005 104,488 104,488 125,542 156,575
7 65,797 70,355 104,488 104,488 129,448 167,509
8 68,428 73,873 104,488 104,488 133,478 179,213
9 71,166 77,566 104,488 104,488 137,635 191,742
10 74,012 81,445 104,488 104,488 141,925 205,154
11 76,973 85,517 104,488 104,488 146,351 219,513
12 80,052 89,793 104,488 104,488 150,917 234,886
13 83,254 94,282 104,488 104,488 155,628 251,344
14 86,584 98,997 104,488 104,488 160,489 268,965
15 90,047 103,946 104,488 104,488 165,504 287,831
16 93,649 109,144 104,488 104,488 170,679 308,029
17 97,395 114,601 104,488 104,488 176,018 329,657
18 101,291 120,331 104,488 104,488 181,529 352,820
19 105,342 126,348 104,488 104,488 187,216 377,630
20 109,556 132,665 104,488 104,488 193,086 404,206
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
---------------------------------------------------------- ----------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
------- ------- -------- -------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$47,844 $49,781 $ 51,718 $ 53,655 $44,341 $46,136 $ 47,932 $ 49,727
46,883 50,758 54,787 58,969 43,790 47,410 51,174 55,080
45,921 51,732 58,012 64,783 43,232 48,703 54,617 60,991
44,961 52,703 61,406 71,144 42,670 50,019 58,278 67,521
44,003 53,673 64,973 78,102 42,103 51,356 62,169 74,731
43,045 54,637 68,720 85,707 41,533 52,718 66,305 82,697
42,089 55,593 72,651 94,013 40,960 54,100 70,700 91,488
41,134 56,538 76,771 103,076 40,383 55,506 75,368 101,193
40,177 57,467 81,079 112,953 39,802 56,931 80,323 111,899
39,218 58,377 85,581 123,710 39,218 58,377 85,581 123,710
38,258 59,266 90,282 135,415 38,258 59,266 90,282 135,415
37,298 60,132 95,186 148,148 37,298 60,132 95,186 148,148
36,343 60,981 100,307 161,999 36,343 60,981 100,307 161,999
35,393 61,808 105,651 177,063 35,393 61,808 105,651 177,063
34,451 62,617 111,229 193,439 34,451 62,617 111,229 193,439
33,516 63,403 117,041 211,227 33,516 63,403 117,041 211,227
32,586 64,160 123,087 230,526 32,586 64,160 123,087 230,526
31,659 64,883 129,361 251,427 31,659 64,883 129,361 251,427
30,735 65,563 135,852 274,023 30,735 65,563 135,852 274,023
29,809 66,193 142,551 298,417 29,809 66,193 142,551 298,417
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION
TABLE ABOVE:]
<FN>
(1) Assumes a 2% premium tax.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
26
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $118,930 FEMALE AGE 5 SINGLE PREMIUM $10,000(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT(2)
PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ---------------------------- ----------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ -------- -------- -------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
1 $ 10,400 $ 10,500 $118,930 $118,930 $122,609 $ 127,188
2 10,816 11,025 118,930 118,930 126,401 136,014
3 11,249 11,576 118,930 118,930 130,308 145,450
4 11,699 12,155 118,930 118,930 134,333 155,535
5 12,167 12,763 118,930 118,930 138,482 166,316
6 12,653 13,401 118,930 118,930 142,757 177,839
7 13,159 14,071 118,930 118,930 147,163 190,160
8 13,686 14,775 118,930 118,930 151,707 203,335
9 14,233 15,513 118,930 118,930 156,389 217,423
10 14,802 16,289 118,930 118,930 161,217 232,491
11 15,395 17,103 118,930 118,930 166,196 248,605
12 16,010 17,959 118,930 118,930 171,328 265,837
13 16,651 18,856 118,930 118,930 176,620 284,267
14 17,317 19,799 118,930 118,930 182,075 303,974
15 18,009 20,789 118,930 118,930 187,698 325,047
16 18,730 21,829 118,930 118,930 193,495 347,578
17 19,479 22,920 118,930 118,930 199,470 371,670
18 20,258 24,066 118,930 118,930 205,629 397,428
19 21,068 25,270 118,930 118,930 211,978 424,969
20 21,911 26,533 118,930 118,930 218,521 454,413
60 (Age 65) 105,196 186,792 118,930 118,930 738,965 6,658,114
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
---------------------------------------------------------- ----------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
------ ------- -------- ---------- ------ ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$9,444 $ 9,824 $ 10,206 $ 10,587 $8,690 $ 9,041 $ 9,391 $ 9,742
9,295 10,061 10,857 11,682 8,629 9,340 10,079 10,845
9,152 10,306 11,551 12,894 8,574 9,654 10,822 12,079
9,017 10,562 12,298 14,239 8,524 9,985 11,626 13,461
8,886 10,828 13,096 15,728 8,478 10,331 12,494 15,006
8,761 11,105 13,951 17,380 8,436 10,694 13,434 16,737
8,639 11,391 14,863 19,206 8,396 11,072 14,447 18,668
8,517 11,683 15,835 21,224 8,357 11,463 15,538 20,825
8,397 11,984 16,871 23,455 8,317 11,869 16,709 23,231
8,277 12,287 17,969 25,913 8,277 12,287 17,969 25,913
8,158 12,599 19,137 28,626 8,158 12,599 19,137 28,626
8,040 12,916 20,379 31,621 8,040 12,916 20,379 31,621
7,921 13,239 21,697 34,922 7,921 13,239 21,697 34,922
7,806 13,571 23,103 38,571 7,806 13,571 23,103 38,571
7,692 13,911 24,599 42,600 7,692 13,911 24,599 42,600
7,580 14,262 26,195 47,054 7,580 14,262 26,195 47,054
7,471 14,621 27,896 51,978 7,471 14,621 27,896 51,978
7,364 14,992 29,711 57,424 7,364 14,992 29,711 57,424
7,259 15,374 31,648 63,447 7,259 15,374 31,648 63,447
7,157 15,767 33,715 70,111 7,157 15,767 33,715 70,111
3,749 40,206 393,875 3,548,841 3,749 40,206 393,875 3,548,841
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION
TABLE ABOVE:]
<FN>
(1) Assumes a 2% premium tax.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
27
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $125,738 FEMALE AGE 25 SINGLE PREMIUM $20,000(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT(2)
PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY -------------------------- ----------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
1 $20,800 $21,000 $125,738 $125,738 $129,619 $ 134,449
2 21,632 22,050 125,738 125,738 133,620 143,763
3 22,497 23,153 125,738 125,738 137,743 153,722
4 23,397 24,310 125,738 125,738 141,994 164,369
5 24,333 25,526 125,738 125,738 146,376 175,754
6 25,306 26,802 125,738 125,738 150,893 187,926
7 26,319 28,142 125,738 125,738 155,549 200,943
8 27,371 29,549 125,738 125,738 160,348 214,858
9 28,466 31,027 125,738 125,738 165,296 229,738
10 29,605 32,578 125,738 125,738 170,396 245,649
11 30,789 34,207 125,738 125,738 175,654 262,661
12 32,021 35,917 125,738 125,738 181,075 280,854
13 33,301 37,713 125,738 125,738 186,664 300,312
14 34,634 39,599 125,738 125,738 192,426 321,121
15 36,019 41,579 125,738 125,738 198,369 343,377
16 37,460 43,658 125,738 125,738 204,496 367,185
17 38,958 45,840 125,738 125,738 210,814 392,650
18 40,516 48,132 125,738 125,738 217,330 419,889
19 42,137 50,539 125,738 125,738 224,050 449,025
20 43,822 53,066 125,738 125,738 230,978 480,190
40 (Age 65) 96,020 140,800 125,738 125,738 425,204 1,842,347
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
-------------------------------------------------------- -------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
------- ------- -------- -------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$19,128 $19,899 $ 20,668 $ 21,439 $17,600 $18,308 $ 19,017 $ 19,725
18,863 20,412 22,023 23,695 17,512 18,951 20,446 21,999
18,602 20,941 23,468 26,191 17,427 19,617 21,985 24,535
18,347 21,484 25,009 28,949 17,345 20,311 23,643 27,369
18,096 22,044 26,653 32,002 17,266 21,032 25,430 30,534
17,849 22,619 28,405 35,377 17,188 21,781 27,354 34,067
17,605 23,207 30,272 39,107 17,111 22,557 29,425 38,011
17,365 23,813 32,265 43,233 17,038 23,364 31,657 42,418
17,130 24,435 34,389 47,796 16,968 24,204 34,063 47,344
16,897 25,073 36,652 52,838 16,897 25,073 36,652 52,838
16,667 25,727 39,064 58,412 16,667 25,727 39,064 58,412
16,437 26,396 41,629 64,568 16,437 26,396 41,629 64,568
16,208 27,075 44,352 71,357 16,208 27,075 44,352 71,357
15,980 27,767 47,248 78,847 15,980 27,767 47,248 78,847
15,748 28,469 50,317 87,101 15,748 28,469 50,317 87,101
15,517 29,180 53,571 96,192 15,517 29,180 53,571 96,192
15,283 29,899 57,019 106,200 15,283 29,899 57,019 106,200
15,049 30,628 60,672 117,220 15,049 30,628 60,672 117,220
14,814 31,365 64,542 129,350 14,814 31,365 64,542 129,350
14,579 32,113 68,644 142,707 14,579 32,113 68,644 142,707
10,167 49,469 226,637 981,989 10,167 49,469 226,637 981,989
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION
TABLE ABOVE:]
<FN>
(1) Assumes a 2% premium tax.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
28
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $95,798 FEMALE AGE 40 SINGLE PREMIUM $25,000(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT(2)
PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY --------------------------- ----------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
1 $26,000 $26,250 $95,798 $95,798 $ 98,757 $102,439
2 27,040 27,563 95,798 95,798 101,808 109,544
3 28,122 28,941 95,798 95,798 104,955 117,143
4 29,246 30,388 95,798 95,798 108,200 125,272
5 30,416 31,907 95,798 95,798 111,546 133,966
6 31,633 33,502 95,798 95,798 114,995 143,266
7 32,898 35,178 95,798 95,798 118,552 153,213
8 34,214 36,936 95,798 95,798 122,221 163,852
9 35,583 38,783 95,798 95,798 126,003 175,233
10 37,006 40,722 95,798 95,798 129,903 187,406
11 38,486 42,758 95,798 95,798 133,924 200,428
12 40,026 44,896 95,798 95,798 138,071 214,357
13 41,627 47,141 95,798 95,798 142,348 229,258
14 43,292 49,498 95,798 95,798 146,757 245,199
15 45,024 51,973 95,798 95,798 151,305 262,252
16 46,825 54,572 95,798 95,798 155,994 280,496
17 48,697 57,300 95,798 95,798 160,830 300,012
18 50,645 60,165 95,798 95,798 165,816 320,888
19 52,671 63,174 95,798 95,798 170,957 343,218
20 54,778 66,332 95,798 95,798 176,257 367,101
25 (Age 65) 66,646 84,659 95,798 95,798 205,345 513,986
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
---------------------------------------------------------- ----------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
------- ------- -------- -------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$23,941 $24,906 $ 25,871 $ 26,835 $22,060 $22,949 $ 23,838 $ 24,726
23,581 25,520 27,536 29,628 21,919 23,722 25,595 27,540
23,219 26,142 29,300 32,702 21,773 24,514 27,475 30,666
22,856 26,771 31,168 36,087 21,626 25,330 29,491 34,144
22,494 27,410 33,150 39,813 21,475 26,168 31,647 38,008
22,134 28,059 35,250 43,916 21,322 27,031 33,959 42,308
21,774 28,718 37,478 48,435 21,169 27,920 36,436 47,090
21,418 29,387 39,840 53,411 21,017 28,837 39,093 52,410
21,062 30,067 42,341 58,885 20,862 29,782 41,941 58,328
20,709 30,756 44,994 64,911 20,709 30,756 44,994 64,911
20,357 31,454 47,801 71,539 20,357 31,454 47,801 71,539
20,007 32,162 50,775 78,830 20,007 32,162 50,775 78,830
19,657 32,877 53,921 86,843 19,657 32,877 53,921 86,843
19,310 33,601 57,246 95,647 19,310 33,601 57,246 95,647
18,962 34,331 60,764 105,320 18,962 34,331 60,764 105,320
18,617 35,068 64,481 115,946 18,617 35,068 64,481 115,946
18,275 35,816 68,417 127,624 18,275 35,816 68,417 127,624
17,937 36,576 72,584 140,465 17,937 36,576 72,584 140,465
17,604 37,350 77,002 154,592 17,604 37,350 77,002 154,592
17,278 38,141 81,689 170,141 17,278 38,141 81,689 170,141
15,686 42,225 109,451 273,960 15,686 42,225 109,451 273,960
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION
TABLE ABOVE:]
<FN>
(1) Assumes a 2% premium tax.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
29
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
INITIAL FACE AMOUNT $121,514 FEMALE AGE 55 SINGLE PREMIUM $50,000(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS
AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT(2)
PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS
END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ---------------------------- -------------------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
1 $ 52,000 $ 52,500 $121,514 $121,514 $125,279 $129,967
2 54,080 55,125 121,514 121,514 129,163 139,010
3 56,243 57,881 121,514 121,514 133,167 148,683
4 58,493 60,775 121,514 121,514 137,296 159,030
5 60,833 63,814 121,514 121,514 141,552 170,096
6 63,266 67,005 121,514 121,514 145,941 181,934
7 65,797 70,355 121,514 121,514 150,467 194,597
8 68,428 73,873 121,514 121,514 155,134 208,144
9 71,166 77,566 121,514 121,514 159,948 222,641
10 74,012 81,445 121,514 121,514 164,915 238,155
11 76,973 85,517 121,514 121,514 170,038 254,758
12 80,052 89,793 121,514 121,514 175,321 272,526
13 83,254 94,282 121,514 121,514 180,771 291,541
14 86,584 98,997 121,514 121,514 186,391 311,887
15 90,047 103,946 121,514 121,514 192,187 333,658
16 93,649 109,144 121,514 121,514 198,166 356,954
17 97,395 114,601 121,514 121,514 204,333 381,886
18 101,291 120,331 121,514 121,514 210,695 408,575
19 105,342 126,348 121,514 121,514 217,260 437,149
20 109,556 132,665 121,514 121,514 224,035 467,746
</TABLE>
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW)
APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
<TABLE>
<CAPTION>
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
-------------------------------------------------------- --------------------------------------------------------
0% 4% 8% 12% 0% 4% 8% 12%
------- ------- -------- -------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$47,910 $49,848 $ 51,785 $ 53,723 $44,282 $46,072 $ 47,863 $ 49,654
47,030 50,911 54,946 59,134 43,822 47,439 51,198 55,102
46,160 51,990 58,292 65,084 43,371 48,849 54,770 61,151
45,305 53,091 61,840 71,630 42,928 50,305 58,596 67,872
44,465 54,215 65,605 78,834 42,494 51,812 62,696 75,338
43,638 55,359 69,593 86,757 42,070 53,368 67,092 83,639
42,821 56,519 73,816 95,465 41,650 54,974 71,796 92,853
42,006 57,688 78,273 105,019 41,228 56,620 76,823 103,075
41,189 58,857 82,967 115,486 40,801 58,303 82,185 114,399
40,368 60,021 87,902 126,939 40,368 60,021 87,902 126,939
39,543 61,176 93,084 139,462 39,543 61,176 93,084 139,462
38,718 62,329 98,532 153,162 38,718 62,329 98,532 153,162
37,895 63,477 104,261 168,149 37,895 63,477 104,261 168,149
37,081 64,634 110,300 184,565 37,081 64,634 110,300 184,565
36,276 65,797 116,663 202,540 36,276 65,797 116,663 202,540
35,479 66,965 123,364 222,215 35,479 66,965 123,364 222,215
34,686 68,125 130,401 243,712 34,686 68,125 130,401 243,712
33,891 69,270 137,770 267,159 33,891 69,270 137,770 267,159
33,090 70,382 145,452 292,662 33,090 70,382 145,452 292,662
32,280 71,453 153,439 320,354 32,280 71,453 153,439 320,354
[THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION
TABLE ABOVE:]
<FN>
(1) Assumes a 2% premium tax.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE
AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN,
DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE
SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF
THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%,
8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO
REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
30
<PAGE>
- --------------------------------------------------------------------------------
YOU WILL RECEIVE
PERIODIC REPORTS
As a policy owner, you will receive an annual statement about your policy giving
you the status as of the first day of the current policy year of:
o the Death Benefit;
o the Account Value and Cash Surrender Value; and
o your outstanding loans.
Notice will also be sent to you for policy issuance, transfers of funds between
Divisions and certain other policy transactions.
You will receive a billing notice each year showing accrued interest for the
past policy year if you have a policy loan outstanding.
We will also send you semiannual reports with financial information on the
Separate Account and the Trust (including a list of the investments held by each
Portfolio in which the Divisions invest) as required by the 1940 Act.
- --------------------------------------------------------------------------------
THE IMPACT OF TAXES
POLICY PROCEEDS
The Tax Reform Act of 1984 (1984 Act) includes a definition of life insurance
for tax purposes. Our variable life policy meets the statutory definition of
life insurance and hence will receive the same Federal income tax treatment as
fixed benefit life insurance. Thus, (a) the Death Benefit under our policy will
be excludable from the gross income of the beneficiary under Section 101(a)(1)
of the Internal Revenue Code (Code) and (b) the policy owner will not be deemed
to be in constructive receipt of the Cash Surrender Value under the policy until
the policy is actually surrendered. Only then would the owner be taxed on any
increase in Cash Surrender Value due to investment experience.
In general, if you return your policy for its Cash Surrender Value, you will not
be taxed on the amount you receive, except for the portion which exceeds the
premium you have paid.
A split of the policy into two policies followed by a return of one for cash, or
an exchange referred to under CANCELLATION AND EXCHANGE RIGHTS, may result in
taxable income to the policy owner depending on the circumstances. We suggest
you consult your tax adviser.
The 1984 Act also gives the Secretary of the Treasury authority to set standards
for diversification of the investments underlying variable life policies in
order for such policies to be treated as life insurance. On September 15, 1986,
Treasury issued temporary regulations regarding the diversification
requirements. Failure to meet the diversification requirements would disqualify
SP-1 as a variable life insurance policy under Section 7702 of the Code. If this
were to occur, you would be taxed on the amount in your Policy Account that
exceeds the premiums you have paid. We believe that the investments underlying
SP-1 are in compliance with the requirements. We do not anticipate any problems
with the investments continuing to meet the requirements.
We also believe that loans received under the policies will be treated as
indebtedness of an owner, and that no part of any loan under a policy will
constitute income to the owner. (However, interest on policy loans is not
deductible.)
The individual situation of each policy owner or beneficiary will determine how
ownership or receipt of policy proceeds will be treated for purposes of Federal
estate tax as well as state and local estate, inheritance and other taxes.
See the Prospectus for the Trust for a discussion of the Trust's tax aspects,
including the diversification requirements.
- --------------------------------------------------------------------------------
OUR INCOME TAXES
Under the life insurance company tax provisions of the Code, as amended by the
1984 Act, variable life insurance is treated in a manner consistent with fixed
life insurance. The operations of the Separate Account are included in the
Federal income tax return of Equitable Variable. Under current tax law,
Equitable Variable pays no tax on investment income and capital gains reflected
in variable life insurance policy reserves. Consequently, no charge is currently
being made to either Division of the Separate Account for our Federal income
taxes. We reserve the right, however, to make such a charge in the future, if
the law changes and we incur Federal income tax
- --------------------------------------------------------------------------------
31
<PAGE>
- --------------------------------------------------------------------------------
which is attributable to the Separate Account. If such a charge is made, it
would be set aside as a provision for taxes which we would keep in the affected
Division rather than in our general account. We anticipate that our variable
life policy owners will benefit from any investment earnings that are not needed
to maintain this provision. We may have to pay state and local taxes (in
addition to premium taxes) in several states. At present, these taxes are not
substantial. If they increase, however, charges may be made for such taxes when
they are attributable to the Separate Account.
- --------------------------------------------------------------------------------
GENERAL PROVISIONS OF
OUR POLICY
This section of the prospectus describes the general provisions of our policy
and is subject to the terms of the policy you buy. You may review a copy of our
policy upon request.
The minimum single premium for this policy is $2,500. The policy may be issued
to age 75. The policy is issued only on a standard risk basis. Before issuing
any policy, we require satisfactory evidence of insurability.
You will handle all business connected with your policy at your regional Life
Insurance Center shown on page 3 of your policy.
- --------------------------------------------------------------------------------
PREMIUM
Your premium is a single premium payment that must accompany your signed
application for the policy.
YOU CAN CHOOSE THE DIVISION OR DIVISIONS WHERE YOUR NET SINGLE PREMIUM WILL BE
PUT. You can decide how your net single premium will be applied to the
Divisions. You can put the whole net single premium in one Division or a
percentage in more than one Division. Percentages cannot be fractions and must
add up to 100.
You will make your decision on the application for your policy.
HOW WE USE THE PREMIUM. The single premium is used to cover expenses and to pay
Death Benefits.
We make no charge to cover the possibility that, at an insured's death, the
guaranteed minimum will be more than what would have been payable, based on the
investment experience of the Divisions, if there were no guaranteed minimum
Death Benefit. If the net premium exceeds what is needed to meet Death Benefits
over the years, the excess contributes to our profits.
CHANGES IN PREMIUM RATES. Congress and the legislatures of various states have
from time to time considered legislation that would require premium rates to be
the same for males and females of the same age and risk class.
ILLUSTRATION OF PREMIUM RATES. Premiums are based on actuarial estimates of
Death Benefits, Account Values, Cash Surrender Value benefits, expenses,
investment experience, and amounts contributed to our surplus.
The following table shows premium rates for certain face amounts. The rates per
$1,000 differ for different face amounts only because of our $200 administrative
fee, which is constant.
- --------------------------------------------------------------------------------
PREMIUMS PER $1,000 INITIAL FACE AMOUNT*
Age at $10,000 Initial $25,000 Initial $50,000 Initial
Issue Face Amount Face Amount Face Amount
- --------------------------------------------------------------------------------
Age 5
Male $119.70 $107.46 $103.38
Female 102.78 90.53 86.45
Age 25
Male 205.77 193.52 189.44
Female 177.85 165.60 161.52
Age 40
Male 323.05 310.81 306.72
Female 279.24 267.00 262.92
Age 55
Male 496.98 484.73 480.65
Female 430.20 417.96 413.88
- --------------------------------------------------------------------------------
*Assuming a 2% state premium tax.
- --------------------------------------------------------------------------------
32
<PAGE>
- --------------------------------------------------------------------------------
CANCELLATION RIGHT
You have a limited right to return your policy to your regional Life Insurance
Center with a written request for cancellation. We will give you a full refund
(guaranteed by Equitable) of the single premium paid if your request and policy
are postmarked by the latest of the following:
o 10 days after you receive your policy; or
o 10 days after we mail a written Notice of Withdrawal Right; or
o 45 days after Part 1 of the policy application was signed.
- --------------------------------------------------------------------------------
EXCHANGING OUR POLICY FOR FIXED
WHOLE LIFE INSURANCE
You may exchange your single premium variable life policy for a fixed whole life
single premium policy on the life of the insured (benefits will be as described
in the single premium fixed life policy). The fixed policy will be issued by
Equitable. You have this right for 24 months from the date your policy is
issued. The exchange will be effective when we receive your request, accompanied
by your policy and an application for the fixed policy.
We will not require evidence of the insured's insurability before an exchange.
The new policy's face amount will be the same as the initial face amount of the
variable life policy. It will also have the same register date and date of
issue. The new policy will be based on premiums for the same sex and age.
Any policy loan with accrued interest must be repaid before the exchange. The
exchange is also subject to limits described in the policy.
CASH ADJUSTMENT ON EXCHANGE. There will be a cash adjustment on exchange. The
adjustment will reflect the difference in premiums between the two policies. The
cash adjustment will also reflect the market performance of the variable life
policy.
The difference in premium will be payable by the owner. This amount, however,
will be adjusted. It will be decreased by the excess, if any, of the total Cash
Surrender Value over the tabular Cash Surrender Value of the policy or will be
increased by the excess, if any, of the tabular Cash Surrender Value over the
total Cash Surrender Value of the policy. We have filed a description of the
method we use to calculate the adjustment with the appropriate state insurance
officials.
You may choose, instead, Equitable Variable's single premium fixed life policy,
SP Plus. If you choose SP Plus, we will advise you of the cash adjustment and
how it is calculated.
- --------------------------------------------------------------------------------
PAYMENT OPTIONS
The Death Benefit proceeds or Cash Surrender Value proceeds (net of loans) of
the policy offered by this prospectus can be paid in a lump sum. Or you may
choose to apply all or part of the proceeds under one of our payment options. A
combination of options can be used if we agree. Proceeds applied under an option
will no longer be affected by investment experience.
For an option to be used, the proceeds to be applied must be at least $2,500. If
no option is chosen at the insured's death, the beneficiary can choose an
option. The following options are available, subject to limits described in the
policy.
DEPOSIT OPTION. Proceeds are left on deposit with us. We will pay interest on
the proceeds of at least 3% a year, or we may set and pay a higher rate.
INSTALLMENT OPTION FOR A FIXED PERIOD. Proceeds are paid in installments for up
to 30 years, with interest of at least 3-1/2% a year.
INSTALLMENT OPTION OF A FIXED AMOUNT. Proceeds are paid in installments with
interest of at least 3-1/2% a year until the proceeds are used up.
LIFE INCOME OPTION WITH A PERIOD CERTAIN. Proceeds are paid in monthly
installments for the longer of the life of the person being paid or the end of a
chosen period of 10 or 20 years.
LIFE INCOME OPTION WITH A REFUND CERTAIN. Proceeds are paid in monthly
installments for the longer of the life of the person being paid or until they
are used up.
- --------------------------------------------------------------------------------
33
<PAGE>
- --------------------------------------------------------------------------------
BENEFICIARY
You name your beneficiary when you apply for your policy. You may change the
beneficiary during the insured's lifetime by writing to your regional Life
Insurance Center. If no beneficiary is living when the insured dies, the Death
Benefit will be paid in equal shares to the insured's surviving children. If
there is no surviving child, the Death Benefit will be paid to the insured's
estate.
- --------------------------------------------------------------------------------
ASSIGNMENT
You may assign the policy as collateral for a loan or other obligation. We are
not responsible for any payment we make or action we take before we receive a
copy of the assignment at your regional Life Insurance Center.
- --------------------------------------------------------------------------------
CREDITORS' CLAIMS
Proceeds are paid free from the claims of creditors to the extent allowed by
law.
- --------------------------------------------------------------------------------
LIMITS ON OUR RIGHT TO CHALLENGE
THE POLICY
We cannot challenge the validity of the policy after it has been in effect
during the insured's lifetime for 2 years from the date of issue (unless another
date is required by law). If a death claim is made within the time we can
challenge validity, our payment will generally be delayed while we determine
whether to make such a challenge.
MISSTATEMENT OF AGE OR SEX. If the insured's age or sex is misstated in the
policy application, the Death Benefit will be what the premium paid would have
purchased based on the insured's true age and sex.
SUICIDE. If the insured commits suicide within 2 years from the date the policy
was issued (or less where required by law), the Death Benefit will be limited to
the sum of the premium paid minus outstanding policy loans with interest.
- --------------------------------------------------------------------------------
DIVIDENDS
No dividends will be paid on the policy described in this prospectus.
- --------------------------------------------------------------------------------
WHEN WE PAY PROCEEDS
Payment of the Death Benefit, Cash Surrender Value (net of loans) or loan
proceeds will be made within 7 days after we receive the required form or
request (and other documents that may be required for payment of the Death
Benefit) at your regional Life Insurance Center. If an Equitable agent is
assisting the beneficiary in preparing the documents required for payment of the
Death Benefit, we will send the check to the agent within 7 days after we
receive all required documents. The agent will then deliver the check to the
beneficiary. But we can delay payment if:
o payment is contested;
o it is not reasonably practicable to determine the amount because the New York
Stock Exchange is closed, trading is restricted by the SEC, or the SEC
declares that an emergency exists; or
o the SEC, by order, permits us to delay in order to protect our policy owners.
We will pay at least 3% interest a year if we delay paying the Cash Surrender
Value or loan proceeds more than 30 days.
- --------------------------------------------------------------------------------
SALES AND OTHER
AGREEMENTS
Equitable Variable and Integrity Life Insurance Company, a wholly-owned
subsidiary of Equitable, are the principal underwriters for the Trust pursuant
to a Distribution Agreement. Under the Distribution Agreement, we have entered
into a Sales Agreement with Equitable by which Equitable will distribute our
policies.
Both Equitable Variable and Equitable are registered with the SEC as
broker-dealers under the Securities and Exchange Act of 1934, and we are each a
member of the National Association of Securities Dealers, Inc. We are also the
principal underwriter for our policies funded through our Separate Account I and
our other policies funded through our Separate Account FP, which is also a
registered investment company. (Equitable may also be deemed a principal
underwriter for our policies.)
- --------------------------------------------------------------------------------
SALES BY AGENTS OF EQUITABLE
We sell our policies through agents who are licensed by state insurance
officials to sell our variable life insurance. These agents are also registered
representatives of Equitable.
Under the Sales Agreement, agents receive commissions from Equitable for selling
our policies. We reimburse Equitable for these commissions. We also reimburse
Equitable for other expenses incurred in marketing and selling our policies.
These expenses include agency and district managers' compensation, agents'
training allowance, deferred compensation, insurance benefits of agents and
agency and district managers, and agency clerical and advertising expenses.
- --------------------------------------------------------------------------------
34
<PAGE>
- --------------------------------------------------------------------------------
COMMISSION SCHEDULE. Agents may receive the equivalent of up to a maximum of 3%
of the premium.
Agents with less than 3 full years of service with Equitable may be paid
differently.
Agents who meet certain production and persistency standards in selling our
policies and Equitable policies will be eligible for added compensation. Agents
who meet certain lifetime production standards will be eligible to receive
increased fees for servicing our policies. Agents also are eligible for added
compensation for servicing our policies when there is no assigned soliciting
agent.
- --------------------------------------------------------------------------------
SALES BY BROKERS
We also sell our policies through independent brokers who are licensed by state
insurance officials to sell our variable life insurance. They will also be
registered representatives either of Equitable or of another company registered
with the SEC as a broker-dealer under the Securities Exchange Act of 1934. The
commissions for independent brokers will be no more than those for agents.
Commissions will be paid through the registered broker-dealer.
- --------------------------------------------------------------------------------
APPLICATIONS
When an application for one of our policies is completed, it is submitted to us.
Based on the information in the application and our standards for issuing
insurance and classifying risks, a policy may be issued. If a policy is not
issued, we will refund any premium that has been paid. (Equitable guarantees the
refund.)
- --------------------------------------------------------------------------------
JOINT SERVICES AGREEMENT
In addition to acting as distributor for our policies, Equitable performs
certain other sales and administrative duties for us. Equitable does this
pursuant to a written agreement. The agreement is automatically renewed each
year, unless either party terminates.
Under this agreement, we pay Equitable for salary costs and other services and
an amount for indirect costs incurred through our use of Equitable personnel and
facilities. We also reimburse Equitable for sales expenses related to business
other than variable life policies.
- --------------------------------------------------------------------------------
AMOUNTS PAID UNDER SALES AND
JOINT SERVICES AGREEMENTS
The amounts paid or accrued to Equitable by us under sales and the joint
services agreements totalled approximately $249.4 million in 1986, $225.7
million in 1985 and $164.8 million in 1984.
- --------------------------------------------------------------------------------
LEGAL PROCEEDINGS
We are not involved in any material legal proceedings.
- --------------------------------------------------------------------------------
LEGAL MATTERS
The legal validity of the policy described in this prospectus has been passed on
by Herbert P. Shyer, who is Executive Vice President and General Counsel of
Equitable.
The Washington, D.C. law firm of Freedman, Levy, Kroll & Simonds has advised
Equitable Variable with respect to certain matters relating to Federal
securities laws.
- --------------------------------------------------------------------------------
FINANCIAL AND ACTUARIAL
EXPERTS
The financial statements of the Separate Account and of Equitable Variable in
this prospectus have been examined by the accounting firm of Deloitte Haskins &
Sells, our independent auditors, to the extent stated in their opinions, and
their opinions on them are part of this prospectus. We have relied on the
opinions of Deloitte Haskins & Sells given upon their authority as experts in
accounting and auditing.
Actuarial matters in this prospectus have been examined by Joseph O. North, Jr.,
F.S.A., M.A.A.A., who is Vice President and Actuary of Equitable Variable and an
Assistant Vice President and Actuary of Equitable. His opinion on actuarial
matters is filed as an exhibit to the Registration Statement we filed with the
SEC.
- --------------------------------------------------------------------------------
35
<PAGE>
- --------------------------------------------------------------------------------
WHERE YOU CAN GET
ADDITIONAL
INFORMATION
We have filed with the SEC a Registration Statement relating to the Separate
Account and the variable life policy described in this prospectus. The
Registration Statement, which is required by the Securities Act of 1933,
includes additional information that is not required in this prospectus under
the rules and regulations of the SEC. If you would like the additional
information, you may obtain copies of that document from the SEC's main office
in Washington, D.C. You will have to pay a fee for the material.
- --------------------------------------------------------------------------------
MANAGEMENT
Here is a list of our directors and officers and a brief statement of their
business experience for the past five years. Unless otherwise noted, the
following persons have been involved in the management of Equitable and its
subsidiaries in various positions for the last five years. Unless otherwise
noted, their address is 787 Seventh Avenue, New York, New York 10019.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Harry Douglas Garber................................ Vice Chairman of the Board, Equitable, since February 1984; prior thereto,
Executive Vice President and Chief Financial Officer. Director, Equitable
Investment Corporation (EIC) and Genesco, Inc. Former Chairman and Chief
Executive Officer, Equitable Variable.
Glenn Howard Gettier, Jr. .......................... Executive Vice President and Chief Financial Officer, Equitable, since
December 1984; prior thereto, Partner, Peat, Marwick, Mitchell & Co.
Richard Hampton Jenrette............................ Vice Chairman, Chief Investment Officer and Director, Equitable. Chairman,
Donaldson, Lufkin and Jenrette, Inc., since February 1985; prior thereto,
Chairman and Chief Executive Officer. Director, Equitable Capital
Management Corporation (Equitable Capital) and various other Equitable
subsidiaries.
William Thomas McCaffrey............................ Executive Vice President, Equitable, since March 1986; prior thereto,
various other Equitable positions.
Francis Helmut Schott............................... Senior Vice President and Chief Economist, Equitable.
Leo Martin Walsh, Jr. .............................. Senior Executive Vice President, Director and Chief Operating Officer,
Equitable, since July 1986; prior thereto, Executive Vice President,
Director and Chief Investment Officer. Chairman, EIC since July 1986; prior
thereto, President and Chief Executive Officer. Director, Equitable
Capital and various other Equitable subsidiaries.
Peter Rawlinson Wilde............................... Executive Vice President, Equitable, since July 1984. Director, Integrity
Life Insurance Company (Integrity) and National Integrity Life Insurance
Company (National Integrity). Chairman and Chief Executive Officer,
Equitable Variable, from November 1984 to December 1986. Chief Financial
Officer, CIGNA Corporation, from April 1983 to June 1984; prior thereto,
Senior Vice President.
Brian Fredrick Wruble............................... Chairman, President and Chief Executive Officer, Equitable Capital.
Executive Vice President, Equitable, since September 1984; prior thereto,
various other Equitable positions.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICER -- DIRECTORS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Robert Wayne Barth.................................. Chairman and Chief Executive Officer, Equitable Variable, since December
1986; President and Chief Operating Officer, from December 1985 to December
1986. Executive Vice President, Equitable, since June 1985; Senior Vice
President since September 1984; prior thereto, Vice President since April
1984.
Thomas Michael Kirwan............................... President and Chief Operating Officer, Equitable Variable, since December
1986. Executive Vice President and Chief Financial Officer, EIC, since
March 1985; prior thereto, President, Columbia Group -- CBS, Inc. Director,
Equitable Capital and various other Equitable subsidiaries.
Robert Seymour Jones................................ Senior Vice President, Equitable Variable, since February 1986. Senior Vice
President, Equitable, since June 1985; prior thereto, Vice President.
Michael Searle Martin............................... Senior Vice President, Equitable Variable, since February 1986. Senior Vice
President, Equitable, since June 1985; prior thereto, Vice President.
Stanley Julian Rispler.............................. Senior Vice President, Equitable Variable, since February 1986. Senior Vice
President, Equitable, since October 1984; prior thereto, Vice President.
Samuel Barry Shlesinger............................. Senior Vice President and Actuary, Equitable Variable, since February 1986.
Senior Vice President and Actuary, Equitable; prior thereto, Vice President
and Actuary.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
James Thomas Liddle, Jr. ........................... Senior Vice President and Chief Financial Officer, Equitable Variable,
since February 1986. Vice President and Actuary, Equitable.
Richard Marshall Stenson............................ Senior Vice President, Equitable Variable, since December 1981. Senior Vice
President, Equitable, since October 1984; prior thereto, Vice President and
Actuary. Actuary, Integrity.
William Arnold Canfield............................. Vice President and Chief Underwriting Officer, Equitable Variable. Vice
2 Penn Plaza President, Equitable.
New York, New York 10121
Franklin Kennedy, III............................... Vice President, Equitable Variable, since August 1981. Senior Vice
1221 Avenue of the Americas President, Equitable Capital since January 1987. Managing Director and
New York, New York 10020 Chief Investment Officer, Equitable Investment Management Corporation, from
November 1983 to January 1987. Vice President, Equitable.
Donald Anthony King................................. Vice President, Equitable Variable, since February 1986. Vice President,
1285 Avenue of the Americas Integrity, since April 1984. Vice President, Equitable, since January 1976.
New York, New York 10020 Executive Vice President, Equitable Capital.
Joseph Oswell North, Jr. ........................... Vice President and Actuary, Equitable Variable, since February 1984. Vice
2 Penn Plaza President and Actuary, Equitable, since October 1984; prior thereto,
New York, New York 10121 Assistant Vice President and Actuary, since April 1982.
Stephen Anthony Scarpati............................ Vice President and Controller, Equitable Variable, since June 1986. Vice
2 Penn Plaza President, Equitable, since December 1985. Vice President and Controller,
New York, New York 10121 EIC, from November 1984 to December 1985; prior thereto, Division
Controller, Colgate-Palmolive Company.
Larry Kenneth Mills................................. Treasurer, Equitable Variable, Integrity and National Integrity, since
February 1986. Vice President and Treasurer, Equitable, since March 1986;
prior thereto, Vice President.
Theodore Edward Plucinski, M.D. .................... Chief Medical Director, Equitable Variable, Integrity and National
2 Penn Plaza Integrity. Chief Medical Director, Equitable, since September 1985; prior
New York, New York 10121 thereto, Chief Medical Director, MONY.
Kevin Brian Keefe................................... Secretary, Equitable Variable, Integrity, National Integrity and The Hudson
River Trust, Vice President and Assistant Secretary, Equitable, since June
1986; prior thereto, Assistant Vice President and Assistant Secretary.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
38
<PAGE>
[THE EQUITABLE FINANCIAL COMPANIES LOGO -- 1986 VERSION]
- --------------------------------------------------------------------------------
Catalogue No. 121503
<PAGE>
[EDGARIZER'S NOTE:]
[THE SP-1 PROSPECTUS ENDS HERE; THE BASIC & EXPANDED PROSPECTUS FOLLOWS]
<PAGE>
- --------------------------------------------------------------------------------
[VLI LOGO]
- --------------------------------------------------------------------------------
LEVEL FACE AMOUNT VARIABLE LIFE INSURANCE POLICY
(Basic Policy)
INCREASING FACE AMOUNT VARIABLE LIFE INSURANCE POLICY
(Expanded Policy)
ISSUED BY
[EQUITABLE VARIABLE LIFE INSURANCE COMPANY LOGO -- 1986 VERSION]
- --------------------------------------------------------------------------------
VM 346 PROSPECTUS DATED APRIL 30, 1986
- --------------------------------------------------------------------------------
THE HUDSON RIVER FUND, INC.
PRINCIPAL OFFICE LOCATED AT:
787 Seventh Avenue, New York, New York 10019
- --------------------------------------------------------------------------------
VM 348 SUPPLEMENT DATED MAY 1, 1986 TO
VM 342 PROSPECTUS DATED APRIL 17, 1986
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
[VLI LOGO]
- --------------------------------------------------------------------------------
LEVEL FACE AMOUNT VARIABLE LIFE INSURANCE POLICY
(Basic Policy)
INCREASING FACE AMOUNT VARIABLE LIFE INSURANCE POLICY
(Expanded Policy)
- --------------------------------------------------------------------------------
ISSUED BY
[EQUITABLE VARIABLE LIFE INSURANCE COMPANY LOGO -- 1986 VERSION]
This prospectus describes two variable life insurance policies being offered by
Equitable Variable. The Basic policy is available only for face amounts under
$50,000. Your net annual premiums are invested in the Common Stock Division and
the Money Market Division of Equitable Variable's Separate Account I.
Each policy owner decides whether the premiums for his or her policy will be put
into the Common Stock Division of the Money Market Division, or both, after
certain deductions have been made. The assets in each Division are invested in
shares of corresponding Portfolios of The Hudson River Fund, Inc.
The prospectus for the Fund, which is attached to this prospectus, describes the
investment objectives and policies of each of the Fund Portfolios as well as the
risks relating to investment in the Fund.
The investment policy of the Fund's Common Stock Portfolio is to purchase
primarily common stock and other equity-type instruments with the objective of
long-term growth of its capital and increasing income. The investment policy of
the Fund's Money Market Portfolio is to purchase primarily high quality
short-term money market instruments with the objective of obtaining a high level
of current income while preserving its assets and maintaining liquidity. There
is no guaranty that the objectives will be achieved.
The death benefit and cash value of a policy will vary up or down depending on
investment experience of the Divisions, which in turn depends on the investment
performance of the corresponding Portfolios. While there is no guaranteed
minimum cash value for a policy, Equitable Variable guarantees that a policy's
death benefit will never be less than its face amount as long as premiums are
paid on time and there is no outstanding policy loan.
A policy is serviced through a regional Life Insurance Center. This is the
Administrative Office shown on page 3 of a policy when it is issued. Equitable
Variable's Home Office is 787 Seventh Avenue, New York, New York. Telephone
(212) 714-5288.
REPLACING EXISTING INSURANCE WITH A POLICY DESCRIBED IN THIS PROSPECTUS MAY NOT
BE TO YOUR ADVANTAGE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PLEASE READ THIS PROSPECTUS FOR DETAILS ON THE POLICIES BEING OFFERED AND KEEP
IT FOR FUTURE REFERENCE. IT IS NOT VALID UNLESS ATTACHED TO THE CURRENT
PROSPECTUS FOR THE HUDSON RIVER FUND, INC.
PROSPECTUS DATED APRIL 30, 1986
- --------------------------------------------------------------------------------
VM-346
Copyright 1986 Equitable Variable Life Insurance Company. All rights reserved.
<PAGE>
- --------------------------------------------------------------------------------
THE PURPOSES OF THE POLICIES WE ARE OFFERING IS TO PROVIDE INSURANCE PROTECTION
FOR A POLICY'S BENEFICIARY.
WE DO NOT CLAIM THAT THE POLICIES ARE IN ANY WAY SIMILAR TO OR COMPARABLE TO A
MUTUAL FUND'S SYSTEMATIC INVESTMENT PLAN.
Because we want you to have as much information as possible about our variable
life policies before you buy one, we urge you to examine this prospectus
carefully, and we also urge you to read the attached Fund prospectus. This
prospectus assumes that all premiums are paid on time and there is no
outstanding policy loan.
The first Part of this prospectus contains a summary that will introduce us and
our variable life policies to you. You will find more detailed information in
Part 2 and financial statements in Part 3.
- --------------------------------------------------------------------------------
PART 1 -- SUMMARY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE ISSUING COMPANY
We are Equitable Variable Life Insurance Company (Equitable Variable), a New
York stock life insurance company.
- --------------------------------------------------------------------------------
OUR PARENT, EQUITABLE
We are a wholly-owned subsidiary of The Equitable Life Assurance Society of the
United States (Equitable), a New York mutual life insurance company.
- --------------------------------------------------------------------------------
THE POLICIES
By this prospectus we are offering two types of variable life insurance
policies:
o Level Face Amount Policy (Basic Policy, Policy Number 85-01)
o Increasing Face Amount Policy (Expanded Policy, Policy Number 85-02).
The Basic policy is available only for face amounts between $25,000 and $49,999.
We also offer, through separate prospectuses, a single premium variable life
policy, a periodic premium variable life policy and a flexible premium variable
life policy. The net premiums for the Basic Policy and the Expanded Policy are
invested in our Separate Account I (Separate Account) which in turn buys shares
in The Hudson River Fund, Inc. (Fund).
- --------------------------------------------------------------------------------
WHY VARIABLE LIFE VARIES
Our variable life policies are, first and foremost, whole life insurance
policies with death benefits, cash values, loan privileges, level premiums, and
other features traditionally associated with whole life insurance. They are
called "variable" because, unlike the fixed death benefits of an ordinary whole
life policy, the death benefits and cash values of our policies may increase or
decrease. They do so because your net annual premiums are put into our Separate
Account's Common Stock Division or Money Market Division. The assets of each
Division buy shares in the Fund's corresponding Common Stock Portfolio or Money
Market Portfolio. The Separate Account's investment experience will vary over
the years reflecting the investment performance of the Fund's Portfolios in
which it invests.
When the Separate Account's net investment return is greater than the assumed
investment return of 4%, additional amounts of paid-up life insurance are
purchased. This results in additional death benefit and cash value. If the
Separate Account's net investment return is less than the assumed investment
return, this additional paid-up life insurance may be lost, resulting in smaller
cash value and death benefit, but the death benefit will never be less than the
guaranteed minimum.
- --------------------------------------------------------------------------------
THE SEPARATE ACCOUNT, ITS
INVESTMENTS AND ITS
INVESTMENT EXPERIENCE
Our Separate Account is 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. For state law purposes the
Separate Account is treated as a part of us.
After making certain deductions from premiums, we put the net annual premiums in
either the Common Stock Division or the Money Market Division (Division) of the
Separate Account. You decide whether your policy's net annual premium will be
put entirely in one Division or whether you want a percentage in each Division.
Each Division invests in shares of a corresponding investment portfolio of the
Fund: the Common Stock Portfolio and the Money Market Portfolio (Portfolio).
Each Portfolio has a different investment policy. Throughout this prospectus we
will discuss the investment experience of the Separate Account and the
Divisions. You should keep in mind that THE INVESTMENT EXPERIENCE OF THE
SEPARATE ACCOUNT AND THE DIVISIONS DEPENDS ON THE INVESTMENT PERFORMANCE OF THE
FUND AND THE CORRESPONDING PORTFOLIOS.
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
THE FUND
The Hudson River Fund, Inc. is a "series" type of mutual fund registered with
the SEC under the 1940 Act as an open-end diversified management investment
company. In addition to the Common Stock Portfolio and the Money Market
Portfolio referred to above, the Fund has a Balanced Portfolio and an Aggressive
Stock Portfolio which currently are not available for investment by the Separate
Account. The Fund does not impose a sales charge.
It is anticipated that, subject to obtaining additional necessary governmental
exemptions and approvals, if any, the Fund may serve as an investment medium
for, among others, variable annuity contracts issued by Equitable, variable life
policies and variable annuity contracts issued by Integrity Life Insurance
Company (Integrity, a wholly-owned subsidiary of Equitable), new series of
variable life policies issued by us, and variable life policies and variable
annuity contracts issued by insurers affiliated or unaffiliated with Equitable.
We are currently in control of the Fund; however, purchasers of each of these
contracts will also have voting privileges in the Fund. See YOUR VOTING
PRIVILEGES.
The Fund's address is 787 Seventh Avenue, New York, New York 10019. The Fund's
custodian is The Chase Manhattan Bank, N.A.
- --------------------------------------------------------------------------------
FUND PORTFOLIO INVESTMENT
POLICIES AND OBJECTIVES
The investment policy of the Common Stock Portfolio is to purchase primarily
common stock and other equity-type instruments to achieve long-term growth of
its capital and increasing income. The investment policy of the Money Market
Portfolio is to purchase primarily high quality short-term money market
instruments to obtain a high level of current income while preserving its assets
and maintaining liquidity.
- --------------------------------------------------------------------------------
THE FUND'S INVESTMENT
ADVISERS
The Fund is advised by Equitable Investment Management Corporation (EIMC), which
is a subsidiary of Equitable, and by Integrity. They are registered with the SEC
as investment advisers under the Investment Advisers Act of 1940. The Fund pays
advisory fees to EIMC and Integrity based on maximum annual rates of 0.40% of
the average daily value of the aggregate net assets of the Common Stock, Money
Market and Balanced Portfolios and 0.50% of the average daily value of the
aggregate net assets of the Aggressive Stock Portfolio. However, we credit the
values of our Basic and Expanded policies to offset completely the effect on
such values of the portion of the Fund's advisory fees which exceeds a 0.25%
annual rate.
- --------------------------------------------------------------------------------
DEATH BENEFITS
The death benefit under a policy can go up or down depending on the investment
experience of the Division or Divisions into which you choose to put your net
premiums. The guaranteed minimum Death Benefit is the face amount of the policy
regardless of the investment experience of the Divisions. In the first policy
year, the death benefit equals the initial face amount. In each later policy
year, the death benefit equals the guaranteed minimum death benefit, plus the
sum (if positive) of the variable adjustment amounts in the Divisions in which
you have cash value.
See THE VARIABLE ADJUSTMENT AMOUNT and THE GUARANTEED MINIMUM DEATH BENEFIT in
Part 2.
- --------------------------------------------------------------------------------
CASH VALUE
Our policies are whole life policies and they can have a cash value. The cash
value of a policy may increase or decrease daily to reflect the investment
experience of the Divisions in which your policy participates. Unlike the death
benefits, which have a guaranteed minimum, we do not guarantee a minimum amount
of cash value. You will bear the entire market risk for cash value.
You can request that all or part of your cash value be transferred between the
Divisions. See YOU CAN TRANSFER CASH VALUE BETWEEN DIVISIONS in Part 2.
- --------------------------------------------------------------------------------
COMMISSIONS
The agent or broker who sells you one of our policies will receive a commission
for the first policy year equivalent to a maximum of 50% of the first year
premium that is payable. Commissions and fees the agent or broker will receive
in later policy years are described under SALES AND OTHER AGREEMENTS in Part 2.
The commissions and fees are paid by Equitable Variable and do not equal the
charges for sales load discussed in this prospectus. See DEDUCTIONS FROM
PREMIUMS in Part 2.
- --------------------------------------------------------------------------------
CHARGES AGAINST PREMIUMS
Your net annual premium is put into our Separate Account each year. This is your
total premium after deductions for any optional insurance benefits, the sales
load, state premium taxes, annual administrative expenses and a risk charge for
the guaranteed minimum death benefit. The charge for sales load is used to pay
agent or broker commissions and other sales expenses for the policy. (You do not
pay any sales charge for shares of the Fund purchased by the Separate Account.)
In the first policy year we also deduct a fixed charge for expenses incurred in
issuing the policy.
See DEDUCTIONS FROM PREMIUMS in Part 2.
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
CHARGES AGAINST THE
SEPARATE ACCOUNT
The amount in the Divisions credited to your policy is decreased by the cost of
your insurance protection. Also, the investment experience of the Separate
Account reflects a daily charge we make at an effective annual rate of 0.50% of
the value of the assets of the Separate Account for certain mortality and
expense risks.
Any charges against the Divisions will have an impact on whether the Divisions
earn more than the assumed rate of 4% and whether your policy's death benefit
increases above the guaranteed minimum.
For more information on the cost of insurance, see HOW WE SUPPORT THE OPERATIONS
OF A POLICY in Part 2.
- --------------------------------------------------------------------------------
POLICY LOANS
As a policy owner, you may borrow up to 90% of your policy's cash value at 5%
interest but borrowed amounts are transferred out of the Divisions and,
therefore, are not affected by the investment experience. You may choose an
adjustable loan interest rate, and if you do, we will credit the adjustable loan
interest rate less 0.75% (and less any charge for taxes) on the borrowed
amounts. For a loan at 5% interest, we will credit the assumed interest rate of
4% to the borrowed amounts.
See TAKING A POLICY LOAN in Part 2.
- --------------------------------------------------------------------------------
PREMIUMS
The size of an annual premium depends on which policy you choose, the initial
face amount (which must be at least $25,000) and the insured's risk class, age
and sex. We guarantee that a premium will remain the same once it has been
determined.
- --------------------------------------------------------------------------------
CANCELLATION AND
EXCHANGE RIGHTS
You have a limited right to return your policy for cancellation and a full
refund of premiums paid. Your request must be postmarked by the latest of
o 10 days after you receive your policy; or
o 10 days after we mail a written Notice of Withdrawal Right; or
o 45 days after Part 1 of the policy application was signed.
Also, within 18 months of a policy's issue date, it may be exchanged for a fixed
whole life insurance policy on the life of the insured without submitting proof
of insurability.
- --------------------------------------------------------------------------------
INCOME TAXES
Any death benefit paid under our policies is fully excludable from the gross
income of the beneficiary for Federal income tax purposes. This may differ for
policies owned by pension or profit sharing plans.
We may, in the future, charge the Divisions for any portion of our income taxes
attributable to the Separate Account.
See THE IMPACT OF TAXES in Part 2.
- --------------------------------------------------------------------------------
MORE INFORMATION
For further information, including illustrations of how the investment
experience of the Separate Account Divisions and the investment performance of
the Fund could cause death benefits and cash values to vary, please see Part 2
of this prospectus and the Fund's current prospectus. Our financial statements
are in Part 3 of this prospectus. The Fund's prospectus contains Condensed
Financial Information for the Fund and its Statement of Additional Information
contains its financial statements.
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
CONDENSED
FINANCIAL
INFORMATION
SEPARATE ACCOUNT I
The tables below show the actual net returns of the Divisions of our Separate
Account as if the Reorganization discussed under GENERAL INFORMATION -- ABOUT US
- -- REORGANIZATION had always been in effect. The tables show the actual net
returns of the predecessor Separate Accounts I and II operating as management
investment companies prior to the Reorganization. The same results would have
been achieved if the continuing Separate Account had operated as a unit
investment trust investing in The Hudson River Fund, Inc., for all the periods
shown, the operations of the Fund having been as currently reported in the
Fund's separate Prospectus and Statement of Additional Information. The net
returns for each Division for the periods shown assume the Common Stock Division
and the Money Market Division would have received initial policy premium
allocations on January 13, 1976 and August 21, 1981, respectively, the dates on
which our former Separate Accounts I and II first received premium allocations
under variable life policies. The tables break the net return into its component
parts.
When you examine the tables, remember that the percentages apply to a policy
with its policy year starting on the first day of the periods shown and apply to
a policy that would have been in force throughout the periods shown. Because
they are determined each December 31, the percentages do not reflect the average
net assets in the Divisions during those periods. The auditing firm of Deloitte
Haskins & Sells, our independent auditors, has examined the tables (for its
opinion, see the Separate Account financial statements in part 3 of this
prospectus). To get a more complete picture of the Separate account and its
Divisions you may want to refer to the financial statements and related notes in
the Statement of Additional Information for The Hudson River Fund, Inc.
- --------------------------------------------------------------------------------
COMMON STOCK DIVISION
<TABLE>
<CAPTION>
January 13,
Year Ended December 31, 1976 to
--------------------------------------------------------------------------------------- December 31,
1985 1984 1983 1982 1981 1980 1979 1978 1977 1976(a)(b)
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET RETURN:
Income 2.95 % 3.22 % 2.65 % 4.64 % 4.02 % 4.35 % 3.91 % 4.06 % 3.49 % 2.63 %
Net realized and
unrealized gain
(loss) on
investments 31.14 % (4.68)% 24.06 % 13.58 % (9.40)% 46.48 % 26.56 % 4.72 % (12.26)% 7.00 %
----- ----- ----- ----- ----- ----- ----- ---- ----- ----
Gross Return 34.09 % (1.46)% 26.71 % 18.22 % (5.38)% 50.83 % 30.47 % 8.78 % (8.77)% 9.63 %
Expense charges (1.00)% (.74)% (.94)% (.95)% (.70)% (1.13)% (.98)% (.81)% (.69)% (.77)%
----- ----- ----- ----- ----- ----- ----- ---- ----- ----
Net Return 33.09 % (2.20)% 25.77 % 17.27 % (6.08)% 49.70 % 29.49 % 7.97 % (9.46)% 8.86 %
===== ===== ===== ===== ===== ===== ===== ==== ===== ====
- --------------------------------------------------------------------------------
<FN>
(a) Date as of which net premiums under the policies were first allocated to the
predecessor of the Division.
(b) The gross return and the net return for the periods indicated are not annual
rates of return, and they are not necessarily indicative of those returns
which would have been realized for a full year.
</FN>
</TABLE>
The effective annual rate of return for the Common Stock Division from January
13, 1976 to December 31, 1985 was 14.09%. For the same period ended December 31,
1985, the average annual increase for the Standard and Poor's 500 Stock Index
with dividends reinvested was 13.63%. (Standard and Poor's is an unmanaged index
of groups of common stocks.)
- --------------------------------------------------------------------------------
MONEY MARKET DIVISION
<TABLE>
<CAPTION>
August 21,
Year Ended December 31, 1981 to
------------------------------------------------- December 31,
1985 1984 1983 1982 1981(a)(b)
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET RETURN:
Income 9.36 % 11.00 % 9.56 % 13.53 % 5.46 %
Net realized and unrealized gain
(loss) on investments (.09)% .42 % (.06)% .03 % .06 %
---- ----- ---- ----- ----
Gross Return 9.27 % 11.42 % 9.50 % 13.56 % 5.52 %
Expense charges (.81)% (.84)% (.83)% (.84)% (.35)%
---- ----- ---- ----- ----
Net Return 8.46 % 10.58 % 8.67 % 12.72 % 5.17 %
==== ===== ==== ===== ====
- --------------------------------------------------------------------------------
<FN>
(a) Date as of which net premiums under the policies were first allocated to the
predecessor of the Division.
(b) The gross return and the net return for the periods indicated are not annual
rates of return, and they are not necessarily indicative of those returns
which would have been realized for a full year.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
HYPOTHETICAL
ILLUSTRATIONS
The following illustrations are based on the assumption that the Separate
Account and the Fund had been operating since January 1, 1976 in the same manner
as they operate as a result of the implementation of the Reorganization
described under GENERAL INFORMATION -- ABOUT US -- REORGANIZATION in Part 2. For
illustrations based on various constant hypothetical annual investment returns,
see ILLUSTRATIONS OF DEATH BENEFITS, CASH VALUES, AND ACCUMULATED PREMIUMS in
Part 2.
- --------------------------------------------------------------------------------
ILLUSTRATIONS OF VARIATIONS
OF THE DEATH BENEFIT AND
THE CASH VALUE IN
RELATION TO ACTUAL
INVESTMENT EXPERIENCE OF
THE COMMON STOCK DIVISION
The following example shows how the net return of the Common Stock Division
would have affected the death benefits and cash values of two policies dated
January 1, 1976. Assume an annual premium of $500 and that the insured was a 25
year old male and a standard risk on January 1, 1976.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
BASIC POLICY EXPANDED POLICY
($40,034 Face Amount) ($29,541 Initial Face Amount)
- -------------------------------------------------------------------------------------------------------------------------
Cash Death Guaranteed Cash Death Guaranteed
Policy Anniversary In: Value Benefit Minimum Value Benefit Minimum
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1977* $ 96 $40,071 $40,034 $ 174 $30,476 $30,427
1978 359 40,034 40,034 443 31,343 31,343
1979 744 40,034 40,034 848 32,288 32,288
1980 1,343 41,017 40,034 1,482 34,323 33,263
1981 2,636 44,863 40,034 2,865 39,448 34,238
1982 2,787 43,595 40,034 3,015 39,119 35,272
1983 3,578 44,949 40,034 3,850 41,633 36,335
1984 5,022 48,724 40,034 5,378 46,757 37,428
1985 5,195 47,338 40,034 5,547 46,403 38,551
1986 7,433 53,596 40,034 7,908 54,206 39,703
- -------------------------------------------------------------------------------------------------------------------------
<FN>
*Reflects net investment income credited at the assumed rate of 4% from January
1, 1976 to January 12, 1976, and the actual rate of return for the Common Stock
Division assuming the investment performance of the Fund's Common Stock
Portfolio was the same as our pre-Reorganization Separate Account I starting
January 13, 1976. Net annual premiums were first put into our
pre-Reorganization Separate Account I on January 13, 1976.
</FN>
</TABLE>
Remember, this example of past investment performance is for a specific age,
sex, risk class, premium amount and policy anniversary. Also, the policy series
described in this prospectus was not available in 1976. The benefits illustrated
under these policies are calculated on the policy anniversary and do not
represent the average net investment performance of our pre-Reorganization
Separate Account I during the policy year. Past investment performance should
not be deemed a representation of future investment experience of the Division
or investment performance of the Fund.
This example assumes that net annual premiums and related cash values are 100%
in the Common Stock Division for the entire period.
- --------------------------------------------------------------------------------
ILLUSTRATION OF VARIATIONS
OF THE DEATH BENEFIT AND
THE CASH VALUE IN
RELATION TO ACTUAL
INVESTMENT EXPERIENCE OF
THE MONEY MARKET DIVISION
The following example shows how the net return of the Money Market Division
would have affected the death benefits and cash values of two policies dated
January 1, 1982. Assume an annual premium of $500 and that the insured was a 25
year old male and a standard risk on January 1, 1982.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
BASIC POLICY EXPANDED POLICY
($40,034 Face Amount) ($29,541 Initial Face Amount)
- -------------------------------------------------------------------------------------------------------------------------
Cash Death Guaranteed Cash Death Guaranteed
Policy Anniversary In: Value Benefit Minimum Value Benefit Minimum
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1983 $ 102 $40,103 $40,034 $ 182 $30,519 $30,427
1984 458 40,214 40,034 558 31,563 31,343
1985 860 40,471 40,034 982 32,793 32,288
1986 1,277 40,721 40,034 1,419 34,041 33,263
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
This example reflects Money Market Division investment experience assuming the
investment performance of the Fund's Money Market Portfolio was the same as our
pre-Reorganization Separate Account II starting January 1, 1982. Net annual
premiums under variable life policies were first put into our pre-Reorganization
Separate Account II on August 21, 1981.
Remember, this example of past investment performance is for a specific age,
sex, risk class, premium amount and policy anniversary. The benefits illustrated
under the Basic and Expanded policies are calculated on the policy anniversary
and do not represent the average net investment performance of our
pre-Reorganization Separate Account II during the policy year. Past investment
performance should not be deemed a representation of future investment
experience of the Division or future investment performance of the Fund.
This example assumes that net annual premiums and related cash values are 100%
in the Money Market Division for the entire period.
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
PART 2 -- DETAILED INFORMATION
- --------------------------------------------------------------------------------
GENERAL
INFORMATION
ABOUT US
We are Equitable Variable. We were organized in 1972 in New York State as a
stock life insurance company and are authorized to sell life insurance and
annuities there. We also are authorized to sell life insurance and annuities in
other jurisdictions. In January of 1976 we began selling periodic premium
variable life policies, and two years later, in January of 1978, we began
selling fixed annuity contracts.
In 1983 we began selling a form of fixed life insurance policy, the Equitable
Life Account. In 1983 we also began selling single premium variable life
policies. In 1986 we began selling an individual flexible premium variable life
policy designed to provide insurance coverage with flexibility in death benefits
and premium payments. We also sell two types of term insurance policies, fixed
single premium life insurance policies and universal life insurance policies. At
the end of 1985 we had approximately $6.9 billion face amount of variable life
insurance in force and $38 billion of fixed life insurance in force (and about
$1.6 billion of fixed annuity payment obligations).
REORGANIZATION. Pursuant to a Plan of Reorganization (Reorganization) approved
at a meeting of our policy owners held on February 14, 1985, effective as of
March 22, 1985, we restructured our Separate Accounts I and II into one separate
account in unit investment trust form. To accomplish this restructuring, we
converted our then existing Separate Account I, a Common Stock Account and
Separate Account II, a Money Market Account, into our continuing Separate
Account I with two investment divisions: the Common Stock Division and the Money
Market Division. On March 22, 1985, all of the assets and related liabilities of
our former Separate Accounts I and II were transferred to the Common Stock and
Money Market Portfolios of the Fund, respectively, in exchange for shares in the
Portfolios, and we ceased to be an investment adviser of our continuing Separate
Account. EIMC, which served with us as an investment adviser of our former
Separate Accounts I and II, continues as an investment adviser to the Fund. At
the Reorganization, Integrity began to serve, together with EIMC, as an
investment adviser to the Fund. The Separate Account no longer requires an
investment adviser. The Reorganization did not change the policy values of then
outstanding policies or policies.
Policy owners who have our variable life policies on a single premium basis, as
well as on a periodic premium basis, have monies placed in our Separate Account.
Our financial statement including those of our continuing Separate Account are
in Part 3.
- --------------------------------------------------------------------------------
EQUITABLE
Equitable is a New York mutual life insurance company that has its home office
at 787 Seventh Avenue, New York, N.Y. 10019.
Equitable has been in business since 1859. Equitable's total assets make it the
third largest life insurance company in the United States. At December 31, 1985
these assets were over $51 billion. Equitable is also one of the largest
managers of retirement fund assets. At December 31, 1985, Equitable and its
subsidiaries, such as Alliance Capital Management Corporation, were managing
pension fund assets of over $54 billion and total assets of over $91 billion. At
December 31, 1985, Equitable, together with EIMC, was responsible for stock
portfolios of over $5 billion and debt portfolios of about $23 billion. These
portfolios include amounts in our General Account, Equitable's General Account
and separate accounts, and other accounts managed by Equitable and EIMC.
Between the time we were organized and the end of December 1985, Equitable
invested over $334 million in us. This money has been used to help us meet
operational costs and policy reserve requirements.
Equitable probably will invest more money in us in the future although it has no
legal obligation to do so. Its assets do not back benefits that may be paid
under the policy discussed in this prospectus.
In December, 1984, Equitable acquired Donaldson, Lufkin & Jenrette, Inc. (DLJ).
A DLJ subsidiary, Donaldson, Lufkin & Jenrette Securities Corporation, is one of
the nation's largest investment banking and securities firms. Another DLJ
subsidiary, Autranet, Inc., is a securities broker that markets independently
originated research to institutions. Through the Pershing Division of Donaldson,
Lufkin & Jenrette Securities Corporation, DLJ supplies correspondent services,
including order execution, securities clearance and other centralized financial
services, to approximately 300 independent regional securities firms and 100
banks.
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
To the extent permitted by law, Equitable Variable and their separate accounts
and affiliated companies, several of which are registered investment companies
(including the Fund), may engage in securities and other transactions with the
various entities mentioned in the preceding paragraph or may invest in shares of
investment companies with which those entities have affiliations.
- --------------------------------------------------------------------------------
REGULATION
We are regulated and supervised by the New York State Insurance Department. In
addition, we are subject to insurance laws and regulations in ever jurisdiction
where we sell our policies. We submit annual reports on our operations and
finances to insurance officials in these jurisdictions. The officials are
responsible for reviewing our reports to be sure we are financially sound and
that we are complying with applicable laws and regulations.
Our Basic and Expanded variable life policies have been approved in 49 states
and the Virgin Islands.
We are also subject to various Federal securities laws and regulations.
- --------------------------------------------------------------------------------
THE FUND
The Hudson River Fund, Inc. currently issues four series of classes of shares,
each of which represents an interest in one of the Fund's Portfolios. Shares of
the Common Stock and Money Market Portfolios are purchased and redeemed by the
corresponding Separate Account Division. The Fund sells and redeems its shares
at net asset value. It does not impose a sales charge.
It is anticipated that, subject to obtaining additional necessary governmental
exemptions and approvals, if any, the Fund may serve as an investment medium
for, among others, variable annuity contracts issued by Equitable, variable life
policies and variable annuity contracts issued by Integrity, new series of
variable life policies issued by us, and variable life insurance policies and
variable annuity contracts issued by insurers affiliated or unaffiliated with
Equitable. Letters of intent have been signed with two such unaffiliated
insurers and preliminary discussions are now going on with several additional
unaffiliated insurers. We currently do not foresee any disadvantages to our
policy owners arising out of this. However, the Fund's Board of Directors
intends to monitor events in order to identify any material irreconcilable
conflicts that possibly may arise and to determine what action, if any, should
be taken in response. If we believe that the Fund's response to any of those
events insufficiently protects our policy owners, we will see to it that
appropriate action is taken to protect our policy owners. Also, if we ever
believe that any of the Fund's Portfolios is so large as to materially impair
the investment performance of a Portfolio or the Fund, we will examine other
investment options.
The Fund's shares will be sold only to separate accounts of insurance companies.
Since we are the only insurance company now investing in the Fund, we are
currently in control of the Fund. We owned approximately $331 million worth of
the Fund's shares as of December 31, 1985, and we will continue to control the
Fund at least until other insurance companies, selling significant amounts of
variable insurance products, have made substantial investments in Fund shares.
The Fund's address is 787 Seventh Avenue, New York, New York 10019. The
custodian of the securities and other assets of the Fund is The Chase Manhattan
Bank, N.A.
The Fund, its investment objectives and policies, its risks, expenses,
organization and other aspects of its operations are described in more detail in
its prospectus, which is attached to this prospectus, and in a Statement of
Additional Information which may be obtained free of charge by written request
to the Fund at 787 Seventh Avenue, New York, New York 10019. Please carefully
read the Fund's prospectus.
- --------------------------------------------------------------------------------
THE FUND'S INVESTMENT
ADVISERS
The Fund is advised by EIMC and Integrity. They are registered with the SEC as
investment advisers under the Investment Advisers Act of 1940. EIMC's address is
1221 Avenue of the Americas, New York, New York 10020 and Integrity's address is
787 Seventh Avenue, New York, New York 10019.
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
Services are provided pursuant to an investment advisory agreement among the
Fund, EIMC and Integrity for a fee equivalent to maximum annual rates of 0.40%
of the average daily value of the aggregate net assets of the Common Stock,
Money Market and Balanced Portfolios (0.25% to EIMC and 0.15% to Integrity) and
0.50% of the average daily value of the Aggressive Stock Portfolio's aggregate
net assets (0.35% to EIMC and 0.15% to Integrity). We make a daily credit to the
values of our Basic and Expanded policies to offset completely the effect on
such values of the portion of the Fund's investment advisory fee which exceeds a
0.25% annual rate and all other Fund expenses except (a) all brokers'
commissions, transfer taxes and other fees and expenses for services relating to
purchases and sales of Portfolio investments and (b) any Fund income tax
liabilities.
- --------------------------------------------------------------------------------
DEDUCTIONS FROM
PREMIUMS
The amount of premium put into the Separate Account's Divisions is based on what
is called the basic annual premium. This is the total annual premium for a
standard mortality risk policy minus a $30 annual administrative charge and
minus the premiums for any optional insurance benefits you take. After we figure
the basic annual premium, we deduct certain charges and put the rest (the net
annual premium) into the Separate Account's Divisions.
A summary of charges against premiums follows. We guarantee that premiums will
not increase.
- --------------------------------------------------------------------------------
ANNUAL ADMINISTRATIVE
CHARGE
We charge $30 in each policy year for administrative expenses. These include:
o premium billing and collection;
o processing claims, paying cash values, and making policy changes;
o record keeping;
o communicating with policy owners; and
o other expenses and overhead.
- --------------------------------------------------------------------------------
ADDITIONAL FIRST YEAR
ADMINISTRATIVE CHARGE
In the first policy year we make a one-time administrative charge of $5 for each
$1,000 of initial face amount of a policy. This charge is applied to the cost
of:
o processing applications;
o conducting medical examinations;
o establishing policy records; and
o determining insurability and assigning the insured to a risk class.
- --------------------------------------------------------------------------------
SALES LOAD
We make a charge that can be considered a "sales load". The amount of the sales
load in a policy year is not necessarily related to our actual sales expenses
for that year. We expect to recover our total sales expenses over the lifetimes
of the insureds.
Our sales load charge will not be more than:
o 20% of the basic annual premium for the first policy year;
o 14.5% of the basic annual premium for the 2nd through 4th policy years; and
o 7.25% of the basic annual premium for all policy years after the 4th.
To the extent sales expenses are not covered by the sales load, we will cover
them from funds other than premium deductions.
- --------------------------------------------------------------------------------
RISK CHARGE
We charge 1.2% of the basic annual premium to provide for the possibility that
an insured will die at a time when, based on the investment experience of the
Separate Account, the death benefit that would ordinarily be paid is less than
the guaranteed minimum death benefit of the policy.
- --------------------------------------------------------------------------------
STATE PREMIUM TAX CHARGE
We deduct 2% of the basic annual premium to cover state premium taxes. These
taxes vary from state to state and the 2% rate is an average.
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
EXAMPLE OF DEDUCTIONS
FROM PREMIUMS
The following example (using the policies shown in the ILLUSTRATION OF DEATH
BENEFITS, CASH VALUES, AND ACCUMULATED PREMIUMS) shows what amount of net annual
premium would be put into the Separate Account at the start of each policy year.
A policy's actual cash value is related to the policy's net annual premium. The
differences between net annual premiums for males and females are due to two
factors: the higher face amounts for females cause higher first year
administrative charges and our pricing policies lead to other variations. These
variations sometimes lead to lower sales loads.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Issue Age 10 Issue Age 25 Issue Age 40
$300 Annual $500 Annual $1,000 Annual
Beginning of Premium for Premium for Premium for
Policy Year Standard Risk Standard Risk Standard Risk
- ------------------------------------------------------------------------------------------------------
MALE FEMALE MALE FEMALE MALE FEMALE
<S> <C> <C> <C> <C> <C> <C>
Basic Policy
(Initial Face Amount) ($37,605) ($42,654) ($40,034) ($45,898) ($49,238) ($57,396)
1st 57.91 60.57 160.94 131.73 498.78 458.02
2nd through 4th 238.79 238.01 392.73 405.74 900.56 873.57
5th through 40th 242.18 241.85 421.16 421.34 928.63 912.60
Expanded Policy
(Initial Face Amount) ($29,316) ($33,708) ($29,541) ($34,382) ($34,754) ($40,756)
1st 60.98 45.51 213.58 189.44 571.36 541.65
2nd through 4th 233.94 240.34 386.99 387.14 900.48 873.40
5th and later 241.86 242.02 421.25 421.52 928.63 912.93
- ------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
OUR SEPARATE
ACCOUNT AND ITS
DIVISIONS
Our Separate Account is registered with the SEC as a unit investment trust,
which is a type of investment company. This does not involve any supervision by
the SEC of the management or investment policy or practices of the Separate
Account. For state law purposes the Separate Account is treated as a part of us.
After making certain deductions from premiums, we put your net annual premiums
in the Common Stock Division or the Money Market Division of our Separate
Account. You decide whether your policy's net annual premium will be put
entirely in one Division or whether you want a percentage in each Division.
(Also, you have certain voting privileges with respect to the Fund shares held
in the Divisions. See YOUR VOTING PRIVILEGES.) Each Division invests in shares
of a corresponding investment Portfolio of the Fund. The Separate Account also
invests income or capital gains dividends received from the Fund in shares of
the Fund.
The Separate Account purchases and redeems shares of the Fund at their net asset
value per share. The Separate Account's assets are allocated between the
Divisions in accordance with the allocations of the net annual premiums invested
in the Separate Account and the earnings on those assets. Also, liabilities of
the Separate Account will be allocated to the Division to which they relate.
Accrued liabilities that are not allocable to one Division will be allocated to
both Divisions in proportion to their relative net assets. In the unlikely event
that any Division incurred liabilities in excess of its assets, the other
Division could be liable for such excess.
Each Portfolio has a different investment policy (see THE FUND). You should keep
in mind that the investment experience of the Separate Account and the Divisions
depends on the investment performance of the Fund and the corresponding
Portfolios. Also, values of Basic and Expanded policies are increased to
compensate policy owners for their share of Fund expenses in excess of the sum
of (1) expenses for brokers' commissions, transfer taxes and other fees relating
to purchases and sale of Portfolio investments, (2) fees for advisory services
at an annual rate equivalent to 0.25% of the average daily value of the
aggregate net assets of the Portfolios and (3) Fund income taxes, if any.
The Common Stock Division of our Separate Account superseded our
pre-Reorganization Separate Account I, which was established on June 28, 1973.
The Money Market Division of our Separate Account superseded our
pre-Reorganization Separate Account II, which was
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
established on December 12, 1980. Both pre-Reorganization Separate Accounts were
established under the insurance law of New York State as separate investment
accounts. Assets that were used to provide money to pay benefits under our
variable life policies were allocated to the pre-Reorganization Separate
Accounts from time to time. As a result of the Reorganization those assets, and
additional assets to be received from premiums under in-force policies and
future policies, will be allocated to the Separate Account Divisions from time
to time and used to provide money to pay benefits under our variable life
policies.
Any increase or decrease in a policy's death benefit or cash value will reflect
the investment experience of the Division where you have cash value, which in
turn will depend upon the investment performance of the corresponding Portfolio
of the Fund. (It will not be affected by the experience of the other Division
unless you have cash value in both Separate Account Divisions.)
- --------------------------------------------------------------------------------
HOW WE SUPPORT THE
OPERATIONS OF A POLICY
We support the operations of a policy by putting the net annual premium (which
is the annual premium less the charges described under DEDUCTIONS FROM PREMIUMS)
into the appropriate Separate Account Division or Divisions as the policy owner
chooses. We do this when the policy is issued and, after that, at the beginning
of each policy year during the premium payment period. Even though the gross
premium will be higher for an insured who is a high risk than the gross premium
for an insured who is a standard risk, any cash value that may build up on a
policy covering a high risk insured will be the same as the cash value that
would build up on a policy covering a standard risk insured of the same age and
sex, for the same amount and plan of insurance, and having the same date of
issue and allocation to the Divisions. This is also true for an insured who is a
non-smoker, even though the gross premium for a non-smoker insured will be lower
than for an insured who is a standard risk.
The policy is designed so that the net annual premium put in the Divisions does
not vary with the risk class of the insured. Therefore, we charge a higher gross
premium for an insured who is a high risk to cover the extra risk of mortality.
We charge a lower gross premium for certain non-smokers because of the expected
lower mortality.
The amount at risk on policy anniversaries is the death benefit payable less the
amounts in the Divisions in which a policy participates (adjusted for any
loans). Once the net annual premium is placed into the Divisions, we charge for
the cost of insurance based on the attained age for the amount at risk without
regard to differences in risk class. The cost of insurance is based on the 1958
Commissioners' Standard Ordinary Mortality Table, and generally increases with
attained age. The cost of insurance differs in each year because, based on this
mortality table, the probability of death generally increases with attained age
and the amount at risk is different year by year. The dollar amount of the cost
of insurance also depends on investment experience of the Divisions in which a
policy participates.
Your net annual premium will be put into the Divisions only once each year,
regardless of whether you pay your premium monthly, quarterly, semiannually, or
annually.
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT ASSETS
ARE OUR PROPERTY
The assets of the Separate Account are our property. However, New York Insurance
Law provides that the portion of Separate Account's assets that relates to
variable life policies may not be used to satisfy any obligations that may arise
out of any other business we conduct, although under certain circumstances one
Division could perhaps be liable for claims arising out of the other Division's
operations.
We permit money from charges owed to us to stay in the Divisions and accumulate.
These accumulated amounts are in excess of each Division's net assets attributed
to variable life policies. These amounts belong to us.
There probably will be more assets in the Separate Account than those that apply
to our variable life policies. We expect to transfer part or all of the excess
to our General Account. These transfers will be in cash, but before we make them
we will consider whether the transfer could have any adverse effect on our
Separate Account. In 1985 we made no such transfer to our General Account.
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
CHARGES AGAINST
THE SEPARATE
ACCOUNT
The amount in the Separate Account Divisions in which your policy participates
is further decreased (after the following charges) by the cost of your insurance
protection. See HOW WE SUPPORT THE OPERATIONS OF A POLICY.
- --------------------------------------------------------------------------------
CHARGES FOR MORTALITY AND
EXPENSE RISKS
We charge the Separate Account for the mortality and expense risk we assume. The
charge is made daily at an effective annual rate of 0.50% of the value of each
Division's assets that are attributable to variable life policies.
The mortality risk we assume is that insureds may live for shorter periods of
time than we estimated. If this occurs, we have to pay a greater amount of death
benefits than we expected in relation to the premiums we received.
The expense risk we assume is that our costs of issuing and administering
policies may be more than we estimated.
The money we collect from this charge may exceed the amount needed to cover
benefits and expenses and would be our gain.
- --------------------------------------------------------------------------------
OTHER CHARGES
The Separate Account purchases shares of the Fund at their net asset value. The
net asset value of those shares reflects management fees and other expenses
already deducted from the assets of the Fund that are briefly described under
THE FUND. More detailed information about the Fund is in its prospectus and in
its Statement of Additional Information.
- --------------------------------------------------------------------------------
YOUR VOTING
PRIVILEGES
GENERAL
As we have already said, all assets held in the Divisions are invested in shares
of the corresponding Portfolios of the Fund. We are the legal owners of those
shares and as such have the right to vote upon certain matters that are required
by the 1940 Act to be approved or ratified by the shareholders of a mutual fund
and to vote upon any other matters that may be voted upon at a shareholder's
meeting. Among other things, we may vote on:
o the election of the Fund's Board of Directors;
o the ratification of the selection of the Fund's independent auditors; and
o matters spelled out in the Fund's prospectus or Statement of Additional
Information that require a shareholder vote.
However, in accordance with our view of current Federal securities law
requirements, we will offer you the opportunity to instruct us as to how Fund
shares allocable to your policy and held by us in the Separate Account will be
voted on these matters. We will vote the shares of the Fund at regular and
special meetings of shareholders of the Fund in accordance with your
instructions. Thus, you will have the right to have a voice in the affairs of
the Fund. Fund shares held in each Division of the Separate Account which are
not allocable to policies or for which no timely instructions from policy owners
are received will be voted by us in the same proportion as shares in that
Division for which instructions are received.
Each policy having a voting interest will be sent proxy material and a form for
giving voting instructions. If required by state insurance officials, we may
disregard voting instructions if those instructions would require shares to be
voted so as to cause a change in the investment objectives or policies of one or
more of the Fund's Portfolios, or to approve or disapprove an investment policy
or investment adviser of one or more of the Fund's Portfolios. In addition, we
may disregard voting instructions in favor of changes initiated by a policy
owner or the Fund's Board of Directors in the investment policy or the
investment adviser of a Portfolio, provided that our disapproval of the change
is reasonable and is based on a good faith determination that the change would
be contrary to state law, the proposed advisory fee would be higher than we are
permitted to pay by the terms of our variable life policies, or the charge would
lead to an adverse effect on our general account because it would result in
unsound or overly speculative investments. We will advise policy owners if we do
disregard voting instructions, and give our reasons for such actions in the next
semiannual report we send to policy owners.
- --------------------------------------------------------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
All Fund shares of whatever class are entitled to one vote, and the votes of all
classes are cast on an aggregate basis, except on matters where the interests of
the Portfolios differ. In such case, the voting is on a Portfolio-by-Portfolio
basis. Approval or disapproval by the shareholders in one Portfolio on such a
matter would not generally be a prerequisite of approval or disapproval by
shareholders in another Portfolio; and shareholders in a Portfolio not affected
by a matter generally would not be entitled to vote on that matter. Examples of
matters which would require a Portfolio-by-Portfolio vote are changes in the
fundamental investment policy or restrictions of a particular Portfolio and
approval of the investment advisory agreement.
- --------------------------------------------------------------------------------
VOTING INSTRUCTIONS OF
OTHER SEPARATE ACCOUNT
PARTICIPANTS
Net premiums for our individual flexible premium variable life policy are
invested in our Separate Account FP, which, in turn, invests in the Fund. In
addition, we anticipate that Fund shares will be held by other separate accounts
established by us or other insurance companies affiliated or unaffiliated with
us. We expect that those shares will be voted through those separate accounts in
accordance with instructions of their participants. This will dilute the effect
of voting instructions of policy owners whose net premiums are invested in the
Separate Account.
- --------------------------------------------------------------------------------
DETERMINING THE FUND
PORTFOLIO FOR WHICH YOU
CAN GIVE VOTING
INSTRUCTIONS
If all your cash value is in one Division, you can participate in the voting
only for the shares in the Fund Portfolio that corresponds to that Division. If
your cash value is divided between the Divisions, you are entitled to
participate in the voting of the shares of the Fund that correspond to each of
the Fund Portfolios.
The number of Fund shares held in each Division attributable to your policy for
purposes of your voting privilege will be determined by dividing your policy's
cash value (less any policy indebtedness) allocable to that Division by the net
asset value of one share of the corresponding Fund Portfolio as of the record
date for the Fund's shareholder meeting. The record date for this purpose will
not be more than 90 days before the meeting of the Fund. Fractional shares are
counted.
EXAMPLE: Your policy has a cash value of $3,000, 50% of which is attributable to
the Common Stock Division and 50% of which is attributable to the Money Market
Division. Assuming the net asset value of one share in each Fund Portfolio is
$100, you would have the privilege of voting 30 shares. You will have the
privilege of instructing us regarding 15 votes in each Division.
EXAMPLE (ASSUMING AN OUTSTANDING LOAN): Your policy has a cash value of $3,000,
which entitles you to 30 votes. If you have a $1,000 loan (including interest)
equally allocated between each Division, you would be entitled to 10 votes in
each Division, or an aggregate 10 fewer votes.
- --------------------------------------------------------------------------------
LAW CHANGES MAY AFFECT
YOUR VOTING PRIVILEGES
Our Separate Account is required by Federal securities laws or regulations as
currently interpreted to have policy owners instruct us as to the Fund's voting
rights. However, if amendments to or interpretations of those laws or
regulations change what must be voted on or restrict the matters for which
policy owners are given the opportunity to provide voting instructions, we will
in turn change what is submitted to policy owners.
- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
OUR RIGHTS
We reserve the right to take certain actions in connection with our operations
and the operations of the Separate Account. We will always attempt to comply
with applicable laws before we take any of these actions. If necessary, we will
seek approval by policy owners.
Specifically, we reserve the right to:
o add Divisions to or remove Divisions from the Separate Account;
o combine any two or more Divisions within the Separate Account;
o transfer assets of the two types of variable life policies offered by this
prospectus, as well as the assets of our other variable life policies, from
one Division to another (if we do, we will withdraw proportional amounts of
each investment to the Division, but we will also make whatever adjustments
are needed to avoid odd lots and fractions);
o operate the Separate Account as a management investment company under the
1940 Act, or in any other form the law allows (if we do, we may invest the
assets in any legal investments and we or one of our affiliates, such as
EIMC, will serve as investment adviser);
o end the registration of the Separate Account under the 1940 Act; or
o operate the Separate Account under the general supervision of a committee
made up of individuals all of whom may be, under the 1940 Act, interested
persons of us or of Equitable or discharge such Committee.
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SUBSTITUTION OF
FUND SHARES
Although we believe it to be highly unlikely, it is possible that, in our
judgment, one or more of the Portfolios of the Fund may become unsuitable for
investment by the Separate Account because, for example, of a change in the
investment policy, or a change in the tax laws, or because the shares are no
longer available for investment. For those or other reasons, we may seek to
substitute the shares of another Portfolio or of an entirely different mutual
fund. Before we can do this, we would obtain the approval of the SEC, and
possibly one or more state insurance departments, to the extent legally
required.
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14
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DEATH BENEFITS
UNDER OUR POLICIES
The death benefit is the amount payable to the named beneficiary when the
insured dies. All or part of the benefit can be paid in cash or applied under
one or more of our payment options described under PAYMENT OPTIONS.
The death benefit will at least equal the guaranteed minimum of insurance for
the policy year in which the insured dies. Whether the death benefit is higher
than the guaranteed minimum depends on the investment experience of the
Divisions in which you have cash value. See ILLUSTRATIONS OF DEATH BENEFITS,
CASH VALUES, AND ACCUMULATED PREMIUMS.
The death benefit is the guaranteed minimum death benefit, plus the sum (if
positive) of the variable adjustment amounts (determined annually) in the
Divisions in which you have cash value.
The amount of death benefit actually paid to the insured's beneficiary will be
adjusted as of the date of the insured's death to reflect:
o any policy loans together with accrued interest;
o part of any unpaid premium due if the insured dies during the grace period;
o any premium paid for a period beyond the policy month in which the insured
dies;
o any insurance added to the policy by a rider;
o the insured's suicide within 2 years after the policy's date of issue. See
LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY; and
o any material misstatement in the application for insurance, including a
misstatement of the insured's age or sex. See LIMITS ON OUR RIGHT TO
CHALLENGE THE POLICY.
Interest will be paid from the date of death to the date the death benefit is
paid at least at the annual rate that we are paying under the deposit option
described in PAYMENT OPTIONS.
If you sign an application and send us money, and if the person proposed to be
insured dies between the application date and the date we act on the
application, we have a special rule. Should we decide the proposed insured was
insurable and accept the application, we will pay the initial face amount to the
proposed beneficiary.
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THE GUARANTEED MINIMUM
DEATH BENEFIT
The guaranteed minimum death benefit equals a policy's face amount for the
policy year in which the insured dies, regardless of the investment experience
of the Divisions in which a policy participates.
BASIC POLICY. The guaranteed minimum death benefit of a Basic Policy is equal to
its face amount and remains level as long as the policy is in force.
EXPANDED POLICY. The guaranteed minimum death benefit of an Expanded Policy is
equal to its face amount for the policy year in which the insured dies. The
policy's face amount in the first policy year is its initial face amount.
On each policy anniversary the face amount will increase by 3% over the prior
year's face amount until the 14th policy anniversary, when the face amount is
set at 150% of the initial face amount. Thereafter, the face amount always
remains at that level.
In the table below, we show the face amount for each $1,000 of initial face
amount in an Expanded Policy.
- --------------------------------------------------------------------------------
On Policy Face Amount On Policy Face Amount
Anniversary Increases To Anniversary Increases To
- --------------------------------------------------------------------------------
1 $1,030 8 $1,267
2 1,061 9 1,305
3 1,093 10 1,344
4 1,126 11 1,384
5 1,159 12 1,426
6 1,194 13 1,469
7 1,230 14 and beyond 1,500
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15
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THE VARIABLE ADJUSTMENT
AMOUNT
The variable adjustment amount for each Division is the amount of the death
benefit that results from all past investment experience of that Division. In
the first policy year, the variable adjustment amount in each Division is zero.
After that, the variable adjustment amount is the amount of insurance purchased
by the difference between the actual rate of return and 4%. Therefore, a
Division's variable adjustment amount will not change in any year that the
Division's gross return minus the charges to that Division results in a net
return of 4%. If the net return is more than 4%, the variable adjustment amount
will increase. The variable adjustment amount will increase because additional
amounts of paid-up life insurance are purchased. If the net return is less than
4%, it will decrease. The variable adjustment amount will decrease because these
additional amounts of paid-up life insurance are lost. The rates at which these
additional amounts of paid-up life insurance are purchased or lost are based on
sex and attained age and are guaranteed.
The percentage change in the death benefit for any year is not the same as the
net return for the preceding year and it is not necessarily related to current
or future rates of inflation.
The death benefit is equal to the guaranteed minimum death benefit plus the sum
(if positive) of the variable adjustment amounts for both Divisions. However,
even if the sum of the variable adjustment amounts is negative, the death
benefit in the year the insured dies will never be less than the guaranteed
minimum.
In any year that the sum of the variable adjustment amounts increases (and is
positive), the death benefit will increase. If the sum of the variable
adjustment amounts is negative, investment experience can not increase the death
benefit above the guaranteed minimum until it has increased the variable
adjustment amount of at least one Division so that the sum is positive. In any
year that the sum of the variable adjustment amounts for the Divisions
decreases, the death benefit may decrease, unless it is already at the
guaranteed minimum.
The variable adjustment amount for each Division is set on each policy
anniversary. Once set, it remains the same for the following policy year. If it
is set above the guaranteed minimum, we will be responsible for keeping it at
that level until the next policy anniversary. You will bear the risk that it
could drop on the next policy anniversary (but not below the guaranteed
minimum).
There is no guarantee that a Division's investment experience, which will
reflect the investment performance of the corresponding Portfolio of the Fund,
will be sufficient to result in an increase in death benefits. However, the
historical pattern of stock market investment performance has been one of
long-range growth, and money market investments in recent years have returned
over 4%.
THE VARIABLE ADJUSTMENT IS CUMULATIVE. Increases and decreases in the variable
adjustment amount are carried into each succeeding year. The variable adjustment
amount for a Division can be positive or negative. If it is positive, good
investment experience will produce a larger variable adjustment amount. If it is
negative, good investment experience must first offset the current negative
variable adjustment amount before there can be a positive amount.
For a given net return, the greater the cash value in a Division, the greater
the effect of investment experience will be on the variable adjustment amount.
Therefore, in later policy years, when your total cash value is likely to be
greater, investment experience may have a greater effect on the death benefit.
EXAMPLE: You were a 25 year old male when your policy was issued, and you have a
Basic Policy. Assume a hypothetical gross annual investment return of 0% for the
first 9 policy years. This results in a negative variable adjustment amount. A
net return of approximately 26.6% in the 10th policy year would offset the
cumulative negative variable adjustment
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16
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amount so that it would equal zero. Any net return above that would produce a
positive variable adjustment amount. On the other hand, the negative variable
adjustment amount may be offset over a number of years. Thus, if the gross
return in the 10th policy year was 8% (net return of 7.19%), a net return of
7.19% in each of the 5 following policy years would be required to produce a
positive variable adjustment amount by the 16th policy year.
- --------------------------------------------------------------------------------
NET RETURN
The death benefit based on a Division's net return is set on each policy
anniversary. The net return depends on a Division's investment experience from
the first day of that policy year to the first day of the next policy year. It
takes into account investment income, capital gains and capital losses (whether
realized or unrealized) with respect to Fund shares owned by the Division and
gains resulting from the reimbursement by us to the Division of amounts
corresponding to certain Fund expenses. The charges against the Division are
then deducted to determine the net return. the net return on a date during a
policy year depends on the investment experience of the Division from the first
day of that policy year to that date and can affect cash values but not death
benefits.
The net return of each Division is determined at the close of business on each
day in which the degree of trading in the corresponding Portfolio of the Fund
might materially affect the net return of the Division. We call this a "business
day". Normally this would be each day that the New York Stock Exchange is open.
However, because we are closed on Martin Luther King Day and the Friday after
Thanksgiving Day, no determinations will be made on those days.
The assets of each Division are valued by multiplying the number of Fund shares
in each Division by the net asset value of such shares and is adjusted by the
charge for mortality and expense risks. See the financial statements for the
Separate Account in this prospectus.
The net return for a policy year is not the same as for a calendar year unless
the policy anniversary is January 1.
A statement of the method we use to calculate net return is an exhibit to the
Registration Statement we filed with the SEC. It will be furnished on request.
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HOW THE DEATH BENEFIT
VARIES FROM THE
GUARANTEED MINIMUM
The following example shows how the death benefit varies from the guaranteed
minimum as a result of investment experience. Assume that the insured was a 25
year old male when the policy was issued, and the hypothetical gross annual
return is 8% for each Division or their combination (which is equal to a net
return of 7.19%). Use the amounts from the ILLUSTRATION OF DEATH BENEFITS, CASH
VALUES, AND ACCUMULATED PREMIUMS.
- --------------------------------------------------------------------------------
Variable
Guaranteed Adjustment Death
Minimum + Amount = Benefit
- --------------------------------------------------------------------------------
BASIC POLICY
End of policy year 5 $40,034 $621 $40,655
Increase -- 280 280 (0.7% increase)
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End of policy year 6 $40,034 $901 $40,935
- --------------------------------------------------------------------------------
EXPANDED POLICY
End of policy year 5 $34,238 $688 $34,926
Increase 1,033 302 1,335 (3.8% increase)
- --------------------------------------------------------------------------------
End of policy year 6 $35,271 $990 $36,261
- --------------------------------------------------------------------------------
If the gross annual return was 0% (equal to a net return of -.75%), the death
benefit at the end of policy year 6 would have been:
o $40,238 (a 1.0% decrease) for the Basic Policy. This reflects a decrease in
the variable adjustment amount of $417.
o $35,511 (a 1.7% increase) for the Expanded Policy. This reflects a decrease
in the variable adjustment amount of $449.
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17
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CASH VALUE AND
LOAN PRIVILEGES
UNDER OUR POLICIES
HOW WE DETERMINE CASH
VALUE
The cash value is the sum, on any date, of the cash values in each Division of
the Separate Account in which your policy participates. If no premium is due and
unpaid, the cash value of the Division equals the tabular cash value at the end
of each year as stated in the policy multiplied by the annual premium allocation
percentage selected by the policy owner for that Division in effect on the last
anniversary, increased or decreased by the aggregate net single premium
specified in the policy for the variable adjustment amount for that Division.
The tabular cash value is what the cash value for the policy would be if all the
Divisions in which you had funds had a constant net investment return of 4% a
year. The premium allocation percentage is the percentage of your current net
annual premium allocated to each of the Divisions. The net single premium is the
one-time cost at your attained age to purchase one dollar of death benefit, as
specified in your policy.
Adjustments during a year reflect a Division's investment experience, the cost
of insurance, premium payments, any indebtedness and any cash value transfers.
The cash values for substandard risk policies and non-smoker policies are the
same as for comparable standard risk policies. See THE VARIABLE ADJUSTMENT
AMOUNT and NET RETURN.
- --------------------------------------------------------------------------------
THERE IS NO GUARANTEED
MINIMUM CASH VALUE
Daily increases or decreases in cash value depend on the investment experience
of the Divisions. It is unlikely that there will be a cash value during the
early part of the first policy year because of the first year administrative
charges. There is no guaranteed minimum cash value.
- --------------------------------------------------------------------------------
RETURNING THE POLICY FOR
CASH
During the insured's lifetime, and subject to our rules, your policy can be
returned for payment of the cash value net of any indebtedness. The amount
payable will be based on the net cash value next computed after we receive your
signed request for payment of the cash value at your Regional Service Center,
accompanied by your policy. The insurance coverage will end on the date you send
us the policy and your request.
SPLITTING THE POLICY. You can request to split your policy into two policies. In
addition, you may return one for cash. Any policy that continues will be based
on the new initial face amount. The premium for the policy that continues will
be based on the new initial face amount but the same age, sex and risk class as
the original policy.
If you split a Basic Policy, the policy we continue must have a face amount of
at least $25,000.
If you split an Expanded Policy, the policy we continue must have a face amount
that at least equals what an Expanded Policy with an initial face amount of
$25,000 with its automatic 3% a year increases would have reached in the policy
year during which you split your policy.
These are our current procedures, which may change.
- --------------------------------------------------------------------------------
INCOME TAX WITHHOLDING
Federal tax law requires us to withhold income tax from any portion of your
surrender proceeds that is subject to tax, unless you request us not to
withhold.
If you surrender your policy and do not advise us in writing that you do not
want us to withhold Federal income tax before the date payment must be made, we
are required by law to withhold tax from the surrender payment.
If you elect not to have tax withheld from the surrender payment, or if the
amount of Federal income tax withheld is insufficient, you may be responsible
for payment of estimated tax. You may incur penalties under the estimated tax
rules if your withholding and estimated tax payments are not sufficient. You may
wish to consult your tax adviser.
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18
<PAGE>
- --------------------------------------------------------------------------------
YOU CAN TRANSFER CASH
VALUE BETWEEN DIVISIONS
You can request to transfer part or all of your cash value between the
Divisions. You may do this up to twice in a policy year. A transfer will go into
effect on the day we receive your signed request at your regional Life Insurance
Center. Your request should show the policy number an amount (either in dollars
or as a percentage) you want to transfer. When cash value is transferred a
portion of the net annual premium is transferred as well. We reallocate loans if
you transfer cash value.
- --------------------------------------------------------------------------------
WHEN A DIVISION
BECOMES INACTIVE
If you have a policy loan allocated to a Division and your cash value plus
remaining net annual premium less your loan (including accrued loan interest) in
that Division reaches zero, that Division will become inactive for your policy.
We will reallocate the loan to the other Division. A Division will also become
inactive for your policy if you transfer its entire cash value to the other
Division.
We will notify you when a Division becomes inactive.
If a Division becomes inactive, the future variable adjustment amount, cash
value and net return will be affected. We will assume that you do not want to
put any part of future net annual premiums into the inactive Division. You can
request us to put any part of a future net annual premium into the inactive
Division effective on the next policy anniversary after your request is
received. You may also transfer cash value into an inactive Division from the
other Division. See YOU CAN TRANSFER CASH VALUE BETWEEN DIVISIONS.
- --------------------------------------------------------------------------------
TAKING A POLICY LOAN
For policy loans, we offer both a fixed and an adjustable interest rate
provision. This section will first discuss loans with fixed interest rates and
will then discuss the special features of the adjustable loan interest rate, if
it is elected.
Borrowing money against your policy will have a permanent effect on your
policy's cash value and the amount by which the death benefit may increase above
the guaranteed minimum. The effect remains even though the loan is repaid in
whole or in part.
You may borrow up to 90% of your policy's cash value using the policy as
security. Unless it is being used to pay premiums, we will not grant a loan that
is not at least $100 more than any outstanding loan with accrued interest. The
amount of your premium will not be affected by the fact you have a loan or by
how you repay the loan. If a loan is made after the due date of a premium, that
premium will be subtracted from the loan proceeds. If you request a loan in
order to pay a premium, we will charge loan interest from the date we make the
loan even if it is before the premium due date.
Whenever the loan with accrued interest from one Division equals or exceeds the
cash value in that Division, that Division will become inactive for your policy.
We will transfer the total cash value and loan allocation to the other Division.
See WHEN A DIVISION BECOMES INACTIVE.
IF LOANS EXCEED THE CASH VALUE OF YOUR POLICY. Whenever the loan with accrued
interest exceeds the total cash value of your policy, we will send a notice to
you and to anyone to whom you told us you assigned the policy. The policy will
end 31 days after we send the notice unless you make a repayment during the 31
day period that is large enough to reduce your outstanding loan with accrued
interest to below the total cash value of your policy. See OPTIONS ON LAPSE.
If you borrow the maximum of 90% of your policy's cash value, you increase your
risk of having your policy end. This might happen if the combination of policy
loan interest (as it builds up), the cost of insurance, asset charges against
the Separate Account and investment experience in the Divisions where you have
cash value uses up the remaining 10%.
INTEREST. Except as discussed under ADJUSTABLE LOAN INTEREST RATE, interest on
loans is 5% a year. Interest is charged daily and is payable by the policy owner
on each anniversary. However, if it is not paid, it will be compounded on the
policy anniversary because it will be added to the loan principal. This unpaid
interest is transferred out of each Division where you have your loan into our
general account. You should rely on your tax adviser as to whether this interest
is deductible.
REPAYMENT. You can repay all or part of any outstanding loan with accrued
interest at any time while the policy is in effect and the insured is alive. You
repayment, whether full or partial, will be reallocated to the Divisions in
proportion to the loan allocation to each Division at the time of repayment.
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19
<PAGE>
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The amount of any outstanding loan with accrued interest will be deducted from
the death benefit or cash value proceeds.
WHICH DIVISION WE CHARGE LOANS AGAINST. We allocate a loan based on the net cash
value in each Division on the date the loan is made. We reallocate loans if you
transfer cash value.
THE PERMANENT EFFECT OF A FIXED INTEREST RATE LOAN. When you take out a loan, we
transfer part of the cash value equal to the amount of the loan from the
Divisions to our general account. In addition, unpaid interest on the policy
loan will be transferred to our general account from time to time. The amount
taken out of the Divisions will not be affected by the Divisions' investment
experience while the loan is outstanding. Since the amount is not in the
Divisions, it cannot contribute to any possible increase in your policy's death
benefit or cash value.
We will credit your policy with a 4% annual return on any amount transferred to
our general account as a result of your policy loan. This can protect cash value
from decreasing if investment experience is below 4%. It will also prevent cash
value from increasing if investment experience is above 4%.
EXAMPLE: You were a 25 year old male when your policy was issued, and you have a
Basic Policy with standard rates. Use the illustration on page 25, and assume an
8% hypothetical gross annual investment return for each Division of their
combination (which is a net return of 7.19%). If you take a loan for $3,000 at
the end of the 9th policy year, it will affect the death benefit and cash value
(before subtracting the amount of the loan with loan interest) in the 10th
policy year as follows:
- --------------------------------------------------------------------------------
Without Loan With Loan
- --------------------------------------------------------------------------------
Death Benefit $42,603 $42,250
Cash Value 4,456 4,360
- --------------------------------------------------------------------------------
The difference results from the transfer of the portion of the cash value equal
to the loan from the Division to the general account. The return on the amount
transferred is reduced to 4% a year, rather than the Division's net return of
7.19%.
See DEATH BENEFITS UNDER OUR POLICIES for adjustments that are made as of the
date of the insured's death.
ADJUSTABLE LOAN INTEREST RATE. As an alternative to the fixed loan interest rate
of 5%, you may elect (in writing) the Adjustable Loan Interest Rate. Under this
alternative, a rate will be determined as of the beginning of each policy year
and it will apply to any new or outstanding loan under your policy during that
policy year. The annual interest rate for a policy year will be the greater of
5% or the Monthly Average Corporates yield shown in Moody's Corporate Bond Yield
Averages published by Moody's Investors Service, Inc., for the month ending two
months before the beginning of the policy year.
However, if you have elected an Adjustable Loan Interest Rate, it will be the
same for a policy year after the first as it was for the immediately preceding
policy year if the formula above would produce a change of less than 1/2 of 1%
from the rate applicable to your policy for the preceding year.
NOTIFICATION OF ADJUSTABLE LOAN INTEREST RATE. We will notify you of the initial
interest rate at the time a loan is made under the Adjustable Loan Interest Rate
election. Initial loan interest rates are also available on request. We will
also notify you in advance of each policy anniversary of the interest rate for
the following policy year.
CANCELLATION OF ADJUSTABLE LOAN INTEREST RATE ELECTION. You may cancel your
election of the Adjustable Loan Interest Rate in writing at any time, but the
request will not take effect until the next policy anniversary. When the
cancellation takes effect, the loan rate will revert to the fixed rate of 5%.
Election or re-election of the Adjustable Loan Interest Rate may be made in
writing at any time but will not take effect until the next policy anniversary
even if no loan is outstanding.
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20
<PAGE>
STATE VARIATIONS. Not all states have laws permitting adjustable policy loan
interest rates. Some states permit adjustable rates but set maximums. Some
states do not permit cancellation of an adjustable loan interest rate provision,
and there are other variations from state to state. For details about the policy
loan interest rate laws in your state, contact your agent or your regional Life
Insurance Center.
AMOUNTS CREDITED ON BORROWED FUNDS. When you take out a loan, we transfer part
of the cash value equal to the amount of the loan from the Divisions in which
your policy participates to our general account. In addition, unpaid interest on
the policy loan will be transferred to our general account from time to time.
The amount taken out of the Divisions will not be affected by the investment
experience of the Divisions while the loan is outstanding. Since the amounts is
not in the Divisions, it contributes to possible increases in your policy's
death benefit or cash value only if you have elected the Adjustable Loan
Interest Rate.
If you have chosen an Adjustable Loan Interest Rate, we will credit your policy
with a rate of return which is 0.75% below the interest rate that is charged as
a result of your policy loan, minus any charges for taxes or amounts set aside
as a provision for taxes. We are not making charges for taxes or provisions for
taxes now but we may make such charges in the future. See OUR INCOME TAXES. For
example, if the Adjustable Loan Interest Rate were 10%, the credit rate would be
9.25%. If the Adjustable Loan Interest Rate were below 5%, the actual interest
rate would be 5% and the credit rate would be 4.25%. Any amounts credited over
4% will increase your policy's death benefit and cash value. If you elect the
Adjustable Loan Interest Rate, you will bear the additional investment risk
connected with changes in the annual credit rate because they affect the death
benefit and cash value under your policy.
THE PERMANENT EFFECT OF AN ADJUSTABLE INTEREST RATE LOAN. If the current policy
year's Adjustable Loan Interest Rate less 0.75% (and less any charge for taxes
or provision for taxes) is greater than the net return for that year of the
Divisions in which you have funds, then the death benefit and cash value for
that year will be greater than if no loan were made. The reverse would also be
true.
EXAMPLE: You were a 25 year old male when your policy was issued, and you have a
Basic Policy with standard rates. Use the illustration on page 25, and assume an
8% hypothetical gross annual investment return for each Division of their
combination (which is a net return of 7.19%). If you take a loan for $3,000 at
the beginning of the 10th policy year and you have elected the Adjustable Loan
Interest Rate with an assumed hypothetical loan interest rate of 12.88% (the
actual rate for February, 1985) in the 10th policy year, it will affect the
death benefit and cash value (before subtracting the amount of the loan with
loan interest) in the 10th policy year as follows:
- --------------------------------------------------------------------------------
Without Loan With Loan
- --------------------------------------------------------------------------------
Death Benefit $42,603 $43,150
Cash Value 4,456 4,604
- --------------------------------------------------------------------------------
See the example under THE PERMANENT EFFECT OF A FIXED INTEREST RATE LOAN for a
loan with the fixed interest rate of 5%.
WHENEVER THIS PROSPECTUS DISCUSSES INCREASES AND DECREASES IN THE DEATH BENEFIT
AND CASH VALUES UNDER OUR VARIABLE LIFE POLICIES, YOU SHOULD CONSIDER THE IMPACT
OF HAVING ELECTED AN ADJUSTABLE LOAN INTEREST RATE.
21
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ILLUSTRATIONS OF
DEATH BENEFITS,
CASH VALUES, AND
ACCUMULATED
PREMIUMS
To help you get a picture of how the key financial elements of our policies
work, we have prepared a series of tables.
The tables show how death benefits and cash value of policies with annual
premiums of $300, $500, and $1,000 could vary over an extended period of time if
the Divisions had CONSTANT hypothetical gross annual investment returns of 0%,
4%, 8% and 12% over the years covered by each table. The death benefits and cash
values would differ from those shown in the tables if the annual investment
returns did not remain absolutely constant. Thus, the figures would be different
if the return AVERAGED 0%, 4%, 8% and 12% over a period of years but went above
or below those figures in individual policy years. The death benefits and cash
values would also differ, depending on the investment allocations made to the
Divisions, if the actual rates of investment return averaged 0%, 4%, 8% and 12%,
but went above or below those figures for individual Divisions. The tables are
for standard risk policies.
The cash values in the tables are related to the annual premiums shown on page
38. The amounts of death benefits and cash values shown in the tables for the
end of each policy year take into account a daily charge against each Division
that is equivalent to an annual charge of 0.75% at the beginning of each year.
This charge is the 0.50% charge against the Separate Account for mortality and
expense risks and the effect on each Division's investment experience of the
charge to the Fund assets for investment advisory services (equivalent to an
annual rate of 0.25% of the aggregate average daily net assets of the
Portfolios). The effect of these adjustments is that on a 0% actual rate of
return the net rate of return would be -0.75%, on 4% it would be 3.22%, on 8% it
would be 7.19% and on 12% it would be 11.16%.
The hypothetical returns shown in the tables do not reflect any charges for Fund
expenses in addition to an investment advisory fee charge of 0.25%, because the
Divisions in general will be reimbursed for their share of such expenses, as
previously discussed under THE SEPARATE ACCOUNT, ITS INVESTMENTS AND ITS
INVESTMENT EXPERIENCE and THE FUND.
The tables reflect the fact that we do not currently charge the Divisions for
Federal income tax. However, if we do make such a charge in the future, it would
take a higher rate of return to produce after-tax returns of 0%, 4%, 8% and 12%
than it does now.
The second and third columns of each table show what would happen if an amount
equal to the total annual premiums for the premium payment period were invested
to earn interest, after taxes, of 4% or 5% compounded annually. These tables
show that if a policy is returned in its early years for payment of its cash
value, the cash value will be low in comparison to premiums accumulated with
interest. This means that the cost of carrying insurance for a relatively short
time will be high.
The Basic Policy has a level guaranteed minimum death benefit. The Expanded
Policy has a guaranteed death benefit which increases by 3% per year regardless
of investment experience until it reaches 150% of the original face amount in
the fifteenth year.
If you request, we will furnish you with a comparable illustration based on the
proposed insured's sex and age and an initial face amount or premium amount of
your choice. A specific illustration will assume that the insured is a standard
risk and that the premium will be paid on an annual basis. In addition, if you
do purchase a policy, we will deliver a specific illustration that reflects how
the premium will actually be paid and to what risk class the insured has been
assigned.
We have also prepared special illustrations showing the effects of policy loans
on a planned basis and showing various insurance plans suitable for special
purposes. These are available on request.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
OF ILLUSTRATIONS
- --------------------------------------------------------------------------------
Basic policy Expanded policy
Page Page
---------------------------------------
$ 300 annual premium Male Age 10 23 24
$ 500 annual premium Male Age 25 25 26
$1,000 annual premium Male Age 40 27 28
$ 300 annual premium Female Age 10 29 30
$ 500 annual premium Female Age 25 31 32
$1,000 annual premium Female Age 40 33 34
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22
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EQUITABLE VARIABLE LIFE INSURANCE COMPANY
BASIC POLICY
$37,605 FACE AMOUNT MALE ISSUE AGE 10
(GUARANTEED MINIMUM DEATH BENEFIT) $300 ANNUAL PREMIUM FOR STANDARD RISK(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED
PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT.
THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
<TABLE>
<CAPTION>
PREMIUMS(1) DEATH BENEFIT(2)
ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS
END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------- -----------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 312 $ 315 $37,605 $37,605 $ 37,619 $ 37,637
2 636 646 37,605 37,605 37,680 37,775
3 974 993 37,605 37,605 37,788 38,025
4 1,325 1,358 37,605 37,605 37,944 38,391
5 1,690 1,741 37,605 37,605 38,149 38,881
6 2,069 2,143 37,605 37,605 38,402 39,500
7 2,464 2,565 37,605 37,605 38,704 40,254
8 2,875 3,008 37,605 37,605 39,055 41,149
9 3,302 3,473 37,605 37,605 39,455 42,193
10 3,746 3,962 37,605 37,605 39,905 43,394
15 6,247 6,797 37,605 37,605 42,921 52,064
20 9,291 10,416 37,605 37,605 47,286 66,260
25 12,993 15,034 37,605 37,605 53,123 87,932
30 17,498 20,928 37,605 37,605 60,578 119,837
55 (Age 65) 53,393 79,106 37,605 37,605 128,494 637,584
</TABLE>
CASH VALUE(2)
ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF
- -----------------------------------------------------
0% 4% 8% 12%
- ------ ------- ------- --------
$ 7 $ 10 $ 12 $ 14
197 209 221 234
385 414 445 477
569 624 683 746
753 842 939 1,045
934 1,065 1,211 1,375
1,112 1,292 1,500 1,738
1,286 1,525 1,806 2,138
1,457 1,762 2,131 2,578
1,627 2,006 2,478 3,065
2,456 3,338 4,595 6,390
3,270 4,896 7,548 11,915
4,066 6,706 11,647 21,071
4,828 8,779 17,285 36,150
4,419 17,723 80,874 401,295
(1) If premiums are paid more frequently than annually the payments would be
$153 semi-annually, $78 quarterly or $27 monthly. The death benefits and
cash values shown would not be affected by the more frequent premium
payments, nor would such amounts be affected by the Insured's risk
classification.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8%
OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE
FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD
ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE
TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF
RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW
THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
23
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
EXPANDED POLICY
$29,316 FACE AMOUNT MALE ISSUE AGE 10
(GUARANTEED MINIMUM DEATH BENEFIT) $300 ANNUAL PREMIUM FOR STANDARD RISK(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED
PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT.
THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
<TABLE>
<CAPTION>
PREMIUMS(1) DEATH BENEFIT(2)(3)
ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS
END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------- -----------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 312 $ 315 $30,195 $30,195 $ 30,210 $ 30,229
2 636 646 31,104 31,104 31,183 31,283
3 974 993 32,042 32,042 32,234 32,482
4 1,325 1,358 33,009 33,009 33,363 33,829
5 1,690 1,741 33,977 33,977 34,543 35,304
6 2,069 2,143 35,003 35,003 35,381 36,971
7 2,464 2,565 36,058 36,058 37,198 38,807
8 2,875 3,008 37,143 37,143 38,646 40,817
9 3,302 3,473 38,257 38,257 40,172 43,008
10 3,746 3,962 39,400 39,400 41,779 45,388
15 6,247 6,797 43,974 43,974 49,430 58,830
20 9,291 10,416 43,974 43,974 53,823 73,195
25 12,993 15,034 43,974 43,974 59,641 94,983
30 17,498 20,928 43,974 43,974 67,022 126,924
55 (Age 65) 59,642 85,905 43,974 43,974 134,792 645,712
</TABLE>
CASH VALUE(2)
ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF
- -----------------------------------------------------
0% 4% 8% 12%
- ------ ------- ------- --------
$ 26 $ 28 $ 31 $ 33
220 233 246 259
411 442 474 508
598 656 717 782
788 881 982 1,092
974 1,110 1,262 1,431
1,156 1,342 1,557 1,804
1,332 1,578 1,870 2,213
1,504 1,818 2,201 2,663
1,671 2,063 2,551 3,158
2,459 3,362 4,652 6,497
3,208 4,852 7,550 12,009
3,933 6,575 11,561 21,129
4,604 8,523 17,050 36,119
5,878 19,389 82,508 404,081
(1) If premiums are paid more frequently than annually the payments would be
$153 semi-annually, $78 quarterly or $27 monthly. The death benefits and
cash values shown would not be affected by the more frequent premium
payments, nor would such amounts be affected by the Insured's risk
classification.
(2) Assumes no policy loan has been made.
(3) The amounts shown for the death benefit at the end of the first through
fourteenth Policy years take into account the annual increase in the face
amount (guaranteed minimum death benefit) in such years. The increases in
the death benefit in the 0% and 4% columns for the end of the first through
fourteenth Policy years result only from such increases in the guaranteed
minimum death benefit and are unrelated to the hypothetical gross annual
investment returns.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8%
OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE
FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD
ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE
TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF
RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW
THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
24
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
BASIC POLICY
$40,034 FACE AMOUNT MALE ISSUE AGE 25
(GUARANTEED MINIMUM DEATH BENEFIT) $500 ANNUAL PREMIUM FOR STANDARD RISK(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED
PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT.
THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
<TABLE>
<CAPTION>
PREMIUMS(1) DEATH BENEFIT(2)
ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS
END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------- ----------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 520 $ 525 $40,034 $40,034 $40,059 $ 40,090
2 1,061 1,076 40,034 40,034 40,133 40,259
3 1,623 1,655 40,034 40,034 40,256 40,544
4 2,208 2,263 40,034 40,034 40,429 40,952
5 2,816 2,901 40,034 40,034 40,655 41,496
6 3,449 3,571 40,034 40,034 40,935 42,183
7 4,107 4,275 40,034 40,034 41,270 43,021
8 4,791 5,013 40,034 40,034 41,659 44,016
9 5,503 5,789 40,034 40,034 42,103 45,177
10 6,243 6,603 40,034 40,034 42,603 46,513
15 10,412 11,329 40,034 40,034 45,957 56,162
20 15,484 17,360 40,034 40,034 50,786 71,906
25 21,656 25,057 40,034 40,034 57,191 95,840
30 29,164 34,880 40,034 40,034 65,321 131,001
40 (Age 65) 49,413 63,419 40,034 40,034 87,684 254,387
</TABLE>
CASH VALUE(2)
ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF
- -----------------------------------------------------
0% 4% 8% 12%
- ------ ------- ------- --------
$ 80 $ 86 $ 93 $ 99
389 415 441 467
696 753 813 875
1,001 1,102 1,211 1,328
1,330 1,491 1,667 1,861
1,656 1,890 2,154 2,451
1,979 2,301 2,674 3,104
2,299 2,725 3,230 3,828
2,615 3,160 3,823 4,628
2,929 3,608 4,456 5,514
4,424 6,016 8,286 11,535
5,748 8,659 13,420 21,282
6,884 11,510 20,219 36,906
7,825 14,525 29,093 61,649
9,395 21,081 55,188 160,111
(1) If premiums are paid more frequently than annually the payments would be
$255 semi-annually, $130 quarterly or $44 monthly. The death benefits and
cash values shown would not be affected by the more frequent premium
payments, nor would such amounts be affected by the Insured's risk
classification.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8%
OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE
FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD
ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE
TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF
RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW
THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
25
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
EXPANDED POLICY
$29,541 FACE AMOUNT MALE ISSUE AGE 25
(GUARANTEED MINIMUM DEATH BENEFIT) $500 ANNUAL PREMIUM FOR STANDARD RISK(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED
PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT.
THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
<TABLE>
<CAPTION>
PREMIUMS(1) DEATH BENEFIT(2)(3)
ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS
END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------- ----------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 520 $ 525 $30,427 $30,427 $30,460 $ 30,502
2 1,061 1,076 31,343 31,343 31,461 31,612
3 1,623 1,655 32,288 32,288 32,543 32,874
4 2,208 2,263 33,263 33,263 33,706 34,294
5 2,816 2,901 34,238 34,238 34,926 35,859
6 3,449 3,571 35,271 35,271 36,261 37,634
7 4,107 4,275 36,335 36,335 37,682 39,596
8 4,791 5,013 37,428 37,428 39,190 41,754
9 5,503 5,789 38,551 38,551 40,785 44,114
10 6,243 6,603 39,703 39,703 42,467 46,686
15 10,412 11,329 44,311 44,311 50,595 61,470
20 15,484 17,360 44,311 44,311 55,595 77,894
25 21,656 25,057 44,311 44,311 62,157 102,683
30 29,164 34,880 44,311 44,311 70,410 138,898
55 (Age 65) 49,413 63,419 44,311 44,311 92,742 264,957
</TABLE>
CASH VALUE(2)
ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF
- -----------------------------------------------------
0% 4% 8% 12%
- ------ ------- ------- --------
$ 153 $ 161 $ 170 $ 179
476 506 537 568
794 859 928 999
1,108 1,222 1,344 1,475
1,451 1,629 1,824 2,039
1,790 2,046 2,335 2,661
2,123 2,473 2,879 3,349
2,451 2,911 3,458 4,108
2,774 3,359 4,074 4,947
3,091 3,818 4,730 5,872
4,553 6,234 8,641 12,103
5,794 8,824 13,818 22,118
6,802 11,562 20,614 38,111
7,540 14,356 29,378 63,326
8,140 19,699 54,314 162,706
(1) If premiums are paid more frequently than annually the payments would be
$255 semi-annually, $130 quarterly or $44 monthly. The death benefits and
cash values shown would not be affected by the more frequent premium
payments, nor would such amounts be affected by the Insured's risk
classification.
(2) Assumes no policy loan has been made.
(3) The amounts shown for the death benefit at the end of the first through
fourteenth Policy years take into account the annual increase in the face
amount (guaranteed minimum death benefit) in such years. The increases in
the death benefit in the 0% and 4% columns for the end of the first through
fourteenth Policy years result only from such increases in the guaranteed
minimum death benefit and are unrelated to the hypothetical gross annual
investment returns.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8%
OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE
FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD
ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE
TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF
RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW
THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
26
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
BASIC POLICY
$49,238 FACE AMOUNT MALE ISSUE AGE 40
(GUARANTEED MINIMUM DEATH BENEFIT) $1,000 ANNUAL PREMIUM FOR STANDARD RISK(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED
PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT.
THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
<TABLE>
<CAPTION>
PREMIUMS(1) DEATH BENEFIT(2)
ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS
END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------- ----------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 1,040 $ 1,050 $49,238 $49,238 $49,286 $ 49,346
2 2,122 2,153 49,238 49,238 49,404 49,617
3 3,246 3,310 49,238 49,238 49,593 50,053
4 4,416 4,526 49,238 49,238 49,850 50,662
5 5,633 5,802 49,238 49,238 50,177 51,454
6 6,898 7,142 49,238 49,238 50,576 52,438
7 8,214 8,549 49,238 49,238 51,046 53,621
8 9,583 10,027 49,238 49,238 51,586 55,012
9 11,006 11,578 49,238 49,238 52,196 56,620
10 12,486 13,207 49,238 49,238 52,878 58,457
15 20,824 22,657 49,238 49,238 57,353 71,501
20 30,969 34,719 49,238 49,238 63,660 92,439
25 (Age 65) 43,312 50,113 49,238 49,238 71,913 124,015
</TABLE>
CASH VALUE(2)
ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF
- -----------------------------------------------------
0% 4% 8% 12%
- ------- ------- ------- --------
$ 321 $ 340 $ 360 $ 380
1,022 1,091 1,161 1,233
1,705 1,852 2,005 2,167
2,370 2,623 2,897 3,190
3,045 3,435 3,867 4,342
3,700 4,257 4,888 5,603
4,335 5,089 5,966 6,984
4,950 5,930 7,100 8,496
5,543 6,778 8,292 10,148
6,115 7,633 9,546 11,955
8,627 11,972 16,809 23,822
10,551 16,333 25,967 42,151
11,884 20,574 37,322 70,115
(1) If premiums are paid more frequently than annually the payments would be
$510 semi-annually, $258 quarterly or $87 monthly. The death benefits and
cash values shown would not be affected by the more frequent premium
payments, nor would such amounts be affected by the Insured's risk
classification.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8%
OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE
FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD
ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE
TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF
RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW
THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
27
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
EXPANDED POLICY
$34,754 FACE AMOUNT MALE ISSUE AGE 40
(GUARANTEED MINIMUM DEATH BENEFIT) $1,000 ANNUAL PREMIUM FOR STANDARD RISK(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED
PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT.
THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
<TABLE>
<CAPTION>
PREMIUMS(1) DEATH BENEFIT(2)(3)
ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS
END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------- -----------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 1,040 $ 1,050 $35,796 $35,796 $35,852 $35,921
2 2,122 2,153 36,873 36,873 37,060 37,297
3 3,246 3,310 37,986 37,986 38,379 38,889
4 4,416 4,526 39,133 39,133 39,806 40,700
5 5,633 5,802 40,280 40,280 41,310 42,710
6 6,898 7,142 41,496 41,496 42,959 44,996
7 8,214 8,549 42,747 42,747 44,720 47,532
8 9,583 10,027 44,033 44,033 46,591 50,327
9 11,006 11,578 45,353 45,353 48,573 53,392
10 12,486 13,207 46,709 46,709 50,666 56,737
15 20,824 22,657 52,131 52,131 60,904 76,223
20 30,969 34,719 52,131 52,131 67,604 98,584
25 (Age 65) 43,312 50,113 52,131 52,131 76,279 132,073
</TABLE>
CASH VALUE(2)
ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF
- -----------------------------------------------------
0% 4% 8% 12%
- ------- ------- ------- --------
$ 450 $ 473 $ 495 $ 518
1,203 1,280 1,359 1,439
1,939 2,101 2,271 2,450
2,655 2,934 3,235 3,557
3,381 3,808 4,281 4,802
4,085 4,693 5,384 6,165
4,767 5,589 6,545 7,657
5,425 6,491 7,766 9,288
6,057 7,399 9,047 11,068
6,662 8,310 10,390 13,011
9,182 12,789 18,017 25,611
10,955 17,126 27,458 44,880
12,067 21,243 39,069 74,185
(1) If premiums are paid more frequently than annually the payments would be
$510 semi-annually, $258 quarterly or $87 monthly. The death benefits and
cash values shown would not be affected by the more frequent premium
payments, nor would such amounts be affected by the Insured's risk
classification.
(2) Assumes no policy loan has been made.
(3) The amounts shown for the death benefit at the end of the first through
fourteenth Policy years take into account the annual increase in the face
amount (guaranteed minimum death benefit) in such years. The increases in
the death benefit in the 0% and 4% columns for the end of the first through
fourteenth Policy years result only from such increases in the guaranteed
minimum death benefit and are unrelated to the hypothetical gross annual
investment returns.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8%
OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE
FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD
ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE
TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF
RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW
THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
28
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
BASIC POLICY
$42,654 FACE AMOUNT FEMALE ISSUE AGE 10
(GUARANTEED MINIMUM DEATH BENEFIT) $300 ANNUAL PREMIUM FOR STANDARD RISK(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED
PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT.
THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
<TABLE>
<CAPTION>
PREMIUMS(1) DEATH BENEFIT(2)
ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS
END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------- -----------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 312 $ 315 $42,654 $42,654 $ 42,671 $ 42,692
2 636 646 42,654 42,654 42,741 42,851
3 974 993 42,654 42,654 42,864 43,135
4 1,325 1,358 42,654 42,654 43,040 43,550
5 1,690 1,741 42,654 42,654 43,272 44,105
6 2,069 2,143 42,654 42,654 43,559 44,806
7 2,464 2,565 42,654 42,654 43,901 45,660
8 2,875 3,008 42,654 42,654 44,299 46,676
9 3,302 3,473 42,654 42,654 44,754 47,862
10 3,746 3,962 42,654 42,654 45,266 49,226
15 6,247 6,797 42,654 42,654 48,695 59,082
20 9,291 10,416 42,654 42,654 53,646 75,193
25 12,993 15,034 42,654 42,654 60,256 99,768
30 17,498 20,928 42,654 42,654 68,700 135,933
55 (Age 65) 53,393 79,106 42,654 42,654 145,533 721,273
</TABLE>
CASH VALUE(2)
ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF
- -----------------------------------------------------
0% 4% 8% 12%
- ------ ------- ------- --------
$ 12 $ 15 $ 17 $ 20
200 212 225 238
386 416 447 479
569 624 684 747
754 843 940 1,046
937 1,067 1,214 1,378
1,117 1,298 1,506 1,745
1,295 1,534 1,817 2,150
1,471 1,776 2,147 2,596
1,642 2,023 2,497 3,087
2,459 3,345 4,607 6,410
3,248 4,871 7,522 11,888
4,032 6,657 11,580 20,973
4,804 8,734 17,206 36,011
4,601 18,399 83,802 415,330
(1) If premiums are paid more frequently than annually the payments would be
$153 semi-annually, $78 quarterly or $27 monthly. The death benefits and
cash values shown would not be affected by the more frequent premium
payments, nor would such amounts be affected by the Insured's risk
classification.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8%
OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE
FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD
ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE
TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF
RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW
THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
29
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
EXPANDED POLICY
$33,708 FACE AMOUNT FEMALE ISSUE AGE 10
(GUARANTEED MINIMUM DEATH BENEFIT) $300 ANNUAL PREMIUM FOR STANDARD RISK(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED
PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT.
THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
<TABLE>
<CAPTION>
PREMIUMS(1) DEATH BENEFIT(2)(3)
ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS
END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------- -----------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 312 $ 315 $34,719 $34,719 $ 34,732 $ 34,748
2 636 646 35,764 35,764 35,846 35,948
3 974 993 36,842 36,842 37,049 37,315
4 1,325 1,358 37,955 37,955 38,343 38,852
5 1,690 1,741 39,067 39,067 39,693 40,534
6 2,069 2,143 40,247 40,247 41,167 42,433
7 2,464 2,565 41,460 41,460 42,732 44,524
8 2,875 3,008 42,708 42,708 44,389 46,813
9 3,302 3,473 43,988 43,988 46,136 49,309
10 3,746 3,962 45,303 45,303 47,974 52,019
15 6,247 6,797 50,562 50,562 56,715 67,297
20 9,291 10,416 50,562 50,562 61,670 83,499
25 12,993 15,034 50,562 50,562 68,220 108,044
30 17,498 20,928 50,562 50,562 76,529 144,011
55 (Age 65) 59,641 85,903 50,562 50,562 152,983 727,459
</TABLE>
CASH VALUE(2)
ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF
- -----------------------------------------------------
0% 4% 8% 12%
- ------ ------- ------- --------
$ 7 $ 9 $ 11 $ 13
206 218 229 242
402 431 462 494
594 650 709 773
785 875 974 1,081
972 1,105 1,255 1,421
1,156 1,341 1,553 1,796
1,336 1,581 1,869 2,209
1,511 1,824 2,203 2,661
1,681 2,070 2,555 3,158
2,452 3,353 4,639 6,475
3,168 4,801 7,478 11,901
3,873 6,487 11,422 20,890
4,555 8,432 16,873 35,747
6,259 20,283 85,423 416,224
(1) If premiums are paid more frequently than annually the payments would be
$157 semi-annually, $78 quarterly or $27 monthly. The death benefits and
cash values shown would not be affected by the more frequent premium
payments, nor would such amounts be affected by the Insured's risk
classification.
(2) Assumes no policy loan has been made.
(3) The amounts shown for the death benefit at the end of the first through
fourteenth Policy years take into account the annual increase in the face
amount (guaranteed minimum death benefit) in such years. The increases in
the death benefit in the 0% and 4% columns for the end of the first through
fourteenth Policy years result only from such increases in the guaranteed
minimum death benefit and are unrelated to the hypothetical gross annual
investment returns.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8%
OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE
FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD
ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE
TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF
RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW
THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
30
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
BASIC POLICY
$37,605 FACE AMOUNT FEMALE ISSUE AGE 25
(GUARANTEED MINIMUM DEATH BENEFIT) $500 ANNUAL PREMIUM FOR STANDARD RISK(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED
PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT.
THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
<TABLE>
<CAPTION>
PREMIUMS(1) DEATH BENEFIT(2)
ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS
END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------- ----------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 520 $ 525 $45,898 $45,898 $45,921 $ 45,950
2 1,061 1,076 45,898 45,898 46,000 46,131
3 1,623 1,655 45,898 45,898 46,136 46,445
4 2,208 2,263 45,898 45,898 46,329 46,899
5 2,816 2,901 45,898 45,898 46,582 47,507
6 3,449 3,571 45,898 45,898 46,895 48,274
7 4,107 4,275 45,898 45,898 47,270 49,210
8 4,791 5,013 45,898 45,898 47,706 50,323
9 5,503 5,789 45,898 45,898 48,204 51,623
10 6,243 6,603 45,898 45,898 48,765 53,119
15 10,412 11,329 45,898 45,898 52,537 63,952
20 15,484 17,360 45,898 45,898 57,993 81,687
25 21,656 25,057 45,898 45,898 65,259 108,718
30 29,164 34,880 45,898 45,898 74,502 148,463
40 (Age 65) 49,413 63,419 45,898 45,898 99,952 287,894
</TABLE>
CASH VALUE(2)
ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF
- -----------------------------------------------------
0% 4% 8% 12%
- ------ ------- ------- --------
$ 42 $ 48 $ 53 $ 58
358 381 405 429
671 725 781 840
981 1,079 1,185 1,297
1,305 1,461 1,633 1,820
1,627 1,855 2,112 2,400
1,946 2,261 2,625 3,044
2,262 2,679 3,173 3,757
2,576 3,110 3,759 4,547
2,887 3,554 4,385 5,421
4,403 5,974 8,210 11,402
5,811 8,711 13,441 21,228
7,053 11,713 20,450 37,125
8,125 14,958 29,733 62,589
9,916 22,140 57,555 165,778
(1) If premiums are paid more frequently than annually the payments would be
$255 semi-annually, $130 quarterly or $44 monthly. The death benefits and
cash values shown would not be affected by the more frequent premium
payments, nor would such amounts be affected by the Insured's risk
classification.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8%
OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE
FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD
ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE
TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF
RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW
THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
31
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
EXPANDED POLICY
$45,898 FACE AMOUNT FEMALE ISSUE AGE 25
(GUARANTEED MINIMUM DEATH BENEFIT) $500 ANNUAL PREMIUM FOR STANDARD RISK(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED
PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT.
THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
<TABLE>
<CAPTION>
PREMIUMS(1) DEATH BENEFIT(2)(3)
ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS
END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------- -----------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 520 $ 525 $35,413 $35,413 $ 35,447 $ 35,489
2 1,061 1,076 36,479 36,479 36,604 36,762
3 1,623 1,655 37,579 37,579 37,852 38,206
4 2,208 2,263 38,714 38,714 39,192 39,827
5 2,816 2,901 39,848 39,848 40,595 41,609
6 3,449 3,571 41,052 41,052 42,131 43,628
7 4,107 4,275 42,289 42,289 43,764 45,857
8 4,791 5,013 43,561 43,561 45,495 48,305
9 5,503 5,789 44,868 44,868 47,326 50,982
10 6,243 6,603 46,209 46,209 49,254 53,896
15 10,412 11,329 51,573 51,573 58,538 70,567
20 15,484 17,360 51,573 51,573 64,137 88,895
25 21,656 25,057 51,573 51,573 71,522 116,639
30 29,164 34,880 51,573 51,573 80,839 157,228
40 (Age 65) 49,413 63,419 51,573 51,573 106,116 298,586
</TABLE>
CASH VALUE(2)
ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF
- -----------------------------------------------------
0% 4% 8% 12%
- ------ ------- ------- --------
$ 124 $ 131 $ 139 $ 146
440 468 497 526
752 814 878 945
1,060 1,168 1,284 1,409
1,398 1,568 1,754 1,960
1,731 1,977 2,255 2,568
2,060 2,398 2,789 3,240
2,384 2,829 3,357 3,983
2,703 3,270 3,961 4,803
3,016 3,721 4,604 5,707
4,494 6,134 8,479 11,843
5,819 8,810 13,721 21,857
6,938 11,693 20,689 38,000
7,817 14,717 29,821 63,756
8,728 20,769 56,456 167,286
(1) If premiums are paid more frequently than annually the payments would be
$255 semi-annually, $130 quarterly or $44 monthly. The death benefits and
cash values shown would not be affected by the more frequent premium
payments, nor would such amounts be affected by the Insured's risk
classification.
(2) Assumes no policy loan has been made.
(3) The amounts shown for the death benefit at the end of the first through
fourteenth Policy years take into account the annual increase in the face
amount (guaranteed minimum death benefit) in such years. The increases in
the death benefit in the 0% and 4% columns for the end of the first through
fourteenth Policy years result only from such increases in the guaranteed
minimum death benefit and are unrelated to the hypothetical gross annual
investment returns.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8%
OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE
FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD
ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE
TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF
RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW
THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
32
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
BASIC POLICY
$57,396 FACE AMOUNT FEMALE ISSUE AGE 40
(GUARANTEED MINIMUM DEATH BENEFIT) $1,000 ANNUAL PREMIUM FOR STANDARD RISK(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED
PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT.
THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
<TABLE>
<CAPTION>
PREMIUMS(1) DEATH BENEFIT(2)
ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS
END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------- ----------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 1,040 $ 1,050 $57,396 $57,396 $57,446 % 57,509
2 2,122 2,153 57,396 57,396 57,576 57,805
3 3,246 3,310 57,396 57,396 57,784 58,289
4 4,416 4,526 57,396 57,396 58,070 58,968
5 5,633 5,802 57,396 57,396 58,439 59,857
6 6,898 7,142 57,396 57,396 58,889 60,964
7 8,214 8,549 57,396 57,396 59,420 62,301
8 9,583 10,027 57,396 57,396 60,032 63,875
9 11,006 11,578 57,396 57,396 60,726 65,699
10 12,486 13,207 57,396 57,396 61,502 67,785
15 20,824 22,657 57,396 57,396 66,616 82,643
20 30,969 34,719 57,396 57,396 73,853 106,568
25 (Age 65) 43,312 50,113 57,396 57,396 83,351 142,705
</TABLE>
CASH VALUE(2)
ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF
- -----------------------------------------------------
0% 4% 8% 12%
- ------ ------- ------- --------
$ 305 $ 323 $ 341 $ 359
1,007 1,073 1,140 1,208
1,696 1,837 1,986 2,142
2,368 2,615 2,881 3,167
3,063 3,446 3,869 4,335
3,739 4,290 4,913 5,617
4,399 5,147 6,016 7,025
5,040 6,017 7,182 8,569
5,663 6,900 8,413 10,264
6,268 7,794 9,713 12,123
8,991 12,409 17,337 24,457
11,173 17,172 27,123 43,770
12,814 21,970 39,517 73,695
(1) If premiums are paid more frequently than annually the payments would be
$510 semi-annually, $258 quarterly or $87 monthly. The death benefits and
cash values shown would not be affected by the more frequent premium
payments, nor would such amounts be affected by the Insured's risk
classification.
(2) Assumes no policy loan has been made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8%
OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE
FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD
ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE
TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF
RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW
THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
33
<PAGE>
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
EXPANDED POLICY
$40,756 FACE AMOUNT FEMALE ISSUE AGE 40
(GUARANTEED MINIMUM DEATH BENEFIT) $1,000 ANNUAL PREMIUM FOR STANDARD RISK(1)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED
PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT.
THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
<TABLE>
<CAPTION>
PREMIUMS(1) DEATH BENEFIT(2)(3)
ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS
END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------- ----------------------------------------------------
YEAR 4% 5% 0% 4% 8% 12%
------ ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $ 1,040 $ 1,050 $41,978 $41,978 $42,038 $ 42,112
2 2,122 2,153 43,242 43,242 43,445 43,704
3 3,246 3,310 44,546 44,546 44,977 45,537
4 4,416 4,526 45,891 45,891 46,633 47,619
5 5,633 5,802 47,236 47,376 48,376 49,926
6 6,898 7,142 48,662 48,662 50,287 52,547
7 8,214 8,549 50,129 50,129 52,325 55,453
8 9,583 10,027 51,637 51,637 54,491 58,653
9 11,006 11,578 53,186 53,186 56,783 62,160
10 12,486 13,207 54,776 54,776 59,202 65,985
15 20,824 22,657 61,134 61,134 70,999 88,188
20 30,969 34,719 61,134 61,134 78,599 113,460
25 (Age 65) 43,312 50,113 61,134 61,134 88,471 151,369
</TABLE>
CASH VALUE(2)
ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF
- ------------------------------------------------------
0% 4% 8% 12%
- ------- ------- ------- --------
$ 431 $ 453 $ 474 $ 496
1,177 1,251 1,327 1,404
1,908 2,065 2,230 2,402
2,622 2,894 3,186 3,500
3,358 3,776 4,239 4,748
4,074 4,672 5,350 6,117
4,771 5,581 6,524 7,618
5,447 6,502 7,762 9,265
6,099 7,432 9,066 11,068
6,729 8,370 10,438 13,041
9,436 13,082 18,352 25,989
11,458 17,786 28,342 46,082
12,855 22,410 40,881 77,099
(1) If premiums are paid more frequently than annually the payments would be
$510 semi-annually, $258 quarterly or $87 monthly. The death benefits and
cash values shown would not be affected by the more frequent premium
payments, nor would such amounts be affected by the Insured's risk
classification.
(2) Assumes no policy loan has been made.
(3) The amounts shown for the death benefit at the end of the first through
fourteenth Policy years take into account the annual increase in the face
amount (guaranteed minimum death benefit) in such years. The increases in
the death benefit in the 0% and 4% columns for the end of the first through
fourteenth Policy years result only from such increases in the guaranteed
minimum death benefit and are unrelated to the hypothetical gross annual
investment returns.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH
BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF
ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8%
OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE
FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD
ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE
TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF
RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW
THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
34
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YOU WILL RECEIVE
PERIODIC REPORTS
As a policy owner, you will receive an annual statement about your policy giving
you the status as of the first day of the current policy year of:
o the way the net annual premium is divided between the Divisions;
o the death benefit;
o the cash value; and
o your outstanding policy loans.
Notice will also be sent to you for policy issuance, transfers of funds between
Division and certain other policy transactions.
We will not send you an annual statement for any year your policy is in effect
under an option on lapse.
You will also receive a billing notice each year showing accrued interest for
the past policy year if you have a policy loan outstanding.
We will also send you semiannual reports with financial information on the
Separate Account and the Fund (including a list of the investments held by each
Portfolio of the Fund in which the Divisions invest) as required by the 1940
Act.
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THE IMPACT OF
TAXES
POLICY PROCEEDS
The Tax Reform Act of 1984 (1984 Act) includes a definition of life insurance
for tax purposes. Our variable life policies meet the statutory definition of
life insurance and hence will receive the same Federal income tax treatment as
fixed benefit life insurance. Thus, (a) the death benefit under our policies
will be excludable from the gross income of the beneficiary under Section
101(a)(1) of the Internal Revenue Code (Code) and (b) the policy owner will not
be deemed to be in constructive receipt of the cash value under the policy until
the policy is actually surrendered. Only then would the owner be taxed on any
increase in cash value due to investment experience.
In general if you return your policy for its cash value, you will not be taxed
on the amount you receive, except for the portion which exceeds the premiums you
have paid.
A split of the policy into two policies followed by a return of one for cash, or
an exchange referred to under CANCELLATION AND EXCHANGE RIGHTS, may result in
taxable income to the policy owner depending on the circumstances. We suggest
you consult your tax adviser.
The 1984 Act also gives the Secretary of the Treasury authority to set standards
for diversification of the investments underlying variable life policies in
order for such policies to be treated as life insurance. Based on a Temporary
Regulation, we believe that we will have 90 days following publication in the
Federal Register of the regulations prescribing diversification standards to
comply with those standards. We do not anticipate any problem in complying with
the regulatory standards within the 90-day period.
We also believe that loans received under the policies will be treated as
indebtedness of an owner, and that no part of any loan under a policy will
constitute income to the owner.
The individual situation of each policy owner or beneficiary will determine how
ownership or receipt of policy proceeds will be treated for purposes of Federal
estate tax as well as state and local estate, inheritance and other taxes.
See the prospectus of the Fund for discussion of the Fund's tax aspects.
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PENSION AND PROFIT
SHARING PLANS
If our policies are purchased by a trust which forms part of a pension or profit
sharing plan qualified under Section 401(a) of the Code for the benefit of
participants covered under the plan, the Federal income tax treatment with
respect to our policies will be somewhat different from that described above. We
suggest you consult your tax adviser.
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35
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The first difference is that the current value of the "at risk" portion of our
policies, that is, the amount by which the current death benefit exceeds the
cash value, is treated as a "current fringe benefit" and is required to be
included annually in the plan participant's gross income. This value, commonly
referred to as the "P.S. 58 cost", is computed by using tables published by the
Internal Revenue Service and is reported to the participant annually as an
addition to wages and salaries on the Form W-2 annually furnished by the
employer who is maintaining the plan.
Second, if the plan participant dies while covered by the plan and the policy
proceeds are paid to the participant's beneficiary, then a portion of the
proceeds of our policies may be includable in the gross income of the
beneficiary. The 1984 Act repeals the $100,000 exclusion for death benefits
payable under qualified plans effective for deaths after December 31, 1984.
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OUR INCOME TAXES
Under the life insurance company tax provisions of the Code, as amended by the
1984 Act, variable life insurance is treated in a manner consistent with fixed
life insurance. The operations of the Separate Account are included in the
Federal income tax return of Equitable Variable. Under current tax law,
Equitable Variable pays no tax on investment income and capital gains reflected
in variable life insurance policy reserves. Consequently, no charge is currently
being made to either Division of the Separate Account for our Federal income
taxes. We reserve the right, however, to make such a charge in the future, if
the law changes and we incur Federal income tax which is attributable to the
Separate Account. If such a charge is made, it would be set aside as a provision
for taxes which we would keep in the affected Division rather than in our
general account. We anticipate that our variable life policy owners will benefit
from any investment earnings that are not needed to maintain this provision.
We may have to pay state and local taxes (in addition to premium taxes) in
several states. At present, these taxes are not substantial. If they increase,
however, charges may be made for such taxes when they are attributable to the
Separate Account.
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TAX REFORM
The President of the United States recently submitted a comprehensive set of tax
reform proposals to Congress. These proposals were substantially modified by the
House of Representatives which adopted a comprehensive tax reform bill. The
Senate is also considering comprehensive tax reform. The House bill would not
affect the taxes paid by life insurance companies such as Equitable Variable as
they relate to our Separate Account and would not alter the favorable tax
treatment of life insurance policies described in this prospectus. The ultimate
nature and the prospects for enactment of proposals for tax reform and their
precise effect are uncertain at this time.
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GENERAL PROVISIONS
OF OUR POLICIES
This section of the prospectus describes the general provisions of our policies
and is subject to the terms of the policy you buy. You can review copies of our
Basic and Expanded Policies upon request.
The minimum face amount of a policy you may apply for is $25,000. The Basic
Policy may be issued to age 75 and the Expanded Policy to age 65. Before issuing
any policy, we require satisfactory evidence of insurability.
You will pay your premium and handle all other business connected with your
policy at your regional Life Insurance Center shown on page 3 of your policy.
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PREMIUMS
Your premium is due on or before the due date shown in the policy and may be
paid annually, semiannually, quarterly or monthly. Monthly payments can be made
through a direct automatic payment plan arranged with your bank. You can request
a change in the frequency of the premium payment by writing to your regional
Life Insurance Center.
Premiums for the Basic Policy are payable for 40 years (but never beyond an
insured's attained age of 95). Premiums for the Expanded Policy are payable for
the insured's lifetime. The length of time during which your premium must be
paid is called the premium payment period.
Premiums are not affected by the investment experience of the Separate Account,
or, in the case of our Expanded Policy, by increases in the policy's face
amount. We guarantee that your premium will not go up during your premium
payment period.
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36
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Because the Basic Policy does not provide for an increasing guaranteed minimum,
the premium for it is lower than for the Expanded Policy, which does have this
feature.
We offer reduced premiums if the insured is a standard risk and meets additional
requirements as to smoking habits. The reduction is greater for face amounts of
at least $100,000. Non-smoker rates are available for ages 20 and over.
We will charge an additional premium if an extra mortality risk is involved or
if you want certain optional insurance benefits.
YOU CAN CHOOSE THE DIVISION OR DIVISIONS WHERE YOUR NET ANNUAL PREMIUM WILL BE
PUT. You can decide how your net annual premium will be applied to the
Divisions. You can put the whole net annual premium in either Division, or you
can put a percentage in each Division. Percentages cannot be fractions and must
add up to 100.
You make your initial decision on the application for your policy. You can write
to your regional Life Insurance Center at any time requesting to change your
decision. Regardless of when you make your request, changes go into effect only
on the next policy anniversary because we allocate net annual premiums to the
Separate Account only on policy anniversaries. It may not always be possible to
make a change that is received less than 7 days before a policy anniversary. In
this case, the change will not go into effect until the policy anniversary
following the entire next policy year.
HOW WE USE PREMIUMS. Premiums are used to cover expenses and to pay death
benefits. The amount of your annual premium does not change during the premium
payment period.
The way we use the premium does change. This is because, in early policy years,
policy expenses are greater and the risk of paying death benefits is less than
in later policy years. The risk of paying death benefits increases as the
insured gets older, while expenses decrease. Part of the net annual premium put
into the Separate Account in early policy years is used to pay death benefits in
those years, while the balance is used as a reserve to pay death benefits in
later policy years. The net annual premium in early policy years is more than
what is needed to meet death benefits. The net annual premium in later policy
years is less than what is needed to meet death benefits. If the net annual
premiums exceed what is needed to meet death benefits over the years, the excess
contributes to our profits.
Part of our premiums are retained in our general account as a reserve to cover
the possibility that, at an insured's death, the guaranteed minimum will be more
than what would have been payable, based on the investment experience of the
Separate Account, if there were no guaranteed minimum death benefit.
PREMIUM PAYMENTS BY SALARY ALLOTMENT. If you work for an employer which permits
you to pay insurance premiums by deduction from your salary, we may offer you
and your fellow employees fixed insurance in the amount of the face amount for
the variable insurance you apply for (with a maximum of $250,000). This
insurance would be without charge (except that a premium will be deducted from
any fixed death benefit), and would be in effect until we receive the first
payment from your employer. At that time, your policy will begin its
participation in our Separate Account.
CHANGES IN PREMIUM RATES. Congress and the legislatures of various states have
from time to time considered legislation that would require premium rates to be
the same for males and females of the same age and risk class. In addition,
employers and employee organizations should consider, in consultation with
counsel, the impact of Title VII of the Civil Rights Act of 1964 on the purchase
of the Basic Policy or the Expanded Policy in connection with an
employment-related insurance or benefit plan. The United States Supreme Court
held, in a 1983 decision, that, under Title VII, optional annuity benefits under
a deferred compensation plan could not vary on the basis of sex.
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37
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ILLUSTRATION OF PREMIUM RATES. Premiums are based on actuarial estimates of
death benefits, cash value benefits, lapses, expenses, investment experience and
amount contributed to our surplus.
The following tables show premium rates for each $1,000 of face amount for
$25,000 policies, which is the minimum, and for a $100,000 Expanded policy,
which is the amount where our rates per $1,000 go down (except for smokers).
- --------------------------------------------------------------------------------
$25,000 FACE AMOUNT BASIC POLICY
Annual Premium for each $1,000 Face Amount
MALE FEMALE
Age At ----------------------------- -----------------------------
Issue Standard Risk Non-Smoker Standard Risk Non-Smoker
- --------------------------------------------------------------------------------
10 $ 8.38 n.a. $ 7.53 n.a.
25 12.94 $12.60 11.44 $11.24
40 20.90 19.88 18.10 17.49
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$25,000 INITIAL FACE AMOUNT EXPANDED POLICY
Annual Premium for each $1,000 Initial Face Amount
MALE FEMALE
Age At ----------------------------- -----------------------------
Issue Standard Risk Non-Smoker Standard Risk Non-Smoker
- --------------------------------------------------------------------------------
10 $10.41 n.a. $ 9.21 n.a.
25 17.11 $16.77 14.87 $14.67
40 29.11 28.09 25.00 24.39
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$100,000 INITIAL FACE AMOUNT EXPANDED POLICY
Annual Premium for each $1,000 Initial Face Amount
MALE FEMALE
Age At ----------------------------- -----------------------------
Issue Standard Risk Non-Smoker Standard Risk Non-Smoker
- --------------------------------------------------------------------------------
10 $ 9.33 n.a. $ 8.15 n.a.
25 16.21 $15.30 13.97 $13.27
40 28.21 26.26 24.10 22.68
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<PAGE>
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Premiums for semiannual, quarterly, and monthly periods will be higher per year
than the annual premium. This is due to a charge for loss of interest and added
billing and collection costs. The following tables compare annual and monthly
premiums for standard risks:
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PREMIUMS FOR EACH $1,000 FACE AMOUNT
<TABLE>
<CAPTION>
% Excess of Total
Monthly Premiums
for Policy Year
Over
Initial Annual Basis Monthly Basis Annual Premiums
Age at Face ------------------ ----------------- ----------------
Issue Amount Male Female Male Female Male Female
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BASIC POLICY
10 $ 25,000 $ 8.38 $ 7.53 $ .78 $ .70 11.7% 11.6%
25 25,000 12.94 11.44 1.17 1.04 8.5 9.1
40 25,000 20.90 18.10 1.85 1.61 6.2 6.7
EXPANDED POLICY
10 $ 25,000 $10.41 $ 9.21 $ .95 $ .85 9.5% 10.7%
100,000 9.51 8.31 .83 .73 4.7 5.4
25 25,000 17.11 14.87 1.53 1.34 7.3 8.1
100,000 16.21 13.97 1.41 1.22 4.4 4.8
40 25,000 29.11 25.00 2.56 2.21 5.5 6.1
100,000 28.21 24.10 2.44 2.09 3.8 4.1
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</TABLE>
GRACE PERIOD. We allow a grace period of 31 days to pay each premium after the
first one. Insurance will continue during the grace period, but we will deduct
one month's premium from the death benefit if the insured dies during the grace
period.
LAPSE. If a premium has not been paid by the end of the 31-day grace period, the
policy will lapse as of the date the premium was due. When a policy lapses, any
riders will end. All insurance may end unless the policy's net cash value is
used under a continued insurance option on lapse. See OPTIONS ON LAPSE.
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OPTIONS ON LAPSE
If a policy lapses because a premium remains due and unpaid beyond its 31-day
grace period, you may use one of the following options. A key element in these
options is your policy's net cash value on any day for a period of up to 3
months after the unpaid premium was due. Net cash value is cash value minus any
policy loans with accrued interest on the date an option is used. If your policy
has no net cash value, you cannot use the options.
PAYMENT OF NET CASH VALUE OPTION. You can withdraw the net cash value and
receive payment in cash.
CONTINUED INSURANCE OPTION. Within 3 months from the date a policy lapses (which
is the date the unpaid premium was due), you can use its net cash value to
obtain one of two types of fixed life insurance plans. These are reduced paid-up
insurance or extended term insurance. You will not have to pay any additional
premium on either type because you are, in effect, using the net cash value of
your variable life policy to buy continued life coverage.
If we do not receive a written request to use the continued insurance option
with 3 months after lapse, extended term insurance will automatically go into
effect. The extended term insurance option may not be available under your
policy if the insured's risk class is not at least standard. If so, that fact
will be stated on page 3 of the policy and reduced paid-up insurance will apply
instead. If the insured dies after the grace period but within 3 months of the
date of lapse, the continued insurance option that would provide the greater
benefit will automatically apply, regardless of any restriction stated on page 3
of the policy.
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39
<PAGE>
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Here are details on the two types of plans offered under our continued insurance
option.
o REDUCED PAID-UP FIXED INSURANCE. You can use the net cash value to buy
reduced paid-up fixed whole life insurance. The net cash value determines the
face amount that can be purchased at the insured's age at the time of
purchase. Paid-up insurance has cash value. You can use the net cash value
during the insured's lifetime for a loan or for cash payment.
EXAMPLE: You are a 30 year old male insured. Your variable life policy was
issued when you were 25. Use the illustrations on page 25, and assume a 4%
hypothetical gross annual investment return for each Division or their
combination. At the end of the 5th policy year, depending on whether you had
a Basic or an Expanded Policy, its net cash value could buy reduced paid-up
fixed whole life insurance with a face amount as follows:
- --------------------------------------------------------------------------------
Face Amount Term
- --------------------------------------------------------------------------------
Basic Policy $6,477 Life
Expanded Policy $7,076 Life
- --------------------------------------------------------------------------------
o EXTENDED TERM INSURANCE. If the insured's risk class is at least standard,
you can use the net cash value to buy extended term insurance. The face
amount will equal the death benefit under your variable life policy on the
date of lapse minus any unpaid loan with accrued interest. The net cash value
determines how long coverage will last at the insured's then attained age. It
will last at least 90 days if the premium has been paid on the variable life
policy for 3 months before lapse and there is no policy loan. Extended term
coverage has cash value, but it cannot be used for a loan.
EXAMPLE: You are a 30 year old male insured. Your variable life policy was
issued when you were 25. Use the illustrations on page 25, and assume a 4%
hypothetical gross annual investment return for each Division or their
combination. At the end of the 5th policy year, depending on whether you had
a Basic or Expanded Policy, its net cash value could buy extended term
insurance as follows:
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Face Amount Term
- --------------------------------------------------------------------------------
Basic Policy $40,034 13 Years
Expanded Policy $34,238 16 Years
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REINSTATEMENT OPTION. You can request that we reinstate the policy during the
insured's lifetime. You must make this request within 5 years after lapse. We
will not reinstate the policy if it has been returned for net cash value.
Before we will reinstate, we must receive evidence satisfactory to us of the
insured's insurability. We must also receive the larger of:
o all due and unpaid premiums with interest at 6% a year; or
o an amount equal to:
the cash value just after reinstatement, MINUS
the cash value just before reinstatement, and further MINUS
any policy loan with accrued interest at 5% a year compounded daily to the
date of reinstatement, TIMES
110%.
If we do reinstate, the policy will have the same variable adjustment amount and
premium allocation between the Divisions as if there had been no lapse.
If a policy has enough cash value at the time it lapses, it might be possible to
reinstate it by requesting a policy loan for that purpose.
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40
<PAGE>
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CANCELLATION RIGHT
You have a limited right to return your policy to your regional Life Insurance
Center with a written request for cancellation. We will give you a full refund
(guaranteed by Equitable) of premiums paid if your request and policy are
postmarked by the latest of the following:
o 10 days after your receive your policy; or
o 10 days after we mail a written Notice of Withdrawal Right; or
o 45 days after Part 1 of the policy application was signed.
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EXCHANGING OUR POLICIES
FOR FIXED WHOLE LIFE
INSURANCE
You may exchange your variable life policy for a fixed whole life policy on the
life of the insured (benefits will be as described in the fixed life policy).
You have this right for 18 months from the date your policy is issued, but only
if no premium remains due and unpaid. The fixed policy may be issued by
Equitable. The exchange will be effective when we receive your request,
accompanied by your policy and an application for the fixed policy.
We will not require evidence of the insured's insurability before an exchange.
The new policy's face amount will be the same as the initial face amount of the
variable life policy. It will also have the same register date, date of issue
and risk class. The premium for the new policy will be that in effect on the
register date for the same sex, age and risk class.
Any policy loan with accrued interest must be repaid before the exchange. The
exchange is also subject to limits described in the policy.
CASH ADJUSTMENT ON EXCHANGE. There will be a cash adjustment on exchange. The
adjustment will reflect the difference in premiums between the two policies.
There will also be an adjustment for the difference in cash values between the
two policies. If the new policy's cash value is more than the cash value of the
policy that is turned in, you pay the difference. If it is less, the difference
is paid to you. The adjustment will also reflect the effect of the investment
performance on cash value. We have filed a description of the method we use to
calculate the adjustment with the appropriate state insurance officials.
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PAYMENT OPTIONS
The death benefit proceeds or net cash value proceeds of the policies offered by
this prospectus can be paid in a lump sum. Or you can choose to apply all or
part of the proceeds under one of our payment options. A combination of options
can be used if we agree. Proceeds applied under an option will no longer be
affected by investment experience.
For an option to be used, the proceeds to be applied must be at least $2,500. If
no option is chosen at the insured's death, the beneficiary can choose an
option. The following options are available, subject to limits described in the
policy.
DEPOSIT OPTION. Proceeds are left on deposit with us. We will pay interest on
the proceeds of at least 3% a year, or we may set and pay a higher rate.
INSTALLMENT OPTION FOR A FIXED PERIOD. Proceeds are paid in installment for up
to 30 years, with interest of at least 3-1/2% a year.
INSTALLMENT OPTION OF A FIXED AMOUNT. Proceeds are paid in installments with
interest of at least 3-1/2% a year until the proceeds are used up.
LIFE INCOME OPTION WITH A PERIOD CERTAIN. Proceeds are paid in monthly
installments for the longer of the life of the person being paid or the end of a
chosen period of 10 or 20 years.
LIFE INCOME OPTION WITH A REFUND CERTAIN. Proceeds are paid in monthly
installments for the longer of the life of the person being paid or until they
are used up.
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41
<PAGE>
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ADDITIONAL BENEFITS YOU
CAN GET BY RIDER
Your policy can include additional benefits that we approve based on our
standards for issuing insurance and classifying risks. An additional benefit
requires an additional premium. An additional benefit is provided by a rider
that is subject to the terms of the policy. The following riders are available.
WAIVER OF PREMIUM RIDER. With this rider, we will waive the premium if the
insured becomes totally disabled and the disability continues for 6 months. The
disability must start before the policy anniversary nearest the insured's 60th
birthday. If disability starts after that, we will waive the premium only up to
the policy anniversary nearest the insured's 65th birthday.
ACCIDENTAL DEATH BENEFIT RIDER. With this rider, we will pay a benefit if the
insured dies from an accidental bodily injury before the policy anniversary
nearest his or her 70th birthday.
OPTION TO PURCHASE ADDITIONAL INSURANCE RIDER. With this rider, you have the
right to buy additional insurance on the life of the insured at certain future
dates. We will not require evidence of the insured's insurability when you use
your right to buy additional insurance.
SUPPLEMENTAL PROTECTIVE BENEFIT RIDER. With this rider, we will waive the
premium if the insured is a child under age 15 on the date of issue and:
o the person who applied for the policy dies; or
o the person who applied for the policy is totally disabled for at least 6
months before the policy anniversary nearest his or her 60th birthday. We
will only waive the premium while the disability continues.
In any case, we will not waive the premium that is due after the policy
anniversary nearest the insured's 25th birthday.
TERM INSURANCE RIDER. Several types of riders are available that provide for
term insurance on the life of the insured or an additional insured.
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BENEFICIARY
You name your beneficiary when you apply for your policy. You can change the
beneficiary during the insured's lifetime by writing to your regional Life
Insurance Center. If no beneficiary is living when the insured dies, the death
benefit will be paid in equal shares to the insured's surviving children. If
there is no surviving child, the death benefit will be paid to the insured's
estate.
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ASSIGNMENT
You can assign the policy as collateral for a loan or other obligation. We are
not responsible for any payment we make or action we take before we receive a
copy of the assignment at your regional Life Insurance Center.
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CREDITORS' CLAIMS
Proceeds are paid free from the claims of creditors to the extent allowed by
law.
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LIMITS ON OUR RIGHT TO
CHALLENGE THE POLICY
We cannot challenge the validity of the policy after it has been in effect
during the insured's lifetime for 2 years from the date of issue or
reinstatement (unless another date is required by law). But we can challenge at
any time any rider that provides benefits in the event of total disability. If a
death claim is made within the time we can challenge validity, our payment will
generally be delayed while we determine whether to make such a challenge.
MISSTATEMENT OF AGE OR SEX. If the insured's age or sex is misstated in the
policy application, the death benefit will be what the premium paid would have
purchased based on the insured's true age and sex.
SUICIDE. If the insured commits suicide within 2 years from the date the policy
was issued or reinstated (or less where required by law), the death benefit will
be limited to the sum of all premiums paid minus outstanding policy loans with
interest.
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42
<PAGE>
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DIVIDENDS
No dividends will be paid on the policies described in this prospectus.
- --------------------------------------------------------------------------------
WHEN WE PAY PROCEEDS
Payment of the death benefit, net cash value, or loan proceeds will be made
within 7 days after we receive the required form or request (and other documents
that may be required for payment of the death benefit) at your regional Life
Insurance Center. If an Equitable agent is assisting the beneficiary in
preparing the documents required for payment of the death benefit, we will send
the check to the agent within 7 days after we receive all required documents.
The agent will then deliver the check to the beneficiary. But we can delay
payment if:
o payment is contested;
o it is not reasonably practicable to determine the amount because the New York
Stock Exchange is closed, trading is restricted by the SEC, or the SEC
declares that an emergency exists; or
o the SEC, by order, permits us to delay to protect our policy owners.
If your policy is being continued as reduced paid-up or extended term insurance,
we can delay payment of a loan or cash value for up to 6 months.
We will pay at least 3% interest a year if we delay paying the cash value or
loan proceeds more than 30 days.
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SALES AND OTHER
AGREEMENTS
Equitable Variable and Integrity are the principal underwriters for the Fund
pursuant to a Distribution Agreement. Under the Distribution Agreement, we have
entered into a Sales Agreement with Equitable by which Equitable will distribute
our policies.
Equitable Variable, Integrity and Equitable are registered with the SEC as
broker-dealers under the Securities Exchange Act of 1934 and each of us is a
member of the National Association of Securities Dealers, Inc. We are also the
principal underwriter for our policies. (Equitable may also be deemed a
principal underwriter for our policies.)
- --------------------------------------------------------------------------------
SALES BY AGENTS OF
EQUITABLE
We sell our policies through agents who are licensed by state insurance
officials to sell our variable life policies. These agents are also registered
representatives of Equitable.
Under the Sales Agreement, agents receive commissions from Equitable for selling
our policies. We reimburse Equitable for these commissions. We also reimburse
Equitable for other expenses incurred in marketing and selling our policies.
These expenses include agency and district managers' compensation, agents'
training allowance, deferred compensation, insurance benefits of agents and
agency and district managers, and agency clerical and advertising expenses.
COMMISSION SCHEDULE. Agents receive the equivalent of up to 50% of the premium
payable in the first policy year. In the second policy year, agents receive up
to 10% of the premium paid for that year. In the third, fourth and fifth policy
years, agents receive up to 8% of the premium paid in each year. In the sixth
through tenth policy years, agents receive up to 5% of the premium paid in each
year. After that, agents receive up to 2% of the premium paid in each year.
Agents will less than 3 full years of service with Equitable may be paid
differently.
Agents who meet certain production and persistency standards in selling
Equitable Variable and Equitable policies will be eligible for added
compensation. Agents who meet certain lifetime production standards will be
eligible to receive increased fees for servicing our policies. Agents also are
eligible for added compensation for servicing our policies when there is no
assigned soliciting agent.
- --------------------------------------------------------------------------------
43
<PAGE>
- --------------------------------------------------------------------------------
SALES BY BROKERS
We also sell our policies through independent brokers who are licensed by state
insurance officials to sell our variable life policies. They will also be
registered representatives either of Equitable or of another company registered
with the SEC as a broker-dealer under the Securities Exchange Act of 1934. The
commissions for independent brokers will be no more than those for agents.
Commissions will be paid through the registered broker-dealer.
- --------------------------------------------------------------------------------
APPLICATIONS
When an application for one of our policies is completed, it is submitted to us.
Based on the information in the application and our standards for issuing
insurance and classifying risks, a policy may be issued. If a policy is not
issued, we will refund any premium that has been paid. (Equitable guarantees the
refund.)
- --------------------------------------------------------------------------------
JOINT SERVICES AGREEMENT
In addition to acting as distributor for our policies, Equitable performs
certain other sales and administrative duties for us. Equitable does this
pursuant to a written agreement. The agreement is automatically renewed each
year, unless either party terminates and have been superseded by the sales
agreement referred to above.
Under this agreement, we pay Equitable for salary costs and other services and
an amount for indirect costs incurred through our use of Equitable personnel and
facilities. We also reimburse Equitable for sales expenses related to business
other than variable life policies.
- --------------------------------------------------------------------------------
AMOUNTS PAID UNDER SALES
AND JOINT SERVICES
AGREEMENTS
The aggregate amounts paid or accrued to Equitable by us under sales and joint
services agreements totalled approximately $225,277,000 in 1985, $164,754,000 in
1984 and $93,361,000 in 1983.
- --------------------------------------------------------------------------------
LEGAL PROCEEDINGS
We are not involved in any material legal proceedings.
- --------------------------------------------------------------------------------
LEGAL MATTERS
The legal validity of the policies described in this prospectus has been passed
on by Herbert L. Shyer, who is Executive Vice President and General Counsel of
Equitable.
The Washington, D.C. law firm of Freedman, Levy, Kroll & Simonds has served as
special counsel on matters relating to Federal securities laws.
- --------------------------------------------------------------------------------
FINANCIAL AND
ACTUARIAL EXPERTS
The financial statements of the Separate Account and of Equitable Variable in
this prospectus have been examined by the accounting firm of Deloitte Haskins &
Sells, our independent auditors, to the extent stated in its opinions, and its
opinions on them are part of this prospectus. We have relied on the fact that
Deloitte Haskins & Sells is expert in accounting and auditing.
Actuarial matters in this prospectus have been examined by Joseph O. North, Jr.,
F.S.A., M.A.A.A., who is Vice President and Actuary of Equitable Variable and an
Assistant Vice President and Actuary of Equitable. His opinion on actuarial
matters is filed as an exhibit to the Registration Statement we filed with the
SEC.
- --------------------------------------------------------------------------------
44
<PAGE>
- --------------------------------------------------------------------------------
MANAGEMENT
Here is a list of our directors and officers and their business experience for
the past five years. Unless otherwise noted, the following persons have been
involved in the management of Equitable and its subsidiaries in various
positions for the last five years. Unless otherwise noted, their address is 787
Seventh Avenue, New York, New York 10019.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Richard Lee Anderson Executive Vice President -- Operations and Director, Melville Corp. since
3000 Westchester Avenue January 1983; prior thereto, President F.W. Woolworth Co. Director,
Harrison, New York 10528 Equitable.
Ruth Smolensky Block Executive Vice President and Chief Insurance Officer, Equitable, since
February 1985; prior thereto, Executive Vice President. Chairman and Chief
Executive Officer, Equitable Variable, until November 1984. Director,
Integrity Life Insurance Company, National Integrity Life Insurance
Company, Tandem Financial Group, Inc., Equitable Investment Management
Corporation, Equitable Tax-Free Account, Inc., Equitable Money Market
Account, Inc., Equitable Real Estate Group, Inc., Donaldson, Lufkin &
Jenrette, Inc., Avon Products, Inc., Economics Laboratory, Inc. Trustee,
The Life Underwriters Training Council.
Joseph Lewis Dionne President and Chief Executive Officer McGraw-Hill, Inc. since June 1983;
1221 Avenue of the Americas prior thereto, President and Chief Operating Officer. Director, Equitable
New York, New York 10020 and Equitable Investment Corporation.
Raymond Bernard Dolan Executive Vice President, Equitable, since February 1985; prior thereto,
Executive Vice President and Chief Agency Officer. Chairman, The Equitable
of Delaware, Inc. Director, Equico Securities, Inc., Donaldson, Lufkin &
Jenrette, Inc., Equitable Capital Management Corporation, Equitable Life
Leasing Corporation and Equitable/Omnilease, Inc.
Harry Douglas Garber Vice Chairman of the Board, Equitable, since February 1984; prior thereto,
Executive Vice President and Chief Financial Officer. Director, Equitable
Investment Corporation and Genesco, Inc. Former Chairman and Chief
Executive Officer, Equitable Variable.
Glenn Howard Gettier, Jr. Executive Vice President and Chief Financial Officer, Equitable, since
December 1984; prior thereto, Partner, Peat, Marwick, Mitchell & Co.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Donald Richardson Kurtz Chairman and Chief Executive Officer, Equitable Investment Management
1221 Avenue of the Americas Corporation, since November 1983. Executive Vice President, Equitable.
New York, New York 10020 Director, Calvin Bullock, Ltd., Integrity Life Insurance Company, National
Integrity Life Insurance Company and Equitable Real Estate Group, Inc.
Member, Advisory Board of the Investment Management Institute, the Board of
Overseers of Bowdoin College and the Board of Trustees of Investor
Responsibility Research Center, Inc.
Donald James Mooney Executive Vice President, Equitable, since October 1984; prior thereto,
Senior Vice President. President, Equitable Variable, until November 1984.
Director, Integrity Life Insurance Company, The Equitable of Delaware,
Inc., Equico Securities, Inc., and The Equitable of Colorado, Inc.
Francis Helmut Schott Senior Vice President and Chief Economist, Equitable.
Leo Martin Walsh, Jr. Executive Vice President, Director and Chief Investment Officer, Equitable,
since June 1983; prior thereto, Executive Vice President. Director since
March 1983 and President and Chief Executive Officer since March 1984,
Equitable Investment Corporation; prior thereto, Executive Vice President
and Chief Operating Officer. Chairman, Calvin Bullock, Ltd., Equitable
Casualty Insurance Company, Equitable General Insurance Company of
Oklahoma, Equitable Money Market Account, Inc., Equitable Tax-Free Account,
Inc., Equitable Life Leasing Corporation, and Equitable Relocation
Management Corporation. Director, Equitable Mortgage Resources, Inc.,
Equitable Real Estate Investment Management, Inc., Equitable Agri-Business,
Inc., mutual funds to which Calvin Bullock, Ltd. is investment adviser,
ELAFUND, INC., Tandem Financial Group, Inc., Equitable Investment
Management Corporation, Equitable Capital Management Corporation, Alliance
Capital Management Corporation and Donaldson, Lufkin & Jenrette, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS -- DIRECTORS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Robert Wayne Barth President and Chief Operating Officer, Equitable Variable, since December
1985. Executive Vice President, Equitable, since June 1985; Senior Vice
President since September 1984; prior thereto, Vice President since April
1984. Director, The Equitable of Colorado, Inc. Director, President and
Chief Executive Officer, The Equitable of Delaware, Inc.
Peter Rawlinson Wilde Chairman and Chief Executive Officer, Equitable Variable, since November
1984. Chairman and Chief Executive Officer, The Equitable of Delaware, Inc.
Executive Vice President, Equitable, since July 1984; Chief Financial
Officer, CIGNA Corporation, from April 1983 to June 1984; prior thereto,
Senior Vice President. Director, Integrity Life Insurance Company, National
Integrity Life Insurance Company and Tandem Financial Group, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Robert Seymour Jones Senior Vice President, Equitable Variable, since February 1986. Senior Vice
President, Equitable, since June 1985; prior thereto, Vice President.
James Thomas Liddle, Jr. Senior Vice President and Chief Financial Officer, Equitable Variable,
2 Penn Plaza since February 1986. Vice President and Actuary, The Equitable of Colorado,
New York, New York 10121 since February 1984. Vice President and Actuary, Equitable.
Michael Searle Martin Senior Vice President, Equitable Variable, since February 1986. Director,
The Equitable of Colorado and The Equitable of Delaware. Senior Vice
President, Equitable, since June 1985; Vice President, from June 1982 to
June 1985; prior thereto, Agency Manager.
Stanley Julian Rispler Senior Vice President, Equitable Variable, since February 1986. Senior Vice
President, Equitable, since October 1984; prior thereto, Vice President.
Samuel Barry Shlesinger Senior Vice President, Equitable Variable, since February 1986; President
and Chief Executive Officer, The Equitable of Colorado, since September
1985. Vice President and Actuary, Equitable.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
47
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Richard Marshall Stenson Senior Vice President, Equitable Variable, since December 1981. Senior Vice
President, Equitable, since October 1984; prior thereto, Vice President and
Actuary. Actuary, Integrity Life Insurance Company. Director, The Equitable
of Colorado, Inc.
Michael Guy Carew Vice President, Equitable Variable, since February 1986. Vice President,
Equitable, since February 1985. Prior thereto, Chief Financial Officer and
Treasurer, City Trust Bancorp, Inc.
Richard Henry Fitzpatrick Vice President, Equitable Variable, since February 1986. Vice President,
Equitable.
Diane Marie Giachino Vice President, Equitable Variable, since February 1986. Vice President,
Equitable, since October 1985; Assistant Vice President, from March 1983 to
October 1985; prior thereto, various managerial positions.
Catherine Theresa Henry Vice President, Equitable Variable, since February 1986. Vice President,
Equitable, since October, 1983; prior thereto, Assistant Vice President.
David Joseph Hughes Vice President, Equitable Variable, since February 1986; Vice President and
2 Penn Plaza Chief of Staff, The Equitable of Colorado. Vice President, Equitable, since
New York, New York 10121 October 1985; Assistant Vice President from August 1982 to October 1985;
prior thereto, Manager.
Franklin Kennedy, III Vice President, Equitable Variable, since August 1981; Managing Director
1221 Avenue of the Americas and Chief Investment Officer, Equitable Investment Management Corporation,
New York, New York 10020 since November 1983. Vice President, Equitable.
John Alfred Kern Vice President, Equitable Variable, since February 1986. Vice President,
2 Penn Plaza Equitable.
New York, New York 10121
Donald Anthony King Vice President, Equitable Variable, since February 1986; Vice President,
1285 Avenue of the Americas Integrity Life Insurance Company, since April 1984; Vice President,
New York, New York 10020 Equitable, since January 1976. Executive Vice President, Equitable Capital
Management Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Joseph Oswell North, Jr. Vice President and Actuary, Equitable Variable, since February 1984. Vice
2 Penn Plaza President and Actuary, Equitable, since October 1984; prior thereto,
New York, New York 10121 Assistant Vice President and Actuary, Equitable, since April 1982; prior
thereto, Associate Actuary, John Hancock Mutual Life Insurance Company.
Geoffrey Hall Radbill Vice President, Equitable Variable, since February 1986. Vice President,
135 West 50th Street Equitable, since February 1983; prior thereto, Assistant Vice President.
New York, New York 10020
Thomas Willard Shade, Jr. Vice President, Equitable Variable, since February 1986. Vice President,
2 Penn Plaza Equitable, since October 1985; Assistant Vice President from March 1983 to
New York, New York 10121 October 1985; prior thereto, various managerial positions.
Alan Romney Thomander Vice President and Controller, Equitable Variable, since February 1983;
2 Penn Plaza prior thereto, Vice President
New York, New York 10121 -- Controller's Operations. Vice President, Equitable, from May 1982 until
February 1983; prior thereto, Assistant Vice President. Controller,
Integrity Life Insurance Company.
Larry Kenneth Mills Treasurer, Equitable Variable, Integrity Life Insurance Company and
National Integrity Life Insurance Company, since February 1986. Vice
President and Treasurer, Equitable and Equico Securities, Inc., since March
1986; prior thereto, Vice President, Equitable. Treasurer, Equitable Real
Estate Group, Inc. Vice President, Treasurer and Director, Equitable Realty
Assets Corp.
Theodore Edward Plucinski, M.D. Chief Medical Director, Equitable Variable, since February 1986; Integrity
2 Penn Plaza Life Insurance Company and National Integrity Life Insurance Company since
New York, New York 10121 November 1985, and Equitable since September 1985. Prior thereto, Chief
Medical Director, MONY.
Kevin Brian Keefe Secretary, Equitable Variable, Assistant Vice President and Assistant
Secretary, Equitable, since August 1983; prior thereto, Assistant
Secretary. Secretary, Integrity Life Insurance Company, National Integrity
Life Insurance Company, Tandem Financial Group, Inc., The Hudson River
Fund, Inc., The Equitable of Delaware, Inc., and The Equitable of Colorado,
Inc. Assistant Secretary, Equitable Life Leasing Corporation and Equico
Securities.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Vincent Walter Jiminez Assistant Vice President, Equitable Variable, since June 1985; prior
2 Penn Plaza thereto, Vice President, Equitable Real Estate Investment Management Inc.
New York, New York 10121 Assistant Vice President, Equitable, since June 1984; prior thereto,
various managerial positions with Equitable. Director, Equico Capital
Corporation.
Norman Russell Meise Assistant Vice President, Equitable Variable, since February 1983; prior
2 Penn Plaza thereto, Assistant Vice President and Controller and Assistant Vice
New York, New York 10121 President, Equitable.
Robert Floyd Wiseman Assistant Vice President, Equitable Variable, since February 1986.
2 Penn Plaza Assistant Vice President, Equitable.
New York, New York 10121
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
WHERE YOU CAN GET
ADDITIONAL
INFORMATION
We have filed with the SEC a Registration Statement relating to the Separate
Account and the variable life policies described in this prospectus. The
Registration Statement, which is required by the Securities Act of 1933,
includes additional information that is not required in this prospectus under
the rules and regulations of the SEC. If you would like the additional
information, you may obtain copies of that document from the SEC's main office
in Washington, D.C. You will have to pay a fee for the material.
- --------------------------------------------------------------------------------
50
<PAGE>
- --------------------------------------------------------------------------------
PART 3 -- FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT 1
INDEX PAGE
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities, December 31, 1985 52
- --------------------------------------------------------------------------------
Statement of Operations for the Year Ended December 31, 1985 52
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets for the Years Ended
December 31, 1985 and 1984 53
- --------------------------------------------------------------------------------
Notes to Financial Statements 54
- --------------------------------------------------------------------------------
Opinion of Independent Auditors 55
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQUITABLE VARIABLE LIFE
INSURANCE COMPANY
INDEX PAGE
- --------------------------------------------------------------------------------
Balance Sheets, December 31, 1985 and 1984 56
- --------------------------------------------------------------------------------
Summaries of Operations and Capital and Surplus Funds for the Years
Ended December 31, 1985 and 1984 57
- --------------------------------------------------------------------------------
Statements of Changes in Financial Position for the Years Ended
December 31, 1985 and 1984 58
- --------------------------------------------------------------------------------
Notes to Financial Statements 59
- --------------------------------------------------------------------------------
Opinion of Independent Auditors 62
- --------------------------------------------------------------------------------
The financial statements of Equitable Variable herein should be considered only
as bearing upon the ability of Equitable Variable to meet its obligations under
the policies.
- --------------------------------------------------------------------------------
51
<PAGE>
- --------------------------------------------------------------------------------
[VARIABLE LIFE INSURANCE LOGO]
- --------------------------------------------------------------------------------
[EQUITABLE VARIABLE LIFE INSURANCE COMPANY LOGO -- 1986 VERSION]
- --------------------------------------------------------------------------------
Catalogue No. 11776
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
----------------------------------
This registration statement comprises the following papers and documents:
The facing sheet.
The Champion Reconciliation and Tie (included in Post-Effective Amendment No.
28).
The SP-1 Reconciliation and Tie (included in Post-Effective Amendment No. 25).
The Basic and Expanded Reconciliation and Tie (included in Post-Effective
Amendment No. 25).
The Supplement dated January 1, 1997, consisting of 57 pages.
The Supplement dated May 1, 1996, consisting of 38 pages.
The Champion prospectus consisting of 40 pages.
SP-1 prospectus consisting of 40 pages.
Basic & Expanded prospectus consisting of 52 pages.
Undertaking to file reports (included in Post-Effective Amendment No. 24).
Undertaking pursuant to Rule 484(b)(i) under the Securities Act of 1933
(included in Post-Effective Amendment No. 24).
The signatures.
The consent of Independent Public Accountants (see Exhibit 13).
The following exhibits:
<TABLE>
<S> <C> <C>
1(1)(a)(i) Resolution re aurthority to market variable life insurance and establish separate accounts.
1(2) Inapplicable.
1(3) Schedule of sales commissions.
1(4) Inapplicable.
1(5) See Exhibit 2 below.
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C> <C>
1(6)(a) Declaration and Charter of Equitable, as amended
1(6)(b) By-Laws of Equitable, as amended.
1(7) Inapplicable.
1(8)(a) Distribution and Servicing Agreement among EQ Financial Consulants, Inc. (forrmerly know as Equico
Securities, Inc.), Equitable and Equitable Variable dated as of May 1, 1994.
1(9)(a) Agreement and Plan of Merger of Equitable Variable with and into Equitable dated September 19, 1996.
1(10) See Exhibit 2 below.
2(a) Variable Whole Life Insurance Policy.
2(b) Variable Increasing Protection Life Insurance Policy.
2(c) Variable Limited Payment Life Insurance Policy --
Level Face Amount.
2(d) Variable Whole Life Insurance Policy -- Increasing
Face Amount.
2(e) Variable Limited Payment Life Plan Insurance Policy--
Level Face Amount.
</TABLE>
II-2
<PAGE>
OTHER EXHIBITS REQUIRED OR PERMITTED BY FORM S-6
------------------------------------------------
<TABLE>
<S> <C> <C>
2(f) Variable Whole Life Plan Insurance Policy -- Increasing Face Amount.
2(g) Single Premium Whole Life Plan Insurance Policy.
2(h) Single Premium Whole Life Plan Insurance Policy -- Level Face Amount.
2(i) Variable Whole Life Plan Insurance Policy.
2(j) Variable Whole Life Plan -- Level Face Amount.
2(k) Single Premium Whole Life Plan Insurance Policy -- Level Face Amount.
2(l) Variable Limited Payment Life Plan Insurance Policy -- Level Face Amount.
2(m) Variable Whole Life Plan Insurance Policy -- Increasing Face Amount.
2(n) Rider adding Separate Account II to existing policies. R81-100).
2(o) Rider re "Loan Value." (S. 83-23).
2(p) Rider re "Account Value." (S. 83-41).
2(q) Rider re "Loans." (S. 83-61).
2(r) Rider re "VAA Change Amount" and "Calculation of Cash Values." (S. 84-81).
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C> <C>
2(s) Rider re "Unit Investment Trust Endorsement" (S.85-101).
2(t) Backdating Endorsement No. S.85-81 relating to Policy No. 85-11.
2(u) Adjustable Loan Interest Rate Endorsement No. S.85-83 relating to Policy No. 85-11.
2(v) Accelerated Death Benefit Rider.
2(w) Name change endorsement (S.97-1).
3(a) Form of Opinion and Consent of Vice President and Associate General Counsel of The Equitable Life
Assurance Society of the United States.
3(b)(1) Opinion and Consent of Joseph O. North, Vice President and Actuary, relating to the SP-1 policies.
3(b)(2) Opinion and Consent of Joseph O. North, Vice President and Actuary, relating to the Champion and
the Basic and Expanded policies.
3(b)(3) Form of Consent.
4 Inapplicable.
5 Inapplicable.
* 6(a) Powers of Attorney (Exhibit 7(e) to Post-Effective Amendment No. 15 in File No. 2-98590).
* 6(b) Powers of Attorney (Exhibit 7(b) to Original Registration Statement in File No. 33-38594).
* 6(c) Powers of Attorney (Exhibit 7(c) to Original Registration Statement in File No. 33-40590).
<FN>
- ----------
*Incorporated by reference.
</FN>
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
* 6(d) Powers of Attorney (Exhibit 7(d) to Original Registration Statement in File No. 33-47928)
* 6(e) Powers of Attorney (Exhibit 7(e) to Post-Effective Amendment No. 1 in File No. 33-47928).
* 6(f) Powers of Attorney (Exhibit 7(f) to Post-Effective Amendment No. 5 in File No. 33-40590).
6(g) Powers of Attorney (Exhibit 6(g) to Post-Effective Amendment No. 40 in File No. 2-54015).
6(h) Powers of Attorney (Exhibit 6(h) to Post-Effective Amendment No. 41 in File No. 2-54015).
6(i) Powers of Attorney (Exhibit 6(i) to Post-Effective Amendment No. 42 in File No. 2-54015).
7 Schedule Regarding Equitable Variable Policies and Related Post-Effective Amendments.
8 Notice of Election pursuant to Section 27(g) of the Investment Company Act of 1940.
9 Amended and Restated Description of Equitable's Issuance, Transfer and Redemption Procedures
for Policies pursuant to Rule 6e-2(b)(12)(ii).
10 Inapplicable.
11 Inapplicable.
12 Inapplicable.
13 Consent of Independent Public Accountant.**
14 Inapplicable.
15(a) Inapplicable.
27 Financial Data Schedule.**
<FN>
- ----------
** To be filed by post-effective amendment.
</FN>
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this amendment to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, and its seal to be hereunto affixed and attested, all in the City
and State of New York on the 4th day of October, 1996.
SEPARATE ACCOUNT I OF EQUITABLE VARIABLE
LIFE INSURANCE COMPANY
By: EQUITABLE VARIABLE LIFE INSURANCE
COMPANY, DEPOSITOR
By: /s/ Samuel B. Shlesinger
------------------------
(Samuel B. Shlesinger)
Senior Vice President
Attest: /s/ Linda Galasso
(Linda Galasso)
---------------
Assistant Secretary
October 4, 1996
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City and State of New York on the 4th day of October,
1996.
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
By: /s/ Samuel B. Shlesinger
------------------------
(Samuel B. Shlesinger)
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
Joseph J. Melone Chairman of the Board and Chief Executive Officer
James M. Benson President and Chief Operating Officer
PRINCIPAL FINANCIAL OFFICER:
J. Thomas Liddle, Jr. Senior Vice President and Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ Alvin H. Fenichel Vice President and Controller
- ------------------------
Alvin H. Fenichel
DIRECTORS:
Michel Beaulieu Gordon Dinsmore Michael J. Rich
James M. Benson William T. McCaffrey Samuel B. Shlesinger
Harvey Blitz Joseph J. Melone Jose S. Suquet
Laurent Clamagirand Peter D. Noris Dennis D. Witte
Jerry de St. Paer
By: /s/ Samuel B. Shlesinger
--------------------------
(Samuel B. Shlesinger)
Attorney-in-Fact
October 3, 1996
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. TAG VALUE
- ----------- ---------
<S> <C> <C>
1(1)(a)(i) Resolution re aurthority to market variable life insurance EX-99.1(1)a RESOLU
and establish separate accounts.
1(3) Schedule of sales commissions. EX-99.1(3) SCHED COM
1(6)(a) Declaration and Charter of Equitable, as amended EX-99.1(6)a CHARTER
1(6)(b) By-Laws of Equitable, as amended. EX-99.1(6)b BYLAWS
1(8)(a) Distribution and Servicing Agreement among EQ Financial EX-99.1(8)a DIST AGR
Consulants, Inc. (forrmerly know as Equico
Securities, Inc.), Equitable and Equitable Variable
dated as of May 1, 1994.
1(9)(a) Agreement and Plan of Merger of Equitable Variable with EX-99.1(9)a MERG AGR
and into Equitable dated Sepatember 19, 1996.
2(a) Variable Whole Life Insurance Policy. EX-99.2a POLICY
2(b) Variable Increasing Protection Life Insurance Policy. EX-99.2b POLICY
2(c) Variable Limited Payment Life Insurance Policy -- EX-99.2c POLICY
Level Face Amount.
2(d) Variable Whole Life Insurance Policy -- Increasing EX-99.2d POLICY
Face Amount.
2(e) Variable Limited Payment Life Plan Insurance Policy-- EX-99.2e POLICY
Level Face Amount.
2(f) Variable Whole Life Plan Insurance Policy -- EX-99.2f POLICY
Increasing Face Amount.
2(g) Single Premium Whole Life Plan Insurance Policy. EX-99.2g POLICY
2(h) Single Premium Whole Life Plan Insurance Policy -- EX-99.2h POLICY
Level Face Amount.
2(i) Variable Whole Life Plan Insurance Policy. EX-99.2i POLICY
2(j) Variable Whole Life Plan -- Level Face Amount. EX-99.2j POLICY
2(k) Single Premium Whole Life Plan Insurance Policy -- EX-99.2k POLICY
Level Face Amount.
2(l) Variable Limited Payment Life Plan Insurance Policy EX-99.2l POLICY
-- Level Face Amount.
2(m) Variable Whole Life Plan Insurance Policy -- EX-99.2m POLICY
Increasing Face Amount.
2(n) Rider adding Separate Account II to existing policies. EX-99.2n RIDER
R81-100).
2(o) Rider re "Loan Value." (S. 83-23). EX-99.2o RIDER
2(p) Rider re "Account Value." (S. 83-41). EX-99.2p RIDER
2(q) Rider re "Loans." (S. 83-61). EX-99.2q RIDER
2(r) Rider re "VAA Change Amount" and "Calculation of Cash EX-99.2r RIDER
Values." (S. 84-81).
2(s) Rider re "Unit Investment Trust Endorsement" EX-99.2s RIDER
(S.85-99).
2(t) Backdating Endorsement No. S.85-81 relating to Policy EX-99.2t ENDORS
No. 85-11.
2(u) Adjustable Loan Interest Rate Endorsement No. S.85-83 EX-99.2u ENDORS
relating to Policy No. 85-11.
2(v) Accelerated Death Benefit Rider. (R94-102) EX-99.2v RIDER
2(w) Name change endorsement (S.97-1). EX-99.2w ENDORS
3(a) Form of Opinion and Consent of Vice President and Associate EX-99.3a OPINION
General Counsel of The Equitable Life Assurance Society
of the United States.
3(b)(1) Opinion and Consent of Joseph O. North, Vice EX-99.3b1.OPIN
President and Actuary, relating to the SP-1 policies.
3(b)(2) Opinion and Consent of Joseph O. North, Vice EX-99.3b2 OPIN
President and Actuary, relating to the Champion and
the Basic and Expanded policies.
3 (b)(3) Form of Actuarial Consent EX-99.3b3 CONSENT
7 Schedule Regarding Equitable Variable Policies and EX-99.7 SCHEDULE
Related Post-Effective Amendments.
8 Notice of Election pursuant to Section 27(g) of the EX-99.8 NOT ELEC
Investment Company Act of 1940.
9 Amended and Restated Description of Equitable EX-99.9 DESC PROC
Variable's Issuance, Transfer and Redemption
Procedures for Policies pursuant to Rule 6e-2(b)(12)
(ii).
13 Consent of Independent Public Accountant.** EX-99.13 CONSENT
27 Financial Data Schedule.** EX-27
</TABLE>
II-8
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
ASSISTANT SECRETARY'S CERTIFICATE
As an Assistant Secretary of The Equitable Life Assurance Society of the
United States (the "Corporation"), a corporation organized and existing under
the laws of the State of New York, I, Janet E. Hannon, hereby certify that
attached hereto marked Exhibit A is a true, correct, and complete copy of
Resolution B28-95, duly adopted by the Board of Directors of the Corporation at
a meeting held on September 21, 1995, at which a quorum was present and acting
throughout; and that said resolution has not been amended, annulled, rescinded,
or revoked, and is now in full force and effect.
IN WITNESS WHEREOF, I have hereunto affixed my signature and the seal of
the Corporation this 30th day of May, 1996.
SEAL /s/ Janet E. Hannon
-------------------
Assistant Secretary
7275N/21
<PAGE>
EXHIBIT A
AUTHORITY TO MARKET VARIABLE LIFE INSURANCE
AND ESTABLISH SEPARATE ACCOUNTS
-------------------------------
B28-95
WHEREAS, by memorandum to Executive Vice President and Chief Administrative
Officer William T. McCaffrey, dated September 6, 1995 (the "Memorandum"), Senior
Vice President Samuel B. Shlesinger referred to a proposal currently under
consideration by management to merge Equitable Variable Life Insurance Company
into Equitable Life (the "Proposed Merger");
WHEREAS, if the Proposed Merger were to occur, the Company would require
all necessary licenses and other approvals to carry on the business of EVLICO,
some of which must be applied for in advance upon authority granted by this
Board to engage in a variable life insurance business; and
WHEREAS, the Memorandum requests that this Board authorize, contingent upon
the effectiveness of the Proposed Merger, the conduct by the Company of a
variable life insurance business and other actions to facilitate the operation
of such business;
NOW, THEREFORE, BE IT
RESOLVED, That authorization is given to continue studying the feasibility
of merging EVLICO into the Company;
FURTHER RESOLVED, That, contingent upon the effectiveness of the Proposed
Merger, the Company shall commence a variable life insurance business in order
to perform its obligations under the EVLICO variable life insurance policies
issued prior to the Proposed Merger and to offer and sell variable life
insurance policies thereafter;
FURTHER RESOLVED, That the Company hereby establishes Separate Accounts I,
FP, PVT and P-1 (the "Separate Accounts") to become operational upon the
effectiveness of the Merger;
FURTHER RESOLVED, That the Separate Accounts shall fund variable life
insurance policies currently funded in corresponding separate accounts of EVLICO
and policies to be issued by Equitable Life after the Merger.
<PAGE>
FURTHER RESOLVED, That the Chief Investment Officer of the Company, with
power to sub-delegate, is authorized in his discretion as he may deem
appropriate from time to time and in accordance with applicable laws and
regulations (a) to divide the Separate Accounts into one or more divisions or
subdivisions, (b) to modify or eliminate any such division or subdivision, (c)
to change the designation of the Separate Accounts to another designation (d) to
designate additional divisions or subdivisions thereof and (e) to authorize and
establish any and all additional separate accounts as may be deemed by such
officer to by necessary or desirable for the Company's variable life insurance
business and having investment policies substantially similar to any current or
future separate account of the Company which has been or may be specifically
approved by this Board;
FURTHER RESOLVED, That the officers of the Company be, and each of them
hereby is, authorized to invest cash in the Separate Accounts or in any division
thereof as may be deemed necessary or appropriate to facilitate the commencement
of the Separate Account's operations or to meet any minimum capital requirements
under the Investment Company Act of 1940 (the "1949 Act") and to transfer cash
or securities from time to time between the Company's general account and any
Separate Account as deemed necessary or appropriate as long as such transfers
are not prohibited by law and are consistent with the terms of the variable life
insurance policies issued by the Company providing for allocations to such
Separate Accounts;
FURTHER RESOLVED, That authority is hereby delegated to the Chief Executive
Officer, the President and the Chief Investment Officer, with power to
sub-delegate, to adopt Rules and Regulations for Certain Operations of the
Separate Accounts, providing for, among other things, criteria by which the
Company shall institute procedures to provide for a pass-through of voting
rights to the owners of variable life insurance policies issued by the Company
providing for allocation to any Separate Account with respect to the shares of
any investment companies which are held in such Separate Account;
FURTHER RESOLVED, That the initial fundamental investment policy of each
Separate Account shall be the investment policy of the corresponding separate
account of EVLICO at the effective date of the Proposed Merger, provided,
however, that such investment policy may be changed from time to time in
accordance with applicable law by the Chief Investment Officer of the Company or
such other officer as he may designate;
FURTHER RESOLVED, That the Company may register under the Securities Act of
1933 (the "1933 Act") variable life insurance policies, or units of interest
thereunder, under which amounts will be allocated by the Company to the Separate
Accounts to support reserves for such policies and, in connection therewith, the
officers of the Company be, and each of them hereby is, authorized, with the
<PAGE>
assistance of accountants, legal counsel and other consultants, to prepare,
execute and file with the Securities and Exchange Commission, in the name and on
behalf of the Company, registration statements under the 1933 Act, including
prospectuses, supplements, exhibits and other documents relating thereto, and
amendments to the foregoing, in such form as the officer executing the same may
deem necessary or appropriate;
FURTHER RESOLVED, That the officers of the Company are authorized, with the
assistance of accountants, legal counsel and other consultants, to take all
actions necessary to register the Separate Accounts under the 1940 Act and to
take such related actions as they deem necessary and appropriate to carry out
the foregoing;
FURTHER RESOLVED, That the officers of the Company be, and each of them
hereby is, authorized to prepare, execute, and file with the Securities and
Exchange Commission such no-action requests and applications for such
exemptions from or orders under the federal or state securities laws as they may
from time to time deem necessary or desirable;
FURTHER RESOLVED, That the President of the Company is hereby appointed as
agent for service under any registration statement under the 1933 Act or the
1940 Act relating to the Separate Accounts, such person to by duly authorized to
receive communications and notices from the Securities and Exchange Commission
with respect to such registration statement and to exercise powers given to such
agent by the 1933 Act and 1940 Act and the rules and regulations thereunder, and
any other applicable law;
FURTHER RESOLVED, That the officers of the Company be, and each of them
hereby is, authorized to effect, in the name and on behalf of the Company, all
such registrations, filing and qualifications under applicable securities laws
and regulations and under insurance securities laws and insurance laws and
regulations of such states and other jurisdictions as they may deem necessary or
appropriate, with respect to the Company, and with respect to any variable life
insurance policies under which amounts will be allocated by the Company to the
Separate Accounts to support reserves for such policies; such authorization to
include registration, filing and qualification of the Company and of said
policies, as well as registration, filing and qualification of officers,
employees and agents of the Company as brokers, dealers, agents, salesmen, or
otherwise; and such authorization shall also include, in connection therewith,
authority to prepare, execute, acknowledge and file all such applications,
applications for exemptions, certificates, affidavits, covenants, consents to
service of process and other instruments and to take all such action as the
officer executing the same or taking such action may deem necessary or
desirable;
<PAGE>
B28-95 (continued)
FURTHER RESOLVED, That the standards of suitability and code of conduct
relating to the doing by the Company of a variable life insurance business, in
the forms annexed to the Memorandum, are hereby approved; and
FURTHER RESOLVED, That the officers of the Company are, and each of them
hereby is, authorized and instructed to take all such acts and prepare and
deliver all such documents in the name and on behalf of the Company, including
all documents required by state licensing authorities to conduct a variable life
insurance business, as may be necessary or desirable to effectuate the purposes
of the foregoing resolutions.
SCHEDULE OF COMMISSIONS
A. For Policies issued with a register date September 20, 1978 or before:
Policy Year Percent of Annualized Premium
1st 40%
2nd 10%
3rd through 10th 8%
11th and later (service fees) 2%
B. For annual premium Policies issued with a register date September 21, 1978
or after:
Policy Year Percent of Annualized Premium
1st 50%
2nd 10%
3rd through 5th 8%
6th through 10th 5%
11th and later (service fees) 2%
C. For single premium Policies: 3%.
1. For servicing life insurance policies and annuity contracts (including
Policies) issued by Equitable for which there is no soliciting agent assigned,
Equitable may compensate its agents who have met production and persistency
standard specified by it through participation in a service compensation pool.
The operation of the pool and participation therein by agents will be governed
solely by rules established by Equitable. Subject to minimum funding
requirements established by Equitable. Equitable will fund the pool by
transferring into it from time to time amounts equal to 1-1/2% of the renewal
premiums paid under life insurance policies and annuity contracts (including
Policies) issued by Equitable for which there is no soliciting agent assigned.
2. Equitable may pay its soliciting agents who have met production and
persistency standards specified by it an additional 5% of the renewal premiums
paid under Policies for the 4th Policy year.
3. Equitable may pay its soliciting agents who have met production standards
specified by it an additional 1% of the renewal premiums paid under Policies for
each Policy year after the 10th Policy year.
RESTATED CHARTER
OF
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
Under
Sections 1206 and 7103
of the New York Insurance Law and
Section 807
of the New York Business Corporation Law
----------------------------------------
The undersigned, being the President and Secretary, respectively, of
The Equitable Life Assurance Society of the United States (the "Corporation"), a
New York corporation, hereby certify as follows:
1. The name of the Corporation is The Equitable Life Assurance Society
of the United States.
2. The Charter of the Corporation was filed in the office of the
Superintendent of Insurance of the State of New York on May 10, 1859.
3. The Charter of the Corporation, as restated and amended prior to the
date hereof (the "Charter"), is hereby further amended, as authorized by
Sections 1206 and 7103 of the New York Insurance Law and Section 807 of the New
York Business Corporation Law, in connection with the Agreement and Plan of
Merger (the "Merger Agreement"), dated as of September 19, 1996, by and between
the Corporation and Equitable Variable Life Insurance Company ("EVLICO"), to (i)
revise the provision of the Charter relating to the definition of "Life
Insurance" to be in accordance with Section 1113 (a) (1) of the New York
Insurance Law and (ii) delete the third sentence in paragraph (a) of Article VI
relating to the Board of Directors of the Corporation.
4. The text of the Charter, as amended by the filing of this Restated
Charter, is hereby amended and restated to read in full as follows:
<PAGE>
RESTATED CHARTER
OF
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
ARTICLE I
The name of the corporation shall continue to be The Equitable Life
Assurance Society of the United States.
ARTICLE II
The principal office of the corporation shall be located in the City of
New York, County of New York, State of New York.
ARTICLE III
(a) The business to be transacted by the corporation shall be the kinds
of insurance business specified in Paragraphs 1, 2 and 3 of Subsection (a) of
Section 1113 of the Insurance Law of the State of New York, as follows:
(1) "Life insurance": every insurance upon the lives of human
beings, and every insurance appertaining thereto, including the
granting of endowment benefits, additional benefits in the event of
death by accident, additional benefits to safeguard the contract from
lapse, accelerated payments of part or all of the death benefit or a
special surrender value upon diagnosis (A) of terminal illness defined
as a life expectancy of twelve months or less, or (B) of a medical
condition requiring extraordinary medical care or treatment regardless
of life expectancy, or provide a special surrender value, upon total
and permanent disability of the insured, and optional modes of
settlement of proceeds. "Life insurance" also includes additional
benefits to safeguard the contract against lapse in the event of
unemployment of the insured. Amounts paid the insurer for life
insurance and proceeds applied under optional modes of settlement or
under dividend options may be allocated by the insurer
-2-
<PAGE>
to one or more separate accounts pursuant to section four thousand two
hundred forty of the Insurance Law of the State of New York;
(2) "Annuities": all agreements to make periodical payments
for a period certain or where the making or continuance of all or some
of a series of such payments, or the amount of any such payment,
depends upon the continuance of human life, except payments made under
the authority of paragraph (1) above. Amounts paid the insurer to
provide annuities and proceeds applied under optional modes of
settlement or under dividend options may be allocated by the insurer to
one or more separate accounts pursuant to section four thousand two
hundred forty of the Insurance Law of the State of New York;
(3) "Accident and health insurance": (i) insurance against
death or personal injury by accident or by any specified kind or kinds
of accident and insurance against sickness, ailment or bodily injury,
including insurance providing disability benefits pursuant to article
nine of the workers' compensation law, except as specified in item (ii)
hereof; and (ii) non-cancellable disability insurance, meaning
insurance against disability resulting from sickness, ailment or bodily
injury (but excluding insurance solely against accidental injury) under
any contract which does not give the insurer the option to cancel or
otherwise terminate the contract at or after one year from its
effective date or renewal date;
and any amendments to such paragraphs or provisions in substitution therefor
which may be hereafter adopted; such other kind or kinds of business now or
hereafter authorized by the laws of the State of New York to stock life
insurance companies; and such other kind or kinds of business to the extent
necessarily or properly incidental to the kind or kinds of insurance business
which the corporation is authorized to do.
(b) The corporation shall also have all other rights, powers, and
privileges now or hereafter authorized or granted by the Insurance Law of the
State of New York or any other law or laws of the State of New York to stock
life insurance companies having power to do the kind or kinds of business
hereinabove referred to and any and all other rights, powers, and privileges of
a corporation now or hereafter granted by the laws of the State of New York and
not prohibited to such stock life insurance companies.
-3-
<PAGE>
ARTICLE IV
The business of the corporation shall be managed under the direction of
the Board of Directors.
ARTICLE V
(a) The Board of Directors shall consist of not less than 13 (except
for vacancies temporarily unfilled) nor more than 36 Directors, as may be
determined from time to time by a vote of a majority of the entire Board of
Directors. No decrease in the number of Directors shall shorten the term of any
incumbent Director.
(b) The Board of Directors shall have the power to adopt from time to
time such By-Laws, rules and regulations for the governance of the officers,
employees and agents and for the management of the business and affairs of the
corporation, not inconsistent with this Charter and the laws of the State of New
York, as may be expedient, and to amend or repeal such by-laws, rules and
regulations, except as provided in the By-Laws.
(c) Any or all of the Directors may be removed at any time, either
for or without cause, by vote of the shareholders.
(d) No Director shall be personally liable to the corporation or any of
its shareholders for damages for any breach of duty as a Director; provided,
however, that the foregoing provision shall not eliminate or limit (i) the
liability of a Director if a judgment or other final adjudication adverse to him
or her establishes that his or her acts or omissions were in bad faith or
involved intentional misconduct or that he or she personally gained in fact a
financial profit or other advantage to which he or she was not legally entitled,
or were acts or omissions which (a) he or she knew or reasonably should have
known violated the Insurance Law of the State of New York or (b) violated a
specific standard of care imposed on Directors directly, and not by reference,
by a provision of the Insurance Law of the State of New York (or any regulations
promulgated thereunder) or (c) constituted a knowing violation of any other law;
or (ii) the liability of a Director for any act or omission prior to September
21, 1989.
-4-
<PAGE>
ARTICLE VI
(a) The Directors of the corporation shall be elected at each annual
meeting of shareholders of the corporation in the manner prescribed by law. The
annual meeting of shareholders shall be held at such place, within or without
the State of New York, and at such time as may be fixed by or under the By-Laws.
At each annual meeting of shareholders, directors shall be elected to hold
office for a term expiring at the next annual meeting of shareholders.
(b) Newly created directorships resulting from an increase in the
number of Directors and vacancies occurring in the Board of Directors shall be
filled by vote of the shareholders.
(c) Each Director shall be at least twenty-one years of age, and at all
times a majority of the Directors shall be citizens and residents of the United
States, and not less than three of the Directors shall be residents of the State
of New York.
(d) The Board of Directors shall elect such officers as are provided
for in the By-Laws at the first meeting of the Board of Directors following each
annual meeting of the shareholders. In the event of the failure to elect
officers at such meeting, officers may be elected at any regular or special
meeting of the Board of Directors. A vacancy in any office may be filled by the
Board of Directors at any regular or special meeting.
ARTICLE VII
The duration of the corporate existence of the corporation shall be
perpetual.
ARTICLE VIII
The amount of the capital of the corporation shall be $2,500,000,
and shall consist of 2,000,000 Common Shares, par value $1.25 per share.
-5-
<PAGE>
5. The Merger Agreement and the foregoing amendments and restatement of
the Charter were duly authorized, adopted and approved at a meeting duly called
and held on September 19, 1996 by the board of directors of the Corporation,
followed by the written consent of the sole shareholder of the Corporation, and
the Merger Agreement was duly authorized, adopted and approved by the unanimous
written consent dated September 19, 1996 of the board of directors of EVLICO
followed by the written consent of the sole shareholder of EVLICO.
IN WITNESS WHEREOF, the undersigned have executed this Restated Charter
on the 19th day of September, 1996.
/s/ James M. Benson
--------------------------
James M. Benson
President
/s/ Pauline Sherman
--------------------------
Pauline Sherman
Secretary
-6-
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On this 19th day of September, 1996, before me personally came
James M. Benson, to me personally known to me to be one of the persons who
executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Edra F Bloom
--------------------------
Notary Public
EDRA F. BLOOM
Notary Public, State of New York
No. 31-4962102
Qualified in New York County
Commission Expires February 12th, 1998
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On this 19th day of September, 1996, before me personally came Pauline
Sherman, to me personally known to me to be one of the persons who executed the
foregoing instrument, and she duly acknowledged to me that she executed the
same.
/s/ Edra F Bloom
--------------------------
Notary Public
EDRA F. BLOOM
Notary Public, State of New York
No. 31-4962102
Qualified in New York County
Commission Expires February 12th, 1998
44606-1.DOC
-7-
BY-LAWS
OF
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
ARTICLE I
---------
SHAREHOLDERS
------------
Section 1.1. Annual Meetings. The annual meeting of the shareholders of
the Company for the election of Directors and for the transaction of such other
business as properly may come before such meeting shall be held at the principal
office of the Company on the third Wednesday in the month of May at 3:00 P.M. or
at such other hour as may be fixed from time to time by resolution of the Board
of Directors and set forth in the notice or waiver of notice of the meeting.
[Business Corporation Law Sec. 602 (a), (b)]*
Section 1.2. Notice of Meetings; Waiver. The Secretary or any Assistant
Secretary shall cause written notice of the place, date and hour of each meeting
of the shareholders, and, in the case of a special meeting, the purpose or
purposes for which such meeting is called and by or at whose direction such
notice is being issued, to be given, personally or by first class mail, not
fewer than ten nor more than fifty days before the date of the meeting to each
shareholder of record entitled to vote at such meeting.
No notice of any meeting of shareholders need be given to any
shareholder who submits a signed waiver of notice, in person or by proxy,
whether before or after the meeting or who attends the meeting, in person or by
proxy, without protesting prior to its conclusion the lack of notice of such
meeting. [Business Corporation Law Sec. 605, 606]
Section 1.3. Organization; Procedure. At every meeting of shareholders
the presiding officer shall be the Chairman of the Board or, in the event of his
or her absence or disability, the President or, in his or her absence, any
officer of the Company designated by the shareholders. The order of business and
all other matters of procedure at every meeting of shareholders may be
determined by such presiding officer. The Secretary, or in the event of his or
her absence or disability, an Assistant Secretary or, in his or her absence, an
appointee of the presiding officer shall act as Secretary of the meeting.
- ------------------------------------
* Citations are to the Business Corporation Law and Insurance Law of the
State of New York, as in effect on [date of adoption], and are inserted
for reference only, and do not constitute a part of the By-Laws.
1
<PAGE>
Section 1.4. Action Without a Meeting. Any action required or permitted
to be taken by shareholders may be taken without a meeting on written consent
signed by the holders of all the outstanding shares entitled to vote on such
action. [Business Corporation Law Sec. 615]
ARTICLE II
BOARD OF DIRECTORS
Section 2.1. Regular Meetings. Regular meetings of the Board of
Directors shall be held at the principal office of the Company on the third
Thursday of each month, except January and August, unless a change in place or
date is ordered by the Board of Directors. The first regular meeting of the
Board of Directors following the annual meeting of the shareholders of the
Company is designated as the Annual Meeting. [Business Corporation Law Sec. 710]
Section 2.2. Special Meetings. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board, the President,
or two directors. [Business Corporation Law Sec. 710]
Section 2.3. Independent Directors; Quorum. Not less than one-third of
the Board of Directors shall be persons who are not officers or employees of the
Company or of any entity controlling, controlled by, or under common control
with the Company and who are not beneficial owners of a controlling interest in
the voting stock of the Company or of any such entity.
A majority of the entire Board of Directors, including at least one
Director who is not an officer or employee of the Company or of any entity
controlling, controlled by, or under common control with the Company and who is
not a beneficial owner of a controlling interest in the voting stock of the
Company or of any such entity, shall constitute a quorum for the transaction of
business at any regular or special meeting of the Board of Directors, except as
otherwise prescribed by these By-Laws. Except as otherwise prescribed by law,
the Charter of the Company, or these By-Laws, the vote of a majority of the
Directors present at the time of the vote, if a quorum is present at such time,
shall be the act of the Board of Directors. A majority of the Directors present,
whether or not a quorum is present, may adjourn any meeting from time to time
and from place to place. As used in these By-Laws "entire Board of Directors"
means the total number of directors which the Company would have if there were
no vacancies. [Business Corporation Law Sec. 707, 708; Insurance Law Sec. 1202]
Section 2.4. Notice of Meetings. Notice of a regular meeting of the
Board of Directors need not be given. Notice of a change in the time or place of
a regular meeting of the Board of Directors shall be given to each Director at
least ten days in advance thereof in writing and by telephone or telecopy.
Notice of each special meeting of the Board of Directors shall be given to each
Director at least two days in advance thereof in
2
<PAGE>
writing and by telephone or telecopy, and shall state in general terms the
purpose or purposes of the meeting. Any such notice for a regular or special
meeting not specifically required by this Section 2.4 to be given by telephone
or telecopy shall be deemed given to a director when sent by mail, telegram,
cablegram or radiogram addressed to such director at his or her address
furnished to the Secretary. Notice of an adjourned regular or special meeting of
the Board of Directors shall be given if and as determined by a majority of the
directors present at the time of the adjournment, whether or not a quorum is
present. [Business Corporation Law Sec. 711]
Section 2.5. Newly Created Directorships; Vacancies. Any newly created
directorships resulting from an increase in the number of Directors and
vacancies occurring in the Board of Directors for any reasons (including
vacancies resulting from the removal of a Director without cause) shall be
filled by the shareholders of the Company. [Business Corporation Law Sec. 705;
Insurance Law Sec. 4211]
Section 2.6. Presiding Officer. In the absence or inability to act of
the Chairman of the Board at any regular or special meeting of the Board of
Directors, any Vice-Chairman of the Board, or the President, as designated by
the chief executive officer, shall preside at such meeting. In the absence or
inability to act of all of such officers, the Board of Directors shall select
from among their number present a presiding officer.
Section 2.7. Telephone Participation in Meetings; Action by Consent
Without Meeting. Any Director may participate in a meeting of the Board or any
committee thereof by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other at the same time, and such participation shall constitute presence in
person at such meeting; provided that one meeting of the Board each year shall
be held without the use of such conference telephone or similar communication
equipment. When time is of the essence, but not in lieu of a regularly scheduled
meeting of the Board of Directors, any action required or permitted to be taken
by the Board or any committee thereof may be taken without a meeting if all
members of the Board or such committee, as the case may be, consent in writing
to the adoption of a resolution authorizing the action and such written consents
and resolution are filed with the minutes of the Board or such committee, as the
case may be. [Business Corporation Law Sec. 708].
ARTICLE III
COMMITTEES
Section 3.1. Committees. (a) The Board of Directors, by resolution
adopted by a majority of the entire Board of Directors, may establish from among
its members an Executive Committee of the Board composed of five or more
Directors. Not less than one-third of the members of such committee shall be
persons who are not officers or employees of the Company or of any entity
controlling, controlled by, or under common
3
<PAGE>
control with the Company and who are not beneficial owners of a controlling
interest in the voting stock of the Company or of any such entity.
(b) The Board of Directors, by resolution adopted by a majority of the
entire Board of Directors, shall establish from among its members one or more
committees with authority to discharge the responsibilities enumerated in this
subsection (b). Each such committee shall be composed of five or more Directors
and shall be comprised solely of Directors who are not officers or employees of
the Company or of any entity controlling, controlled by, or under common control
with the Company and who are not beneficial owners of a controlling interest in
the voting stock of the Company or of any such entity. Such committee or
committees shall have responsibility for:
(i) Recommending to the Board of Directors candidates for
nomination for election by the shareholders to the Board of
Directors;
(ii) Evaluating the performance of officers deemed by any such
committee to be principal officers of the Company and
recommending their selection and compensation;
(iii) Recommending the selection of independent certified public
accountants;
(iv) Reviewing the scope and results of the independent audit and
of any internal audit; and
(v) Reviewing the Company's financial condition.
(c) The Board of Directors, by resolution adopted from time to time by
a majority of the entire Board of Directors, may establish from among its
members one or more additional committees of the Board, each composed of five or
more Directors. Not less than one-third of the members of each such committee
shall be persons who are not officers or employees of the Company or of any
entity controlling, controlled by, or under common control with the Company and
who are not beneficial owners of a controlling interest in the voting stock of
the Company or of any such entity. [Business Corporation Law Sec. 712; Insurance
Law Sec. 1202]
Section 3.2. Authority of Committees. Each committee shall have all the
authority of the Board of Directors, to the extent permitted by law and provided
in the resolution creating such committee, provided, however, that no committee
shall have the authority of the Board of Directors contained in Sections 1.1,
1.3, 2.1, 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.8, 4.1, 4.2, 4.3, 4.4. 4.5, 4.6, 5.1,
5.2, 7.1, 7.3, 7.4, 7.5 or 8.1 or these By-Laws, nor shall any committee have
authority to amend or repeal any resolution of the Board of Directors. [Business
Corporation Law Sec. 712]
4
<PAGE>
Section 3.3. Quorum and Manner of Acting. A majority of the total
membership that a committee would have if there were no vacancies (including at
least one Director who is not an officer or employee of the Company or of any
entity controlling, controlled by, or under common control with the Company and
who is not a beneficial owner of a controlling interest in the voting stock of
the Company or of any such entity) shall constitute a quorum for the transaction
of business. The vote of a majority of the members present at the time of the
vote, if a quorum is present at such time, shall be the act of such committee.
Except as otherwise prescribed by these By-Laws or by the Board of Directors,
each committee may elect a chairman from among its members, fix the times and
dates of its meeting, and adopt other rules of procedure.
Section 3.4. Removal of Members. Any member (and any alternate member)
of a committee may be removed by vote of a majority of the entire Board of
Directors.
Section 3.5. Vacancies. Any vacancy occurring in any committee for any
reason may be filled by vote of a majority of the entire Board of Directors.
Section 3.6. Subcommittees. Any committee may appoint one or more
subcommittees from its members. Any such subcommittee may be charged with the
duty of considering and reporting to the appointing committee on any matter
within the responsibility of the committee appointing such subcommittee but
cannot act in place of the appointing committee.
Section 3.7. Alternate Members of Committees. The Board of Directors
may designate, by resolution adopted by a majority of the entire Board of
Directors, one or more directors as alternate members of any committee who may
replace any absent member or members at a meeting of such committee. [Business
Corporation Law Sec. 712]
Section 3.8. Attendance of Other Directors. Except as otherwise
prescribed by the Board of Directors, members of the Board of Directors may
attend any meeting of any committee.
ARTICLE IV
OFFICERS
Section 4.1. Chairman of the Board. The Board of Directors may at a
regular or special meeting elect from among their number a Chairman of the Board
who shall hold office, at the pleasure of the Board of Directors, until the next
Annual Meeting.
The Chairman of the Board shall preside at all meetings of the Board of
Directors and also shall exercise such powers and perform such duties as may be
delegated or assigned to or required of him or her by these By-Laws or by or
pursuant to authorization of the Board of Directors.
5
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Section 4.2. Vice-Chairman of the Board. The Board of Directors may at
a regular or special meeting elect from among their number one or more
Vice-Chairmen of the Board who shall hold office, at the pleasure of the Board
of Directors, until the next Annual Meeting.
The Vice-Chairman of the Board shall exercise such powers and perform
such duties as may be delegated or assigned to or required of them by these
By-Laws or by or pursuant to authorization of the Board of Directors or by the
Chairman of the Board.
Section 4.3. President. The Board of Directors shall at a regular or
special meeting elect from among their number a President who shall hold office,
at the pleasure of the Board of Directors, until the next Annual Meeting and
until the election of his or her successor.
The President shall exercise such powers and perform such duties as may
be delegated or assigned to or required of him or her by these By-Laws or by or
pursuant to authorization of the Board of Directors or (if the President is not
the chief executive officer) by the chief executive officer. The President and
Secretary may not be the same person.
Section 4.4. Chief Executive Officer. The Chairman of the Board or the
President shall be the chief executive officer of the Company as the Board of
Directors from time to time shall determine, and the Board of Directors from
time to time may determine who shall act as chief executive officer in the
absence or inability to act of the then incumbent.
Subject to the control of the Board of Directors, and to the extent not
otherwise prescribed by these By-Laws, the chief executive officer shall have
plenary power over all departments, officers, employees, and agents of the
Company, and shall be responsible for the general management and direction of
all the business and affairs of the Company.
Section 4.5. Secretary. The Board of Directors shall at a regular or
special meeting elect a Secretary who shall hold office, at the pleasure of the
Board of Directors, until the next Annual Meeting and until the election of his
or her successor.
The Secretary shall issue notices of the meeting of the shareholders
and the Board of Directors and its committees, shall keep the minutes of the
meetings of the shareholders and the Board of Directors and its committees and
shall have custody of the Company's corporate seal and records. The Secretary
shall exercise such powers and perform such other duties as relate to the office
of the Secretary, and also such powers and duties as may be delegated or
assigned to or required of him or her by or pursuant to authorization of the
Board of Directors or by the Chairman of the Board or (if the Chairman of the
Board is not the chief executive officer) the chief executive officer.
Section 4.6. Other Offices. The Board of Directors may elect such other
officers as may be deemed necessary for the conduct of the business of the
Company. Each such
6
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officer elected by the Board of Directors shall exercise such powers and perform
such duties as may be delegated or assigned to or required of him or her by the
Board of Directors of the chief executive officer, and shall hold office until
the next Annual Meeting, but at any time may be suspended by the chief executive
officer or by the Board of Directors, or removed by the Board of Directors.
[Business Corporation Law Sec. 715, 716]
ARTICLE V
CAPITAL STOCK
Section 5.1. Transfers of Stock; Registered Shareholders. (a) Shares of
stock of the Company shall be transferable only upon the books of the Company
kept for such purpose upon surrender to the Company or its transfer agent or
agents of a certificate (unless such shares shall be uncertificated shares)
representing shares, duly endorsed or accompanied by appropriate evidence of
succession, assignment or authority to transfer. Within a reasonable time after
the transfer of uncertificated shares, the Company shall send to the registered
owner thereof a written notice containing the information required to be set
forth or stated on certificates.
(b) Except as otherwise prescribed by law, the Board of Directors may
make such rules, regulations and conditions as it may deem expedient concerning
the subscription for, issue, transfer and registration of, shares of stock.
Except as otherwise prescribed by law, the Company, prior to due presentment for
registration of transfer, may treat the registered owner of shares as the person
exclusively entitled to vote, to receive notification, and otherwise to exercise
all the rights and powers of an owner. [Business Corporation Law Sec.508(d),
(f); Insurance Law Sec. 4203]
Section 5.2. Transfer Agent and Registrar. The Board of Directors may
appoint one or more transfer agents and one or more registrars, and may require
all certificates representing shares to bear the signature of any such transfer
agents or registrars. The same person may act as transfer agent and registrar
for the Company.
ARTICLE VI
EXECUTION OF INSTRUMENTS
Section 6.1. Execution of Instruments. (a) Any one of the following,
namely, the Chairman of the Board, any Vice-Chairman of the Board, the
President, any Vice-President (including a Deputy or Assistant Vice-President or
any other Vice-President designated by a number or a word or words added before
or after the title Vice-President to indicate his or her rank or
responsibilities), the Secretary, or the Treasurer, or any officer, employee or
agent designated by or pursuant to authorization of the Board of Directors or
any committee created under these By-Laws, shall have power in the ordinary
course of business to enter into contracts or execute instruments on behalf of
the
7
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Company (other than checks, drafts and other orders drawn on funds of the
Company deposited in its name in banks) and to affix the corporate seal. If any
such instrument is to be executed on behalf of the Company by more than one
person, any two or more of the foregoing or any one or more of the foregoing
with an Assistant Secretary or an Assistant Treasurer shall have power to
execute such instrument and affix the corporate seal.
(b) The signature of any officer may be in facsimile on any such
instrument if it shall also bear the actual signature, or personally inscribed
initials, of an officer, employee or agent empowered by or pursuant to the first
sentence of this Section to execute such instrument, provided that the Board of
Directors or a committee thereof may authorize the issuance of insurance
contracts and annuity contracts on behalf of the Company bearing the facsimile
signature of an officer without the actual signature or personally inscribed
initials of any person.
(c) All checks, drafts and other orders drawn on funds of the Company
deposited in its name in banks shall be signed only pursuant to authorization of
and in accordance with rules prescribed from time to time by the Board of
Directors or a committee thereof , which rules may permit the use of facsimile
signatures.
Section 6.2. Facsimile Signatures of Former Officers. If any officer
whose facsimile signature has been placed upon any instrument shall have ceased
to be such officer before such instrument is issued, it may be issued with the
same effect as if he or she had been such officer at the time of its issue.
Section 6.3. Meaning of Term "Instruments". As used in this Article VI,
the term "instruments" includes, but is not limited to, contracts and
agreements, checks, drafts and other orders for the payment of money, transfers
of bonds, stocks, notes and other securities, and powers of attorney, deeds,
leases, releases of mortgages, satisfactions and all other instruments entitled
to be recorded in any jurisdiction.
ARTICLE VII
GENERAL
Section 7.1. Reports of Committees. Reports of any committee charged
with responsibility for supervising or making investments shall be submitted at
the next meeting of the Board of Directors. Reports of other committees of the
Board of Directors shall be submitted at a regular meeting of the Board of
Directors as soon as practicable, unless otherwise directed by the Board of
Directors.
Section 7.2. Financial Statements and Reports, etc. At the meeting of
the Board of Directors falling on the third Thursday of February, the Annual
Statement and audited financial statements of the Company for the preceding
year, together with an opinion with respect to such audited financial statements
by such independent certified public accountants as may have been selected by
the Board of Directors, shall be submitted.
8
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Interim reports on the financial condition of the Company shall be submitted at
a regular meeting of the Board of Directors as soon as practicable following the
end of each of the first three quarterly financial periods in each year. All
such financial statements and interim reports shall be filed with the records of
the Board of Directors and a note of such submission shall be spread upon the
minutes.
Section 7.3. Independent Certified Public Accountants. The books and
accounts of the Company shall be audited throughout each year by such
independent certified public accountants as shall be selected by the Board of
Directors.
Section 7.4. Directors' Fees. The Directors shall be paid such fees for
their services in any capacity as may have been authorized by the Board of
Directors. No Director who is a salaried officer of the Company shall receive
any fees for serving as a Director of the Company. [Business Corporation Law
Sec. 713(e)]
Section 7.5. Indemnification of Directors, Officers and Employees. (a)
To the extent permitted by the law of the State of New York and subject to all
applicable requirements thereof:
(i) any person made or threatened to be made a party to any
action or proceeding, whether civil or criminal, by
reason of the fact that he or she, or his or her testator
or intestate, is or was a director, officer or employee
of the Company shall be indemnified by the Company;
(ii) any person made or threatened to be made a party to any
action or proceeding , whether civil or criminal, by
reason of the fact that he or she, or his or her testator
or intestate serves or served any other organization in
any capacity at the request of the Company may be
indemnified by the Company; and
(iii) the related expenses of any such person in any of said
categories may be advanced by the Company.
(b) To the extent permitted by the law of the State of New York, the
Company may provide for further indemnification or advancement of expenses by
resolution of shareholders of the Company or the Board of Directors, by
amendment of these By-Laws, or by agreement. [Business Corporation Law Sec.
721-726; Insurance Law Sec. 1216]
Section 7.6. Waiver of Notice. Notice of any meeting of the Board of
Directors or any committee thereof shall not be required to be given to any
Director who submits a signed waiver of notice whether before or after the
meeting, or who attends the meeting without protesting, prior to or at its
commencement, the lack of notice to him. [Business Corporation Law Sec. 711(c)]
9
<PAGE>
Section 7.7. Company. The term "Company" in these By-Laws means The
Equitable Life Assurance Society of the United States.
ARTICLE VIII
AMENDMENT OF BY-LAWS
Section 8.1. Amendment of By-Laws. Subject to Section 1210 of the
Insurance Law of the State of New York, these By-Laws (other than Sections 1.4,
2.2, 2.3, 2.4, 2.5, 3.1, 3.2 and 8.1 (the "Governance By-Laws") and all By-Laws
adopted by vote of the shareholders of the Company) may be amended or repealed
and new By-Laws, consistent with the Governance By-Laws and with all By-Laws
adopted by the shareholders of the Company, may be adopted at a regular or
special meeting of the Board of Directors, provided that a notice, given not
less than ten days before the meeting in writing and by telephone or telecopy,
shall set forth the amendment or repeal or new By-Laws proposed to be acted upon
at such meeting. [Business Corporation Law Sec. 601; Insurance Law Sec. 1210]
10
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF
THE UNITED STATES
BY-LAWS
As Amended July 22, 1992
11
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF
THE UNITED STATES
Table of Contents
-----------------
ARTICLE I SHAREHOLDERS 1
Section 1.1 Annual Meetings 1
Section 1.2 Notice of Meetings; Waiver 1
Section 1.3 Organization; Procedure 1
Section 1.4 Action Without a Meeting 2
ARTICLE II BOARD OF DIRECTORS 2
Section 2.1 Regular Meetings 2
Section 2.2 Special Meetings 2
Section 2.3 Independent Directors; Quorum 2
Section 2.4 Notice of Meetings 2
Section 2.5 Newly Created Directorships; Vacancies 3
Section 2.6 Presiding Officer 3
Section 2.7 Telephone Participation in Meetings; Action by
Consent Without Meeting 3
ARTICLE III COMMITTEES 3
Section 3.1 Committees 3
Section 3.2 Authority of Committees 4
Section 3.3 Quorum and Manner of Acting 5
Section 3.4 Removal of Members 5
Section 3.5 Vacancies 5
Section 3.6 Subcommittees 5
Section 3.7 Alternate Members of Committees 5
Section 3.8 Attendance of Other Directors 5
ARTICLE IV OFFICERS 5
Section 4.1 Chairman of the Board 5
Section 4.2 Vice-Chairman of the Board 6
Section 4.3 President 6
Section 4.4 Chief Executive Officer 6
Section 4.5 Secretary 6
Section 4.6 Other Officers 6
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ARTICLE V CAPITAL STOCK 7
Section 5.1 Transfers of Stock;
Registered Shareholders 7
Section 5.2 Transfer Agent and Registrar 7
ARTICLE VI EXECUTION OF INSTRUMENTS 7
Section 6.1 Execution of Instruments 7
Section 6.2 Facsimile Signature of
Former Officers 8
Section 6.3 Meaning of Term "Instruments" 8
ARTICLE VII GENERAL 8
Section 7.1 Reports of Committees 8
Section 7.2 Financial Statements
and Reports, etc. 8
Section 7.3 Independent Certified
Public Accountants 9
Section 7.4 Directors' Fees 9
Section 7.5 Indemnification of Directors,
Officers and Employees 9
Section 7.6 Waiver of Notice 9
Section 7.7 Company 10
ARTICLE VIII AMENDMENT OF BY-LAWS 10
Section 8.1 Amendment of By-laws 10
ii
DISTRIBUTION AND SERVICING AGREEMENT
This DISTRIBUTION AND SERVICING AGREEMENT, dated as of May 1, 1994, is
made by and among Equico Securities, Inc. ("Equico"), The Equitable Life
Assurance Society of the United States ("Equitable") and Equitable Variable Life
Insurance Company ("Equitable Variable"), as follows:
WHEREAS, pursuant to a Distribution Agreement, dated as of May 1, 1994,
Equico is the principal underwriter of The Hudson River Trust ("Trust"), a
series mutual fund registered under the Investment Company Act of 1940 ("1940
Act") whose shareholders are separate accounts of Equitable and Equitable
Variable and of other insurance companies;
WHEREAS, both Equitable and Equitable Variable issue variable insurance
contracts ("Variable Contracts") whose net premiums or considerations are
allocated in whole or in part to the respective separate accounts of Equitable
and Equitable Variable for investment in the Trust, for direct investment or for
investment in other funding media ("Separate Accounts");
WHEREAS, units of interest in the Separate Accounts are registered
under the Securities Act of 1933 ("1933 Act") to the extent such registration is
required;
WHEREAS, Equitable and Equitable Variable are each broker-dealers
registered under the Securities Exchange Act of 1934, as amended ("1934 Act"),
and each is a member of the National Association of Securities Dealers, Inc.
("NASD");
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WHEREAS, the Variable Contracts (including all Variable Contracts
issued by Equitable Variable) are offered and sold by members of Equitable's
agency force, or by insurance brokers under contract with Equitable, who are
also registered representatives of Equico and of Equitable ("Agents");
WHEREAS, Equitable and Equitable Variable each desire to engage Equico,
a wholly-owned subsidiary of Equitable which is a registered broker-dealer under
the 1934 Act and a member of the NASD, to assume the responsibilities set forth
in this Agreement with respect to the distribution of the Variable Contracts,
including in particular the responsibility for compliance with broker-dealer
requirements under federal and any applicable state or foreign securities laws
and the NASD Rules of Fair Practice ("NASD Rules") with respect to the offering
of the Variable Contracts, and Equico desires to assume such responsibilities;
WHEREAS, Equico desires to utilize Equitable's services and personnel
in carrying out certain of its responsibilities under this Agreement, and
Equitable is willing to furnish the same on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, the parties hereto agree as follows:
<PAGE>
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ARTICLE I
Distribution Responsibility for the Variable Contracts
Sec. 1.1 Equitable and Equitable Variable authorize Equico to act, and
Equico agrees to serve, as broker-dealer in connection with the distribution of
their respective Variable Contracts to the extent provided in this
Agreement. Equico shall be fully responsible for carrying out all
compliance and supervisory obligations in connection with the distribution of
the Variable Contracts, as required by the NASD Rules and by federal and any
applicable state or foreign securities laws. Equitable shall be fully
responsible for compensating the Agents for their sales of Variable Contracts,
as provided in Section 1.4.
Sec. 1.2 Without limiting the generality of Section 1.1, Equico agrees
that it shall be fully responsible for:
(A) Requiring that each person who is authorized to offer and
sell the Variable Contracts is duly registered as a representative of Equico and
is appropriately licensed, registered or otherwise qualified to offer and sell
the Variable Contracts under the federal securities laws and any applicable
securities laws of each state or other jurisdiction in which the Variable
Contracts offered by such person may be lawfully sold;
(B) Training, supervising and directing the Agents for
purposes of complying on a continuous basis with the NASD Rules and with federal
and state securities laws applicable in connection with the offer and sale of
the Variable Contracts. In this connection, Equico shall:
<PAGE>
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(i) Establish and implement reasonable written procedures
which provide for diligent supervision of sales practices of the Agents;
(ii) Require that Agents shall recommend the purchase of
Variable Contracts only upon reasonable grounds to believe that the purchase is
suitable for each prospective purchaser, and verify their compliance with such
requirement;
(iii) Provide a sufficient number of registered principals
and an adequate compliance staff to carry out the responsibilities set forth
herein; and
(iv) Impose disciplinary measures on the Agents.
(C) Oversight of the securities activities of all persons
engaged directly or indirectly in operations of Equico, Equitable and Equitable
Variable related to the offer or sale of the Variable Products, each of whom
shall be considered a "person associated" with Equico, as defined in Section
3(a)(18) of the 1934 Act. Equico shall have full responsibility for each such
person with regard to his or her training, supervision and control, as
contemplated by Section 15 of the 1934 Act, and, in that connection, shall have
the authority to require that disciplinary action be taken with respect to such
persons.
Sec. 1.3 Equico represents that it is a broker-dealer duly registered
under the 1934 Act and is a member in good standing of the NASD and, to the
extent necessary to perform the activities contemplated hereunder, is duly
registered, or otherwise qualified, under the securities laws of every state or
other jurisdiction in
<PAGE>
-5-
which the Variable Contracts are available for sale, and Equico agrees to
maintain such status. Consistent with its designation as distributor of the
Variable Contracts, as provided in Section 1.1 of this Agreement, Equico
acknowledges that it may be deemed to be an "underwriter" or a "principal
underwriter" of the Separate Accounts under the federal securities laws.
Sec. 1.4 Equitable shall have exclusive responsibility for the payment
of commissions or other fees in accordance with the applicable agreements
between each Agent and Equitable relating to the Variable Contracts. All
compensation paid by Equitable to the Agents with respect to sales of the
Variable Contracts shall be paid by Equitable on its own behalf or on behalf of
Equitable Variable (with respect to sales of Variable Contracts issued by
Equitable Variable), and shall be reflected on the books and records of
Equitable and, to the extent related to Variable Contracts issued by Equitable
Variable, on the books and records of Equitable Variable. The responsibility of
Equitable shall include the performance of all activities necessary in order
that the payment of compensation hereunder complies with all applicable federal
securities laws and state securities and insurance laws. Equitable and Equitable
Variable retain the ultimate right to determine the rates of commission and
other fees to be paid to the Agents in connection with their respective Variable
Contracts. Nothing contained in this Agreement shall obligate Equico to pay any
commissions or other fees to Agents or to reimburse any Agents for expenses
incurred by them, nor shall Equico have any responsibility for the adequacy or
accuracy of any amount paid to an Agent in connection with the sale of the
Variable Contracts. Equico shall have no right or interest whatsoever in any
commissions or other fees payable to Agents by Equitable or by Equitable
Variable.
<PAGE>
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Sec. 1.5 Equitable represents that it is a broker-dealer duly
registered under the 1934 Act and is a member in good standing of the NASD. If
Equitable shall determine, in its sole judgment, that such status is not
required for the purpose of properly discharging its responsibility under
Section 1.4 of this Agreement,
Equitable may terminate its status as a registered broker-dealer without notice
to the other parties hereto.
Sec. 1.6 Equitable Variable agrees to cooperate fully with Equico and
with Equitable in the proper discharge of the responsibilities allocated to them
under this Article I. While undertaking to provide such cooperation and to
perform various activities on its own behalf hereunder, Equitable Variable
assumes no duties or responsibilities under this Agreement in its capacity as a
registered broker-dealer and, accordingly, shall be under no obligation to
maintain such status.
Sec. 1.7 Equico, Equitable and Equitable Variable shall each cause to
be maintained and preserved such accounts, books and other documents as are
required by the 1934 Act and 1940 Act and any other applicable laws and
regulations. In particular, without limiting the foregoing, Equico shall cause
all the books and records in connection with the offer and sale of the Variable
Contracts to be maintained and preserved in conformity with the requirements of
Rules 17a-3 and 17a-4 under the 1934 Act, to the extent that such requirements
are applicable to the Variable Contracts. The payment of premiums, purchase
payments, commissions and other fees and payments in connection with the
Variable Contracts shall be reflected on the books and records of Equitable and
of Equitable Variable, as provided in Section 1.4 hereof and as may otherwise be
<PAGE>
-7-
required under applicable NASD regulations and federal and applicable state
securities laws requirements.
Sec. 1.8 Equico, Equitable and Equitable Variable shall each submit to
all regulators and administrative bodies having jurisdiction over the sales of
the Variable Contracts, present or future, any information, reports, or other
material that any such body by reason of this Agreement may request or require
pursuant to applicable laws or regulations. In particular, without limiting the
foregoing, Equitable and Equitable Variable agree that any books and records
which they maintain pursuant to Section 1.5 of this Agreement which are required
to be maintained under Rule 17a-3 or 17a-4 of the 1934 Act shall be subject to
inspection by the SEC in accordance with Section 17(a) of the 1934 Act.
Sec. 1.9 Equico and Equitable each agree and understand that all
documents, reports, records, books, files and other materials required under
applicable NASD regulations and federal and state securities laws relative to
the sale of Variable Contracts shall be the property of Equico, with the
exception of those books and records maintained by Equitable pursuant to Section
1.4 which relate to sales compensation and shall be the joint property of
Equitable and Equico. If, however, such documents, reports, records, books,
files and other materials which are the property of Equico are required by
applicable regulation or law to be maintained also by Equitable or by Equitable
Variable, such material shall be the joint property of Equico, Equitable or
Equitable Variable. All other documents, reports, records, books, files and
other materials maintained relative to this Agreement shall be the property of
Equitable or of Equitable Variable, depending upon the identity of the issuer of
the Variable Contracts involved. Upon the
<PAGE>
-8-
termination of this Agreement, all such material shall be returned to the
applicable party.
Sec. 1.10 Equico, Equitable and Equitable Variable from time to time
during the term of this Agreement, shall allocate among themselves, subject to a
right of further delegation, the administrative responsibility for maintaining
and preserving the books, records and accounts kept in connection with the
Variable Contracts; provided, however, in the case of books, records and
accounts kept pursuant to a requirement of applicable law or regulation, the
ultimate responsibility for maintaining and preserving such books, records and
accounts shall be that of the party which is required to maintain or preserve
such books, records and accounts under the applicable law or regulation, and
such books, records and accounts shall be maintained and preserved under the
supervision of that party. Equico, Equitable and Equitable Variable shall cause
each other to be furnished with such reports as each may reasonably request for
the purpose of meeting its respective reporting and recordkeeping requirements
under such regulations and laws and under the insurance laws of the State of New
York and any other applicable states or jurisdictions.
ARTICLE II
Procedures for Sale of Variable Contracts
Sec. 2.1 Equitable and Equitable Variable each represent and warrant
that units of interest of their respective Separate Accounts offered under the
Variable Contracts are registered under the 1933 Act to the extent such
registration is required, that the Separate Accounts are registered under the
1940 Act unless
<PAGE>
-9-
exempt from such registration, and that the Variable Contracts are qualified to
be sold under the insurance laws and any applicable securities laws of all
states and other jurisdictions in which the Variable Contracts are authorized
for sale. Equitable and Equitable Variable each further represent and warrant
that each of them is a life insurance company duly organized under the laws of
the State of New York and in good standing and authorized to conduct business
under the laws of each state in which the Variable Contracts are offered and
sold.
Sec. 2.2 Equico will require that the Agents use only the effective
prospectuses, statements of additional information ("SAIs") and other authorized
materials in soliciting and selling the Variable Contracts. Equico is not
authorized to give any information or to make any representations concerning the
Variable Contracts other than those contained in the current prospectus or SAI
therefor filed with the SEC or in such materials as may be authorized by
Equitable or by Equitable Variable.
Sec. 2.3 All applications for Variable Contracts shall be made on
application forms supplied by Equitable or by Equitable Variable, as
appropriate, and all payments collected by Equico shall be remitted by Equico
promptly in full, together with such application or enrollment forms and any
other required documentation, directly to Equitable or to Equitable Variable, as
appropriate, at the address indicated on such application or to such other
address as Equitable or Equitable Variable may, from time to time, designate in
writing. Equico shall review all such applications for suitability. Checks or
money orders in payment on any Variable Contract shall be drawn to the order of
"The Equitable Life Assurance Society of the United States" or "Equitable
Variable Life Insurance Company", as appropriate. All applications for Variable
Contracts shall be subject to
<PAGE>
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acceptance or rejection by Equitable or by Equitable Variable at their
respective discretion.
Sec. 2.4 All money payable in connection with any of the Variable
Contracts, whether as premiums, purchase payments or otherwise, and whether paid
by, or on behalf of any applicant or contractowner, is the property of Equitable
or of Equitable Variable and shall be transmitted promptly in accordance with
the administrative procedures of Equitable and Equitable Variable without any
deduction or offset for any reason, including by example but not limitation, any
deduction or offset for compensation claimed by Equico or payable to the Agents.
No cash payments shall be accepted by Equico in connection with the Variable
Contracts.
Sec. 2.5 Equitable and Equitable Variable shall be responsible for
payment of the costs of printing the prospectuses, SAIs and sales material used
in connection with the solicitation of applications for the Variable Contracts
and to allocate such costs between themselves. Equitable and Equitable Variable
shall provide to Equico copies of such prospectuses, SAIs and sales material in
such number as Equico shall reasonably request. Equitable and Equitable Variable
shall make available to Equico copies of all financial statements and other
documents that Equico shall reasonably request for use in connection with the
distribution of the Variable Contracts.
Sec. 2.6 Notwithstanding anything in this Agreement to the contrary,
Equico may enter into sales agreements with independent broker-dealers for the
sale of the Variable Contracts, subject to the prior written approval of
Equitable and of Equitable Variable of each such sales agreement and the terms
thereof. All such
<PAGE>
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sales agreements entered into by Equico shall provide that each independent
broker-dealer will assume full responsibility for continued compliance by itself
and its associated persons with the NASD Rules and applicable federal and state
securities and insurance laws. All associated persons of such independent
broker-dealer soliciting applications for the Variable Contracts shall be duly
and appropriately licensed or appointed for the sale of the Variable Contracts
under the NASD Rules and federal and state securities and insurance laws in
which such person shall offer or sell the Variable Contracts.
Sec. 2.7 Equitable shall apply for and maintain the proper insurance
licenses for each of the Agents selling the Variable Contracts in all states or
jurisdictions in which the Variable Contracts are offered for sale by such
Agent. Equitable and Equitable Variable reserve the right to refuse to appoint
any proposed agent, or independent broker-dealer, and to terminate an Agent or
independent broker-dealer once appointed. Equitable and Equitable Variable shall
promptly notify Equico of each such termination. Equitable agrees to be
responsible for all licensing or other fees required under pertinent state
insurance laws to properly authorize Agents for the sale of the Variable
Contracts; however, the foregoing shall not limit Equitable's right to collect
such amount from any person or entity other than Equico.
Sec. 2.8 The parties hereto recognize that any person selling the
Variable Contracts as contemplated by this Agreement shall be acting as an
insurance agent of Equitable or of Equitable Variable or as an insurance broker,
and that the rights of Equico to supervise such persons shall be limited to the
extent specifically described herein or required under applicable federal or
state securities laws or NASD regulations. Such persons shall not be considered
employees of Equico and
<PAGE>
-12-
shall be considered agents of Equico only as and to the extent required by such
laws and regulations. Further, it is intended by the parties hereto that such
persons are and shall continue to be considered to have a common law independent
contractor relationship with Equitable and Equitable Variable and not to be
common law employees of Equitable or of Equitable Variable, unless any contract
between Equitable and any person selling the Variable Contracts specifically
provides otherwise.
Sec. 2.9 Consistent with the responsibility of Equico to discharge all
compliance and supervisory obligations relating to the distribution of the
Variable Contracts as provided in this Agreement and consistent with the
authority given to Equico hereunder, Equitable and Equitable Variable shall
retain the ultimate right of control over, and responsibility for, the issuance,
servicing and marketing of their respective Variable Contracts. In that
connection, Equitable and Equitable Variable shall review and approve all
advertising concerning the Variable Contracts issued by each of them; however,
Equico shall be responsible for filing such materials, as required, with the
NASD and with state securities regulators and for obtaining such approvals as
may be necessary.
Sec. 2.10 Unless otherwise agreed in writing by Equitable or by
Equitable Variable, neither Equico nor any Agent nor any independent
broker-dealer shall have an interest in any surrender charges, deductions or
other fees payable to Equitable or to Equitable Variable.
<PAGE>
-13-
ARTICLE III
Services and Personnel Provided by Equitable
Sec. 3.1 Equitable agrees to furnish compliance and related support
services, including personnel, to assist Equico in the performance of the
services which Equico is required to provide hereunder. In furnishing such
services, all personnel of Equitable shall be subject at all times to the
supervision and control of Equico.
ARTICLE IV
Compensation and Expenses
Sec. 4.1 Equico shall be compensated, not less frequently than
quarterly, by Equitable and by Equitable Variable for its services under this
Agreement in an aggregate annual amount which shall be equal to the actual
expenses incurred by Equico to provide compliance and related support services,
plus a percentage of such expenses which shall approximate the annual rate of
profit earned by Equico from its performance of comparable services for
unaffiliated clients.
Sec. 4.2 Equico shall pay the costs and expenses, direct and indirect,
incurred by Equitable in furnishing services and personnel, pursuant to Article
III of this Agreement. In determining the basis for the apportionment of
expenses, specific identification or estimates based on time, company assets,
square footage or any other mutually agreeable method providing for a fair and
reasonable allocation of cost may be used, provided such method is in conformity
with the requirements of Section 1712 of the New York Insurance Law and New York
Insurance
<PAGE>
-14-
Department Regulation No. 33. The charge to Equico for such apportioned expenses
shall be at cost as described in this Section 4.2.
Sec. 4.3 Within 45 days after the end of each calendar quarter, and
more often if desired, Equitable shall submit to Equico a statement of
apportioned expenses showing the basis for such apportionment; and settlement
shall be made within 15 days thereafter. The statement of apportioned expenses
shall set forth in reasonable detail the nature of the expenses being
apportioned and other relevant information to support the charge.
Sec. 4.4 To enable Equitable to compensate Agents for the sale of
Variable Contracts issued by Equitable Variable, Equitable Variable shall
furnish Equitable with a schedule of the commissions and other fees payable with
respect to each form of Variable Contract issued by it, together with a list of
rules and procedures applicable to the payment of such compensation. Equitable
Variable agrees to reimburse Equitable for commissions and service fees (not in
excess of the amounts specified by Equitable Variable) paid to the Agents for
the sale of its Variable Contracts pursuant to Section 1.4 of this Agreement.
ARTICLE V
Term of Agreement
Sec. 5.1 Subject to termination as herein provided, this Agreement
shall remain in full force and effect for a two-year period commencing on the
date first above written, and this Agreement shall continue in full force and
effect from year to year thereafter, until terminated as herein provided.
<PAGE>
-15-
Sec. 5.2 This Agreement may be terminated by any party hereto on not
less than 60 days' prior written notice to the other parties or by an agreement
in writing signed by all of the parties hereto, except that data processing
services may not be terminated on less than 180 days' prior written notice, if
requested by Equico in writing promptly following its receipt of written notice
of termination of this Agreement. This Agreement shall automatically be
terminated in the event of its assignment.
Sec. 5.3 Upon termination of this Agreement, all authorizations,
rights, and obligations shall cease except the obligations to settle accounts
hereunder, including the settlement of monies due in connection with Variable
Contracts in effect at the time of termination or issued pursuant to
applications received by Equitable or by Equitable Variable prior to
termination.
ARTICLE VI
Miscellaneous
Sec. 6.1 Should an irreconcilable difference of opinion arise between
or among the parties to this Agreement as to the interpretation of any matter
respecting this Agreement, it is hereby mutually agreed that such differences
shall be submitted to arbitration as the sole remedy available to the parties.
Such arbitration shall be in accordance with the rules of the American
Arbitration Association, the arbitrators shall have extensive experience in the
insurance industry, and the arbitration shall take place in New York, New York.
<PAGE>
-16-
Sec. 6.2 For purposes of this Agreement, the term "Variable Contracts"
shall not include any variable insurance contract issued by Equitable which is
not offered and sold by employees or agents of Equitable.
Sec. 6.3 This Agreement replaces the Sales Agreement, dated December
23, 1985, as amended, between Equitable Variable and Equitable, which shall
terminate on the effective date hereof.
Sec. 6.4 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule, or otherwise, the remainder of this
Agreement shall not be affected thereby.
Sec. 6.5 This Agreement constitutes the entire agreement between the
parties hereto and may not be modified except in a written instrument executed
by all parties hereto.
Sec. 6.6 This Agreement shall be subject to the provisions of the 1934
Act and, to the extent applicable, the 1940 Act and the rules, regulations and
rulings thereunder and of the NASD, from time to time in effect, including such
exemptions from the 1940 Act as the SEC may grant, and the terms hereof shall be
interpreted and construed in accordance therewith.
Sec. 6.7 This Agreement shall be interpreted in accordance with the
laws of the State of New York.
<PAGE>
-17-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunto duly authorized, as of the day
and year first above written.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By: /s/Joseph J. Melone
-------------------
Joseph J. Melone
Chairman and
Chief Executive Officer
EQUITABLE VARIABLE LIFE
INSURANCE COMPANY
By: /s/Samuel B. Shlesinger
-----------------------
Samuel B. Shlesinger
Senior Vice President
EQUICO SECURITIES, INC.
By: /s/Richard V. Silver
--------------------
Richard V. Silver
President and
Chief Operating Officer
5292/430_1.DOC
AGREEMENT AND PLAN OF MERGER OF
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
WITH AND INTO THE EQUITABLE LIFE
ASSURANCE SOCIETY OF THE UNITED STATES
--------------------------------------
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement and Plan of
Merger"), dated as of September 19, 1996, is by and between The Equitable Life
Assurance Society of the United States, a New York corporation having its
principal place of business at 787 Seventh Avenue, New York, New York 10019
("Equitable Life"), and Equitable Variable Life Insurance Company, a New York
corporation having its principal place of business at 787 Seventh Avenue, New
York, New York 10019 ("EVLICO") (the foregoing corporations hereinafter
sometimes referred to as the "Constituent Companies").
WHEREAS, Equitable Life and EVLICO are corporations duly organized and
validly existing under the laws of the State of New York and duly licensed as
stock life insurance companies under the New York Insurance Law (the "Insurance
Law");
WHEREAS, EVLICO has authorized capital stock consisting of 5 million
shares of Common Stock (the "EVLICO Common Stock"), $1.00 par value, of which at
the date hereof 1.5 million shares are issued and outstanding and owned by
Equitable Life and are the only shares of stock of EVLICO entitled to vote on
this Agreement and Plan of Merger;
WHEREAS, Equitable Life has authorized capital stock consisting of 2
million shares of Common Stock (the "Equitable Common Stock"), $1.25 par value,
all of which shares on the date hereof are issued and outstanding and owned by
The Equitable Companies Incorporated, a Delaware corporation having its
principal place of business at 787 Seventh Avenue, New York, New York, 10019.
The issued and outstanding shares of Equitable Common Stock are the only shares
of stock of Equitable Life entitled to vote on this Agreement and Plan of
Merger; and
WHEREAS, the Boards of Directors of Equitable Life and EVLICO deem it
advisable and in the best interest of the policyholders and contract holders of
their respective companies to effect the merger (the "Merger") of EVLICO and
Equitable Life with and into Equitable Life as the surviving company, and the
Board of Directors and sole stockholder, respectively, of each of Equitable Life
and EVLICO have duly approved and adopted this Agreement and Plan of Merger.
<PAGE>
-2-
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, it is hereby agreed by and between
the parties hereto that EVLICO shall be merged with and into Equitable Life
pursuant to Article 71 of the Insurance Law and in accordance with this
Agreement and Plan of Merger.
ARTICLE 1
---------
Surviving Company
-----------------
Section 1.1 The Surviving Company. The surviving company of the Merger
(the "Surviving Company") shall be Equitable Life.
Section 1.2 Charter. The proposed Restated Charter of the Surviving
Company is annexed hereto as Exhibit A.
Section 1.3 By-Laws. The By-Laws of Equitable Life in effect at the
Effective Time of the Merger (as hereinafter defined) shall be the By-Laws of
the Surviving Company.
ARTICLE 2
---------
Terms and Conditions of the Merger and Mode of Carrying the Merger into Effect
- ------------------------------------------------------------------------------
Section 2.1 General. Subject to and upon the terms and conditions of
this Agreement and Plan of Merger, upon the Effective Time of the Merger, EVLICO
shall be merged with and into Equitable Life and Equitable Life shall continue
as the Surviving Company as permitted and provided by Section 7102 of the
Insurance Law. All of the EVLICO Common Stock issued and outstanding immediately
prior to the Effective Time of the Merger shall, at the Effective Time of the
Merger, be cancelled. All of the Equitable Common Stock issued and outstanding
immediately prior to the Effective Time of the Merger shall remain unchanged.
Section 2.2 Consents, Approvals, Etc. to be Obtained by the Parties to
the Merger. Equitable Life and EVLICO shall each obtain all necessary consents
and approvals of, permits from, and assurances of no objection to the Merger or
other rulings from, the appropriate governmental authorities, including the
following:
(a) approval by the New York Insurance Department to consummate
the Merger pursuant to Section 7105 of the Insurance Law; and
(b) approval by the New York Insurance Department of one or more
plans of operation of Equitable Life separate accounts which
will continue the operations of EVLICO separate
<PAGE>
-3-
accounts in operation at the Effective Time of the Merger as
separate accounts of Equitable Life.
Section 2.3 Effective Time of the Merger. This Agreement and Plan of
Merger shall be duly executed and attested and a certified copy thereof,
together with certificates of its adoption as provided for in the Insurance Law
and certificates as to fees, commissions or other compensations or valuable
considerations paid or to be paid in connection with the Merger, shall be
submitted for approval to the Superintendent of Insurance of the State of New
York (the "Superintendent"). Following the receipt of such approval from the
Superintendent and the fulfillment of the conditions set forth herein, a
certified copy of this Agreement and Plan of Merger, with evidence of the
approval of the Superintendent endorsed thereon, shall be filed in the office of
the Clerk of the County of New York, where the principal office of each of
Equitable Life and EVLICO is located. Subject to the foregoing, the Merger shall
become effective at 12:01 a.m. on January 1, 1997 (the "Effective Time of the
Merger").
ARTICLE 3
---------
Other Provisions with Respect to the Merger
-------------------------------------------
Section 3.1. Effect of the Merger. At the Effective Time of the Merger,
the separate existence of EVLICO shall cease and, in accordance with the
provisions of this Agreement and Plan of Merger, EVLICO shall be merged with and
into Equitable Life, and Equitable Life shall survive the Merger and shall
continue in existence and shall possess all the rights, privileges, immunities,
powers and purposes of each of the Constituent Companies. All the rights,
franchises and interests in and to every species of property, real, personal,
and mixed, including things in action, causes of action and every other asset of
the Constituent Companies, shall vest in the Surviving Company without further
act or deed, except that if the Surviving Company shall at any time deem it
desirable that any further assignment or assurance shall be given to fully
accomplish the purposes of the Merger, the directors and officers of EVLICO
shall do all things necessary, including the execution of any and all relevant
documents, to carry out the intent and purposes of this Agreement and Plan of
Merger. No liability or obligation due or to become due, or claim or demand for
any cause existing against either Constituent Company, or any policyholder,
shareholder, officer, or director thereof, shall be released or impaired by the
Merger. No action or proceeding, civil or criminal, then pending by or against
either Constituent Company, or any policyholder, shareholder, officer, or
director thereof, shall be abated or discontinued by the Merger, but may be
enforced, prosecuted, settled or compromised as if the Merger had not occurred,
or Equitable Life, as the Surviving Company, may be substituted in place of
EVLICO by order of the court in which the action or proceeding may be pending.
From and after the Effective Time of the Merger, Equitable Life shall be liable
in place of EVLICO for all the liabilities and obligations of EVLICO, including
liabilities under policies and contracts issued by EVLICO.
<PAGE>
-4-
Section 3.2. Abandonment of the Merger. If, at any time prior to the
Effective Time of the Merger, events or circumstances occur which, in the
opinion of a majority of the Board of Directors of either of the Constituent
Companies, render it inadvisable to consummate the Merger, this Agreement and
Plan of Merger shall not become effective even though previously approved and
adopted by the Board of Directors and sole shareholder, respectively, of each of
Equitable Life and EVLICO.
Section 3.3. Expenses of the Merger. Equitable Life shall pay all the
expenses of carrying this Agreement and Plan of Merger into effect and of
accomplishing the Merger.
Section 3.4. Counterparts. For the convenience of the parties and to
facilitate approval of this Agreement and Plan of Merger, any number of
counterparts hereof may be executed, and each such executed counterpart shall be
deemed to be an original instrument.
Section 3.5. Governing Law. This Agreement and Plan of Merger has been
executed in and shall be governed by and construed under the laws of the State
of New York.
IN WITNESS WHEREOF, this Agreement and Plan of Merger has been duly
executed and delivered by the duly authorized officers of Equitable Life and
EVLICO on the date first above written.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
[Seal]
Attest:
/s/ Pauline Sherman /s/ James M. Benson
- -------------------------- By:------------------------------------
Secretary President and Chief Executive Officer
EQUITABLE VARIABLE LIFE
INSURANCE COMPANY
[Seal]
Attest:
/s/ Pauline Sherman /s/ James M. Benson
- -------------------------- By:------------------------------------
Secretary President and Chief Executive Officer
28903
<PAGE>
Exhibit A
RESTATED CHARTER
OF
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
ARTICLE I
The name of the corporation shall continue to be The Equitable Life
Assurance Society of the United States.
ARTICLE II
The principal office of the corporation shall be located in the City of
New York, County of New York, State of New York.
ARTICLE III
(a) The business to be transacted by the corporation shall be the kinds
of insurance business specified in Paragraphs 1, 2 and 3 of Subsection (a) of
Section 1113 of the Insurance Law of the State of New York, as follows:
(1) "Life insurance": every insurance upon the lives of human
beings, and every insurance appertaining thereto, including the
granting of endowment benefits, additional benefits in the event of
death by accident, additional benefits to safeguard the contract from
lapse, accelerated payments of part or all of the death benefit or a
special surrender value upon diagnosis (A) of terminal illness defined
as a life expectancy of twelve months or less, or (B) of a medical
condition requiring extraordinary medical care or treatment regardless
of life expectancy, or provide a special surrender value, upon total
and permanent disability of the insured, and optional modes of
settlement of proceeds. "Life insurance" also includes additional
benefits to safeguard the contract against lapse in the event of
unemployment of the insured. Amounts paid the insurer for life
insurance and proceeds applied under optional modes of settlement or
under dividend options may be allocated by the insurer
<PAGE>
to one or more separate accounts pursuant to section four thousand two
hundred forty of the Insurance Law of the State of New York;
(2) "Annuities": all agreements to make periodical payments
for a period certain or where the making or continuance of all or some
of a series of such payments, or the amount of any such payment,
depends upon the continuance of human life, except payments made under
the authority of paragraph (1) above. Amounts paid the insurer to
provide annuities and proceeds applied under optional modes of
settlement or under dividend options may be allocated by the insurer to
one or more separate accounts pursuant to section four thousand two
hundred forty of the Insurance Law of the State of New York;
(3) "Accident and health insurance": (i) insurance against
death or personal injury by accident or by any specified kind or kinds
of accident and insurance against sickness, ailment or bodily injury,
including insurance providing disability benefits pursuant to article
nine of the workers' compensation law, except as specified in item (ii)
hereof; and (ii) non-cancellable disability insurance, meaning
insurance against disability resulting from sickness, ailment or bodily
injury (but excluding insurance solely against accidental injury) under
any contract which does not give the insurer the option to cancel or
otherwise terminate the contract at or after one year from its
effective date or renewal date;
and any amendments to such paragraphs or provisions in substitution therefor
which may be hereafter adopted; such other kind or kinds of business now or
hereafter authorized by the laws of the State of New York to stock life
insurance companies; and such other kind or kinds of business to the extent
necessarily or properly incidental to the kind or kinds of insurance business
which the corporation is authorized to do.
(b) The corporation shall also have all other rights, powers, and
privileges now or hereafter authorized or granted by the Insurance Law of the
State of New York or any other law or laws of the State of New York to stock
life insurance companies having power to do the kind or kinds of business
hereinabove referred to and any and all other rights, powers, and privileges of
a corporation now or hereafter granted by the laws of the State of New York and
not prohibited to such stock life insurance companies.
-2-
<PAGE>
ARTICLE IV
The business of the corporation shall be managed under the direction of
the Board of Directors.
ARTICLE V
(a) The Board of Directors shall consist of not less than 13 (except
for vacancies temporarily unfilled) nor more than 36 Directors, as may be
determined from time to time by a vote of a majority of the entire Board of
Directors. No decrease in the number of Directors shall shorten the term of any
incumbent Director.
(b) The Board of Directors shall have the power to adopt from time to
time such By-Laws, rules and regulations for the governance of the officers,
employees and agents and for the management of the business and affairs of the
corporation, not inconsistent with this Charter and the laws of the State of New
York, as may be expedient, and to amend or repeal such by-laws, rules and
regulations, except as provided in the By-Laws.
(c) Any or all of the Directors may be removed at any time, either for
or without cause, by vote of the shareholders.
(d) No Director shall be personally liable to the corporation or any of
its shareholders for damages for any breach of duty as a Director; provided,
however, that the foregoing provision shall not eliminate or limit (i) the
liability of a Director if a judgment or other final adjudication adverse to him
or her establishes that his or her acts or omissions were in bad faith or
involved intentional misconduct or that he or she personally gained in fact a
financial profit or other advantage to which he or she was not legally entitled,
or were acts or omissions which (a) he or she knew or reasonably should have
known violated the Insurance Law of the State of New York or (b) violated a
specific standard of care imposed on Directors directly, and not by reference,
by a provision of the Insurance Law of the State of New York (or any regulations
promulgated thereunder) or (c) constituted a knowing violation of any other law;
or (ii) the liability of a Director for any act or omission prior to September
21, 1989.
-3-
<PAGE>
ARTICLE VI
(a) The Directors of the corporation shall be elected at each annual
meeting of shareholders of the corporation in the manner prescribed by law. The
annual meeting of shareholders shall be held at such place, within or without
the State of New York, and at such time as may be fixed by or under the By-Laws.
At each annual meeting of shareholders, directors shall be elected to hold
office for a term expiring at the next annual meeting of shareholders.
(b) Newly created directorships resulting from an increase in the
number of Directors and vacancies occurring in the Board of Directors shall be
filled by vote of the shareholders.
(c) Each Director shall be at least twenty-one years of age, and at all
times a majority of the Directors shall be citizens and residents of the United
States, and not less than three of the Directors shall be residents of the State
of New York.
(d) The Board of Directors shall elect such officers as are provided
for in the By-Laws at the first meeting of the Board of Directors following each
annual meeting of the shareholders. In the event of the failure to elect
officers at such meeting, officers may be elected at any regular or special
meeting of the Board of Directors. A vacancy in any office may be filled by the
Board of Directors at any regular or special meeting.
ARTICLE VII
The duration of the corporate existence of the corporation shall be
perpetual.
ARTICLE VIII
The amount of the capital of the corporation shall be $2,500,000, and
shall consist of 2,000,000 Common Shares, par value $1.25 per share.
44859-1.DOC
-4-
VARIABLE WHOLE LIFE INSURANCE POLICY
THE INSURED REGISTER DATE
FACE AMOUNT POLICY NUMBER
[EVLICO LOGO]
EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO)
HOME OFFICE: 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10019
ADMINISTRATIVE OFFICE: HUNTINGTON STATION, NEW YORK 11746
EVLICO agrees, subject to the provisions of this policy, to pay a Death Benefit
(determined in accordance with the Death Benefit provision on page seven) to the
beneficiary upon receipt of due proof of the death of the Insured and the
surrender of this policy,
PROVIDED PREMIUMS ARE DULY PAID, DURING THE FIRST POLICY YEAR THE DEATH BENEFIT
WILL EQUAL THE FACE AMOUNT AS SHOWN ON PAGE THREE AND THEREAFTER MAY INCREASE OR
DECREASE ON EACH ANNIVERSARY OF THE REGISTER DATE, DEPENDING ON THE INVESTMENT
EXPERIENCE OF SEPARATE ACCOUNT I, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT.
AS PROVIDED IN THE CASH VALUE PROVISION ON PAGE EIGHT, THE CASH VALUE UNDER THIS
POLICY WILL VARY FROM DAY TO DAY AND MAY INCREASE OR DECREASE DEPENDING ON THE
INVESTMENT EXPERIENCE OF SEPARATE ACCOUNT I.
Premiums as shown on page three are fixed as to amount and will not vary with
the investment experience of Separate Account I.
NOTICE OF RIGHT TO EXAMINE POLICY. The Owner may examine this policy and at any
time within 10 days after receipt of this policy, or within 45 days of
completion of Part 1 of the Application, whichever is later, may return it with
a written request for cancellation to the Administrative Office and obtain a
full refund of the premium paid.
The provisions on the following pages are part of this contract.
SPECIMEN PRESIDENT
SPECIMEN SECRETARY
SPECIMEN ASSISTANT REGISTRAR
Variable Insurance Payable In Event of Death. Guaranteed Minimum Death
Benefit If Premiums Duly Paid. Fixed Premiums Payable For Life.
Non-Participating. Investment Experience Reflected in Benefits.
Variable Whole Life
VWL-75
<PAGE>
Page Two
--------
GUIDE TO POLICY PROVISIONS
PAGE
Owner..................................................... 2
Assignments............................................... 2
Beneficiary............................................... 2
Premiums.................................................. 5
Grace..................................................... 5
Loans..................................................... 5
Reinstatement............................................. 5
Separate Account I........................................ 6
Separate Account Index.................................... 6
Actual and Base Net Rates of Return....................... 7
Death Benefit............................................. 7
Variable Adjustment Amount................................ 7
Cash Value................................................ 8
Options on Lapse.......................................... 8
Exchange of Policy........................................ 8-9
General Provisions........................................ 9
Optional Modes of Settlement.............................. 10-11
OWNER
The Owner is the Insured unless otherwise specified in the application or
endorsed on this policy by EVLICO. While the insured is living, the Owner may
exercise all rights and take any other action agreed to by EVLICO in connection
with this policy (including changing the ownership). Exercise of the rights of
ownership shall not require the concurrence of any person whose interest at the
time of such exercise is that of a contingent or successor owner, or of any
other person referred to in this policy.
ASSIGNMENTS
EVLICO assumes no responsibility for the validity of any assignment.
No assignment of this policy will bind EVLICO or be deemed to be in force as to
EVLICO unless in writing and until filed at EVLICO's Administrative Office.
The Owner may assign this policy and all rights hereunder except the right to
change the beneficiary and the right to make an election under the Optional
Modes of Settlement provision.
If an assignment of this policy as collateral security is on file with EVLICO,
the Owner may change the beneficiary or make an election under the Optional
Modes of Settlement provision, but the rights of the beneficiary shall be
subordinate to those of the assignee.
So long as an assignment remains in force, the rights of the Owner and of any
other person referred to in this policy shall be subordinate to those of the
assignee but shaLL not otherwise be affected by the assignment.
EVLICO may pay to an assignee, in a single sum, any amount claimed by the
assignee to be payable under the terms of the assignment. Any amount payable
which is not claimed by the assignee shall be payable in accordance with the
terms of the policy to the person or persons who would have been entitled to the
amount then payable had there been no assignment outstanding.
BENEFICIARY
The beneficiary is as designated in the application unless changed. The Owner
may change the beneficiary from time to time during the lifetime of the Insured,
by written notice in a form satisfactory to EVLICO. The change will, upon
recording at EVLICO's Administrative Office, take effect as of the time the
written notice was signed, whether or not the Insured is living at the time of
recording, but without further liability as to any payment or other settlement
made by EVLICO before recording the change.
Unless otherwise specified in the designation, if two or more persons are
designated as beneficiary, the beneficiary will be the designated person or
persons who survive the Insured, and if more than one survive, they will share
equally.
Any proceeds for which there is no designated beneficiary surviving at the death
of the Insured will be payable in a single sum to the children of the Insured
who survive the Insured, in equal shares, or should none survive, then to the
Insured's executors or administrators.
VWL-75
--------
Page Two
<PAGE>
DATE OF ISSUE JAN 01, 1976
THE INSURED RICHARD ROE JAN 01, 1976 REGISTER DATE
FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER
BENEFICIARY MARGARET H ROE, WIFE 35M ISSUE AGE & SEX
**************************BENEFITS AND PREMIUMS TABLE **************************
BENEFITS ANNUAL PREMIUM PREMIUM PERIOD
LIFE INSURANCE - VARIABLE $1,921.00 FOR LIFE
THE FIRST PREMIUM IS $1,921.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
SUBSEQUENT PREMIUMS ARE DUE ON JAN 01, 1977 AND EVERY 12 MONTHS THEREAFTER
DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE.
************************** TABLE OF NET ANNUAL PREMIUMS ************************
BEGINNING OF NET ANNUAL
POLICY YEAR PREMIUM
1 $1,072.00
2 - 4 1,576.00
5 AND LATER 1,714.00
VWL-75-03
----------
PAGE THREE
<PAGE>
THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1981
FACE AMOUNT $100,000 DATE OF ISSUE JUN 1, 1981
POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE
**************************** TABULAR CASH VALUES********************************
THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN
SEE PAGE 5 FOR CASH VALUE PROVISION
INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
<TABLE>
<CAPTION>
INTERIM INTERIM INTERIM
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
MONTH VALUES MONTH VALUES MONTH VALUES
<S> <C> <C> <C> <C> <C>
1 $ 0 5 $ 0 9 $ 278
2 0 6 16 10 366
3 0 7 104 11 452
4 0 8 192 12 540
</TABLE>
<TABLE>
<CAPTION>
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
YEAR VALUES YEAR VALUES YEAR VALUES
<S> <C> <C> <C> <C> <C>
1 $ 540 9 $ 12,069 17 $ 26,057
2 1,808 10 13,701 18 27,941
3 3,114 11 15,368 19 29,851
4 4,456 12 17,070 20 31,788
5 5 907 13 18,806 AGE 60 41,808
6 7,393 14 20,574 AGE 62 45,947
7 8,916 15 22,373 AGE 65 52,277
8 10,474 16 24,201 AGE 70 63,165
<FN>
* VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
</FN>
</TABLE>
-------
V81-01-3A PAGE 3A
<PAGE>
Page Three-B
------------
TABLE OF NET SINGLE PREMIUMS (MALE)
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance
Values shown are applicable on policy anniversaries. The net single premium as
of a date during a policy year shall be determined by interpolation between the
values applicable on the immediately preceding and immediately following
anniversaries.
<TABLE>
<CAPTION>
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
- ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ .15949 21 $ .25687 41 $ .42294 61 $ .65332 81 $ .85569
2 .16277 22 .26320 42 .43340 62 .66514 82 .86326
3 .16637 23 .26971 43 .44402 63 .67688 83 .87050
4 .17013 24 .27641 44 .45480 64 .68851 84 .87746
5 .17405 25 .28330 45 .46575 65 .70002 85 .88417
6 .17814 26 . .29040 46 .47684 66 .71138 86 .89067
7 .18241 27 .29771 47 .48807 67 .72257 87 .89701
8 .18683 28 .30523 48 .49944 68 .73354 88 .90325
9 .19143 29 .31296 49 .51092 69 .74427 89 .90943
10 .19618 30 .32091 50 .52250 70 .75473 90 .91561
11 .20108 31 .32907 51 .53418 71 .76492 91 .92185
12 .20612 32 .33746 52 .54593 72 .77487 92 .92818
13 .21129 33 .34608 53 .55775 73 .78461 93 .93469
14 .21657 34 .35493 54 .56964 74 .79418 94 .94149
15 .22197 35 .36402 55 .58157 75 .80361 95 .94880
16 .22748 36 .37333 56 .59354 76 .81290 96 .95685
17 .23310 37 .38286 57 .60553 77 .82201 97 .96594
18 .23883 38 .39260 58 .61752 78 .83090 98 .97584
19 .24470 39 .40253 59 .62949 79 .83950 99 .98538
20 .25071 40 .41265 60 64143 80 .84777 100 1.00000
</TABLE>
------------
VWL-7J-03B(M) Page Three-B
<PAGE>
Page Four
---------
---------
Page Four
<PAGE>
Page Five
---------
PREMIUMS
Premiums are payable for the premium period indicated on page three but no
premium will fall due after the death of the Insured. The premium period is
measured from the Register Date. If the end of the premium period is indicated
by an age, it extends to the policy anniversary nearest the birthday on which
the Insured attains that age.
Premiums are payable on or before their due dates at the Administrative Office
or to an EVLICO premium collection office. A receipt, signed by a Vice
President, the Secretary or the Treasurer, will be furnished upon request.
Premiums are as shown on page three except that by written request premiums may
be made payable at a different frequency allowed by EVLICO at its applicable
rates provided each premium payment is at least $20. If the request is
applicable to the first premium, it must be made on or before the payment of
that premium and delivery of this policy. Requests made after the first premium
has been paid are subject to the approval of EVLICO. A premium not paid on or
before its due date will be in default, and its due date will be the date of
default. Upon default this policy will lapse and the insurance will cease as of
the date of default, except as stated in the Grace and Options on Lapse
provisions.
The proceeds payable upon the death of the Insured while this policy is in force
on a premium paying basis will be increased by the portion of the last premium
due and paid which is applicable to any part of the then current premium
interval extending after the end of the policy month in which death occurs.
GRACE
A grace period of 31 days will be granted for the payment of each premium after
the first. The insurance will continue in force during the grace period but if
the Insured dies during the grace period of a premium then due and unpaid, the
portion of the premium due which is applicable to the period from the premium
due date to the end of the policy month in which death occurs will be deducted
from the proceeds. If a premium is paid during the grace period, then all
benefits thereafter under the policy shall be the same as if such premium were
paid on its due date.
LOANS
While this policy has a loan value, the Owner may obtain a loan from EVLICO upon
assignment of the policy as sole security if no premium is in default beyond the
grace period or if this policy is being continued under Option (a) of the
Options on Lapse provision. "Indebtedness" as used in this policy means a loan
by EVLICO on the sole security of this policy together with accrued interest.
The loan may not exceed the loan value, and EVLICO will deduct from the loan
proceeds an amount necessary to repay any outstanding indebtedness. The loan
value of this policy, if no premium is in default beyond the grace period, is an
amount equal to 75% of the cash value determined in accordance with the Cash
Value provision on page eight. The loan value, if the policy is continued under
Option (a) of the Options on Lapse provision, is the amount which, accumulated
with interest to the next policy anniversary, equals the cash value as of such
anniversary determined in accordance with the Cash Value provision. Extended
term insurance under Option (b) of the Options on Lapse provision has no loan
value.
A loan will have a permanent effect on the Variable Adjustment Amount, Death
Benefit and cash value under this policy whether or not the indebtedness created
thereby is repaid in whole or in part.
The following will apply:
1. Except when used to pay premiums, a loan will not be permitted unless it is
at least $100 more than the existing indebtedness.
2. Interest on a loan will accrue daily at the effective rate of 4-1/2% per
year, will become part of the indebtedness as it accrues and will be
compounded on policy anniversaries.
3. Whenever the indebtedness under this policy exceeds the cash value, EVLICO
will mail to the Owner and any assignee of record at their last known
addresses a notice that the policy will terminate if the excess
indebtedness is not repaid within 31 days after the date of mailing of such
notice.
4. Any indebtedness may be repaid, in whole or in part, while the Insured is
living and the policy is in force, except that if the policy is being
continued under one of the options on lapse, any indebtedness which was
deducted in determining the benefit on lapse may not be repaid unless the
policy is reinstated.
Indebtedness will be deducted in a single sum in any settlement.
REINSTATEMENT
If premiums are in default and if this policy has not been terminated by payment
of its cash value, it may be reinstated within five years from the date of
default upon production of evidence of insurability satisfactory to EVLICO and
the payment of the larger of (a) all overdue premiums with interest at 6%;
compounded annually and (b) 110% of the difference between (i) and (ii), where
(i) is the excess of the cash value immediately following reinstatement over the
cash value immediately preceding reinstatement*, and (ii) is any indebtedness in
effect at the date any option on lapse became effective, with interest at 4-1/2%
compounded annually to the date of reinstatement.
Upon reinstatement this policy will have the same benefit base and the same
Variable Adjustment Amount (as these are determined in the Variable Adjustment
Amount provision on page seven) as if default had not occurred. Also upon
reinstatement this policy will have indebtedness equal to the sum of (i) and
(ii), where (i) is any indebtedness in effect at the date any option on lapse
became effective, with interest at 4-1/2% compounded annually to the date of
reinstatement, and (ii) is any indebtedness arising subsequent to the date any
option on lapse became effective, with interest at 4-1/2% compounded annually to
the date of reinstatement.
---------
VWL-75 Page Five
<PAGE>
Page Six
--------
SEPARATE ACCOUNT I
Separate Account I is an account established and maintained by EVLICO pursuant
to the laws of the State of New York under which income, gains and losses,
whether or not realized, from assets allocated to such account, are credited to
or charged against such account without regard to other income, gains, or losses
of EVLICO. Assets will be allocated to Separate Account I to support the
operation of this policy and certain other variable life insurance policies.
Assets may also be allocated to Separate Account I for other purposes, but not
to support the operation of any contracts or policies other than variable life
insurance.
It is contemplated that investments in Separate Account I will, at most times,
consist primarily of common stocks and other equity-type investments. However,
EVLICO may, in its discretion, invest the assets of Separate Account I in any
investments permitted by applicable law. EVLICO may rely conclusively on the
opinion of counsel (including attorneys in its employ) as to what investments it
is permitted by law to make.
In lieu of making such investments directly, to the extent permitted by
applicable laws and regulations EVLICO reserves the right to operate Separate
Account I as a unit investment trust, or other form, investing all or part of
its assets in shares or units of a fund, the investment adviser of which would
be EVLICO, an affiliate, or The Equitable Life Assurance Society of the United
States. The assets of such a fund would be invested as provided herein with
respect to Separate Account I.
The assets of Separate Account I are the property of EVLICO. However, the
portion of the assets of Separate Account I equal to the reserves and other
policy liabilities with respect to Separate Account I will not be chargeable
with liabilities arising out of any other business EVLICO may conduct. EVLICO
reserves the right to transfer assets of Separate Account I in excess of such
reserves and policy liabilities to the general account of EVLICO.
The assets of Separate Account I shall be valued on each business day.
EVLICO reserves the right to withdraw from Separate Account I and allocate to
another separate account assets determined by EVLICO to be associated with the
class of policies to which this policy belongs. In any such event, to the extent
practicable and permissible under applicable laws and regulations, the
withdrawal shall be made by withdrawing the same percentage of each investment
in Separate Account I, with appropriate adjustments to avoid odd lots and
fractions. On and after the date of such withdrawal the term "Separate Account
I" in this policy shall mean such other separate account to which the withdrawn
assets were allocated.
EVLICO reserves the right to the extent permitted by applicable laws and
regulations (including any order of the Securities and Exchange Commission):
(a) to cause the registration or deregistration of Separate Account I under the
Investment Company Act of 1940;
(b) to operate Separate Account I under the general supervision of a Committee
any or all of the members of which may, but need not, be interested persons
of EVLICO, an affiliate, or The Equitable Life Assurance Society of the
United States, or to discharge such Committee at any time; or
(c) to eliminate or restrict any voting rights of policyholders or other
persons having such voting rights in respect of Separate Account I.
CHANGES IN INVESTMENT ADVISER OR INVESTMENT POLICY OF SEPARATE ACCOUNT I. Unless
otherwise required by applicable law, the investment adviser or any investment
policy of Separate Account I may not be changed without the consent of EVLICO.
If required by applicable laws and regulations, the investment policy of
Separate Account I will not be changed unless approved by the Superintendent of
Insurance of the State of New York or deemed approved in accordance with such
laws and regulations. If so required, the process for obtaining such approval
will be filed with the insurance supervisory official of the state in which this
policy is delivered.
SEPARATE ACCOUNT INDEX
The Separate Account Index for the valuation period which included the first day
on which there were assets in Separate Account I was 100. The Separate Account
Index for each subsequent valuation period is the Separate Account index for the
immediately preceding valuation period multiplied by the Net Investment Factor
for such subsequent valuation period. The Separate Account Index for a valuation
period applies to each day in that period.
VALUATION PERIOD. Each business day together with any non-business day or
consecutive non-business days immediately preceding such business day will
constitute a valuation period.
A business day is any day on which the New York Stock Exchange is open for
trading.
NET INVESTMENT FACTOR. The Net Investment Factor for a valuation period is (a)
divided by (b), minus (c), where
(a) is (1) the value of the assets in Separate Account I at the close of
business of the preceding valuation period, plus (2) the investment income
and the capital gains, realized or unrealized, credited to the assets of
Separate Account I in the valuation period for which the Net Investment
Factor is being determined, minus (3) the capital losses, realized or
unrealized, charged against such assets in such valuation period, minus (4)
any amount charged against Separate Account I in such valuation period for
taxes or for amounts set aside by EVLICO as a reserve for taxes
attributable to the maintenance or operation of Separate Account I;
(b) is the value of the assets in Separate Account I at the close of business
of the preceding valuation period; and
(c) is a charge not exceeding .00002063 for each day in the valuation period,
corresponding to the sum of (i) a charge not exceeding .25% per year for
investment management expense, and (ii) a charge not exceeding .50% per
year for mortality and expense risks and other contingencies.
The value of the assets in Separate Account I shall be taken at their fair
market value or, where there is no readily available market, their fair value
determined in accordance with accepted accounting practices and applicable laws
and regulations.
--------
VWL-75 Page Six
<PAGE>
Page Seven
----------
ACTUAL AND BASE NET RATES OF RETURN
ACTUAL NET RATE OF RETURN. The Actual Net Rate of Return for a policy year is
equal to the change in the Separate Account Index from the first day of such
policy year to the first day of the next policy year, divided by the Separate
Account Index for the first day of such policy year. The Actual Net Rate of
Return for a policy year is negative if the Separate Account Index decreased
over the year. The Actual Net Rate of Return for a period less than a year is
determined on a corresponding basis.
BASE NET RATE OF RETURN. The Base Net Rate of Return for this policy is .03 (3%)
per year. (For a period less than a year, it is a pro-rata part of the annual
rate.) Provided premiums are duly paid, if the Actual Net Rate of Return for
each policy year equals the Base Net Rate of Return, the Death Benefit in each
policy year will equal the face amount and the cash value at the end of each
policy year will equal the tabular cash value as shown on page three-A.
"The difference between the Actual and Base Net Rates of Return" as used in this
policy is positive if the Actual Net Rate of Return is greater than the Base Net
Rate of Return, and is negative if the Actual Net Rate of Return is less than
the Base Net Rate of Return.
DEATH BENEFIT
A. PROVIDED PREMIUMS ARE DULY PAID, the Death Benefit shall equal the face
amount plus the Variable Adjustment Amount for the policy year in which
death occurs; except that if the Variable Adjustment Amount is negative,
the Death Benefit shall equal the face amount. In no event, however, will
the Death Benefit be less than the amount of insurance under Option (a)
of the Options on Lapse provision, assuming premiums had been paid to the
date of death of the Insured and such Option had become effective on that
date.
B. UPON DEFAULT IN PAYMENT OF A PREMIUM, the Death Benefit shall be as
provided in the Grace and Options on Lapse provisions.
VARIABLE ADJUSTMENT AMOUNT
On each policy anniversary to which premiums have been duly paid, EVLICO will
determine the Variable Adjustment Amount for the policy year beginning on that
anniversary, to take into account the investment experience of Separate Account
I for the preceding policy year. The Variable Adjustment Amount is zero during
the first policy year, and thereafter it may be positive or negative. It remains
at a constant amount during a policy year as long as premiums are duly paid. The
Variable Adjustment Amount during the policy year will equal the sum of the VAA
Change Amount determined on the policy anniversary at the beginning of such
policy year and the Variable Adjustment Amount for the preceding policy year.
A. IF DURING THE PRECEDING POLICY YEAR NO LOAN HAS BEEN MADE OR INDEBTEDNESS
REPAID, then the VAA Change Amount on a policy anniversary will be positive
or negative depending on whether the Actual Net Rate of Return for the
preceding policy year is greater or less than the Base Net Rate of Return,
and will equal the product of (a) and (b), divided by (c) where
(a) is the difference between such Actual and Base Net Rates of Return;
(b) is the benefit base defined below; and
(c) is the net single premium on the current policy anniversary for $1.00
of Variable Adjustment Amount.
In determining the VAA Change Amount on the first policy anniversary the
benefit base will be the net annual premium applicable at the beginning of
the first policy year. In determining the VAA Change Amount on a policy
anniversary after the first the benefit base will be the sum of (a) the
tabular cash value on the previous anniversary, (b) the net single premium
for the Variable Adjustment Amount on the previous anniversary, and (c) the
net annual premium for such previous policy anniversary, less the
indebtedness, if any, as of such previous policy anniversary.
The net annual premium is determined from the table on page three and the
tabular cash value from the table on page three-A. The net single premium
for the Variable Adjustment Amount is determined from the table on page
three-B. If the Variable Adjustment Amount is negative, the net single
premium for it is negative.
B. IF DURING THE PRECEDING POLICY YEAR A LOAN HAS BEEN MADE OR INDEBTEDNESS
REPAID, then the VAA Change Amount on a policy anniversary will equal the
VAA Change Amount as calculated in Section A above, plus the Repayment
Adjustment Amounts on such policy anniversary, if any, less the Loan
Adjustment Amounts on such policy anniversary, if any. The Repayment
Adjustment Amount and Loan Adjustment Amount are defined as follows:
(i) For each such repayment, the Repayment Adjustment Amount on a policy
anniversary will equal the product of (a) and (b), divided by (c),
where
(a) is the difference between the Actual and Base Net Rates of Return
for the period from the date of the repayment to the policy
anniversary following such repayment;
(b) is the amount of the repayment; and
(c) is the net single premium on such policy anniversary for $1.00 of
Variable Adjustment Amount.
(ii) For each such loan, the Loan Adjustment Amount on a policy
anniversary will equal the product of (a) and (b), divided by (c),
where
(a) is the difference between the Actual and Base Net Rates of Return
for the period from the date of the loan to the policy
anniversary following such loan;
(b) is the amount of the loan; and
(c) is the net single premium on such policy anniversary for $1.00 of
Variable Adjustment Amount.
----------
VWL-75 Page Seven
<PAGE>
Page Eight
----------
CASH VALUE
The Owner may surrender this policy for its net cash value at any time. The net
cash value is the cash value as defined below less any indebtedness, and will be
determined as of the date the signed request for surrender is received by EVLICO
at its Administrative Office. Surrender will take effect as of the date the
policy and request are transmitted to EVLICO. The cash value is defined as
follows:
A. If no premium is in default, the cash value on any date DURING THE FIRST
POLICY YEAR is equal to the sum of (1) the tabular cash value on such date,
and (2) the product of (i) and (ii), where (i) is the difference between
the Actual and Base Net Rates of Return for the period from the Register
Date to such date and (ii) is the net annual premium applicable at the
beginning of the first policy year.
B. If no premium is in default the cash value on any date AFTER THE FIRST
POLICY YEAR is equal to the sum of (1) the tabular cash value on such date
and (2) the net single premium on such date for the Variable Adjustment
Amount, and (3) if such date is not a policy anniversary, the product of
(i) and (ii), where (i) is the difference between the Actual and Base Net
Rates of Return for the period from the last policy anniversary to such
date and (ii) is the benefit base on the previous policy anniversary (as
determined in the Variable Adjustment Amount provision).
C. If a premium is in default, then within three months after the date of
default, the cash value is equal to the sum of (1) the cash value as of the
date to which premiums have been paid, and (2) the product of (i) and (ii),
where (i) is the difference between the Actual and Base Net Rates of Return
for the period of default and (ii) is the cash value as of the date to
which premiums have been paid less the indebtedness, if any, as of the date
to which premiums have been paid.
Account will be taken of any loans or repayments of indebtedness in calculating
the cash value in paragraphs A., B. and C. above.
D. More than three months after the date of default, if this policy is
continued under Option (a) or Option (b) of the Options on Lapse provision,
the cash value on any date is equal to the reserve for the policy as of
such date, provided that the cash value within 30 days after a policy
anniversary will not be less than on that anniversary.
TABULAR CASH VALUE DURING FIRST POLICY YEAR. The tabular cash value during the
first policy year will be determined by EVLICO based on the first year interim
tabular cash value, with allowance for the time elapsed and for any portion of
the year for which premiums due have been paid. First year interim tabular cash
values are determined in accordance with the table on page three-A which shows
values at the ends of policy months assuming premiums have been duly paid to the
end of such policy months.
TABULAR CASH VALUE AFTER THE FIRST POLICY YEAR. The tabular cash value after the
first policy year is determined in accordance with the table on page three-A
which shows values applicable at the ends of policy years, provided premiums are
duly paid. Values not shown will be furnished on request. Where an age is shown,
the values are those applicable at the end of the policy year nearest the
birthday on which the Insured attains such age. The tabular cash value during a
policy year will be determined by EVLICO with allowance for the time elapsed and
for any portion of the year for which premiums due have been paid.
OPTIONS ON LAPSE
Upon default in the payment of a premium while this policy has a net cash value,
the Owner may elect by written notice to continue insurance on the Insured under
one of the following options if he does not elect to surrender the policy for
its net cash value.
OPTION (a). REDUCED PAID-UP FIXED BENEFIT LIFE INSURANCE for a fixed amount of
insurance equal to the net cash value as of the date the option becomes
effective divided by the net single premium on the date of default for $1.00 of
paid-up whole life insurance.
OPTION (b). EXTENDED FIXED BENEFIT TERM INSURANCE for a fixed amount of
insurance equal to the Death Benefit less any indebtedness as of the date the
option becomes effective (determined as if default had not occurred) and for the
period from the date of default which the net cash value as of the date the
option becomes effective will purchase as a net single premium at the Insured's
age at nearest birthday on the date of default. SEE PAGE THREE FOR ANY
RESTRICTIONS UNDER THIS POLICY AS TO AVAILABILITY OF OPTION (b).
The following will apply:
1. The election of an option made within three months after the date of
default will become effective on the date written notice is received by
EVLICO at its Administrative Office.
2. If an option has not been elected within three months after the date of
default, Option (b) will take effect automatically at the end of such three
month period.
3. Option (a) will replace Option (b) if Option (b) is not available under
this policy or if Option (a) provides an equal or greater amount of
insurance at the date the option becomes effective.
4. If the Insured dies after the grace period but within three months from the
date of default, and if the policy has not been surrendered for its net
cash value, Option (b) will apply notwithstanding any restrictions stated
on page three as to the availability of Option (b) under this policy,
provided that the net cash value as of the date of death (determined as if
death had not occurred) will purchase extended term insurance for a period
from the date of default to at least the date of death. In that event, any
election of Option (a) will be automatically cancelled.
EXCHANGE OF POLICY
Within 18 months after the Date of Issue shown on page three, provided premiums
are duly paid, the Owner may exchange this policy, without evidence of
insurability, for a policy of permanent fixed benefit life insurance (as
described below) on the life of the Insured. The exchange will take effect as of
the date this policy and the signed request on EVLICO's form for such
----------
VWL-75 Page Eight
<PAGE>
---------
Page Nine
exchange are transmitted to EVLICO, or as of the date any amounts required to be
paid for such exchange by the Owner are received by EVLICO at its Administrative
Office, whichever is later.
The new policy will be the form of policy being offered by The Equitable Life
Assurance Society of the United States (Equitable) on the Date of Issue of this
policy, known as the "Executive Policy." The new policy will have a face amount
of life insurance equal to the face amount of this policy and will have the same
Register Date, Date of Issue and Issue Age as shown on page three of this
policy. Premiums for the new policy will be based on Equitable's premium rates
for such policy in effect at such Register Date for the same classification of
risk as under this policy.
The exchange will be subject to a premium or cash value adjustment that takes
appropriate account of the premiums and cash values under this policy and under
the new policy. A detailed statement of the method of computing such an
adjustment has been filed with the insurance supervisory official of the state
in which this policy is delivered.
Any indebtedness under this policy must be repaid on the date of the exchange.
Any additional benefit provisions included under this policy will be included
with the new policy only to the extent that such provisions were being offered
with the new policy on the Date of Issue.
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
required premiums. This policy and the application (a copy of which is attached
at issue) constitute the entire contract. The rights conferred by this policy
are in addition to those provided by applicable Federal and State laws and
regulations.
All statements made in the application shall be deemed representations and not
warranties. No statement shall avoid this policy or be used in defense of a
claim unless contained in the application.
This policy may not be modified, nor may any of the rights or requirements of
EVLICO be waived, except in writing signed by the President, a Vice President,
the Secretary or the Treasurer of EVLICO.
All sums payable by EVLICO under this policy are payable at its Administrative
Office.
POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, and policy
anniversaries are measured from the Register Date shown on page three. Each
policy month begins on the same day in each calendar month as that specified in
the Register Date.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be such as the premium paid would have purchased at the correct age and sex.
SUICIDE. In the event of the suicide of the Insured, sane or insane, within two
years from the Date of Issue shown on page three, the liability of EVLICO will
be limited to the payment to the beneficiary of a single sum equal to the
premiums paid less any indebtedness.
INCONTESTABILITY. Except as to any disability provision, this policy will be
incontestable, except for non-payment of premiums, after it has been in force
during the lifetime of the Insured for two years from the Date of Issue shown on
page three.
POLICY CHANGES. The Owner, with the consent of EVLICO, may change this policy to
another form, kind or plan of insurance or make any other change permitted by
EVLICO.
REPORTS TO OWNER. Except while this policy is continued under the Options on
Lapse provision, a statement will be sent to the Owner setting forth the Death
Benefit and the cash value as of the first day of such year and, if there is
existing indebtedness, the amount of such indebtedness as of the first day of
such year and the accrued interest for the previous policy year. Other reports
will be furnished to the Owner as required by law.
BASIS OF COMPUTATION. All cash values, reserves and net single premiums referred
to in this policy are based on the Commissioners 1958 Standard Ordinary
Mortality Table, except that for any extended term insurance they are based on
the Commissioners 1958 Extended Term Insurance Table. Continuous functions are
used and interest is assumed at a rate of 3% compounded annually. The cash
values and paid-up insurance benefits are equal to or greater than those
required by the state in which this policy is delivered. A detailed statement of
the method of computing values and benefits has been filed with the insurance
supervisory official of that state. Tabular cash values at the end of each
policy year are equal to reserves, which are not less than reserves determined
according to the Commissioners Reserve Valuation Method. Expense and mortality
results of EVLICO shall not adversely affect the dollar amount of insurance
benefits or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. If no premium is in default more
than three months, then except as provided below, EVLICO will (1) make payment
of the cash value within seven days after receipt by EVLICO at its
Administrative Office of the policy and a signed request for its surrender; (2)
make payment of any loan within seven days after receipt by EVLICO at its
Administrative Office of a request for loan; and (3) subject to the provisions
of this policy, make payment of the Death Benefit within seven days after
receipt by EVLICO at its Administrative Office of this policy, due proof of the
death of the Insured, and all other requirements deemed necessary before such
payment may be made.
During any period when (i) the sale of securities or the determination of the
Separate Account Index is not reasonably practicable because the New York Stock
Exchange is closed or conditions are such that, under rules and regulations
adopted by the Securities and Exchange Commission, trading is deemed to be
restricted or an emergency is deemed to exist, or (ii) the Commission by order
permits postponement for the protection of EVLICO policyholders, EVLICO reserves
the right:
(a) to defer determination of cash values and payment of the cash value;
(b) to defer payment of a loan;
(c) to defer determination of a change in Variable Adjustment Amount and, if
such determination has been deferred, to defer payment of any portion of
the Death Benefit equal to the Variable Adjustment Amount; and
(d) if payment of all or part of the Death Benefit is deferred, to defer
application of the Death Benefit under the Optional Modes of Settlement
provision.
DEFERMENT UNDER OPTION (a) OR OPTION (b) OF THE OPTIONS ON LAPSE PROVISION. The
payment of the cash value under Option (a) or Option (b) of the Options on Lapse
provision and the making of a loan under Option (a) may be deferred by EVLICO
for up to six months after the receipt of request. Interest at the rate of 3%
per year will be allowed on such cash payment deferred for 30 days or more.
---------
VWL-75 Page Nine
<PAGE>
Page Ten
--------
OPTIONAL MODES OF SETTLEMENT
A. ELECTIONS
In lieu of payment in one sum, an election may be made to apply the whole or any
part of the proceeds under the following options. An election for the benefit of
a payee who is not a natural person or who is acting in a fiduciary capacity, or
which includes more than one of the options, may be made only with the approval
of EVLICO.
ELECTION AS TO DEATH BENEFIT. During the lifetime of the Insured, the Owner may
make an election for the benefit of the beneficiary and may change or revoke a
previous election. A change of beneficiary revokes any previous election. An
election in effect at the death of the Insured may not be changed or revoked by
an election made after the death of the Insured.
If no election is effective at the death of the Insured, the beneficiary may
then make an election for his own benefit, or in the case of Option 5, for the
benefit of two persons, one of whom must be the beneficiary.
ELECTION AS TO CASH VALUE. Upon surrender of this policy for its net cash value,
the Owner may make an election for the benefit of the Owner or the Insured, or
in the case of Option 5 for the benefit of two persons, one of whom must be the
Owner or the Insured.
B. OPTIONS
1. DEPOSIT OPTION: Left on deposit with EVLICO with interest payable at a rate
of 3% per year. The deposit period and withdrawal rights and rights to
change to another option will be as approved by EVLICO at the time of
election.
2. INSTALMENT OPTION, FIXED PERIOD: Payable in equal instalments for the
number of years elected (not more than 30) in an amount determined by the
Table of instalments. Rights of commutation of unpaid instalments (based on
interest of 3% per year compounded annually) will be as approved by EVLICO
at the time of election.
3. LIFE INCOME OPTIONS:
A. 10 or 20 Years Certain. Payable in instalments for the certain period
elected, and continuing thereafter for the remaining lifetime of the
person upon whose life the income depends.
B. Refund Certain. Payable in instalments until the total amount paid
equals the proceeds applied under this option and continuing
thereafter for the remaining lifetime of the person upon whose life
the income depends.
The amount of each instalment will be determined by EVLICO at the time
of payment of the first instalment but will not be less per $1,000 of
proceeds than the Minimum Monthly instalment shown in the Table of
instalments. instalments shall be without the right of commutation.
4. INSTALMENT OPTION, FIXED AMOUNT: Payable in instalments until the proceeds
applied, together with interest on the unpaid balance at the effective rate
of 3% per year, are exhausted. Amounts of instalments and withdrawal rights
will be as approved by EVLICO at the time of election.
5. JOINT AND SURVIVOR OPTION, 10 YEARS CERTAIN: Payable in instalments for ten
years, and continuing thereafter while either of two persons upon whose
lives the income depends is surviving. The amount of each instalment will
be determined by EVLICO at the time of payment of the first instalment but
will not be less per $1,000 of proceeds than the Minimum Monthly instalment
shown in the Table of Instalments. Instalments shall be without the right
of commutation.
C. GENERAL PROVISIONS
Interest under Option 1 and instalments under Options 2 and 4 will be paid
annually, semi-annually, quarterly or monthly, in accordance with the election.
instalments under Options 3 and 5 will be paid monthly. Deposit years under
Option 1 and instalment years under the other options are measured from the date
the option becomes operative, and the first instalment under the other options
will be due on such date.
Excess interest may be allowed under Options 1, 2 and 4 as determined annually
by EVLICO. Any such excess interest will be applied to increase the payments
under Option 1, the payment at the end of each instalment year under Option 2,
and the unpaid balance at the end of each instalment year under Option 4.
If at the death of any payee there is no designated person living entitled to
receive any remaining payments, EVLICO will pay in a single sum to such payee's
executors or administrators: (a) any balance left with EVLICO under Option 1 or
4, or (b) the commuted value of any remaining instalments under Option 2, 3 or 5
on the basis of compound interest of 3% per year, except that if the amount of
instalments under Option 3 or 5 is greater than the amount determined in
accordance with the Table of Instalments, the commutation interest rate will be
that associated with the more favorable amount.
The payee for whose benefit an option is operative may designate (with the right
to change such designation) a person or persons to receive any amount which
would otherwise become payable to such payee's executors or administrators.
Any election, change, revocation or designation shall be made, and will take
effect, in the same manner as a change of beneficiary.
If Option 3 or 5 is elected, EVLICO will require satisfactory evidence of the
age of any person upon whose life the income depends. instalments under Option 3
or 5 terminate with the last instalment due before the death of the person upon
whose life the income depends or the end of the certain period, whichever is
later.
EVLICO will require satisfactory evidence of survival whenever a payment depends
upon the survival of any person.
If instalments or interest payments to any payee would amount to less than $20
each, EVLICO may change the interval of payment so that the payments will amount
to at least $20 each.
If the amount to be applied under an option with respect to a payee is less than
$2,000, EVLICO may pay the amount to the payee in a single sum instead of
applying it under the option.
No sum payable under any option elected by the Owner for the benefit of a payee
other than the Owner may be assigned or encumbered by such payee and, to the
extent permitted by law, no such sum shall in any way be subject to any legal
process to subject the same to the payment of any claim against such payee.
If a withdrawal or commutation right under an option is exercised, EVLICO may
defer payment for up to six months from the receipt of request.
--------
VWL-75 Page Ten
<PAGE>
Page Eleven
-----------
TABLE OF INSTALMENTS UNDER OPTIONAL MODES OF SETTLEMENT
FOR EACH $1,000 OF PROCEEDS
Instalment amounts for Options 3 and 5 are based on age nearest birthday on the
due date of the first instalment. Option 5 instalment amounts for ages not
shown, or for two males or two females, will be furnished on request.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OPTION 2 OPTION 3 -- LIFE INCOME (Minimum Monthly Instalment)
- ------------------------------------------------------------------------------------------------------------------------------------
Number
of Years' Monthly Annual 10 20 10 20
Instal- Instal- Instal- Years Certain Years Certain Refund Certain Years Certain Years Certain Refund Certain
ments ment ment AGE Male Female Male Female Male Female AGE Male Female Male Female Male Female
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $84.48 $1000.00 5 & under $2.86 $2.76 $2.85 $2.76 $2.85 $2.76 45 $4.13 $3.69 $3.99 $3.65 $ 3.98 $3.62
2 42.86 507.39 6 2.87 2.77 2.86 2.77 2.86 2.77 46 4.20 3.74 4.05 3.69 4.03 3.67
3 28.99 343.23 7 2.88 2.78 2.88 2.78 2.87 2.78 47 4.27 3.79 4.10 3.74 4.09 3.72
4 22.06 261.19 8 2.90 2.79 2.89 2.79 2.88 2.79 48 4.34 3.84 4.15 3.78 4.15 3.77
5 17.91 211.99 9 2.91 2.81 2.90 2.80 2.90 2.80 49 4.42 3.90 4.21 3.84 4.22 3.82
6 15.14 179.22 10 2.92 2.82 2.92 2.81 2.91 2.81 50 4.50 3.96 4.27 3.89 4.28 3.87
7 13.16 155.83 11 2.94 2.83 2.93 2.83 2.93 2.82 51 4.58 4.02 4.32 3.94 4.35 3.93
8 11.68 138.30 12 2.96 2.84 2.95 2.84 2.94 2.83 52 4.67 4.09 4.38 4.00 4.42 3.99
9 10.53 124.69 13 2.97 2.85 2.97 2.85 2.96 2.85 53 4.75 4.16 4.44 4.06 4.50 4.05
10 9.61 113.81 14 2.99 2.87 2.98 2.86 2.98 2.86 54 4.85 4.24 4.50 4.12 4.58 4.11
11 8.86 104.92 15 3.01 2.88 3.00 2.88 2.99 2.87 55 4.94 4.32 4.56 4.18 4.66 4.18
12 8.24 97.53 16 3.03 2.89 3.02 2.89 3.01 2.89 56 5.04 4.40 4.62 4.24 4.74 4.25
13 7.71 91.29 17 3.05 2.91 3.04 2.91 3.03 2.90 57 5.15 4.49 4.68 4.31 4.83 4.33
14 7.26 85.94 18 3.07 2.92 3.06 2.92 3.05 2.91 58 5.26 4.58 4.74 4.38 4.93 4.41
15 6.87 81.32 19 3.09 2.94 3.08 2.94 3.07 2.93 59 5.37 4.68 4.81 4.45 5.03 4.49
16 6.53 77.29 20 3.11 2.96 3.10 2.95 3.09 2.95 60 5.49 4.78 4.86 4.52 5.13 4.58
17 6.23 73.74 21 3.13 2.97 3.12 2.97 3.11 2.96 61 5.62 4.89 4.92 4.59 5.24 4.67
18 5.96 70.59 22 3.16 2.99 3.15 2.99 3.13 2.98 62 5.75 5.00 4.98 4.66 5.35 4.77
19 5.73 67.78 23 3.18 3.01 3.17 3.00 3.16 3.00 63 5.88 5.12 5.04 4.73 5.48 4.88
20 5.51 65.25 24 3.21 3.03 3.19 3.02 3.18 3.01 64 6.03 5.25 5.09 4.80 5.60 4.99
21 5.32 62.98 25 3.23 3.05 3.22 3.04 3.21 3.03 65 6.17 5.39 5.14 4.88 5.74 5.10
22 5.15 60.91 26 3.26 3.07 3.25 3.06 3.23 3.05 66 6.32 5.53 5.19 4.95 5.88 5.22
23 4.99 59.04 27 3.29 3.09 3.28 3.08 3.26 3.07 67 6.48 5.68 5.24 5.01 6.03 5.35
24 4.84 57.32 28 3.32 3.11 3.30 3.11 3.29 3.09 68 6.64 5.83 5.28 5.08 6.18 5.49
25 4.71 55.75 29 3.36 3.14 3.34 3.13 3.32 3.12 69 6.80 6.00 5.32 5.14 6.35 5.64
26 4.59 54.30 30 3.39 3.16 3.37 3.15 3.35 3.14 70 6.97 6.17 5.35 5.20 6.53 5.79
27 4.47 52.97 31 3.42 3.19 3.40 3.18 3.38 3.16 71 7.15 6.34 5.38 5.26 6.71 5.96
28 4.37 51.74 32 3.46 3.21 3.43 3.20 3.41 3.19 72 7.32 6.53 5.41 5.30 6.91 6.13
29 4.27 50.59 33 3.50 3.24 3.47 3.23 3.44 3.21 73 7.50 6.72 5.43 5.35 7.12 6.32
30 4.18 49.53 34 3.54 3.27 3.50 3.26 3.48 3.24 74 7.67 6.92 5.45 5.38 7.34 6.52
- ----------------------------
35 3.58 3.30 3.54 3.28 3.52 3.27 75 7.85 7.12 5.47 5.42 7.58 6.73
Quarterly instalments 36 3.63 3.33 3.58 3.31 3.55 3.30 76 8.02 7.32 5.48 5.44 7.82 6.96
are 25.28% of the 37 3.67 3.37 3.62 3.35 3.59 3.33 77 8.19 7.53 5.49 5.46 8.09 7.21
annual instalments. 38 3.72 3.40 3.66 3.38 3.64 3.36 78 8.36 7.75 5.50 5.48 8.38 7.47
39 3.77 3.44 3.71 3.41 3.68 3.39 79 8.52 7.96 5.50 5.49 8.67 7.75
Semi-annual 40 3.83 3.47 3.75 3.45 3.72 3.43 80 8.67 8.16 5.51 5.50 9.00 8.05
instalments are 50.37% 41 3.88 3.51 3.80 3.48 3.77 3.46 81 8.81 8.36 5.51 5.51 9.34 8.39
of the annual 42 3.94 3.55 3.84 3.52 3.82 3.50 82 8.94 8.55 5.51 5.51 9.70 8.73
instalments. 43 4.00 3.60 3.89 3.56 3.87 3.54 83 9.06 8.73 5.51 5.51 10.10 9.12
44 4.06 3.64 3.94 3.60 3.92 3.58 84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OPTION 5 -- JOINT AND SURVIVOR, 10 YEARS CERTAIN (Minimum Monthly Instalment)
- ------------------------------------------------------------------------------------------------------------------------------------
Female Age
Male -----------------------------------------------------------------------------------------------------------------------------
Age 45 50 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 75
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
45 $3.47 $3.60 $3.72 $3.75 $3.77 $3.79 $3.81 $3.84 $3.86 $3.88 $3.90 $3.91 $3.93 $3.95 $3.97 $3.98 $4.00 $4.01 $4.06
50 3.53 3.70 3.86 3.90 3.93 3.96 4.00 4.03 4.06 4.09 4.12 4.15 4.17 4.20 4.23 4.25 4.27 4.29 4.39
55 3.58 3.78 3.99 4.04 4.08 4.12 4.17 4.21 4.26 4.30 4.34 4.38 4.43 4.47 4.50 4.54 4.58 4.61 4.76
56 3.59 3.79 4.01 4.06 4.11 4.15 4.20 4.25 4.29 4.34 4.39 4.43 4.48 4.52 4.56 4.60 4.64 4.68 4.84
57 3.60 3.80 4.04 4.08 4.13 4.18 4.23 4.28 4.33 4.38 4.43 4.48 4.53 4.57 4.62 4.66 4.70 4.75 4.92
58 3.60 3.82 4.06 4.11 4.16 4.21 4.26 4.32 4.37 4.42 4.47 4.53 4.58 4.63 4.68 4.72 4.77 4.81 5.01
59 3.61 3.83 4.08 4.13 4.18 4.24 4.29 4.35 4.40 4.46 4.52 4.57 4.63 4.68 4.73 4.78 4.83 4.88 5.09
60 3.62 3.84 4.10 4.15 4.21 4.26 4.32 4.38 4.44 4.50 4.56 4.62 4.67 4.73 4.79 4.84 4.90 4.95 5.18
61 3.62 3.85 4.11 4.17 4.23 4.29 4.35 4.41 4.47 4.54 4.60 4.66 4.72 4.78 4.85 4.91 4.96 5.02 5.27
62 3.63 3.86 4.13 4.19 4.25 4.31 4.38 4.44 4.51 4.57 4.64 4.70 4.77 4.84 4.90 4.97 5.03 5.09 5.37
63 3.64 3.87 4.15 4.21 4.27 4.34 4.40 4.47 4.54 4.61 4.68 4.75 4.82 4.89 4.96 5.02 5.09 5.16 5.46
64 3.64 3.88 4.16 4.23 4.29 4.36 4.43 4.50 4.57 4.64 4.71 4.79 4.86 4.93 5.01 5.08 5.16 5.23 5.55
65 3.65 3.89 4.18 4.24 4.31 4.38 4.45 4.52 4.60 4.67 4.75 4.83 4.90 4.98 5.06 5.14 5.22 5.29 5.65
66 3.65 3.89 4.19 4.26 4.33 4.40 4.47 4.55 4.62 4.70 4.78 4.86 4.95 5.03 5.11 5.20 5.28 5.36 5.75
67 3.65 3.90 4.20 4.27 4.34 4.42 4.49 4.57 4.65 4.73 4.81 4.90 4.99 5.07 5.16 5.25 5.34 5.43 5.84
68 3.66 3.91 4.22 4.29 4.36 4.43 4.51 4.59 4.67 4.76 4.84 4.93 5.02 5.12 5.21 5.30 5.40 5.49 5.94
69 3.66 3.91 4.23 4.30 4.37 4.45 4.53 4.61 4.70 4.78 4.87 4.97 5.06 5.16 5.25 5.35 5.45 5.55 6.03
70 3.66 3.92 4.24 4.31 4.38 4.46 4.54 4.63 4.72 4.81 4.90 5.00 5.09 5.19 5.30 5.40 5.50 5.61 6.12
75 3.68 3.94 4.28 4.35 4.43 4.52 4.61 4.70 4.80 4.90 5.01 5.12 5.23 5.35 5.47 5.60 5.73 5.86 6.54
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-----------
VWL-75 Page Eleven
<PAGE>
********************************************************************************
VARIABLE WHOLE LIFE INSURANCE POLICY
[EVLICO LOGO] EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO)
Variable Insurance Payable In Event of Death. Guaranteed
Minimum Death Benefit If Premiums Duly Paid. Fixed
Premiums Payable For Life. Non-Participating. Investment
Experience Reflected in Benefits.
********************************************************************************
VWL-75
VARIABLE INCREASING PROTECTION LIFE INSURSANCE POLICY
THE INSURED REGISTER DATE
INITIAL POLICY NUMBER
FACE AMOUNT
EQUITABLE VARIABLE LIFE INSURANCE INSURANCE COMPANY (EVLICO)
EVLICO Home Office: 1285 Avenue of the Americas, New York, New York 10019
Administrative Office: Huntington Station, New York 11746
EVLICO agrees, subject to the provision of this policy, to pay a Death Benefit
(determined in accordance with the Death Benefit provision on page seven) to the
beneficiary upon receipt of due proof of the death of the Insured and the
surrender of this policy.
As shown on page three, the face amount increases at the beginning of each
policy year from the second to the fifteenth and is constant thereafter at 150%
of the initial face amount.
PROVIDED PREMIUMS ARE DULY PAID, DURING THE FIRST POLICY YEAR THE DEATH BENEFIT
WILL EQUAL THE INITIAL FACE AMOUNT AND THEREAFTER MAY INCREASE OR DECREASE ON
EACH ANNIVERSARY OF THE REGISTER DATE, DEPENDING ON THE INVESTMENT EXPERIENCE OF
SEPARATE ACCOUNT I, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT FOR THE POLICY
YEAR IN WHICH DEATH OCCURS.
AS PROVIDED IN THE CASH VALUE PROVISION ON PAGE EIGHT, THE CASH VALUE UNDER THIS
POLICY WILL VARY FROM DAY TO DAY AND MAY INCREASE OR DECREASE DEPENDING ON THE
INVESTMENT EXPERIENCE OF SEPARATE ACCOUNT I.
Premiums as shown on page three are fixed as to amount and will not vary with
the investment experience of Separate Account I.
NOTICE OF RIGHT TO EXAMINE POLICY. The Owner may examine this policy and at any
time within 10 days after receipt of this policy, or within 45 days of
completion of Part 1 of the Application, whichever is later, may return it with
a written request for cancellation to the Administrative Office and obtain a
full refund of the premium paid.
The provisions of the following pages are part of this contract.
SPECIMEN PRESIDENT
SPECIMEN SECRETARY
SPECIMEN ASSISTANT REGISTRAR
Variable Insurance Payable In Event of Death. Guaranteed Minimum
Death Benefit If Premiums Duly Paid. Face Amount Increases
Annually to 150% of Initial Face Amount. Fixed Premiums Payable
For Life. Non-Participating. Investment Experience Reflected in
Benefits.
Variable Increasing Protection Life
VIP-75
<PAGE>
Page Two
--------
GUIDE TO POLICY PROVISIONS
Owner ....................................... 2
Assignments ................................. 2
Beneficiary ................................. 2
Premiums .................................... 5
Grace ....................................... 5
Loans ....................................... 5
Reinstatement ............................... 5
Separate Account I .......................... 6
Separate Account Index ...................... 6
Actual and Base Net Rate of Return .......... 7
Death Benefit ............................... 7
Variable Adjustment Amount .................. 7
Cash Value .................................. 8
Options on Lapse ............................ 8
Exchange of Policy .......................... 8-9
General Provisions .......................... 9
Optional Modes of Settlement ................ 10-11
OWNER
The Owner is the Insured unless otherwise specified in the application or
endorsed on this policy by EVLICO. While the Insured is living, the Owner may
exercise all rights and take any other action agreed to by EVLICO in connection
with this policy (including changing the ownership). Exercise of the rights of
ownership shall not require the concurrence of any person whose interest at the
time of such exercise is that of a contingent or successor owner, or of any
other person referred to in this policy.
ASSIGNMENTS
EVLICO assumes no responsibility for the validity of any assignment.
No assignment of this policy will bind EVLICO or be deemed to be in force as to
EVLICO unless in writing and until filed at EVLICO's Administrative Office.
The Owner may assign this policy and all rights hereunder except the right to
change the beneficiary and the right to make an election under the Optional
Modes of Settlement provision.
If an assignment of this policy as collateral security is on file with EVLICO,
the Owner may change the beneficiary or make an election under the Optional
Modes of settlement provision, but the rights of the beneficiary shall be
subordinate to those of the assignee.
So long as an assignment remains in force, the rights of the Owner and of any
other person referred to in this policy shall be subordinate to those of the
assignee but shall not otherwise be affected by the assignment.
EVLICO may pay to an assignee, in a single sum, any amount claimed by the
assignee to be payable under the terms of the assignment. Any amount payable
which is not claimed by the assignee shall be payable in accordance with the
terms of the policy to the person or persons who would have been entitled to the
amount then payable had there been no assignment outstanding.
BENEFICIARY
The beneficiary is as designated in the application unless changed. The Owner
may change the beneficiary from time to time during the liftime of the Insured,
by written notice in a form satisfactory to EVLICO. The change will, upon
recording at EVLICO's Administrative Office, take effect as of the time the
written notice was signed, whether or not the Insured is living at the time of
recording, but without further liability as to any payment or other settlement
made by EVLICO before recording the change.
Unless otherwise specified in the designation, if two or more persons are
designated as beneficiary the beneficiary will be the designated person or
persons who survive the Insured, and if more than one survive, they will share
equally.
Any proceeds for which there is no designated beneficiary surviving at the death
of the Insured will be payable in a single sum to the children of the Insured
who survive the Insured, in equal shares, or should none survive, then to the
Insured's executors or administrators.
--------
VIP-75 Page Two
<PAGE>
DATE OF ISSUE JAN 01, 1976
THE INSURED RICHARD ROE JAN 01, 1976 REGISTER DATE
INITIAL SPECIMEN POLICY NUMBER
FACE AMOUNT $100,000
BENEFICIARY MARGARET H ROE, WIFE 35M ISSUE AGE & SEX
**************************BENEFITS AND PREMIUMS TABLE **************************
BENEFITS ANNUAL PREMIUM PREMIUM PERIOD
LIFE INSURANCE - VARIABLE $2,595.00 FOR LIFE
THE FIRST PREMIUM IS $2,595.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
SUBSEQUENT PREMIUMS ARE DUE ON JAN 01, 1977 AND EVERY 12 MONTHS THEREAFTER
DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE.
************************** TABLE OF FACE AMOUNTS *******************************
POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT
1 $100,000 6 $115,900 11 $134,400
2 $103,000 7 $119,400 12 $138,400
3 $106,100 8 $123,000 13 $142,600
4 $109,300 9 $126,700 14 $146,900
5 $112,600 10 $130,500 15 AND OVER $150,000
************************* TABLE OF NET ANNUAL PREMIUMS *************************
BEGINNING OF NET ANNUAL
POLICY YEAR PREMIUM
1 $1,495.00
2 - 4 2,136.00
5 AND LATER 2,323.00
VIP-75-03 PAGE THREE
<PAGE>
THE INSURED RICHARD ROE JAN 01, 1976 REGISTER DATE
INITIAL
FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER
ISSUE DATE JAN 01, 1976 35M ISSUE AGE & SEX
****************************** TABULAR CASH VALUES *****************************
THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN
SEE PAGE EIGHT FOR CASH VALUE PROVISION
INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
<TABLE>
<CAPTION>
INTERIM INTERIM INTERIM
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
MONTH VALUES MONTH VALUES MONTH VALUES
<S> <C> <C> <C> <C> <C>
1 $ 0 5 $ 240 9 $ 838
2 0 6 387 10 990
3 0 7 539 11 1137
4 88 8 691 12 1289
</TABLE>
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
<TABLE>
<CAPTION>
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
YEAR VALUES YEAR VALUES YEAR VALUES
<S> <C> <C> <C> <C> <C>
1 $ 1,289 9 $19,437 17 $40,356
2 3,274 10 21,971 18 43,070
3 5,308 11 24,538 19 45,806
4 7,389 12 27,131 20 48,561
5 9,708 13 29,744 AGE 60 62,506
6 12,074 14 32,368 AGE 62 68,083
7 14,485 15 35,003 AGE 65 76,341
8 16,941 16 37,666 AGE 70 89,414
<FN>
* VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
</FN>
</TABLE>
VIP-75-03A PAGE THREE-A
<PAGE>
Page Three-B
------------
TABLE OF NET SINGLE PREMIUMS (MALE)
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance
Values shown are applicable on policy anniversaries. The net single premium as
of a date during a policy year shall be determined by interpolation between the
values applicable on the immediately preceding and immediately following
anniversaries.
<TABLE>
<CAPTION>
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
--------- ------- --------- ------- --------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.12306 21 $.21025 41 $.37203 61 $.61279 81 $.83521
2 .12579 22 .21615 42 .38261 62 .62552 82 .84371
3 .12885 23 .22223 43 .39340 63 .63820 83 .85186
4 .13206 24 .22852 44 .40440 64 .65079 84 .85970
5 .13545 25 .23502 45 .41559 65 .66329 85 .86726
6 .13900 26 .24175 46 .42698 66 .67565 86 .87461
7 .14273 27 .24871 47 .43854 67 .68785 87 .88178
8 .14663 28 .25590 48 .45029 68 .69985 88 .88885
9 .15070 29 .26332 49 .46219 69 .71159 89 .89586
10 .15493 30 .27098 50 .47424 70 .72308 90 .90288
11 .15931 31 .27890 51 .48642 71 .73429 91 .90998
12 .16384 32 .28706 52 .49872 72 .74525 92 .91721
13 .16850 33 .29548 53 .51113 73 .75600 93 .92464
14 .17329 34 .30417 54 .52364 74 .76660 94 .93240
15 .17818 35 .31312 55 .53624 75 .77706 95 .94078
16 .18320 36 .32234 56 .54892 76 .78738 96 .95007
17 .18834 37 .33181 57 .56166 77 .79753 97 .96051
18 .19360 38 .34153 58 .57443 78 .80745 98 .97196
19 .19899 39 .35148 59 .58722 79 .81706 99 .98283
20 .20454 40 .36165 60 .60002 80 .82633 100 1.00000
</TABLE>
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VIP-75 Page Three-B
<PAGE>
Page Four
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Page Four
<PAGE>
Page Five
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PREMIUMS
Premiums are payable for the premium period indicated on page three but no
premium will fall due after the death of the Insured. The premium period is
measured from the Register Date. If the end of the premium period is indicated
by an age it extends to the policy anniversary nearest the birthday on which the
Insured attains that age.
Premiums are payable on or before their due dates at the Administrative Office
or to an EVLICO premium collection office. A receipt, signed by a Vice
President, the Secretary or the Treasurer, will be furnished upon request.
Premiums are as shown on page three except that by written request premiums may
be made payable at a different frequency allowed by EVLICO at its applicable
rates provided each premium payment is at least $20. If the request is
applicable to the first premium, it must be made on or before the payment of
that premium and delivery of this policy. Requests made after the first premium
has been paid are subject to the approval of EVLICO. A premium not paid on or
before its due date will be in default, and its due date will be the date of
default. Upon default this policy will lapse and the insurance will cease as of
the date of default, except as stated in the Grace and Options on Lapse
provisions.
The proceeds payable upon the death of the Insured while this policy is in force
on a premium paying basis will be increased by the portion of the last premium
due and paid which is applicable to any part of the then current premium
interval extending after the end of the policy month in which death occurs.
GRACE
A grace period of 31 days will be granted for the payment of each premium after
the first. The insurance will continue in force during the grace period but if
the Insured dies during the grace period of a premium then due and unpaid, the
portion of the premium due which is applicable to the period from the premium
due date to the end of the policy month in which death occurs will be deducted
from the proceeds. If a premium is paid during the grace period, then all
benefits thereafter under the policy shall be the same as if such premium were
paid on its due date.
LOANS
While this policy has a loan value, the Owner may obtain a loan from EVLICO upon
assignment of the policy as sole security, if no premium is in default beyond
the grace period or if this policy is being continued under Option (a) of the
Options on Lapse provision. "Indebtedness" as used in this policy means a loan
by EVLICO on the sole security of this policy together with accrued interest.
The loan may not exceed the loan value, and EVLICO will deduct from the loan
proceeds an amount necessary to repay any outstanding indebtedness. The loan
value of this policy, if no premium is in default beyond the grace period, is an
amount equal to 75% of the cash value determined in accordance with the Cash
Value provision on page eight. The loan value, if the policy is continued under
Option (a) of the Options on Lapse provision, is the amount which, accumulated
with interest to the next policy anniversary, equals the cash as of such
anniversary determined in accordance with the Cash Value provision. Extended
term insurance under Option (b) of the Options on Lapse provision has no loan
value.
A loan will have a permanent effect on the Variable Adjustment Amount, Death
Benefit and cash value under this policy whether or not the indebtedness created
thereby is repaid in whole or in part.
The following will apply:
1. Except when used to pay premiums, a loan will not be permitted unless it
is at least $100 more than the existing indebtedness.
2. Interest on a loan will accrue daily at the effective rate of 5% per
year, will become part of the indebtedness as it accrues and will be
compounded on policy anniversaries.
3. Whenever the indebtedness under this policy exceeds the cash value,
EVLICO will mail to the Owner and any assignee of record at their last
known addresses a notice that the policy will terminate if the excess
indebtedness is not repaid within 31 days after the date of mailing of
such notice.
4. Any indebtedness may be repaid, in whole or in part, while the Insured
is living and the policy is in force, except that if the policy is being
continued under one of the options on lapse, any indebtedness which was
deducted in determining the benefit on lapse may not be repaid unless
the policy is reinstated.
Indebtedness will be deducted in a single sum in any settlement.
REINSTATEMENT
If premiums are in default and if this policy has not been terminated by payment
of its cash value, it may be reinstated within five years from the date of
default upon production of evidence of insurability satisfactory to EVLICO and
the payment of the larger of (a) all overdue premiums with interest at 6%
compounded annually and (b) 110% of the difference between (i) and (ii), where
(i) is the excess of the cash value immediately following reinstatement over the
cash value immediately preceding reinstatement, and (ii) is any indebtedness in
effect at the date any option on lapse became effective, with interest at 5%
compounded annually to the date of reinstatement.
Upon reinstatement this policy will have the same benefit base and the same
Variable Adjustment Amount (as these are determined in the Variable Adjustment
Amount provision on page seven) as if default had not occured. Also upon
reinstatement this policy will have indebtedness equal to the sum of (i) and
(ii), where (i) is any indebtedness in effect at the date any option on lapse
became effective, with interest at 5% compounded annually to the date of
reinstatement, and (ii) is any indebtedness arising subsequent to the date any
option on lapse became effective, with interest at 5% compounded annually to the
date of reinstatement.
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Page Five
VIP-75
<PAGE>
Page Six
--------
SEPARATE ACCOUNT I
Separate Account I is an account established and maintained by EVLICO pursuant
to the laws of the State of New York under which income, gains and losses,
whether or not realized from assets allocated to such account, are credited to
or charged against such account without regard to other income, gains, or losses
of EVLICO. Assets will be allocated to Separate Account I to support the
operation of this policy and certain other variable life insurance policies.
Assets may also be allocated to Separated Account I for other purposes, but not
to support the operation of any contracts or policies other than variable life
insurance.
It is contemplated that investment is Separate Account I will, at most times,
consist primarily of common stocks and other equity-type investment. However.
EVLICO may, in its discretion, invest the assets of Separate Account I in any
investments permitted by applicable law. EVLICO may rely conclusively on the
opinion of counsel (including attorneys in its employ) as to what investments it
is permitted by law to make.
In lieu of making such investments directly, to the extent permited by
applicable laws and regulations EVLICO reserves the right to operate Separate
Account I as a unit investment trust, or other form, investing all or part of
its assets in shares or units of a fund, the investment adviser of which would
be EVLICO, an affiliate, or The Equitable Life Assurance Society of the United
States. The assets of such a fund would be invested as provided herein with
respect to Separate Account I.
The assets of Separate Account I are the property of EVLICO. However, the
portion of the assets of Separate Account I equal to the reserves and other
policy liabilities with respect to Separate Account I will not be chargeable
with liabilities arising out of any other business EVLICO may conduct. EVLICO
reserves the right to transfer assets of Separate Account I in excess of such
reserves and policy liabilities to the general account of EVLICO.
The assets of Separate Account I shall be valued on each business day.
EVLICO reserve the right to withdraw from Separate Account I and allocate to
another separate account assets determined by EVLICO to be associated with the
class of policies to which this policy belongs. In any such event, to the extent
practicable and permissible under applicable laws and regulations, the
withdrawal shall be made by withdrawing the same percentage of each investment
in Separate Account I, with appropriate adjustments to avoid odd lots and
fractions. On and after the date of such withdrawal the term "Separate Account
I" in this policy shall mean such other separate account to which the withdrawn
assets were allocated.
EVLICO reserves the right to the extent permitted by applicable laws and
regulations (including any order of the Securities and Exchange Commission):
(a) to cause the registration or deregistration of Separate Account I under the
Investment Company Act of 1940;
(b) to operate Separate Account I under the general supervision of a Committee
any or all of the members of which may, but need not, be interested perons
of EVLICO, an affiliate, or The Equitable Life Assurance Society of the
United States, or to discharge such Committee at any time; or
(c) to eliminate or restrict any voting rights of policyholders or other
persons having such voting rights in respect of Separate Account I.
CHANGES IN INVESTMENT ADVISER OR INVESTMENT POLICY OF SEPARATE ACCOUNT I. Unless
otherwise required by applicable law, the investment adviser or any investment
policy of Separate Account I may not be changed without the consent of EVLICO.
If required by applicable laws and regulations, the investment policy of
Separate Account I may not be changed unless approved by the Superintendent of
Insurance of the State of New York or deemed approved in accordance with such
laws and regulations. If so required, the process for obtaining such approval
will be filed ith the insurance supervisory official of the state in which this
policy is delivered.
SEPARATE ACCOUNT INDEX
The Separate Account Index for the valuation period which included the first day
on which there were assets in Separate Account I was 100. The Separate Account
Index for each subsequent valuation period is the Separate Account Index for the
immediately preceding valuation period multiplied by the Net Investment Factor
for such subsequent valuation period. The Separate Account Index for a valuation
period applies to each day in that period.
VALUATION PERIOD. Each business day together with any non-business day or
consecutive non-business days immediately preceding such business day will
constitute a valuation period.
A business day is any day on which the New York Stock Exchange is open for
trading.
NET INVESTMENT FACTOR. The Net Investment Factor for a valuation period is (a)
divided by, (b), minus (c), where
(a) is (1) the value of the assets in Separate Account I at the close of
business of the preceding valuation period, plus (2) the investment income
and the capital gains, realized or unrealized, credited to the assets of
Separate Account I in the valuation period for which the Net Investment
Factor is being determined, minus (3) the capital losses, realized or
unrealized, charged against such assets in such valuation period, minus (4)
any amount charged against Separate Account I in such valuation period for
taxes or for amounts set aside by EVLICO as a reserve for taxes
attributable to the maintenance or operation of Separate Account I;
(b) is the value of the assets in Separate Account I at the close of business
of the preceding valuation period; and
(c) is a charge not exceeding .00002063 for each day in the valuation period,
corresponding to the sum of (i) a charge not exceeding .25% per year for
investment management expense, and (ii) a charge not exceeding .50% per
year for mortality and expense risks and other contingencies.
The value of the assets in Separate Account I shall be taken at their fair
market value or, where there is no readily available market, their fair value
determined in accordance with accepted accounting practices and applicable laws
and regulations.
--------
VIP-75 Page Six
<PAGE>
----------
Page Seven
ACTUAL AND BASE NET RATES OF RETURN
ACTUAL NET RATE OF RETURN. The Actual Net Rate of Return for a policy year is
equal to the change in the Separate Account Index from the first day of such
policy year to the first day of the next policy year, divided by the Separate
Account Index for the first day of such policy year. The Actual Net Rate of
Return for a policy year is negative if the Separate Account Index decreased
over the year. The Actual Net Rate of Return for a period less than a year is
determined on a corresponding basis.
BASE NET RATE OF RETURN. The Base Net Rate of Return for this policy is .035
(3-1/2%) per year. (For a period less than a year, it is a pro-rata part of the
annual rate.) Provided premiums are duly paid, if the Actual Net Rate of Return
for each policy year equals the Base Net Rate of Return, the Death Benefit in
each policy year will equal the face amount for that policy year and the cash
value at the end of each policy year will equal the tabular cash value as shown
on page three-A.
"The difference between the Actual and Base Net Rates of Return" as used in this
policy is positive if the Actual Net Rate of Return is greater than the Base Net
Rate of Return, and is negative if the Actual Net Rate of Return is less than
the Base Net Rate of Return.
DEATH BENEFIT
A. PROVIDED PREMIUMS ARE DULY PAID, the Death Benefit shall equal the face
amount plus the Variable Adjustment Amount for the policy year in which
death occurs; except that if the Variable Adjustment Amount is negative,
the Death Benefit shall equal the face amount for that policy year. In no
event, however, will the Death Benefit be less than the amount of insurance
under Option (a) of the Options on Lapse provision, assuming premiums had
been paid to the date of death of the Insured and such Option had become
effective on that date.
B. UPON DEFAULT IN PAYMENT OF A PREMIUM, the Death Benefit shall be as
provided in the Grace and Options on Lapse provisions.
VARIABLE ADJUSTMENT AMOUNT
On each policy anniversary to which premiums have been duly paid, EVLICO will
determine the Variable Adjustment Amount for the policy year beginning on that
anniversary, to take into account the investment experience of Separate Account
I for the preceding policy year. The Variable Adjustment Amount is zero during
the first policy year, and thereafter it may be positive or negative. It remains
at a constant amount during a policy year as long as premiums are duly paid. The
Variable Adjustment Amount during the policy year will equal the sum of the VAA
Change Amount determined on the policy anniversary at the beginning of such
policy year and the Variable Adjustment Amount for the preceding policy year.
A. IF DURING THE PRECEDING POLICY YEAR NO LOAN HAS BEEN MADE OR INDEBTEDNESS
REPAID, then the VAA Change Amount on a policy anniversary will be positive
or negative depending on whether the Actual Net Rate of Return for the
preceding policy year is greater or less than the Base Net Rate of Return,
and will equal the product of (a) and (b), divided by (c), where
(a) is the difference between such Actual and Base Net Rates of Return:
(b) is the benefit base defined below; and
(c) is the net single premium on the current policy anniversary for $1.00
of Variable Adjustment Amount.
In determining the VAA Change amount on the first policy anniversary the
benefit base will be the net annual premium applicable at the beginning of
the first policy year. In determining the VAA Change Amount on a policy
anniversary after the first the benefit base will be the sum of (a) the
tabular cash value on the previous policy anniversary, (b) the net single
premium for the Variable Adjustment Amount on the previous anniversary, and
(c) the net annual premium for such previous policy anniversary, less the
indebtedness, if any, as of such previous policy anniversary.
The net annual premium is determined from the table on page three and the
tabular cash value from the table on page three-A. The net single premium
for the Variable Adjustment Amount is determined from the table on page
three-B. If the Variable Adjustment Amount is negative, the net single
premium for it is negative.
B. IF DURING THE PRECEDING POLICY YEAR A LOAN HAS BEEN MADE OR INDEBTEDNESS
REPAID, then the VAA Change amount on a policy anniversary will equal the
VAA Change Amount as calculated in Section A above, plus the Repayment
Adjustment Amounts on such policy anniversary, if any, less the Loan
Adjustment amounts on such policy anniversary, if any. The Repayment
Adjustment Amount and Loan Adjustment Amount are defined as follows:
(i) For each such repayment, the Repayment Adjustment Amount on a policy
anniversary will equal the product of (a) and (b), divided by (c),
where
(a) is the difference between the Actual and Base Net Rates of
Return for the period from the date of the repayment to the
policy anniversary following such repayment;
(b) is the amount of the repayment; and
(c) is the net single premium on such policy anniversary for $1.00
of Variable Adjustment Amount.
(ii) For each such loan, the Loan Adjustment Amount on a policy
anniversary, will equal the product of (a) and (b), divided by (c),
where
(a) is the difference between the Actual and Base Net Rates of
Return for the period from the date of the loan to the policy
anniversary following such loan:
(b) is the amount of the loan; and
(c) is the net single premium on such policy anniversary for $1.00
of Variable Adjustment Amount.
----------
VIP-75 Page Seven
<PAGE>
Page Eight
----------
CASH VALUE
The Owner may surrender this policy for its net cash value at any time. The net
cash value is the cash value as defined below less any indebtedness, and will be
determined as of the date the signed request for surrender is received by EVLICO
at its Administrative Office. Surrender will take effect as of the date the
policy and request are transmitted to EVLICO. The cash value is defined as
follows:
A. If no premium is in default, the cash value on any date DURING THE FIRST
POLICY YEAR is equal to the sum of (1) the tabular cash value on such date,
and (2) the product of (i) and (ii), where (i) is the difference between
the Actual and Base Net Rates of Return for the period from the Register
Date to such date and (ii) is the net annual premium applicable at the
beginning of the first policy year.
B. If no premium is in default, the cash value on any date AFTER THE FIRST
POLICY YEAR is equal to the sum of (1) the tabular cash value on such date
and (2) the net single premium on such date for the Variable Adjustment
Amount, and (3) if such date is not a policy anniversary, the product of
(i) and (ii), where (i) is the difference between the Actual and Base Net
Rates of Return for the period from the last policy anniversary to such
date and (ii) is the benefit base on the previous policy anniversary (as
determined in the Variable Adjustment Amount provision).
C. If a premium is in default, then within three months after the date of
default, the cash value is equal to the sum of (1) the cash value as of the
date to which premiums have been paid, and (2) the product of (i) and (ii),
where (i) is the difference between the Actual and Base Net Rates of Return
for the period of default and (ii) is the cash value as of the date to
which premiums have been paid less the indebtedness, if any, as of the date
to which premiums have been paid.
Account will be taken of any loans or repayment of indebtedness in calculating
the cash value in paragraphs A., B. and C. above.
D. More than three months after the date of default, if this policy is
continued under Option (b) or Option (c) of the Options on Lapse provision,
the cash value on any date is equal to the reserve for the policy as of
such date, provided that the cash value within 30 days after a policy
anniversary will not be less than on that anniversary.
TABULAR CASH VALUE DURING FIRST POLICY YEAR. The tabular cash value during the
first policy year will be determined by EVLICO based on the first year interim
tabular cash value, with allowance for the time elapsed and for any portion of
the year for which premiums due have been paid. First year interim tabular cash
values are determined in accordance with the table on page three-A which shows
values at the ends of policy months assuming premiums have been duly paid to the
end of such policy months.
TABULAR CASH VALUE AFTER THE FIRST POLICY YEAR. The tabular cash value after the
first policy year is determined in accordance with the table on page three-A
which shows values applicable at the ends of policy years, provided premiums are
duly paid. Values not shown will be furnished on request. Where an age is shown,
the values are those applicable at the end of the policy year nearest the
birthday on which the Insured attains such age. The tabular cash value during a
policy year will be determined by EVLICO with allowance for the time elapsed and
for any portion of the year for which premiums due have been paid.
OPTIONS OF LAPSE
Upon default in the payment of a premium while this policy has a net cash value,
the Owner may elect by written notice to continue insurance on the Insured under
one of the following options if he does not elect to surrender the policy for
its net cash value.
OPTION (A). REDUCED PAID-UP FIXED BENEFIT LIFE INSURANCE for a fixed amount of
insurance equal to the net cash value as of the date the option becomes
effective divided by the net single premium on the date of default for $1.00 of
paid-up whole life insurance.
OPTION (B). EXTENDED FIXED BENEFIT TERM INSURANCE for a fixed amount of
insurance equal to the Death Benefit less any indebtedness as of the date the
option becomes effective (determined as if default had not occured) and for the
period from the date of default which the net cash value as of the date the
option becomes effective will purchase as a net single premium at the Insured's
age at nearest birthday on the date of default. SEE PAGE THREE FOR ANY
RESTRICTIONS UNDER THIS POLICY AS TO AVAILABILITY OF OPTION (b).
The following will apply:
1. The election of an option made within three months after the date of
default will become effective on the date written notice is received
by EVLICO at its Administrative Office.
2. If an option has not been elected within three months after the date
of default, Option (b) will take effect automatically at the end of
such three month period.
3. Option (a) will replace Option (b) if Option (b) is not available
under this policy or if Option (a) provides an equal or greater amount
of insurance at the date the option becomes effective.
4. If the Insured dies after the grace period but within three months
from the date of default, and if the policy has not been surrendered
for its net cash value, Option (b) will apply notwithstanding any
restrictions stated on page three as to the availability of Option (b)
under this policy, provided that the net cash value as of the date of
death (determined as if death had not occurred) will purchase extended
term insurance for a period from the date of default to at least the
date of death. In that event, any election of Option (a) will be
automatically cancelled.
EXCHANGE OF POLICY
Within 18 months after the Date of Issue shown on page three, provided premiums
are duly paid, the Owner may exchange this policy, without evidence of
insurability, for a policy of permanent fixed benefit life insurance (as
described below) on the life of the Insured. The exchange will take effect as of
the date this policy and the signed request EVLICO's form for such
----------
VIP-75 Page Eight
<PAGE>
Page Nine
---------
exchange are tranmitted to EVLCIO, or as of the date any amounts required to be
paid for such exchange by the Owner are received by EVLICO at its Administrative
Office, whichever is later.
The new policy will be the form of policy being offered by The Equitable Life
Assurance Society of the United States (Equitable) on the Date of Issue of this
policy, known as the "Executive Policy." The new policy will have a face amount
of life insurance equal to the initial face amount of this policy and will have
the same Register Date, Date of Issue and Issue Age as shown on page three of
this policy. Premiums for the new policy will be based on Equitable's premium
rates for such policy in effect at such Register Date for the same
classification of risk as under this policy.
The exchange will be subject to a premium or cash value adjustment that takes
appropriate account of the premiums and cash values under this policy and under
the new policy. A detailed statement of the method of computing such an
adjustment has been filed with the insurance supervisory official of the state
in which this policy is delivered.
Any indebtedness under this policy must be repaid on the date of the exchange.
Any additional benefit provisions included under this policy will be included
with the new policy only to the extent that such provisions were being offered
with the new policy on the Date of Issue.
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
required premiums. This policy and the application (a copy of which is attached
at issue) constitute the entire contract. The rights conferred by this policy
are in addition to those provided by applicable Federal and State laws and
regulations.
All statements made in the application shall be deemed representations and not
warranties. No statement shall avoid this policy or be used in defense of a
claim unless contained in the application.
This policy may not be modified, nor may any of the rights or requirements of
EVLICO be waived, except in writing signed by the President, a Vice President,
the Secretary or the Treasurer of EVLICO.
All sums payable by EVLICO under this policy are payable at its Administrative
Office.
POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months and policy
anniversaries are measured from the Register Date shown on page three. Each
policy month begins on the same day in each calendar month as that specified in
the Register Date.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be such as the premium paid would have purchased at the correct age and sex.
SUICIDE. In the event of the suicide of the Insured, sane or insane, within two
years from the Date of Issue shown on page three, the liability of EVLICO will
be limited to the payment to the beneficiary of a single sum equal to the
premiums paid less any indebtedness.
INCONTESTABILITY. Except as to any disability provision, this policy will be
incontestable, except for non-payment of premiums, after it has been in force
during the lifetime of the Insured for two years from the Date of Issue shown on
page three.
POLICY CHANGES. The Owner, with the consent of EVLICO, may change this policy to
another form, kind or plan of insurance or make any other change permitted by
EVLICO.
REPORTS TO OWNER. Except while this policy is continued under the Options on
Lapse provision, a statement will be sent to the Owner setting forth the Death
Benefit and the cash value as of the first day of such year and. if there is
existing indebtedness, the amount of such indebtedness as of the first day of
such year and the accrued interest for the previous policy year. Other reports
will be furnished to the Owner as required by law.
BASIS OF COMPUTATION. All cash values, reserves and net single premiums referred
to in this policy are based on the Commissioners 1958 Standard Ordinary
Mortality Table, except that for any extended term insurance they are based on
the Commissioners 1958 Extended Term Insurance Table. Continuous function are
used and interest is assumed at a rate of 3-1/2% compounded annually. The cash
values and paid-up insurance benefits are equal to or greater than those
required by the state in which this policy is delivered. A detailed statement of
the method of computing values and benefits has been filed with the insurance
supervisory official of that state. The tabular cash values at the end of each
policy year is equal to reserves which are not less than reserves determined
according to the Commissioners Reserve Valuation Method. Expense and mortality
results of EVLICO shall not adversely affect the dollar amount of insurance
benefits or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. If no premium is in default more
than three months, then, except as provided below, EVLICO will (1) make payment
of the cash value within seven days after receipt by EVLICO at its
Administrative Office of the policy and a signed request for its surrender; (2)
make payment of any loan within seven days after receipt by EVLICO at its
Administrative Office of a request for loan; and (3) subject to the provisions
of this policy, make payment of the Death Benefit within seven days after
receipt by EVLICO at its Administrative Office of this policy, due proof of the
death of the Insured, and all other requirements deemed necessary before such
payment may be made.
During any period when (i) the sale of securities or the determination of the
Separate Account Index is not reasonably practicable because the New York Stock
Exchange is closed or conditions are such that, under rules and regulations
adopted by the Securities and Exchange Commission, trading is deemed to be
restricted or an emergency is deemed to exist, or (ii) the Commission by order
permits postponement for the protection of EVLICO policyholders, EVLICO reserves
the right:
(a) to defer determination of cash values and payment of the cash value;
(b) to defer payment of a loan;
(c) to defer determination of a change in Variable Adjustment Amount and, if
such determination has been deferred, to defer payment of any portion of
the Death Benefit equal to the Variable Adjustment Amount; and
(d) if payment of all or part of the Death Benefit is deferred, to defer
application of the Death Benefit under the Optional Modes of Settlement
provision.
DEFERMENT UNDER OPTION (a) OR OPTION (b) OF THE OPTIONS ON LAPSE PROVISION. The
payment of the cash value under Option (a) or Option (b) of the Options on Lapse
provision and the making of a loan under Option (a) may be deferred by EVLICO
for up to six months after the receipt of request. Interest at the rate of 3%
per year will be allowed on such cash payment deferred for 30 days or more.
---------
VIP-75 Page Nine
<PAGE>
Page Ten
--------
OPTIONAL MODES OF SETTLEMENT
A. ELECTIONS
In lieu of payment in one sum, an election may be made to apply the whole or any
part of the proceeds under the following options. An election for the benefit of
a payee who is not a natural person or who is acting in a fiduciary capacity, or
which includes more than one of the options, may be made only with the approval
of EVLICO.
ELECTION AS TO DEATH BENEFIT. During the lifetime of the Insured, the Owner may
make an election for the benefit of the beneficiary and may change or revoke a
previous election. A change of beneficiary revokes any previous election. An
election in effect at the death of the Insured may not be changed or revoked by
an election made after the death of the Insured.
If no election is effective at the death of the Insured, the beneficiary may
then make an election for his own benefit, or in the case of Option 5, for the
benefit of two persons, one of whom must be the beneficiary.
ELECTION AS TO CASH VALUE. Upon surrender of this policy for its net cash value,
the Owner may make an election for the benefit of the Owner or the Insured, or
in the case of Option 5 for the benefit of two persons, one of whom must be the
Owner or the Insured.
B. OPTIONS
1. DEPOSIT OPTION: Left on deposit with EVLICO with interest payable at a rate
of 3% per year. The deposit period and withdrawal rights and rights to
change to another option will be as approved by EVLICO at the time of
election.
2. INSTALMENT OPTION, FIXED PERIOD: Payable in equal instalments for the
number of years elected (not more than 30) in an amount determined by the
Table of Instalments. Rights of commutation of unpaid instalments (based on
interest of 3% per year compounded annually) will be as approved by EVLICO
at the time of election.
3. LIFE INCOME OPTIONS:
A. 10 or 20 Years Certain. Payable in instalments for the certain period
elected, and continuing thereafter for the remaining lifetime of the
person upon whose life the income depends.
B. Refund Certain. Payable in instalments until the total amount paid
equals the proceeds applied under this option and continuing
thereafter for the remaining lifetime of the person upon whose life
the income depends.
The amount of each instalment will be determined by EVLICO at the time of
payment of the first instalment but will not be less per $1,000 of proceeds
than the Minimum Monthly Instalment shown in the Table of Instalments.
Instalments shall be without the right of commutation.
4. INSTALMENT OPTION, FIXED AMOUNT: Payable in instalments until the proceeds
applied, together with interest on the unpaid balance at the effective rate
of 3% per year, are exhausted. Amounts of instalments and withdrawal rights
will be approved by EVLICO at the time of election.
5. JOINT AND SURVIVOR OPTION, 10 YEARS CERTAIN: Payable in instalments for ten
years, and continuing thereafter while either of two persons upon whose
lives the income depends is surviving. The amount of each instalment will
be determined by EVLICO at the time of payment of the first instalment but
will not be less per $1,000 of proceeds than the Minimum Monthly Instalment
shown in the Table of Instalments. Instalments shall be without the right
of commutation.
C. GENERAL PROVISIONS
Interest under Option 1 and instalments under Options 2 and 4 will be paid
annually, semi-annually, quarterly or monthly, in accordance with the election.
Instalments under Options 3 and 5 will be paid monthly. Deposit years under
Option 1 and instalments years under the other options are measured from the
date the option becomes operative, and the first instalment under the other
options will be due on such date.
Excess interest may be allowed under Option 1, 2 and 4 as determined annually by
EVLICO. Any such excess interest will be applied to increase the payments under
Option 1, the payment at the end of each instalment year under Option 2, and the
unpaid balance at the end of each instalment year under Option 4.
If at the death of any payee there is no designated person living entitled to
receive any remaining payments, EVLICO will pay in a single sum to such payee's
executors or administrators: (a) any balance left with EVLICO under Option 1 or
4, or (b) the commuted value of any remaining instalments under Option 2,3 or 5
on the basis of compound interest of 3% per year, except that if the amount of
instalments under Option 3 or 5 is greater than the amount determined in
accordance with the Table of Instaments, the commutation interest rate will be
that associated with the more favorable amount.
The payee for whose benefit an option is operative may designate (with the right
to change such designation) a person or persons to receive any amount which
would otherwise become payable to such payee's executors or administrators.
Any election, change, revocation or designation shall be made, and will take
effect, in the same manner as a change of beneficiary.
If Option 3 or 5 is elected, EVLICO will require satisfactory evidence of the
age of any person upon whose life the income depends. Instalments under Option 3
or 5 terminate with the last instalment due before the death of the person upon
whose life the income depends or the end of the certain period, whichever is
later.
EVLICO will require satisfactory evidence of survival whenever a payment depends
upon the survival of any person.
If instalments or interest payments to any payee would amount to less than $20
each, EVLICO may change the interval of payment so that the payments will amount
to at least $20 each.
If the amount to be applied under an option with respect to a payee is less than
$2,000, EVLICO may pay the amount to the payee in a single sum instead of
applying it under the option.
No sum payable under any option elected by the Owner for the benefit of a payee
other than the Owner may be assigned or encumbered by such payee and, to the
extent permitted by law, no such sum shall in any way be subject to any legal
process to subject the same to the payment of any claim against such payee.
If a withdrawal or commutation right under an option is exercised, EVLICO may
defer payment for up to six months from the receipt of request.
--------
VIP-75 Page Ten
<PAGE>
Page Eleven
-----------
TABLE OF INSTALMENTS UNDER OPTIONAL MODES OF SETTLEMENT
FOR EACH $1,000 OF PROCEEDS
Instalment amounts for Options 3 and 5 are based on age nearest birthday on the
due date of the first instalment. Option 5 instalment amounts for ages not
shown, or for two males or two females, will be furnished on request.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OPTION 2 OPTION 3 -- LIFE INCOME (Minimum Monthly Instalment)
- ------------------------------------------------------------------------------------------------------------------------------------
Number
of Years' Monthly Annual 10 20 10 20
Instal- Instal- Instal- Years Certain Years Certain Refund Certain Years Certain Years Certain Refund Certain
ments ment ment AGE Male Female Male Female Male Female AGE Male Female Male Female Male Female
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $84.48 $1000.00 5 & under $2.86 $2.76 $2.85 $2.76 $2.85 $2.76 45 $4.13 $3.69 $3.99 $3.65 $ 3.98 $3.62
2 42.86 507.39 6 2.87 2.77 2.86 2.77 2.86 2.77 46 4.20 3.74 4.05 3.69 4.03 3.67
3 28.99 343.23 7 2.88 2.78 2.88 2.78 2.87 2.78 47 4.27 3.79 4.10 3.74 4.09 3.72
4 22.06 261.19 8 2.90 2.79 2.89 2.79 2.88 2.79 48 4.34 3.84 4.15 3.78 4.15 3.77
5 17.91 211.99 9 2.91 2.81 2.90 2.80 2.90 2.80 49 4.42 3.90 4.21 3.84 4.22 3.82
6 15.14 179.22 10 2.92 2.82 2.92 2.81 2.91 2.81 50 4.50 3.96 4.27 3.89 4.28 3.87
7 13.16 155.83 11 2.94 2.83 2.93 2.83 2.93 2.82 51 4.58 4.02 4.32 3.94 4.35 3.93
8 11.68 138.30 12 2.96 2.84 2.95 2.84 2.94 2.83 52 4.67 4.09 4.38 4.00 4.42 3.99
9 10.53 124.69 13 2.97 2.85 2.97 2.85 2.96 2.85 53 4.75 4.16 4.44 4.06 4.50 4.05
10 9.61 113.81 14 2.99 2.87 2.98 2.86 2.98 2.86 54 4.85 4.24 4.50 4.12 4.58 4.11
11 8.86 104.92 15 3.01 2.88 3.00 2.88 2.99 2.87 55 4.94 4.32 4.56 4.18 4.66 4.18
12 8.24 97.53 16 3.03 2.89 3.02 2.89 3.01 2.89 56 5.04 4.40 4.62 4.24 4.74 4.25
13 7.71 91.29 17 3.05 2.91 3.04 2.91 3.03 2.90 57 5.15 4.49 4.68 4.31 4.83 4.33
14 7.26 85.94 18 3.07 2.92 3.06 2.92 3.05 2.91 58 5.26 4.58 4.74 4.38 4.93 4.41
15 6.87 81.32 19 3.09 2.94 3.08 2.94 3.07 2.93 59 5.37 4.68 4.81 4.45 5.03 4.49
16 6.53 77.29 20 3.11 2.96 3.10 2.95 3.09 2.95 60 5.49 4.78 4.86 4.52 5.13 4.58
17 6.23 73.74 21 3.13 2.97 3.12 2.97 3.11 2.96 61 5.62 4.89 4.92 4.59 5.24 4.67
18 5.96 70.59 22 3.16 2.99 3.15 2.99 3.13 2.98 62 5.75 5.00 4.98 4.66 5.35 4.77
19 5.73 67.78 23 3.18 3.01 3.17 3.00 3.16 3.00 63 5.88 5.12 5.04 4.73 5.48 4.88
20 5.51 65.25 24 3.21 3.03 3.19 3.02 3.18 3.01 64 6.03 5.25 5.09 4.80 5.60 4.99
21 5.32 62.98 25 3.23 3.05 3.22 3.04 3.21 3.03 65 6.17 5.39 5.14 4.88 5.74 5.10
22 5.15 60.91 26 3.26 3.07 3.25 3.06 3.23 3.05 66 6.32 5.53 5.19 4.95 5.88 5.22
23 4.99 59.04 27 3.29 3.09 3.28 3.08 3.26 3.07 67 6.48 5.68 5.24 5.01 6.03 5.35
24 4.84 57.32 28 3.32 3.11 3.30 3.11 3.29 3.09 68 6.64 5.83 5.28 5.08 6.18 5.49
25 4.71 55.75 29 3.36 3.14 3.34 3.13 3.32 3.12 69 6.80 6.00 5.32 5.14 6.35 5.64
26 4.59 54.30 30 3.39 3.16 3.37 3.15 3.35 3.14 70 6.97 6.17 5.35 5.20 6.53 5.79
27 4.47 52.97 31 3.42 3.19 3.40 3.18 3.38 3.16 71 7.15 6.34 5.38 5.26 6.71 5.96
28 4.37 51.74 32 3.46 3.21 3.43 3.20 3.41 3.19 72 7.32 6.53 5.41 5.30 6.91 6.13
29 4.27 50.59 33 3.50 3.24 3.47 3.23 3.44 3.21 73 7.50 6.72 5.43 5.35 7.12 6.32
30 4.18 49.53 34 3.54 3.27 3.50 3.26 3.48 3.24 74 7.67 6.92 5.45 5.38 7.34 6.52
- ----------------------------
35 3.58 3.30 3.54 3.28 3.52 3.27 75 7.85 7.12 5.47 5.42 7.58 6.73
Quarterly instalments 36 3.63 3.33 3.58 3.31 3.55 3.30 76 8.02 7.32 5.48 5.44 7.82 6.96
are 25.28% of the 37 3.67 3.37 3.62 3.35 3.59 3.33 77 8.19 7.53 5.49 5.46 8.09 7.21
annual instalments. 38 3.72 3.40 3.66 3.38 3.64 3.36 78 8.36 7.75 5.50 5.48 8.38 7.47
39 3.77 3.44 3.71 3.41 3.68 3.39 79 8.52 7.96 5.50 5.49 8.67 7.75
Semi-annual 40 3.83 3.47 3.75 3.45 3.72 3.43 80 8.67 8.16 5.51 5.50 9.00 8.05
instalments are 50.37% 41 3.88 3.51 3.80 3.48 3.77 3.46 81 8.81 8.36 5.51 5.51 9.34 8.39
of the annual 42 3.94 3.55 3.84 3.52 3.82 3.50 82 8.94 8.55 5.51 5.51 9.70 8.73
instalments. 43 4.00 3.60 3.89 3.56 3.87 3.54 83 9.06 8.73 5.51 5.51 10.10 9.12
44 4.06 3.64 3.94 3.60 3.92 3.58 84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OPTION 5 -- JOINT AND SURVIVOR, 10 YEARS CERTAIN (Minimum Monthly Instalment)
- ------------------------------------------------------------------------------------------------------------------------------------
Female Age
Male -----------------------------------------------------------------------------------------------------------------------------
Age 45 50 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 75
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
45 $3.47 $3.60 $3.72 $3.75 $3.77 $3.79 $3.81 $3.84 $3.86 $3.88 $3.90 $3.91 $3.93 $3.95 $3.97 $3.98 $4.00 $4.01 $4.06
50 3.53 3.70 3.86 3.90 3.93 3.96 4.00 4.03 4.06 4.09 4.12 4.15 4.17 4.20 4.23 4.25 4.27 4.29 4.39
55 3.58 3.78 3.99 4.04 4.08 4.12 4.17 4.21 4.26 4.30 4.34 4.38 4.43 4.47 4.50 4.54 4.58 4.61 4.76
56 3.59 3.79 4.01 4.06 4.11 4.15 4.20 4.25 4.29 4.34 4.39 4.43 4.48 4.52 4.56 4.60 4.64 4.68 4.84
57 3.60 3.80 4.04 4.08 4.13 4.18 4.23 4.28 4.33 4.38 4.43 4.48 4.53 4.57 4.62 4.66 4.70 4.75 4.92
58 3.60 3.82 4.06 4.11 4.16 4.21 4.26 4.32 4.37 4.42 4.47 4.53 4.58 4.63 4.68 4.72 4.77 4.81 5.01
59 3.61 3.83 4.08 4.13 4.18 4.24 4.29 4.35 4.40 4.46 4.52 4.57 4.63 4.68 4.73 4.78 4.83 4.88 5.09
60 3.62 3.84 4.10 4.15 4.21 4.26 4.32 4.38 4.44 4.50 4.56 4.62 4.67 4.73 4.79 4.84 4.90 4.95 5.18
61 3.62 3.85 4.11 4.17 4.23 4.29 4.35 4.41 4.47 4.54 4.60 4.66 4.72 4.78 4.85 4.91 4.96 5.02 5.27
62 3.63 3.86 4.13 4.19 4.25 4.31 4.38 4.44 4.51 4.57 4.64 4.70 4.77 4.84 4.90 4.97 5.03 5.09 5.37
63 3.64 3.87 4.15 4.21 4.27 4.34 4.40 4.47 4.54 4.61 4.68 4.75 4.82 4.89 4.96 5.02 5.09 5.16 5.46
64 3.64 3.88 4.16 4.23 4.29 4.36 4.43 4.50 4.57 4.64 4.71 4.79 4.86 4.93 5.01 5.08 5.16 5.23 5.55
65 3.65 3.89 4.18 4.24 4.31 4.38 4.45 4.52 4.60 4.67 4.75 4.83 4.90 4.98 5.06 5.14 5.22 5.29 5.65
66 3.65 3.89 4.19 4.26 4.33 4.40 4.47 4.55 4.62 4.70 4.78 4.86 4.95 5.03 5.11 5.20 5.28 5.36 5.75
67 3.65 3.90 4.20 4.27 4.34 4.42 4.49 4.57 4.65 4.73 4.81 4.90 4.99 5.07 5.16 5.25 5.34 5.43 5.84
68 3.66 3.91 4.22 4.29 4.36 4.43 4.51 4.59 4.67 4.76 4.84 4.93 5.02 5.12 5.21 5.30 5.40 5.49 5.94
69 3.66 3.91 4.23 4.30 4.37 4.45 4.53 4.61 4.70 4.78 4.87 4.97 5.06 5.16 5.25 5.35 5.45 5.55 6.03
70 3.66 3.92 4.24 4.31 4.38 4.46 4.54 4.63 4.72 4.81 4.90 5.00 5.09 5.19 5.30 5.40 5.50 5.61 6.12
75 3.68 3.94 4.28 4.35 4.43 4.52 4.61 4.70 4.80 4.90 5.01 5.12 5.23 5.35 5.47 5.60 5.73 5.86 6.54
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-----------
VWL-75 Page Eleven
<PAGE>
********************************************************************************
VARIABLE INCREASING PROTECTION LIFE INSURANCE POLICY
[EVLICO LOGO] EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO)
Variable Insurance Payable In Event of Death. Guaranteed Minimum Death
Benefit If Premiums Duly Paid. Face Amount Increases Annually to 150%
of Initial Face Amount. Fixed Premiums Payable For Life.
Non-Participating. Investment Experience Reflected in Benefits.
********************************************************************************
SPECIMEN POLICY
NOTE -- Because of variations in state policy form requirements, the
policy as actually issued may differ somewhat from this specimen policy.
VWL-75
VARIABLE LIFE INSURANCE POLICY
DATE OF ISSUE JAN 01, 1979
THE INSURED RICHARD ROE JAN 01, 1979 REGISTER DATE
FACE AMOUNT POLICY NUMBER
EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO)
HOME OFFICE: 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10019
ADMINISTRATIVE OFFICE: HUNTINGTON STATION, NEW YORK 11746
EVLICO agrees, subject to the provisions of this policy, to pay a Death Benefit
(determined in accordance with the Death Benefit provision on page seven) to the
beneficiary upon receipt of due proof of the death of the Insured and the
surrender of this policy.
PROVIDED PREMIUMS ARE DULY PAID, DURING THE FIRST POLICY YEAR THE DEATH BENEFIT
WILL EQUAL THE FACE AMOUNT AS SHOWN ON PAGE THREE AND THEREAFTER MAY INCREASE OR
DECREASE ON EACH ANNIVERSARY OF THE REGISTER DATE, DEPENDING ON THE INVESTMENT
EXPERIENCE OF SEPARATE ACCOUNT I, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT.
AS PROVIDED IN THE CASH VALUE PROVISION ON PAGE EIGHT, THE CASH VALUE UNDER THIS
POLICY WILL VARY FROM DAY TO DAY AND MAY INCREASE OR DECREASE DEPENDING ON THE
INVESTMENT EXPERIENCE OF SEPARATE ACCOUNT I.
Premiums as shown on page three are fixed as to amount and will not vary with
the investment experience of Separate Account I.
NOTICE OF RIGHT TO EXAMINE POLICY. The Owner may examine this policy and at any
time within 10 days after receipt of this policy, or within 45 days of
completion of Part 1 of the Application, whichever is later, may return it with
a written request for cancellation to the Administrative Office and obtain a
full refund of the premium paid.
The provisions on the following pages are part of this contract.
/s/ Donald J. Mooney PRESIDENT
/s/ Kevin Keefe SECRETARY
ASSISTANT REGISTRAR
LIMITED PAYMENT LIFE -- LEVEL FACE AMOUNT. Variable Insurance
Payable In Event of Death. Guaranteed Minimum Death Benefit If
Premiums Duly Paid. Fixed Premiums Payable For Premium Period
Shown on Page 3 or Until Earlier Death. Non-Participating.
Investment Experience Reflected in Benefits.
No. 79-01
<PAGE>
Page Two
--------
GUIDE TO POLICY PROVISIONS
PAGE
Owner.................................................... 2
Assignments.............................................. 2
Beneficiary.............................................. 2
Premiums................................................. 5
Grace.................................................... 5
Loans.................................................... 5
Reinstatement............................................ 5
Separate Account I....................................... 6
Separate Account Index................................... 6
Actual and Base Net Rates of Return...................... 7
Death Benefit............................................ 7
Variable Adjustment Amount............................... 7
Cash Value............................................... 8
Options on Lapse......................................... 8
Exchange of Policy....................................... 8-9
General Provisions....................................... 9
Optional Modes of Settlement............................. 10-11
OWNER
The Owner is the Insured unless otherwise specified in the application or
endorsed on this policy by EVLICO. While the Insured is living, the Owner may
exercise all rights and take any other action agreed to by EVLICO in connection
with this policy (including changing the ownership). Exercise of the rights of
ownership shall not require the concurrence of any person whose interest at the
time of such exercise is that of a contingent or successor owner, or of any
other person referred to in this policy.
ASSIGNMENTS
EVLICO assumes no responsibility for the validity of any assignment.
No assignment of this policy will bind EVLICO or be deemed to be in force as to
EVLICO unless in writing and until filed at EVLICO's Administrative Office.
The Owner may assign this policy and all rights hereunder except the right to
change the beneficiary and the right to make an election under the Optional
Modes of Settlement provision.
If an assignment of this policy as collateral security is on file with EVLICO,
the Owner may change the beneficiary or make an election under the Optional
Modes of Settlement provision, but the rights of the beneficiary shall be
subordinate to those of the assignee.
So long as an assignment remains in force, the rights of the Owner and of any
other person referred to in this policy shall be subordinate to those of the
assignee but shall not otherwise be affected by the assignment.
EVLICO may pay to an assignee, in a single sum, any amount claimed by the
assignee to be payable under the terms of the assignment. Any amount payable
which is not claimed by the assignee shall be payable in accordance with the
terms of the policy to the person or persons who would have been entitled to the
amount then payable had there been no assignment outstanding.
BENEFICIARY
The beneficiary is as designated in the application unless changed. The Owner
may change the beneficiary from time to time during the lifetime of the Insured,
by written notice in a form satisfactory to EVLICO. The change will, upon
recording at EVLICO's Administrative Office, take effect as of the time the
written notice was signed, whether or not the Insured is living at the time of
recording, but without further liability as to any payment or other settlement
made by EVLICO before recording the change.
Unless otherwise specified in the designation, if two or more persons are
designated as beneficiary, the beneficiary will be the designated person or
persons who survive the Insured, and if more than one survive, they will share
equally.
Any proceeds for which there is no designated beneficiary surviving at the death
of the Insured will be payable in a single sum to the children of the Insured
who survive the Insured, in equal shares, or should none survive, then to the
Insured's executors or administrators.
--------
Page Two
No. 79-01
<PAGE>
DATE OF ISSUE JAN 01, 1979
THE INSURED RICHARD ROE JAN 01, 1979 REGISTER DATE
FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER
BENEFICIARY MARGARET H. ROE, WIFE 35M ISSUE AGE & SEX
************************* BENEFITS AND PREMIUMS TABLE **************************
BENEFITS ANNUAL PREMIUM PREMIUM PERIOD
LIFE INSURANCE - VARIABLE $1,659.00 40 YEARS
THE FIRST PREMIUM IS $1,659.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
SUBSEQUENT PREMIUMS ARE DUE ON JAN 01, 1980 AND EVERY 12 MONTHS THEREAFTER
DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE.
**************************** TABLE OF NET ANNUAL PREMIUMS **********************
BEGINNING OF NET ANNUAL
POLICY YEAR PREMIUM
1 $ 752.00
2 - 4 1,455.00
5 - 40 1,526.00
V1-03 PAGE THREE
<PAGE>
THE INSURED RICHARD ROE JAN 01, 1979 REGISTER DATE
FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER
ISSUE DATE JAN 01, 1979 35M ISSUE AGE & SEX
******************************* TABULAR CASH VALUES ****************************
THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN
SEE PAGE 8 FOR CASH VALUE PROVISION
INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
<TABLE>
<CAPTION>
INTERIM INTERIM INTERIM
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
MONTH VALUES MONTH VALUES MONTH VALUES
----- ------ ----- ------ ----- ------
<S> <C> <C> <C> <C> <C>
1 $0 5 $ 0 9 $278
2 0 6 16 10 366
3 0 7 104 11 452
4 0 8 192 12 540
</TABLE>
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
<TABLE>
<CAPTION>
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
YEAR VALUES YEAR VALUES YEAR VALUES
---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C>
1 $ 540 9 $12,069 17 $26,057
2 1,808 10 13,701 18 27,941
3 3,114 11 15,368 19 29,851
4 4,456 12 17,070 20 31,788
5 5,907 13 18,806 AGE 60 41,808
6 7,393 14 20,574 AGE 62 45,947
7 8,916 15 22,373 AGE 65 52,277
8 10,474 16 24,201 AGE 70 63,165
<FN>
* VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
</FN>
</TABLE>
V1-03A PAGE THREE-A
<PAGE>
Page Three-B
------------
TABLE OF NET SINGLE PREMIUMS (MALE)
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance
Values shown are applicable on policy anniversaries. The net single premium as
of a date during a policy year shall be determined by interpolation between the
values applicable on the immediately preceding and immediately following
anniversaries.
<TABLE>
<CAPTION>
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
- --------- ------- --------- ------- --------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.09647 21 $.17350 41 $.32865 61 $.57583 81 $ .81560
2 .09871 22 .17890 42 .33918 62 .58929 82 .82496
3 .10126 23 .18450 43 .34995 63 .60272 83 .83394
4 .10397 24 .19031 44 .36096 64 .61610 84 .84259
5 .10685 25 .19635 45 .37222 65 .62940 85 .85096
6 .10990 26 .20263 46 .38370 66 .64260 86 .85909
7 .11312 27 .20915 47 .39541 67 .65565 87 .86704
8 .11650 28 .21591 48 .40733 68 .66851 88 .87488
9 .12005 29 .22293 49 .41945 69 .68114 89 .88268
10 .12377 30 .23021 50 .43176 70 .69350 90 .89050
11 .12764 31 .23775 51 .44424 71 .70559 91 .89841
12 .13166 32 .24556 52 .45688 72 .71744 92 .90648
13 .13581 33 .25366 53 .46968 73 .72908 93 .91479
14 .14008 34 .26205 54 .48261 74 .74057 94 .92350
15 .14447 35 .27073 55 .49568 75 .75194 95 .93291
16 .14897 36 .27970 56 .50886 76 .76319 96 .94339
17 .15360 37 .28896 57 .52214 77 .77427 97 .95520
18 .15835 38 .29850 58 .53550 78 .78512 98 .96810
19 .16323 39 .30830 59 .54892 79 .79566 99 .98063
20 .16828 40 .31835 60 .56237 80 .80583 100 1.00000
</TABLE>
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V1-03B(M) Page Three-B
<PAGE>
Page Four
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Page Four
<PAGE>
Page Five
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PREMIUMS
Premiums are payable for the premium period indicated on page three but no
premium will fall due after the death of the Insured. The premium period is
measured from the Register Date. If the end of the premium period is indicated
by an age, it extends to the policy anniversary nearest the birthday on which
the Insured attains that age.
Premiums are payable on or before their due dates at the Administrative Office
or to an EVLICO premium collection office. A receipt, signed by a Vice
President, the Secretary or the Treasurer, will be furnished upon request.
Premiums are as shown on page three except that by written request premiums may
be made payable at a different frequency allowed by EVLICO at its applicable
rates. If the request is applicable to the first premium, it must be made on or
before the payment of that premium and delivery of this policy. Requests made
after the first premium has been paid are subject to the approval of EVLICO. A
premium not paid on or before its due date will be in default, and its due date
will be the date of default. Upon default this policy will lapse and the
insurance will cease as of the date of default, except as stated in the Grace
and Options on Lapse provisions.
The proceeds payable upon the death of the Insured while this policy is in force
on a premium paying basis will be increased by the portion of the last premium
due and paid which is applicable to any part of the then current premium
interval extending after the end of the policy month in which death occurs.
GRACE
A grace period of 31 days will be granted for the payment of each premium after
the first. The insurance will continue in force during the grace period but if
the Insured dies during the grace period of a premium then due and unpaid, the
portion of the premium due which is applicable to the period from the premium
due date to the end of the policy month in which death occurs will be deducted
from the proceeds. If a premium is paid during the grace period, then all
benefits thereafter under the policy shall be the same as if such premium were
paid on its due date.
LOANS
While this policy has a loan value, the Owner may obtain a loan from EVLICO upon
assignment of the policy as sole security, if no premium is in default beyond
the grace period or if this policy is being continued under Option (a) of the
Options on Lapse provision. "Indebtedness" as used in this policy means a loan
by EVLICO on the sole security of this policy together with accrued interest.
The loan may not exceed the loan value, and EVLICO will deduct from the loan
proceeds an amount necessary to repay any outstanding indebtedness. If no
premium is in default beyond the grace period (or if this policy is paid up),
the loan value of this policy is an amount equal to 75% of the cash value
determined in accordance with the Cash Value provision on page eight. The loan
value, if the policy is continued under Option (a) of the Options on Lapse
provision, is the amount which, accumulated with interest to the next policy
anniversary, equals the cash value as of such anniversary determined in
accordance with the Cash Value provision. Extended term insurance under Option
(b) of the Options on Lapse provision has no loan value.
A loan will have a permanent effect on the Variable Adjustment Amount, Death
Benefit and cash value under this policy whether or not the indebtedness created
thereby is repaid in whole or in part.
The following will apply:
1. Except when used to pay premiums, a loan will not be permitted unless
it is at least $100 more than the existing indebtedness.
2. Interest on a loan will accrue daily at the effective rate of 5% per
year, will become part of the indebtedness as it accrues and will be
compounded on policy anniversaries.
3. Whenever the indebtedness under this policy exceeds the cash value,
EVLICO will mail to the Owner and any assignee of record at their last
known addresses a notice that the policy will terminate if the excess
indebtedness is not repaid within 31 days after the date of mailing of
such notice.
4. Any indebtedness may be repaid, in whole or in part, while the Insured
is living and the policy is in force, except that if the policy is
being continued under one of the options on lapse, any indebtedness
which was deducted in determining the benefit on lapse may not be
repaid unless the policy is reinstated.
Indebtedness will be deducted in a single sum in any settlement.
REINSTATEMENT
If premiums are in default and if this policy has not been terminated by payment
of its cash value, it may be restated within five years from the date of default
upon production of evidence of insurability satisfactory to EVLICO and the
payment of the larger of (a) all overdue premiums with interest at 6% compounded
annually and (b) 110% of the difference between (i) and (ii), where (i) is the
excess of the cash value immediately following reinstatement over the cash value
immediately preceding reinstatement, and (ii) is any indebtedness in effect at
the date any option on lapse became effective, with interest at 5% compounded
annually to the date of reinstatement.
Upon reinstatement this policy will have the same benefit base and the same
Variable Adjustment Amount (as there are determined in the Variable Adjustment
Amount provision on page seven) as if default had not occurred. Also upon
reinstatement this policy will have indebtedness equal to the sum of (i) and
(ii), where (i) is any indebtedness in effect at the date any option on lapse
became effective, with interest at 5% compounded annually to the date of
reinstatement, and (ii) is any indebtedness arising subsequent to the date any
option on lapse became effective, with interest at 5% compounded annually to the
date of reinstatement.
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V1-05 Page Five
<PAGE>
Page Six
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SEPARATE ACCOUNT I
Separate Account I is an account established and maintained by EVLICO pursuant
to the laws of the State of New York under which income, gains and losses,
whether or not realized, from assets allocated to such account, are credited to
or charged against such account without regard to other income, gains, or losses
of EVLICO. Assets will be allocated to Separate Account I to support the
operation of this policy and certain other variable life insurance policies.
Assets may also be allocated to Separate Account I for other purposes, but not
to support the operation of any contracts or policies other than variable life
insurance.
It is contemplated that investments in Separate Account I will, at most times,
consist primarily of common stocks and other equity-type investments. However,
EVLICO may, in its discretion, invest the assets of Separate Account I in any
investments permitted by applicable law. EVLICO may rely conclusively on the
opinion of counsel (including attorneys in its employ) as to what investments it
is permitted by law to make.
In lieu of making such investments directly, to the extent permitted by
applicable laws and regulations EVLICO reserves the right to operate Separate
Account I as a unit investment trust, or other form, investing all or part of
its assets in shares or units of a fund, the investment adviser of which would
be EVLICO, an affiliate, or The Equitable Life Assurance Society of the United
States. The assets of such a fund would be invested as provided herein with
respect to Separate Account I.
The assets of Separate Account I are the property of EVLICO. However, the
portion of the assets of Separate Account I equal to the reserves and other
policy liabilities with respect to Separate Account I will not be chargeable
with liabilities arising out of any other business EVLICO may conduct. EVLICO
reserves the right to transfer assets of Separate Account I in excess of such
reserves and policy liabilities to the general account of EVLICO.
The assets of Separate Account I shall be valued on each business day.
EVLICO reserves the right to withdraw from Separate Account I and allocate to
another separate account assets determined by EVLICO to be associated with the
class of policies to which this policy belongs. In any such event, to the extent
practicable and permissible under applicable laws and regulations, the
withdrawal shall be made by withdrawing the same percentage of each investment
in Separate Account I, with appropriate adjustments to avoid odd lots and
fractions. On and after the date of such withdrawal the term "Separate Account
I" in this policy shall mean such other separate account to which the withdrawn
assets were allocated.
EVLICO reserves the right to the extent permitted by applicable laws and
regulations (including any order of the Securities and Exchange Commission):
(a) to cause the registration or deregistration of Separate Account I under the
Investment Company Act of 1940;
(b) to operate Separate Account I under the general supervision of a Committee
any or all of the members of which may, but need not, be interested persons
of EVLICO, an affiliate, or The Equitable Life Assurance Society of the
United States, or to discharge such Committee at any time; or
(c) to eliminate or restrict any voting rights of policyholders or other
persons having such voting rights in respect of Separate Account I.
CHANGES IN INVESTMENT ADVISER OR INVESTMENT POLICY OF SEPARATE ACCOUNT I. Unless
otherwise required by applicable law, the investment adviser or any investment
policy of Separate Account I may not be changed without the consent of EVLICO.
If required by applicable laws and regulations, the investment policy of
Separate Account I will not be changed unless approved by the Superintendent of
Insurance of the State of New York or deemed approved in accordance with such
laws and regulations. If so required, the process for obtaining such approval
will be filed with the insurance supervisory official of the state in which this
policy is delivered.
SEPARATE ACCOUNT INDEX
The Separate Account Index for the valuation period which included the first day
on which there were assets in Separate Account I was 100. The Separate Account
Index for each subsequent valuation period is the Separate Account Index for the
immediately preceding valuation period multiplied by the Net Investment Factor
for such subsequent valuation period. The Separate Account Index for a valuation
period applies to each day in that period.
VALUATION PERIOD. Each business day together with any non-business day or
consecutive non-business days immediately preceding such business day will
constitute a valuation period.
A business day is any day on which the New York Stock Exchange is open for
trading.
NET INVESTMENT FACTOR. The Net Investment Factor for a valuation period is (a)
divided by (b), minus (c), where
(a) is (1) the value of the assets in Separate Account I at the close of
business of the preceding valuation period, plus (2) the investment income
and the capital gains, realized or unrealized, credited to the assets of
Separate Account I in the valuation period for which the Net Investment
Factor is being determined, minus (3) the capital losses, realized or
unrealized, charged against such assets in such valuation period, minus (4)
any amount charged against Separate Account I in such valuation period for
taxes or for amounts set aside by EVLICO as a reserve for taxes
attributable to the maintenance or operation of Separate Account I;
(b) is the value of the assets in Separate Account I at the close of business
of the preceding valuation period; and
(c) is a charge not exceeding .00002063 for each day in the valuation period,
corresponding to the sum of (i) a charge not exceeding .25% per year for
investment management expense, and (ii) a charge not exceeding .50% per
year for mortality and expense risks and other contingencies.
The value of the assets in Separate Account I shall be taken at their fair
market value or, where there is no readily available market, their fair value
determined in accordance with accepted accounting practices and applicable laws
and regulations.
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V1-06 Page Six
<PAGE>
Page Seven
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ACTUAL AND BASE NET RATES OF RETURN
ACTUAL NET RATE OF RETURN. The Actual Net Rate of Return for a policy year is
equal to the change in the Separate Account Index from the first day of such
policy year to the first day of the next policy year, divided by the Separate
Account Index for the first day of such policy year. The Actual Net Rate of
Return for a policy year is negative if the Separate Account index decreased
over the year. The Actual Net Rate of Return for a period less than a year is
determined on a corresponding basis.
BASE NET RATE OF RETURN. The Base Net Rate of Return for this policy is .04 (4%)
per year. (For a period less than a year, it is a pro-rata part of the annual
rate.) Provided premiums are duly paid, if the Actual Net Rate of Return for
each policy year equals the Base Net Rate of Return, the Death Benefit in each
policy year will equal the face amount and the cash value at the end of each
policy year will equal the tabular cash value as shown on page three-A.
"The difference between the Actual and Base Net Rates of Return" as used in this
policy is positive if the Actual Net Rate of Return is greater than the Base Net
Rate of Return, and is negative if the Actual Net Rate of Return is less than
the Base Net Rate of Return.
DEATH BENEFIT
A. PROVIDED PREMIUMS ARE DULY PAID, the Death Benefit shall equal the face
amount plus the Variable Adjustment Amount for the policy year in which
death occurs; except that if the Variable Adjustment Amount is negative,
the Death Benefit shall equal the face amount. In no event, however, will
the net insurance benefit as of the date of death be less than the net cash
value on such date divided by the net single premium on such date for $1.00
of paid up whole life insurance. For this purpose, the "net insurance
benefit" will equal the Death Benefit otherwise determined, decreased by
any indebtedness and increased by any pro-rata portion of premiums returned
on death, all determined as of the date of death.
B. UPON DEFAULT IN PAYMENT OF A PREMIUM, the Death Benefit shall be as
provided in the Grace and Options on Lapse provisions.
VARIABLE ADJUSTMENT AMOUNT
Provided premiums are duly paid, EVLICO will determine on each policy
anniversary the Variable Adjustment Amount for the policy year beginning on that
policy anniversary to take into account the investment experience of Separate
Account I for the preceding policy year. The Variable Adjustment Amount is zero
during the first policy year, and thereafter it may be positive or negative. As
long as premiums are duly paid, the Variable Adjustment Amount remains at a
constant amount during a policy year. The Variable Adjustment Amount during the
policy year will equal the sum of the VAA Change Amount determined on the policy
anniversary at the beginning of such policy year and the Variable Adjustment
Amount for the preceding policy year.
A. IF DURING THE PRECEDING POLICY YEAR NO LOAN HAS BEEN MADE OR INDEBTEDNESS
REPAID, then the VAA Change Amount on a policy anniversary will be positive
or negative depending on whether the Actual Net Rate of Return for the
preceding policy year is greater or less than the Base Net Rate of Return,
and will equal the product of (a) and (b), divided by (c), where
(a) is the difference between such Actual and Base Net Rates of Return;
(b) is the benefit base defined below; and
(c) is the net single premium on the current policy anniversary for $1.00
of Variable Adjustment Amount.
In determining the VAA Change Amount on the first policy anniversary the benefit
base will be the net annual premium applicable at the beginning of the first
policy year. In determining the VAA Change Amount on a policy anniversary after
the first the benefit base will be the sum of (a) the tabular cash value on the
previous anniversary, (b) the net single premium for the Variable Adjustment
Amount on the previous anniversary, and (c) the net annual premium for such
previous policy anniversary, less the indebtedness, if any, as of such previous
policy anniversary.
The net annual premium is determined from the table on page three and applies
only during the premium-paying period. The tabular cash value is determined from
the table on page three-A. The net single premium for the Variable Adjustment
Amount is determined from the table on page three-B. If the Variable Adjustment
Amount is negative, the net single premium for it is negative.
B. IF DURING THE PRECEDING POLICY YEAR A LOAN HAS BEEN MADE OR INDEBTEDNESS
REPAID, then the VAA Change Amount on a policy anniversary will equal the
VAA Change Amount as calculated in Section A above, plus the Repayment
Adjustment Amounts on such policy anniversary, if any, less the Loan
Adjustment Amounts on such policy anniversary, if any. The Repayment
Adjustment Amount and Loan Adjustment Amount are defined as follows:
(i) For each such repayment, the Repayment Adjustment Amount on a policy
anniversary will equal the product of (a) and (b), divided by (c),
where
(a) is the difference between the Actual and Base Net Rates of Return
for the period from the date of the repayment to the policy
anniversary following such repayment;
(b) is the amount of the repayment; and
(c) is the net single premium on such policy anniversary for $1.00 of
Variable Adjustment Amount.
(ii) For each such loan, the Loan Adjustment Amount on a policy
anniversary will equal the product of (a) and (b), divided by (c),
where
(a) is the difference between the Actual and Base Net Rates of Return
for the period from the date of the loan to the policy
anniversary following such loan;
(b) is the amount of the loan; and
(c) is the net single premium on such policy anniversary for $1.00 of
Variable Adjustment Amount.
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V1-07 Page Seven
<PAGE>
Page Eight
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CASH VALUE
The Owner may surrender this policy for its net cash value at any time. The net
cash value is the cash value as defined below less any indebtedness, and will be
determined as of the date the signed request for surrender is received by EVLICO
at its Administrative Office. Surrender will take effect as of the date the
policy and request are transmitted to EVLICO. The cash value is defined as
follows:
A. If no premium is in default, the cash value on any date DURING THE FIRST
POLICY YEAR is equal to the sum of (1) the tabular cash value on such date,
and (2) the product of (i) and (ii), where (i) is the difference between
the Actual and Base Net Rates of Return for the period from the Register
Date to such date and (ii) is the net annual premium applicable at the
beginning of the first policy year.
B. If no premium is in default (or if the policy is paid up), the cash value
on any date AFTER THE FIRST POLICY YEAR is equal to the sum of (1) the
tabular cash value on such date and (2) the net single premium on such date
for the Variable Adjustment Amount, and (3) if such date is not a policy
anniversary, the product of (i) and (ii), where (i) is the difference
between the Actual and Base Net Rates of Return for the period from the
last policy anniversary to such date and (ii) is the benefit base on the
previous policy anniversary (as determined in the Variable Adjustment
Amount provision).
C. If a premium is in default, then within three months after the date of
default, the cash value is equal to the sum of (1) the cash value as of the
date to which premiums have been paid, and (2) the product of (i) and (ii),
where (i) is the difference between the Actual and Base Net Rates of Return
for the period of default and (ii) is the cash value as of the date to
which premiums have been paid less the indebtedness, if any, as of the date
to which premiums have been paid.
Account will he taken of any loans or repayments of indebtedness in calculating
the cash value in paragraphs A., B. and C. above.
D. More than three months after the date of default, if this policy is
continued under Option (a) or Option (b) of the Options on Lapse provision,
the cash value on any date is equal to the reserve for the policy as of
such date, provided that the cash value within 30 days after a policy
anniversary will not be less than on that anniversary.
TABULAR CASH VALUE DURING FIRST POLICY YEAR. The tabular cash value during the
first policy year will be determined by EVLICO based on the first year interim
tabular cash value, with allowance for the time elapsed and for any portion of
the year for which premiums due have been paid. First year interim tabular cash
values are determined in accordance with the table on page three-A which shows
values at the ends of policy months assuming premiums have been duly paid to the
end of such policy months.
TABULAR CASH VALUE AFTER THE FIRST POLICY YEAR. The tabular cash value after the
first policy year is determined in accordance with the table on page three-A
which shows values applicable at the ends of policy years, provided premiums are
duly paid. Values not shown will be furnished on request. Where an age is shown,
the values are those applicable at the end of the policy year nearest the
birthday on which the Insured attains such age. The tabular cash value during a
policy year will be determined by EVLICO with allowance for the time elapsed and
for any portion of the year for which premiums due have been paid.
OPTIONS ON LAPSE
Upon default in the payment of a premium while this policy has a net cash value,
the Owner may elect by written notice to continue insurance on the Insured under
one of the following options if he does not elect to surrender the policy for
its net cash value.
OPTION (a). REDUCED PAID-UP FIXED BENEFIT LIFE INSURANCE for a fixed amount of
insurance equal to the net cash value as of the date the option becomes
effective divided by the net single premium on the date of default for $1.00 of
paid-up whole life insurance.
OPTION (b). EXTENDED FIXED BENEFIT TERM INSURANCE for a fixed amount of
insurance equal to the Death Benefit less any indebtedness as of the date the
option becomes effective (determined as if default had not occurred) and for the
period from the date of default which the net cash value as of the date the
option becomes effective will purchase as a net single premium at the Insured's
current age on the date of default. SEE PAGE THREE FOR ANY RESTRICTIONS UNDER
THIS POLICY AS TO AVAILABILITY OF OPTION (b).
The following will apply:
1. The election of an option made within three months after the date of
default will become effective on the date written notice is received
by EVLICO at its Administrative Office.
2. If an option has not been elected within three months after the date
of default, Option (b) will take effect automatically at the end of
such three month period.
3. Option (a) will replace Option (b) if Option (b) is not available
under this policy or if Option (a) provides an equal or greater amount
of insurance at the date the option becomes effective.
4. If the Insured dies after the grace period but within three months
from the date of default, and if the policy has not been surrendered
for its net cash value, Option (b) will apply notwithstanding any
restrictions stated on page three as to the availability of Option (b)
under this policy, provided that the net cash value as of the date of
death (determined as if death had not occurred) will purchase extended
term insurance for a period from the date of default to at least the
date of death. In that event, any election of Option (a) will be
automatically cancelled.
EXCHANGE OF POLICY
Within 18 months after the Date of Issue shown on page three, provided premiums
are duly paid, the Owner may exchange this policy, without evidence of
insurability, for a policy of permanent fixed benefit life insurance (as
described below) on the life of the Insured. The exchange will take effect as of
the date this policy and the signed request on EVLICO's form for such
----------
V1-08 Page Eight
<PAGE>
Page Nine
---------
exchange are transmitted to EVLICO, or as of the date any amounts required to be
paid for such exchange by the Owner are received by EVLICO at its Administrative
Office, whichever is later.
The new policy will be the form of policy being offered by The Equitable Life
Assurance Society of the United States (Equitable) on the Date of Issue of this
policy, known as the "Executive Policy." The new policy will have a face amount
of life insurance equal to the face amount of this policy and will have the same
Register Date, Date of Issue and Issue Age as shown on page three of this
policy. Premiums for the new policy will be based on Equitable's premium rates
for such policy in effect at such Register Date for the same classification of
risk as under this policy.
The exchange will be subject to a premium or cash value adjustment that takes
appropriate account of the premiums and cash values under this policy and under
the new policy. A detailed statement of the method of computing such an
adjustment has been filed with the insurance supervisory official of the state
in which this policy is delivered.
Any indebtedness under this policy must be repaid on the date of the exchange.
Any additional benefit provisions included under this policy will be included
with the new policy only to the extent that such provisions were being offered
with the new policy on the Date of Issue.
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
required premiums. This policy and the application (a copy of which is attached
at issue) constitute the entire contract. The rights conferred by this policy
are in addition to those provided by applicable Federal and State laws and
regulations.
All statements made in the application shall be deemed representations and not
warranties. No statement shall avoid this policy or be used in defense of a
claim unless contained in the application.
This policy may not be modified, nor may any of the rights or requirements of
EVLICO be waived, except in writing signed by the President, a Vice President,
the Secretary or the Treasurer of EVLICO.
All sums payable by EVLICO under this policy are payable at its Administrative
Office.
POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, and policy
anniversaries are measured from the Register Date shown on page three. Each
policy month begins on the same day in each calendar month as that specified in
the Register Date.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be such as the premium paid would have purchased at the correct age and sex.
SUICIDE. In the event of the suicide of the Insured, sane or insane, within two
years from the Date of Issue shown on page three, the liability of EVLICO will
be limited to the payment to the beneficiary of a single sum equal to the
premiums paid less any indebtedness.
INCONTESTABILITY. Except as to any disability provision, this policy will be
incontestable, except for non-payment of premiums, after it has been in force
during the lifetime of the Insured for two years from the Date of Issue shown on
page three.
POLICY CHANGES. The Owner, with the consent of EVLICO, may change this policy to
another form, kind or plan of insurance or make any other change permitted by
EVLICO.
REPORTS TO OWNER. Except while this policy is continued under the Options on
Lapse provision, a statement will be sent to the Owner setting forth the Death
Benefit and the cash value as of the first day of such year and, if there is
existing indebtedness, the amount of such indebtedness as of the first day of
such year and the accrued interest for the previous policy year. Other reports
will be furnished to the Owner as required by law.
BASIS OF COMPUTATION. All cash values, reserves and net single premiums referred
to in this policy are based on the Commissioners 1958 Standard Ordinary
Mortality Table, except that for any extended term insurance they are based on
the Commissioners 1958 Extended Term Insurance Table. Continuous functions are
used and interest is assumed at a rate of 4% compounded annually. The cash
values and paid-up insurance benefits are equal to or greater than those
required by the state in which this policy is delivered. A detailed statement of
the method of computing values and benefits has been filed with the insurance
supervisory official of that state. Tabular cash values at the end of each
policy year are equal to reserves, which are not less than reserves determined
according to the Commissioners Reserve Valuation Method. Expense and mortality
results of EVLICO shall not adversely affect the dollar amount of insurance
benefits or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. If no premium is in default more
than three months (or if this policy is paid up), then, except as provided
below, EVLICO will (1) make payment of the cash value within seven days after
receipt by EVLICO at its Administrative Office of the policy and a signed
request for its surrender; (2) make payment of any loan within seven days after
receipt by EVLICO at its Administrative Office of a request for loan; and (3)
subject to the provisions of this policy, make payment of the Death Benefit
within seven days after receipt by EVLICO at its Administrative Office of this
policy, due proof of the death of the Insured, and all other requirements
deemed necessary before such payment may be made.
During any period when (i) the sale of securities or the determination of the
Separate Account Index is not reasonably practicable because the New York Stock
Exchange is closed or conditions are such that, under rules and regulations
adopted by the Securities and Exchange Commission, trading is deemed to be
restricted or an emergency is deemed to exist, or (ii) the Commission by order
permits postponement for the protection of EVLICO policyholders, EVLICO reserves
the right:
(a) to defer determination of cash values and payment of the cash value;
(b) to defer payment of a loan;
(c) to defer determination of a change in Variable Adjustment Amount and, if
such determination has been deferred, to defer payment of any portion of
the Death Benefit equal to the Variable Adjustment Amount; and
(d) if payment of all or part of the Death Benefit is deferred, to defer
application of the Death Benefit under the Optional Modes of Settlement
provision.
DEFERMENT UNDER OPTION (a) OR OPTION (b) OF THE OPTIONS ON LAPSE PROVISION. The
payment of the cash value under Option (a) or Option (b) of the Options on Lapse
provision and the making of a loan under Option (a) may be deferred by EVLICO
for up to six months after the receipt of request. Interest at the rate of 3%
per year will be allowed on such cash payment deferred for 30 days or more.
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V1-09 Page Nine
<PAGE>
Page Ten
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OPTIONAL MODES OF SETTLEMENT
A. ELECTIONS
In lieu of payment in one sum, an election may be made to apply the whole or any
part of the proceeds under the following options. An election for the benefit of
a payee who is not a natural person or who is acting in a fiduciary capacity, or
which includes more than one of the options, may be made only with the approval
of EVLICO.
ELECTION AS TO DEATH BENEFIT. During the lifetime of the Insured, the Owner may
make an election for the benefit of the beneficiary and may change or revoke a
previous election. A change of beneficiary revokes any previous election. An
election in effect at the death of the Insured may not be changed or revoked by
an election made after the death of the Insured.
If no election is effective at the death of the Insured, the beneficiary may
then make an election for his own benefit, or in the case of Option 5, for the
benefit of two persons, one of whom must be the beneficiary.
ELECTION AS TO CASH VALUE. Upon surrender of this policy for its net cash value,
the Owner may make an election for the benefit of the Owner or the Insured, or
in the case of Option 5 for the benefit of two persons, one of whom must be the
Owner or the Insured.
B. OPTIONS
1. DEPOSIT OPTION: Left on deposit with EVLICO with interest payable at a rate
of 3% per year. The deposit period and withdrawal rights and rights to
change to another option will be as approved by EVLICO at the time of
election.
2. INSTALMENT OPTION, FIXED PERIOD: Payable in equal instalments for the
number of years elected (not more than 30) in an amount determined by the
Table of Instalments. Rights of commutation of unpaid instalments (based on
interest of 3-1/2% per year compounded annually) will be as approved by
EVLICO at the time of election.
3. LIFE INCOME OPTIONS:
A. 10 or 20 Years Certain. Payable in instalments for the certain period
elected, and continuing thereafter for the remaining lifetime of the
person upon whose life the income depends.
B. Refund Certain. Payable in instalments until the total amount paid
equals the proceeds applied under this option and continuing
thereafter for the remaining lifetime of the person upon whose life
the income depends.
The amount of each instalment will be determined by EVLICO at the time of
payment of the first instalment but will not be less per $1,000 of proceeds
than the Minimum Monthly Instalment shown in the Table of Instalments.
Instalments shall be without the right of commutation.
4. INSTALMENT OPTION, FIXED AMOUNT: Payable in instalments until the proceeds
applied, together with interest on the unpaid balance at the effective rate
of 3-1/2% per year, are exhausted. Amounts of instalments and withdrawal
rights will be as approved by EVLICO at the time of election.
5. JOINT AND SURVIVOR OPTION, 10 YEARS CERTAIN: Payable in instalments for ten
years, and continuing thereafter while either of two persons upon whose
lives the income depends is surviving. The amount of each instalment will
be determined by EVLICO at the time of payment of the first instalment but
will not be less per $1,000 of proceeds than the Minimum Monthly Instalment
shown in the Table of Instalments. Instalments shall be without the right
of commutation.
C. GENERAL PROVISIONS
Interest under Option 1 and instalments under Options 2 and 4 will be paid
annually, semi-annually, quarterly or monthly, in accordance with the election.
Instalments under Options 3 and 5 will be paid monthly. Deposit years under
Option 1 and instalment years under the other options are measured from the date
the option becomes operative, and the first instalment under the other options
will be due on such date.
Excess interest may be allowed under Options 1, 2 and 4 as determined annually
by EVLICO. Any such excess interest will be applied to increase the payments
under Option 1, the payment at the end of each instalment year under Option 2,
and the unpaid balance at the end of each instalment year under Option 4.
If at the death of any payee there is no designated person living entitled to
receive any remaining payments, EVLICO will pay in a single sum to such payee's
executors or administrators: (a) any balance left with EVLICO under Option 1 or
4, or (b) the commuted value of any remaining instalments under Option 2 on the
basis of compound interest of 3-1/2% per year, or Option 3 or 5 on the basis of
compound interest of 3% per year, except that if the amount of instalments under
Option 3 or 5 is greater than the amount determined in accordance with the Table
of Instalments, the commutation interest rate will be that associated with the
more favorable amount.
The payee for whose benefit an option is operative may designate (with the right
to change such designation) a person or persons to receive any amount which
would otherwise become payable to such payee's executors or administrators.
Any election, change, revocation or designation shall be made, and will take
effect, in the same manner as a change of beneficiary.
If Option 3 or 5 is elected, EVLICO will require satisfactory evidence of the
age of any person upon whose life the income depends. Instalments under Option 3
or 5 terminate with the last instalment due before the death of the person upon
whose life the income depends or the end of the certain period, whichever is
later.
EVLICO will require satisfactory evidence of survival whenever a payment depends
upon the survival of any person.
If instalments or interest payments to any payee would amount to less than $25
each, EVLICO may change the interval of payment so that the payments will amount
to at least $25 each.
If the amount to be applied under an option with respect to a payee is less than
$2,000, EVLICO may pay the amount to the payee in a single sum instead of
applying it under the option.
No sum payable under any option elected by the Owner for the benefit of a payee
other than the Owner may be assigned or encumbered by such payee and, to the
extent permitted by law, no such sum shall in any way be subject to any legal
process to subject the same to the payment of any claim against such payee.
If a withdrawal or commutation right under an option is exercised, EVLICO may
defer payment for up to six months from the receipt of request.
--------
V1-10 Page Ten
<PAGE>
Page Eleven
-----------
TABLE OF INSTALMENTS UNDER OPTIONAL MODES OF SETTLEMENT
FOR EACH $1,000 OF PROCEEDS
Instalment amounts for Options 3 and 5 are based on age nearest birthday on the
due date of the first instalment. Option 5 instalment amounts for ages not
shown, or for two males or two females, will be furnished on request.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OPTION 2 OPTION 3 -- LIFE INCOME (Minimum Monthly Instalment)
- ------------------------------------------------------------------------------------------------------------------------------------
Number 10 20 10 20
of Years' Monthly Annual Years Certain Years Certain Refund Certain Years Certain Years Certain Refund Certain
Instal- Instal- Instal- ------------- ------------- -------------- ------------- ------------- --------------
ments ment ment AGE Male Female Male Female Male Female AGE Male Female Male Female Male Female
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $84.70 $1000.00 5 & under $2.86 $2.76 $2.85 $2.76 $2.85 $2.76 45 $4.13 $3.69 $3.99 $3.65 $3.98 $3.62
2 43.08 508.60 6 2.87 2.77 2.86 2.77 2.86 2.77 46 4.20 3.74 4.05 3.69 4.03 3.67
3 29.21 344.86 7 2.88 2.78 2.88 2.78 2.87 2.78 47 4.27 3.79 4.10 3.74 4.09 3.72
4 22.28 263.04 8 2.90 2.79 2.89 2.79 2.88 2.79 48 4.34 3.84 4.15 3.78 4.15 3.77
5 18.12 213.99 9 2.91 2.81 2.90 2.80 2.90 2.80 49 4.42 3.90 4.21 3.84 4.22 3.82
6 15.36 181.32 10 2.92 2.82 2.92 2.81 2.91 2.81 50 4.50 3.96 4.27 3.89 4.28 3.87
7 13.38 158.01 11 2.94 2.83 2.93 2.83 2.93 2.82 51 4.58 4.02 4.32 3.94 4.35 3.93
8 11.91 140.56 12 2.96 2.84 2.95 2.84 2.94 2.83 52 4.67 4.09 4.38 4.00 4.42 3.99
9 10.76 127.00 13 2.97 2.85 2.97 2.85 2.96 2.85 53 4.75 4.16 4.44 4.06 4.50 4.05
10 9.84 116.18 14 2.99 2.87 2.98 2.86 2.98 2.86 54 4.85 4.24 4.50 4.12 4.58 4.11
11 9.09 107.34 15 3.01 2.88 3.00 2.88 2.99 2.87 55 4.94 4.32 4.56 4.18 4.66 4.18
12 8.47 99.98 16 3.03 2.89 3.02 2.89 3.01 2.89 56 5.04 4.40 4.62 4.24 4.74 4.25
13 7.94 93.78 17 3.05 2.91 3.04 2.91 3.03 2.90 57 5.15 4.49 4.68 4.31 4.83 4.33
14 7.49 88.47 18 3.07 2.92 3.06 2.92 3.05 2.91 58 5.26 4.58 4.74 4.38 4.93 4.41
15 7.11 83.89 19 3.09 2.94 3.08 2.94 3.07 2.93 59 5.37 4.68 4.81 4.45 5.03 4.49
16 6.77 79.89 20 3.11 2.96 3.10 2.95 3.09 2.95 60 5.49 4.78 4.86 4.52 5.13 4.58
17 6.47 76.37 21 3.13 2.97 3.12 2.97 3.11 2.96 61 5.62 4.89 4.92 4.59 5.24 4.67
18 6.20 73.25 22 3.16 2.99 3.15 2.99 3.13 2.98 62 5.75 5.00 4.98 4.66 5.35 4.77
19 5.97 70.47 23 3.18 3.01 3.17 3.00 3.16 3.00 63 5.88 5.12 5.04 4.73 5.48 4.88
20 5.76 67.98 24 3.21 3.03 3.19 3.02 3.18 3.01 64 6.03 5.25 5.09 4.80 5.60 4.99
21 5.57 65.74 25 3.23 3.05 3.22 3.04 3.21 3.03 65 6.17 5.39 5.14 4.88 5.74 5.10
22 5.40 63.70 26 3.26 3.07 3.25 3.06 3.23 3.05 66 6.32 5.53 5.19 4.95 5.88 5.22
23 5.24 61.85 27 3.29 3.09 3.28 3.08 3.26 3.07 67 6.48 5.68 5.24 5.01 6.03 5.35
24 5.10 60.17 28 3.32 3.11 3.30 3.11 3.29 3.09 68 6.64 5.83 5.28 5.08 6.18 5.49
25 4.97 58.62 29 3.36 3.14 3.34 3.13 3.32 3.12 69 6.80 6.00 5.32 5.14 6.35 5.64
26 4.84 57.20 30 3.39 3.16 3.37 3.15 3.35 3.14 70 6.97 6.17 5.35 5.20 6.53 5.79
27 4.73 55.90 31 3.42 3.19 3.40 3.18 3.38 3.16 71 7.15 6.34 5.38 5.26 6.71 5.96
28 4.63 54.69 32 3.46 3.21 3.43 3.20 3.41 3.19 72 7.32 6.53 5.41 5.30 6.91 6.13
29 4.54 53.57 33 3.50 3.24 3.47 3.23 3.44 3.21 73 7.50 6.72 5.43 5.35 7.12 6.32
30 4.45 52.53 34 3.54 3.27 3.50 3.26 3.48 3.24 74 7.67 6.92 5.45 5.38 7.34 6.52
</TABLE>
- --------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 3.58 3.30 3.54 3.28 3.52 3.27 75 7.85 7.12 5.47 5.42 7.58 6.73
Quarterly instalments 36 3.63 3.33 3.58 3.31 3.55 3.30 76 8.02 7.32 5.48 5.44 7.82 6.96
are 25.32% of 37 3.67 3.37 3.62 3.35 3.59 3.33 77 8.19 7.53 5.49 5.46 8.09 7.21
the annual instalments. 38 3.72 3.40 3.66 3.38 3.64 3.36 78 8.36 7.75 5.50 5.48 8.38 7.47
39 3.77 3.44 3.71 3.41 3.68 3.39 79 8.52 7.96 5.50 5.49 8.67 7.75
Semi-annual instalments 40 3.83 3.47 3.75 3.45 3.72 3.43 80 8.67 8.16 5.51 5.50 9.00 8.05
are 50.43% of the 41 3.88 3.51 3.80 3.48 3.77 3.46 81 8.81 8.36 5.51 5.51 9.34 8.39
instalments. 42 3.94 3.55 3.84 3.52 3.82 3.50 82 8.94 8.55 5.51 5.51 9.70 8.73
43 4.00 3.60 3.89 3.56 3.87 3.54 83 9.06 8.73 5.51 5.51 10.10 9.12
44 4.06 3.64 3.94 3.60 3.92 3.58 84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OPTION 5 -- JOINT AND SURVIVOR, 10 YEARS CERTAIN (Minimum Monthly Instalment)
- ------------------------------------------------------------------------------------------------------------------------------------
Female Age
Male -----------------------------------------------------------------------------------------------------------------------------
Age 45 50 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 75
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
45 $3.47 $3.60 $3.72 $3.75 $3.77 $3.79 $3.81 $3.84 $3.86 $3.88 $3.90 $3.91 $3.93 $3.95 $3.97 $3.98 $4.00 $4.01 $4.06
50 3.53 3.70 3.86 3.90 3.93 3.96 4.00 4.03 4.06 4.09 4.12 4.15 4.17 4.20 4.23 4.25 4.27 4.29 4.39
55 3.58 3.78 3.99 4.04 4.08 4.12 4.17 4.21 4.26 4.30 4.34 4.38 4.43 4.47 4.50 4.54 4.58 4.61 4.76
56 3.59 3.79 4.01 4.06 4.11 4.15 4.20 4.25 4.29 4.34 4.39 4.43 4.48 4.52 4.56 4.60 4.64 4.68 4.84
57 3.60 3.80 4.04 4.08 4.13 4.18 4.23 4.28 4.33 4.38 4.43 4.48 4.53 4.57 4.62 4.66 4.70 4.75 4.92
58 3.60 3.82 4.06 4.11 4.16 4.21 4.26 4.32 4.37 4.42 4.47 4.53 4.58 4.63 4.68 4.72 4.77 4.81 5.01
59 3.61 3.83 4.08 4.13 4.18 4.24 4.29 4.35 4.40 4.46 4.52 4.57 4.63 4.68 4.73 4.78 4.83 4.88 5.09
60 3.62 3.84 4.10 4.15 4.21 4.26 4.32 4.38 4.44 4.50 4.56 4.62 4.67 4.73 4.79 4.84 4.90 4.95 5.18
61 3.62 3.85 4.11 4.17 4.23 4.29 4.35 4.41 4.47 4.54 4.60 4.66 4.72 4.78 4.85 4.91 4.96 5.02 5.27
62 3.63 3.86 4.13 4.19 4.25 4.31 4.38 4.44 4.51 4.57 4.64 4.70 4.77 4.84 4.90 4.97 5.03 5.09 5.37
63 3.64 3.87 4.15 4.21 4.27 4.34 4.40 4.47 4.54 4.61 4.68 4.75 4.82 4.89 4.96 5.02 5.09 5.16 5.46
64 3.64 3.88 4.16 4.23 4.29 4.36 4.43 4.50 4.57 4.64 4.71 4.79 4.86 4.93 5.01 5.08 5.16 5.23 5.55
65 3.65 3.89 4.18 4.24 4.31 4.38 4.45 4.52 4.60 4.67 4.75 4.83 4.90 4.98 5.06 5.14 5.22 5.29 5.65
66 3.65 3.89 4.19 4.26 4.33 4.40 4.47 4.55 4.62 4.70 4.78 4.86 4.95 5.03 5.11 5.20 5.28 5.36 5.75
67 3.65 3.90 4.20 4.27 4.34 4.42 4.49 4.57 4.65 4.73 4.81 4.90 4.99 5.07 5.16 5.25 5.34 5.43 5.84
68 3.66 3.91 4.22 4.29 4.36 4.43 4.51 4.59 4.67 4.76 4.84 4.93 5.02 5.12 5.21 5.30 5.40 5.49 5.94
69 3.66 3.91 4.23 4.30 4.37 4.45 4.53 4.61 4.70 4.78 4.87 4.97 5.06 5.16 5.25 5.35 5.45 5.55 6.03
70 3.66 3.92 4.24 4.31 4.38 4.46 4.54 4.63 4.72 4.81 4.90 5.00 5.09 5.19 5.30 5.40 5.50 5.61 6.12
75 3.68 3.94 4.28 4.35 4.43 4.52 4.61 4.70 4.80 4.90 5.01 5.12 5.23 5.35 5.47 5.60 5.73 5.86 6.54
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-----------
No. 79-01 Page Eleven
<PAGE>
********************************************************************************
VARIABLE LIFE INSURANCE POLICY
EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO)
LIMITED PAYMENT LIFE -- LEVEL FACE AMOUNT. Variable Insurance
Payable In Event of Death. Guaranteed Minimum Death Benefit If
Premiums Duly Paid. Fixed Premiums Payable For Premium Period
Shown on Page 3 or Until Earlier Death. Non-Participating.
Investment Experience Reflected in Benefits.
********************************************************************************
No. 79-01
VARIABLE LIFE INSURANCE POLICY
THE INSURED RICHARD ROE JAN 0l, 1979 REGISTER DATE
INITIAL
FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER
EQUITABLE VARIBLE LIFE INSURANCE COMPANY (EVLICO)
HOME OFFICE: 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10019
ADMINISTRATIVE OFFICE: HUNTINGTON STATION, NEW YORK 11746
EVLICO agrees, subject to the provisions of this policy, to pay a Death Benefit
(determined in accordance with the Death Benefit provision on page seven) to the
beneficiary upon receipt of due proof of the death of the Insured and the
surrender of this policy.
As shown on page three, the face amount increases at the beginning of each
policy year from the second to the fifteenth and is constant thereafter at 150%
of the initial face amount.
PROVIDED PREMIUMS ARE DULY PAID, DURING THE FIRST POLICY YEAR THE DEATH BENEFIT
WILL EQUAL THE INITIAL FACE AMOUNT AND THEREAFTER MAY INCREASE OR DECREASE ON
EACH ANNIVERSARY OF THE REGISTER DATE, DEPENDING ON THE INVESTMENT EXPERIENCE OF
SEPARATE ACCOUNT I, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT FOR THE POLICY
YEAR IN WHICH DEATH OCCURS.
AS PROVIDED IN THE CASH VALUE PROVISION ON PAGE EIGHT, THE CASH VALUE UNDER THIS
POLICY WILL VARY FROM DAY TO DAY AND MAY INCREASE OR DECREASE DEPENDING ON THE
INVESTMENT EXPERIENCE OF SEPARATE ACCOUNT I.
Premiums as shown on page three are fixed as to amount and will not vary with
the investment experience of Separate Account I.
NOTICE OF RIGHT TO EXAMINE POLICY. The Owner may examine this policy and at any
time within 10 days after receipt of this policy, or within 45 days of
completion of Part 1 of the Application, whichever is later, may return it with
a written request for cancellation to the Administrative Office and obtain a
full refund of the premium paid.
The provisions on the following pages are part of this contract.
PRESIDENT
SECRETARY
ASSISTANT REGISTRAR
WHOLE LIFE -- INCREASING FACE AMOUNT. Variable Insurance
Payable In Event of Death. Guaranteed Minimum Death
Benefit If Premiums Duly Paid. Face Amount Increases
Annually to 150% of Initial Face Amount. Fixed Premiums
Payable For Life. Non-Participating. Investment
Experience Reflected in Benefits.
No. 79-02
<PAGE>
Page Two
--------
GUIDE TO POLICY PROVISIONS
PAGE
Owner................................................... 2
Assignments............................................. 2
Beneficiary............................................. 2
Premiums................................................ 5
Grace................................................... 5
Loans................................................... 5
Reinstatement........................................... 5
Separate Account I...................................... 6
Separate Account Index.................................. 6
Actual and Base Net Rates of Return..................... 7
Death Benefit........................................... 7
Variable Adjustment Amount.............................. 7
Cash Value.............................................. 8
Options on Lapse........................................ 8
Exchange of Policy...................................... 8-9
General Provisions...................................... 9
Optional Modes of Settlement............................ 10-11
OWNER
The Owner is the Insured unless otherwise specified in the application or
endorsed on this policy by EVLICO. While the Insured is living, the Owner may
exercise all rights and take any other action agreed to by EVLICO in connection
with this policy (including changing the ownership). Exercise of the rights of
ownership shall not require the concurrence of any person whose interest at the
time of such exercise is that of a contingent or successor owner, or of any
other person referred to in this policy.
ASSIGNMENTS
EVLICO assumes no responsibility for the validity of any assignment.
No assignment of this policy will bind EVLICO or be deemed to be in force as to
EVLICO unless in writing and until filed at EVLICO's Administrative Office.
The Owner may assign this policy and all rights hereunder except the right to
change the beneficiary and the right to make an election under the Optional
Modes of Settlement provision.
If an assignment of this policy as collateral security is on file with EVLICO,
the Owner may change the beneficiary or make an election under the Optional
Modes of Settlement provision, but the rights of the beneficiary shall be
subordinate to those of the assignee.
So long as an assignment remains in force, the rights of the Owner and of any
other person referred to in this policy shall be subordinate to those of the
assignee but shall not otherwise be affected by the assignment.
EVLICO may pay to an assignee, in a single sum, any amount claimed by the
assignee to be payable under the terms of the assignment. Any amount payable
which is not claimed by the assignee shall be payable in accordance with the
terms of the policy to the person or persons who would have been entitled to the
amount then payable had there been no assignment outstanding.
BENEFICIARY
The beneficiary is as designated in the application unless changed. The Owner
may change the beneficiary from time to time during the lifetime of the Insured,
by written notice in a form satisfactory to EVLICO. The change will, upon
recording at EVLICO's Administrative Office, take effect as of the time the
written notice was signed, whether or not the Insured is living at the time of
recording, but without further liability as to any payment or other settlement
made by EVLICO before recording the change.
Unless otherwise specified in the designation, if two or more persons are
designated as beneficiary, the beneficiary will be the designated person or
persons who survive the Insured, and if more than one survive, they will share
equally.
Any proceeds for which there is no designated beneficiary surviving at the death
of the Insured will be payable in a single sum to the children of the Insured
who survive the Insured, in equal shares, or should none survive, then to the
Insured's executors or administrators.
No. 79-02
--------
Page Two
<PAGE>
DATE OF ISSUE JAN 01, 1979
THE INSURED RICHARD ROE JAN 01, 1979 REGISTER DATE
INITIAL
FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER
BENEFICIARY MARGARET H ROE, WIFE 35M ISSUE AGE & SEX
************************** BENEFITS AND PREMIUMS TABLE *************************
BENEFITS ANNUAL PREMIUM PREMIUM PERIOD
LIFE INSURANCE - VARIABLE $2,320.00 FOR LIFE
THE FIRST PREMIUM IS $2,320.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY
SUBSEQUENT PREMIUMS ARE DUE ON JAN 01, 1980 AND EVERY 12 MONTHS THEREAFTER
DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE.
**************************** TABLE OF FACE AMOUNTS *****************************
<TABLE>
<CAPTION>
POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT
<S> <C> <C> <C> <C> <C>
1 $100,000 6 $115,900 11 $134,400
2 $103,000 7 $119,400 12 $138,400
3 $106,100 8 $123,000 13 $142,600
4 $109,300 9 $126,700 14 $146,900
5 $112,600 10 $130,500 15 AND OVER $150,000
</TABLE>
************************ TABLE OF NET ANNUAL PREMIUMS **************************
BEGINNING OF NET ANNUAL
POLICY YEAR PREMIUM
1 $1,259.00
2 - 4 2,045.00
5 AND LATER 2,145.00
V2-03 PAGE THREE
<PAGE>
THE INSURED RICHARD ROE JAN 01, 1979 REGISTER DATE
INITIAL
FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER
ISSUE DATE JAN 01, 1979 35M ISSUE AGE & SEX
**************************** TABULAR CASH VALUES *******************************
THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN
SEE PAGE EIGHT FOR CASH VALUE PROVISION
<TABLE>
<CAPTION>
INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
INTERIM INTERIM INTERIM
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
MONTH VALUES MONTH VALUES MONTH VALUES
<S> <C> <C> <C> <C> <C>
1 $ 0 5 $146 9 $ 668
2 0 6 275 10 801
3 0 7 407 11 929
4 14 8 540 12 1062
</TABLE>
<TABLE>
<CAPTION>
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
YEAR VALUES YEAR VALUES YEAR VALUES
<S> <C> <C> <C> <C> <C>
1 $ 1,062 9 $18,221 17 $38,251
2 2,959 10 20,622 18 40,884
3 4,912 11 23,062 19 43,546
4 6,917 12 25,534 20 46,235
5 9,077 13 28,033 AGE 60 59,960
6 11,290 14 30,548 AGE 62 65,499
7 13,552 15 33,081 AGE 65 73,755
8 15,864 16 35,650 AGE 70 86,944
<FN>
* VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
</FN>
</TABLE>
V2-03A PAGE THREE-A
<PAGE>
Page Three-B
------------
<TABLE>
<CAPTION>
TABLE OF NET SINGLE PREMIUMS (MALE)
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance
Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined
by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
--------- ------- --------- ------- --------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.09647 21 $.17350 41 $.32865 61 $.57583 81 $ .81560
2 .09871 22 .17890 42 .33918 62 .58929 82 .82496
3 .10126 23 .18450 43 .34995 63 .60272 83 .83394
4 .10397 24 .19031 44 .36096 64 .61610 84 .84259
5 .10685 25 .19635 45 .37222 65 .62940 85 .85096
6 .10990 26 .20263 46 .38370 66 .64260 86 .85909
7 .11312 27 .20915 47 .39541 67 .65565 87 .86704
8 .11650 28 .21591 48 .40733 68 .66851 88 .87488
9 .12005 29 .22293 49 .41945 69 .68114 89 .88268
10 .12377 30 .23021 50 .43176 70 .69350 90 .89050
11 .12764 31 .23775 51 .44424 71 .70559 91 .89841
12 .13166 32 .24556 52 .45688 72 .71744 92 .90648
13 .13581 33 .25366 53 .46968 73 .72908 93 .91479
14 .14008 34 .26205 54 .48261 74 .74057 94 .92350
15 .14447 35 .27073 55 .49568 75 .75194 95 .93291
16 .14897 36 .27970 56 .50886 76 .76319 96 .94339
17 .15360 37 .28896 57 .52214 77 .77427 97 .95520
18 .15835 38 .29850 58 .53550 78 .78512 98 .96810
19 .16323 39 .30830 59 .54892 79 .79566 99 .98063
20 .16828 40 .31835 60 .56237 80 .80583 100 1.00000
</TABLE>
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V2-03B(M) Page Three-B
<PAGE>
Page Four
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Page Four
<PAGE>
Page Five
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PREMIUMS
Premiums are payable for the premium period indicated on page three but no
premium will fall due after the death of the Insured. The premium period is
measured from the Register Date. If the end of the premium period is indicated
by an age it extends to the policy anniversary nearest the birthday on which the
Insured attains that age.
Premiums are payable on or before their due dates at the Administrative Office
or to an EVLICO premium collection office. A receipt, signed by a Vice
President, the Secretary or the Treasurer, will be furnished upon request.
Premiums are as shown on page three except that by written request premiums may
be made payable at a different frequency allowed by EVLICO at its applicable
rates. If the request is applicable to the first premium, it must be made on or
before the payment of that premium and delivery of this policy. Requests made
after the first premium has been paid are subject to the approval of EVLICO. A
premium not paid on or before its due date will be in default, and its due date
will be the date of default. Upon default this policy will lapse and the
insurance will cease as of the date of default, except as stated in the Grace
and Options on Lapse provisions.
The proceeds payablee upon the death of the Insured while this policy is in
force on a premium paying basis will be increased by the portion of the last
premium due and paid which is applicable to any part of the then current premium
interval extending after the end of the policy month in which death occurs.
GRACE
A grace period of 31 days will be granted for the payment of each premium after
the first. The insurance will continue in force during the grace period but if
the Insured dies during the grace period of a premium then due and unpaid, the
portion of the premium due which is applicable to the period from the premium
due date to the end of the policy month in which death occurs will be deducted
from the proceeds. If a premium is paid during the grace period, then all
benefits thereafter under the policy shall be the same as if such premium were
paid on its due date.
LOANS
While this policy has a loan value, the Owner may obtain a loan from EVLICO upon
assignment of the policy as sole security, if no premium is in default beyond
the grace period or if this policy is being continued under Option (a) of the
Options on Lapse provision. "Indebtedness" as used in this policy means a loan
by EVLICO on the sole security of this policy together with accrued interest.
The loan may not exceed the loan value, and EVLICO will deduct from the loan
proceeds an amount necessary to repay any outstanding indebtedness. The loan
value of this policy, if no premium is in default beyond the grace period, is an
amount equal to 75% of the cash value determined in accordance with the Cash
Value provision on page eight. The loan value, if the policy is continued under
Option (a) of the Options on Lapse provision, is the amount which, accumulated
with interest to the next policy anniversary, equals the cash value as of such
anniversary determined in accordance with the Cash Value provision. Extended
term insurance under Option (b) of the Options on Lapse provision has no loan
value.
A loan will have a permanent effect on the Variable Adjustment Amount, Death
Benefit and cash value under this policy whether or not the indebtedness created
thereby is repaid in whole or in part.
The following will apply:
1. Except when used to pay premiums, a loan will not be permitted unless it
is at least $100 more than the existing indebtedness.
2. Interest on a loan will accrue daily at the effective rate of 5% per
year, will become part of the indebtedness as it accrues and will be
compounded on policy anniversaries.
3. Whenever the indebtedness under this policy exceeds the cash value,
EVLICO will mail to the Owner and any assignee of record at their last
known addresses a notice that the policy will terminate if the excess
indebtedness is not repaid within 31 days after the date of mailing of
such notice.
4. Any indebtedness may be repaid, in whole or in part, while the Insured is
living and the policy is in force, except that if the policy is being
continued under one of the options on lapse, any indebtedness which was
deducted in determining the benefit on lapse may not be repaid unless the
policy is reinstated.
Indebtedness will be deducted in a single sum in any settlement.
REINSTATEMENT
If premiums are in default and if this policy has not been terminated by payment
of its cash value, it may be reinstated within five years from the date of
default upon production of evidence of insurability satisfactory to EVLICO and
the payment of the larger of (a) all overdue premiums with interest at 6%
compounded annually and (b) 110% of the difference between (i) and (ii), where
(i) is the excess of the cash value immediately following reinstatement over the
cash value immediately preceding reinstatement, and (ii) is any indebtedness in
effect at the date any option on lapse became effective, with interest at 5%
compounded annually to the date of reinstatement.
Upon reinstatement this policy will have the same benefit base and the same
Variable Adjustment Amount (as these are determined in the Variable Adjustment
Amount provision on page seven) as if default had not occurred. Also upon
reinstatement this policy will have indebtedness equal to the sum of (i) and
(ii), where (i) is any indebtedness in effect at the date any option on lapse
became effective, with interest at 5% compounded annually to the date of
reinstatement, and (ii) is any indebtedness arising subsequent to the date any
option on lapse became effective, with interest at 5% compounded annually to the
date of reinstatement.
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V2-05 Page Five
<PAGE>
Page Six
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SEPARATE ACCOUNT I
Separate Account I is an account established and maintained by EVLICO pursuant
to the laws of the State of New York under which income, gains and losses,
whether or not realized, from assets allocated to such account, are credited to
or charged against such account without regard to other income, gains, or losses
of EVLICO. Assets will be allocated to Separate Account I to support the
operation of this policy and certain other variable life insurance policies.
Assets may also be allocated to Separate Account I for other purposes, but not
to support the operation of any contracts or policies other than variable life
insurance.
It is contemplated that investments in Separate Account I will, at most times,
consist primarily of common stocks and other equity-type investments. However,
EVLICO may, in its discretion, invest the assets of Separate Account I in any
investments permitted by applicable law. EVLICO may rely conclusively on the
opinion of counsel (including attorneys in its employ) as to what investments it
is permitted by law to make.
In lieu of making such investments directly, to the extent permitted by
applicable laws and regulations EVLICO reserves the right to operate Separate
Account I as a unit investment trust, or other form, investing all or part of
its assets in shares or units of a fund, the investment adviser of which would
be EVLICO, an affiliate, or The Equitable Life Assurance Society of the United
States. The assets of such a fund would be invested as provided herein with
respect to Separate Account I.
The assets of Separate Account I are the property of EVLICO. However, the
portion of the assets of Separate Account I equal to the reserves and other
policy liabilities with respect to Separate Account I will not be chargeable
with liabilities arising out of any other business EVLICO may conduct. EVLICO
reserves the right to transfer assets of Separate Account I in excess of such
reserves and policy liabilities to the general account of EVLICO.
The assets of Separate Account I shall be valued on each business day.
EVLICO reserves the right to withdraw from Separate Account I and allocate to
another separate account assets determined by EVLICO to be associated with the
class of policies to which this policy belongs. In any such event, to the extent
practicable and permissible under applicable laws and regulations, the
withdrawal shall be made by withdrawing the same percentage of each investment
in Separate Account I, with appropriate adjustments to avoid odd lots and
fractions. On and after the date of such withdrawal the term "Separate Account
I" in this policy shall mean such other separate account to which the withdrawn
assets were allocated.
EVLICO reserves the right to the extent permitted by applicable laws and
regulations (including any order of the Securities and Exchange Commission):
(a) to cause the registration or deregistration of Separate Account I under the
Investment Company Act of 1940;
(b) to operate Separate Account I under the general supervision of a Committee
any or all of the members of which may, but need not, be interested persons
of EVLICO, an affiliate, or The Equitable Life Assurance Society of the
United States, or to discharge such Committee at any time; or
(c) to eliminate or restrict any voting rights of policyholders or other
persons having such voting rights in respect of Separate Account I.
CHANGES IN INVESTMENT ADVISER OR INVESTMENT POLICY OF SEPARATE ACCOUNT I. Unless
otherwise required by applicable law, the investment adviser or any investment
policy of Separate Account I may not be changed without the consent of EVLICO.
If required by applicable laws and regulations, the investment policy of
Separate Account I will not be changed unless approved by the Superintendent of
Insurance of the State of New York or deemed approved in accordance with such
laws and regulations. If so required, the process for obtaining such approval
will be filed with the insurance supervisory official of the state in which this
policy is delivered.
SEPARATE ACCOUNT INDEX
The Separate Account Index for the valuation period which included the first day
on which there were assets in Separate Account I was 100. The Separate Account
Index for each subsequent valuation period is the Separate Account Index for the
immediately preceding valuation period multiplied by the Net Investment Factor
for such subsequent valuation period. The Separate Account Index for a valuation
period applies to each day in that period.
VALUATION PERIOD. Each business day together with any non-business day or
consecutive non-business days immediately preceding such business day will
constitute a valuation period.
A business day is any day on which the New York Stock Exchange is open for
trading.
NET INVESTMENT FACTOR. The Net Investment Factor for a valuation period is (a)
divided by (b), minus (c), where
(a) is (1) the value of the assets in Separate Account I at the close of
business of the preceding valuation period, plus (2) the investment
income and the capital gains, realized or unrealized, credited to the
assets of Separate Account I in the valuation period for which the Net
Investment Factor is being determined, minus (3) the capital losses,
realized or unrealized, charged against such assets in such valuation
period, minus (4) any amount charged against Separate Account I in such
valuation period for taxes or for amounts set aside by EVLICO as a
reserve for taxes attributable to the maintenance or operation of
Separate Account I;
(b) is the value of the assets in Separate Account I at the close of business
of the preceding valuation period; and
(c) is a charge not exceeding .00002063 for each day in the valuation period,
corresponding to the sum of (i) a charge not exceeding .25% per year for
investment management expense, and (ii) a charge not exceeding .50% per
year for mortality and expense risks and other contingencies.
The value of the assets in Separate Account I shall be taken at their fair
market value or, where there is no readily available market, their fair value
determined in accordance with accepted accounting practices and applicable laws
and regulations.
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V2-06 Page Six
<PAGE>
Page Seven
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ACTUAL AND BASE NET RATES OF RETURN
ACTUAL NET RATE OF RETURN. The Actual Net Rate of Return for a policy year is
equal to the change in the Separate Account Index from the first day of such
policy year to the first day of the next policy year, divided by the Separate
Account Index for the first day of such policy year. The Actual Net Rate of
Return for a policy year is negative if the Separate Account Index decreased
over the year. The Actual Net Rate of Return for a period less than a year is
determined on a corresponding basis.
BASE NET RATE OF RETURN. The Base Net Rate of Return for this policy is .04 (4%)
per year. (For a period less than a year, it is a pro-rata part of the annual
rate.) Provided premiums are duly paid, if the Actual Net Rate of Return for
each policy year equals the Base Net Rate of Return, the Death Benefit in each
policy year will equal the face amount for that policy year and the cash value
at the end of each policy year will equal the tabular cash value as shown on
page three-A.
"The difference between the Actual and Base Net Rates of Return" as used in
this policy is positive if the Actual Net Rate of Return is greater than the
Base Net Rate of Return, and is negative if the Actual Net Rate of Return is
less than the Base Net Rate of Return.
DEATH BENEFIT
A. PROVIDED PREMIUMS ARE DULY PAID, the Death Benefit shall equal the face
amount plus the Variable Adjustment Amount for the policy year in which
death occurs; except that if the Variable Adjustment Amount is negative,
the Death Benefit shall equal the face amount. In no event, however, will
the net insurance benefit as of the date of death be less than the net cash
value on such date divided by the net single premium on such date for $1.00
of paid up whole life insurance. For this purpose, the "net insurance
benefit" will equal the Death Benefit otherwise determined, decreased by
any indebtedness and increased by any pro-rata portion of premiums returned
on death, all determined as of the date of death.
B. UPON DEFAULT IN PAYMENT OF A PREMIUM, the Death Benefit shall be as
provided in the Grace and Options on Lapse provisions.
VARIABLE ADJUSTMENT AMOUNT
Provided premiums are duly paid, EVLICO will determine on each policy
anniversary the Variable Adjustment Amount for the policy year beginning on that
policy anniversary to take into account the investment experience of Separate
Account I for the preceding policy year. The Variable Adjustment Amount is zero
during the first policy year, and thereafter it may be positive or neqative. As
long as premiums are duly paid, the Variable Adjustment Amount remains at a
constant amount during a policy year. The Variable Adjustment Amount during the
policy year will equal the sum of the VAA Change Amount determined on the policy
anniversary at the beginning of such policy year and the Variable Adjustment
Amount for the preceding policy year.
A. IF DURING THE PRECEDING POLICY YEAR NO LOAN HAS BEEN MADE OR INDEBTEDNESS
REPAID, then the VAA Change Amount on a policy anniversary will be positive
or negative depending on whether the Actual Net Rate of Return for the
preceding policy year is greater or less than the Base Net Rate of Return,
and will equal the product of (a) and (b), divided by (c), where
(a) is the difference between such Actual and Base Net Rates of Return;
(b) is the benefit base defined below; and
(c) is the net single premium on the current policy anniversary for $1.00
of Variable Adjustment Amount.
In determining the VAA Change Amount on the first policy anniversary the
benefit base will be the net annual premium applicable at the beginning of
the first policy year. In determining the VAA Change Amount on a policy
anniversary after the first the benefit base will be the sum of (a) the
tabular cash value on the previous policy anniversary, (b) the net single
premium for the Variable Adjustment Amount on the previous anniversary, and
(c) the net annual premium for such previous policy anniversary, less the
indebtedness, if any, as of such previous policy anniversary.
The net annual premium is determined from the table on page three and the
tabular cash value from the table on page three-A. The net single premium
for the Variable Adjustment Amount is determined from the table on page
three-B. If the Variable Adjustment Amount is negative, the net single
premium for it is negative.
B. IF DURING THE PRECEDING POLICY YEAR A LOAN HAS BEEN MADE OR INDEBTEDNESS
REPAID, then the VAA Change Amount on a policy anniversary will equal the
VAA Change Amount as calculated in Section A above, plus the Repayment
Adjustment Amounts on such policy anniversary, if any, less the Loan
Adjustment Amounts on such policy anniversary, if any. The Repayment
Adjustment Amount and Loan Adjustment Amount are defined as follows:
(i) For each such repayment, the Repayment Adjustment Amount on a policy
anniversary will equal the product of (a) and (b), divided by (c),
where
(a) is the difference between the Actual and Base Net Rates of Return
for the period from the date of the repayment to the policy
anniversary following such repayment;
(b) is the amount of the repayment; and
(c) is the net single premium on such policy anniversary for $1.00 of
Variable Adjustment Amount.
(ii) For each such loan, the Loan Adjustment Amount on a policy anniversary
will equal the product of (a) and (b), divided by (c), where
(a) is the difference between the Actual and Base Net Rates of Return
for the period from the date of the loan to the policy
anniversary following such loan;
(b) is the amount of the loan; and
(c) is the net single premium on such policy anniversary for $1.00 of
Variable Adjustment Amount.
----------
V2-07 Page Seven
<PAGE>
Page Eight
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CASH VALUE
The Owner may surrender this policy for its net cash value at any time. The net
cash value is the cash value as defined below less any indebtedness, and will be
determined as of the date the signed request for surrender is received by EVLICO
at its Administrative Office. Surrender will take effect as of the date the
policy and request are transmitted to EVLICO. The cash value is defined as
follows:
A. If no premium is in default, the cash value on any date DURING THE FIRST
POLICY YEAR is equal to the sum of (1) the tabular cash value on such
date, and (2) the product of (i) and (ii), where (i) is the difference
between the Actual and Base Net Rates of Return for the period from the
Register Date to such date and (ii) is the net annual premium applicable
at the beginning of the first policy year.
B. If no premium is in default, the cash value on any date AFTER THE FIRST
POLICY YEAR is equal to the sum of (1) the tabular cash value on such
date and (2) the net single premium on such date for the Variable
Adjustment Amount, and (3) if such date is not a policy anniversary, the
product of (i) and (ii), where (i) is the difference between the Actual
and Base Net Rates of Return for the period from the last policy
anniversary to such date and (ii) is the benefit base on the previous
policy anniversary (as determined in the Variable Adjustment Amount
provision).
C. If a premium is in default, then within three months after the date of
default, the cash value is equal to the sum of (1) the cash value as of
the date to which premiums have been paid, and (2) the product of (i) and
(ii), where (i) is the difference between the Actual and Base Net Rates
of Return for the period of default and (ii) is the cash value as of the
date to which premiums have been paid less the indebtedness, if any, as
of the date to which premiums have been paid.
Account will be taken of any loans or repayment of indebtedness in calculating
the cash value in paragraphs A., B. and C. above.
D. More than three months after the date of default, if this policy is
continued under Option (b) or Option (c) of the Options on Lapse
provision, the cash value on any date is equal to the reserve for the
policy as of such date, provided that the cash value within 30 days after
a policy anniversary will not be less than on that anniversary.
TABULAR CASH VALUE DURING FIRST POLICY YEAR. The tabular cash value during the
first policy year will be determined by EVLICO based on the first year interim
tabular cash value, with allowance for the time elapsed and for any portion of
the year for which premiums due have been paid. First year interim tabular cash
values are determined in accordance with the table on page three-A which shows
values at the ends of policy months assuming premiums have been duly paid to the
end of such policy months.
TABULAR CASH VALUE AFTER THE FIRST POLICY YEAR. The tabular cash value after the
first policy year is determined in accordance with the table on page three-A
which shows values applicable at the ends of policy years, provided premiums are
duly paid. Values not shown will be furnished on request. Where an age is shown,
the values are those applicable at the end of the policy year nearest the
birthday on which the Insured attains such age. The tabular cash value during a
policy year will be determined by EVLICO with allowance for the time elapsed and
for any portion of the year for which premiums due have been paid.
OPTIONS ON LAPSE
Upon default in the payment of a premium while this policy has a net cash value,
the Owner may elect by written notice to continue insurance on the Insured under
one of the following options if he does not elect to surrender the policy for
its net cash value.
OPTION (a). REDUCED PAID-UP FIXED BENEFIT LIFE INSURANCE for a fixed amount of
insurance equal to the net cash value as of the date the option becomes
effective divided by the net single premium on the date of default for $1.00 of
paid-up whole life insurance.
OPTION (b). EXTENDED FIXED BENEFIT TERM INSURANCE for a fixed amount of
insurance equal to the Death Benefit less any indebtedness as of the date the
option becomes effective (determined as if default had not occurred) and for the
period from the date of default which the net cash value as of the date the
option becomes effective will purchase as a net single premium at the Insured's
current age on the date of default. SEE PAGE THREE FOR ANY RESTRICTIONS UNDER
THIS POLICY AS TO AVAILABILITY OF OPTION (b).
The following will apply:
1. The election of an option made within three months after the date of
default will become effective on the date written notice is received by
EVLICO at its Administrative Office.
2. If an option has not been elected within three months after the date of
default, Option (b) will take effect automatically at the end of such
three month period.
3. Option (a) will replace Option (b) if Option (b) is not available under
this policy or if Option (a) provides an equal or greater amount of
insurance at the date the option becomes effective.
4. If the Insured dies after the grace period but within three months from
the date of default, and if the policy has not been surrendered for its
net cash value, Option (b) will apply notwithstanding any restrictions
stated on page three as to the availability of Option (b) under this
policy, provided that the net cash value as of the date of death
(determined as if death had not occurred) will purchase extended term
insurance for a period from the date of default to at least the date of
death. In that event, any election of Option (a) will be automatically
cancelled.
EXCHANGE OF POLICY
Within 18 months after the Date of Issue shown on page three, provided premiums
are duly paid, the Owner may exchange this policy, without evidence of
insurability, for a policy of permanent fixed benefit life insurance (as
described below) on the life of the Insured. The exchange will take effect as of
the date this policy and the signed request on EVLICO's form for such
----------
V2-08 Page Eight
<PAGE>
Page Nine
---------
exchange are transmitted to EVLICO, or as of the date any amounts required to be
paid for such exchange by the Owner are received by EVLICO at its Administrative
Office, whichever is later.
The new policy will be the form of policy being offered by The Equitable
Assurance Society of the United States (Equitable) on the Date of Issue of this
policy, known as the "Executive Policy." The new policy will have a face amount
of life insurance equal to the initial face amount of this policy and will have
the same Register Date, Date of Issue and Issue Age as shown on page three of
this policy. Premiums for the new policy will be based on Equitable's premium
rates for such policy in effect at such Register Date for the same
classification of risk as under this policy.
The exchange will be subject to a premium or cash value adjustment that takes
appropriate account of the premiums and cash values under this policy and under
the new policy. A detailed statement of the method of computing such an
adjustment has been filed with the insurance supervisory official of the state
in which this policy is delivered.
Any indebtedness under this policy must be repaid on the date of the exchange.
Any additional benefit provisions included under this policy will be included
with the new policy only to the extent that such provisions were being offered
with the new policy on the Date of Issue.
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
required premiums. This policy and the application (a copy of which is attached
at issue) constitute the entire contract. The rights conferred by this policy
are in addition to those provided by applicable Federal and State laws and
regulations.
All statements made in the application shall be deemed representations and not
warranties. No statement shall avoid this policy or be used in defense of a
claim unless contained in the application.
This policy may not be modified, nor may any of the rights or requirements of
EVLICO be waived, except in writing signed by the President, a Vice President,
the Secretary or the Treasurer of EVLICO.
All sums payable by EVLICO under this policy are payable at its Administrative
Office.
POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, and policy
anniversaries are measured from the Register Date shown on page three. Each
policy month begins on the same day in each calendar month as that specified in
the Register Date.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be such as the premium paid would have purchased at the correct age and sex.
SUICIDE. In the event of the suicide of the Insured, sane or insane, within two
years from the Date of Issue shown on page three, the liability of EVLICO will
be limited to the payment to the beneficiary of a single sum equal to the
premiums paid less any indebtedness.
INCONTESTABILITY. Except as to any disability provision, this policy will be
incontestable, except for non-payment of premiums, after it has been in force
during the lifetime of the Insured for two years from the Date of Issue shown on
page three.
POLICY CHANGES. The Owner, with the consent of EVLICO, may change this policy to
another form, kind or plan of insurance or make any other change permitted by
EVLICO.
REPORTS TO OWNER. Except while this policy is continued under the Options on
Lapse provision, a statement will be sent to the Owner setting forth the Death
Benefit and the cash value as of the first day of such year and, if there is
existing indebtedness, the amount of such indebtedness as of the first day of
such year and the accrued interest for the previous policy year. Other reports
will be furnished to the Owner as required by law.
BASIS OF COMPUTATION. All cash values, reserves and net single premiums referred
to in this policy are based on the Commissioners 1958 Standard Ordinary
Mortality Table, except that for any extended term insurance they are based on
the Commissioners 1958 Extended Term Insurance Table. Continuous functions are
used and interest is assumed at a rate of 4% compounded annually. The cash
values and paid-up insurance benefits are equal to or greater than those
required by the state in which this policy is delivered. A detailed statement of
the method of computing values and benefits has been filed with the insurance
supervisory official of that state. Tabular cash values at the end of each
policy year are equal to reserves, which are not less than reserves determined
according to the Commissioners Reserve Valuation Method. Expense and mortality
results of EVLICO shall not adversely affect the dollar amount of insurance
benefits or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. If no premium is in default more
than three months, then, except as provided below, EVLICO will (1) make payment
of the cash value within seven days after receipt by EVLICO at its
Administrative Office of the policy and a signed request for its surrender: (2)
make payment of any loan within seven days after receipt by EVLICO at its
Administrative Office of a request for loan: and (3) subject to the provisions
of this policy, make payment of the Death Benefit within seven days after
receipt by EVLICO at its Administrative Office of this policy, due proof of the
death of the Insured, and all other requirements deemed necessary before such
payment may be made.
During any period when (i) the sale of securities or the determination of the
Separate Account Index is not reasonably practicable because the New York Stock
Exchange is closed or conditions are such that, under rules and regulations
adopted by the Securities and Exchange Commission, trading is deemed to be
restricted or an emergency is deemed to exist, or (ii) the Commission by order
permits postponement for the protection of EVLICO policyholders, EVLICO reserves
the right:
(a) to defer determination of cash values and payment of the cash value;
(b) to defer payment of a loan;
(c) to defer determination of a change in Variable Adjustment Amount and, if
such determination has been deferred, to defer payment of any portion of
the Death Benefit equal to the Variable Adjustment Amount; and
(d) if payment of all or part of the Death Benefit is deferred, to defer
application of the Death Benefit under the Optional Modes of Settlement
provision.
DEFERMENT UNDER OPTION (a) OR OPTION (b) OF THE OPTIONS ON LAPSE PROVISION. The
payment of the cash value under Option (a) or Option (b) of the Options on Lapse
provision and the making of a loan under Option (a) may be deferred by EVLICO
for up to six months after the receipt of request. Interest at the rate of 3%
per year will be allowed on such cash payment deferred for 30 days or more.
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V2-09 Page Nine
<PAGE>
Page Ten
--------
OPTIONAL MODES OF SETTLEMENT
A. ELECTIONS
In lieu of payment in one sum, an election may be made to apply the whole or any
part of the proceeds under the following options. An election for the benefit of
a payee who is not a natural person or who is acting in a fiduciary capacity, or
which includes more than one of the options, may be made only with the approval
of EVLICO.
ELECTION AS TO DEATH BENEFIT. During the lifetime of the Insured, the Owner may
make an election for the benefit of the beneficiary and may change or revoke a
previous election. A change of beneficiary revokes any previous election. An
election in effect at the death of the Insured may not be changed or revoked by
an election made after the death of the Insured.
If no election is effective at the death of the Insured, the beneficiary may
then make an election for his own benefit, or in the case of Option 5, for the
benefit of two persons, one of whom must be the beneficiary.
ELECTION AS TO CASH VALUE. Upon surrender of this policy for its net cash value,
the Owner may make an election for the benefit of the Owner or the Insured, or
in the case of Option 5 for the benefit of two persons, one of whom must be the
Owner or the Insured.
B. OPTIONS
1. DEPOSIT OPTION: Left on deposit with EVLICO with interest payable at a
rate of 3% per year. The deposit period and withdrawal rights and rights
to change to another option will be as approved by EVLICO at the time of
election.
2. INSTALMENT OPTION, FIXED PERIOD: Payable in equal instalments for the
number of years elected (not more than 30) in an amount determined by the
Table of Instalments. Rights of commutation of unpaid instalments (based
on interest of 3-1/2% per year compounded annually) will be as approved
by EVLICO at the time of election.
3. LIFE INCOME OPTIONS:
A. 10 or 20 Years Certain. Payable in instalments for the certain period
elected, and continuing thereafter for the remaining lifetime of the
person upon whose life the income depends.
B. Refund Certain. Payable in instalments until the total amount paid
equals the proceeds applied under this option and continuing
thereafter for the remaining lifetime of the person upon whose life
the income depends.
The amount of each instalment will be determined by EVLICO at the time of
payment of the first instalment but will not be less per $1,000 of
proceeds than the Minimum Monthly Instalment shown in the Table of
Instalments. Instalments shall be without the right of commutation.
4. INSTALMENT OPTION, FIXED AMOUNT: Payable in instalments until the
proceeds applied, together with interest on the unpaid balance at the
effective rate of 3-1/2% per year, are exhausted. Amounts of instalments
and withdrawal rights will be as approved by EVLICO at the time of
election.
5. JOINT AND SURVIVOR OPTION, 10 YEARS CERTAIN: Payable in instalments for
ten years, and continuing thereafter while either of two persons upon
whose lives the income depends is surviving. The amount of each
instalment will be determined by EVLICO at the time of payment of the
first instalment but will not be less per $1,000 of proceeds than the
Minimum Monthly Instalment shown in the Table of Instalments. Instalments
shall be without the right of commutation.
C. GENERAL PROVISIONS
Interest under Option 1 and instalments under Options 2 and 4 will be paid
annually, semi-annually, quarterly or monthly, in accordance with the election.
Instalments under Options 3 and 5 will be paid monthly. Deposit years under
Option 1 and instalment years under the other options are measured from the date
the option becomes operative, and the first instalment under the other options
will be due on such date.
Excess interest may be allowed under Options 1, 2 and 4 as determined annually
by EVLICO. Any such excess interest will be applied to increase the payments
under Option 1, the payment at the end of each instalment year under Option 2,
and the unpaid balance at the end of each instalment year under Option 4.
If at the death of any payee there is no designated person living entitled to
receive any remaining payments, EVLICO will pay in a single sum to such payee's
executors or administrators: (a) any balance left with EVLICO under Option 1 or
4, or (b) the commuted value of any remaining instalments under Option 2 on the
basis of compound interest of 3-1/2% per year, or Option 3 or 5 on the basis of
compound interest of 3% per year, except that if the amount of instalments under
Option 3 or 5 is greater than the amount determined in accordance with the Table
of Instalments, the commutation interest rate will be that associated with the
more favorable amount.
The payee for whose benefit an option is operative may designate (with the right
to change such designation) a person or persons to receive any amount which
would otherwise become payable to such payee's executors or administrators.
Any election, change, revocation or designation shall be made, and will take
effect, in the same manner as a change of beneficiary.
If Option 3 or 5 is elected, EVLICO will require satisfactory evidence of the
age of any person upon whose life the income depends. Instalments under Option 3
or 5 terminate with the last instalment due before the death of the person upon
whose life the income depends or the end of the certain period, whichever is
later.
EVLICO will require satisfactory evidence of survival whenever a payment depends
upon the survival of any person.
If instalments or interest payments to any payee would amount to less than $25
each, EVLICO may change the interval of payment so that the payments will amount
to at least $25 each.
If the amount to be applied under an option with respect to a payee is less than
$2,000, EVLICO may pay the amount to the payee in a single sum instead of
applying it under the option.
No sum payable under any option elected by the Owner for the benefit of a payee
other than the Owner may be assigned or encumbered by such payee and, to the
extent permitted by law, no such sum shall in any way be subject to any legal
process to subject the same to the payment of any claim against such payee.
If a withdrawal or commutation right under an option is exercised, EVLICO may
defer payment for up to six months from the receipt of request.
----------
V2-10 Page Ten
<PAGE>
<TABLE>
<CAPTION>
Page Eleven
-----------
TABLE OF INSTALMENTS UNDER OPTIONAL MODES OF SETTLEMENT
FOR EACH $1,000 OF PROCEEDS
Instalment amounts for Options 3 and 5 are based on age nearest birthday on the due date of the first instalment. Option 5 instal-
ment amounts for ages not shown, or for two males or two females, will be furnished on request.
- ------------------------------------------------------------------------------------------------------------------------------------
OPTION 2 OPTION 3 -- LIFE INCOME (Minimum Monthly Instalment)
- ------------------------------------------------------------------------------------------------------------------------------------
Number 10 20 10 20
of Years' Monthly Annual Years Certain Years Certain Refund Certain Years Certain Years Certain Refund Certain
Instal- Instal- Instal- -------------- ------------- -------------- ------------- ------------- --------------
ments ment ment AGE Male Female Male Female Male Female AGE Male Female Male Female Male Female
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $84.70 $1000.00 5 & under $2.86 $2.76 $2.85 $2.76 $2.85 $2.76 45 $4.13 $3.69 $3.99 $3.65 $3.98 $3.62
2 43.08 508.60 6 2.87 2.77 2.86 2.77 2.86 2.77 46 4.20 3.74 4.05 3.69 4.03 3.67
3 29.21 344.86 7 2.88 2.78 2.88 2.78 2.87 2.78 47 4.27 3.79 4.10 3.74 4.09 3.72
4 22.28 263.04 8 2.90 2.79 2.89 2.79 2.88 2.79 48 4.34 3.84 4.15 3.78 4.15 3.77
5 18.12 213.99 9 2.91 2.81 2.90 2.80 2.90 2.80 49 4.42 3.90 4.21 3.84 4.22 3.82
6 15.36 181.32 10 2.92 2.82 2.92 2.81 2.91 2.81 50 4.50 3.96 4.27 3.89 4.28 3.87
7 13.38 158.01 11 2.94 2.83 2.93 2.83 2.93 2.82 51 4.58 4.02 4.32 3.94 4.35 3.93
8 11.91 140.56 12 2.96 2.84 2.95 2.84 2.94 2.83 52 4.67 4.09 4.38 4.00 4.42 3.99
9 10.76 127.00 13 2.97 2.85 2.97 2.85 2.96 2.85 53 4.75 4.16 4.44 4.06 4.50 4.05
10 9.84 116.18 14 2.99 2.87 2.98 2.86 2.98 2.86 54 4.85 4.24 4.50 4.12 4.58 4.11
11 9.09 107.34 15 3.01 2.88 3.00 2.88 2.99 2.87 55 4.94 4.32 4.56 4.18 4.66 4.18
12 8.47 99.98 16 3.03 2.89 3.02 2.89 3.01 2.89 56 5.04 4.40 4.62 4.24 4.74 4.25
13 7.94 93.78 17 3.05 2.91 3.04 2.91 3.03 2.90 57 5.15 4.49 4.68 4.31 4.83 4.33
14 7.49 88.47 18 3.07 2.92 3.06 2.92 3.05 2.91 58 5.26 4.58 4.74 4.38 4.93 4.41
15 7.11 83.89 19 3.09 2.94 3.08 2.94 3.07 2.93 59 5.37 4.68 4.81 4.45 5.03 4.49
16 6.77 79.89 20 3.11 2.96 3.10 2.95 3.09 2.95 60 5.49 4.78 4.86 4.52 5.13 4.58
17 6.47 76.37 21 3.13 2.97 3.12 2.97 3.11 2.96 61 5.62 4.89 4.92 4.59 5.24 4.67
18 6.20 73.25 22 3.16 2.99 3.15 2.99 3.13 2.98 62 5.75 5.00 4.98 4.66 5.35 4.77
19 5.97 70.47 23 3.18 3.01 3.17 3.00 3.16 3.00 63 5.88 5.12 5.04 4.73 5.48 4.88
20 5.76 67.98 24 3.21 3.03 3.19 3.02 3.18 3.01 64 6.03 5.25 5.09 4.80 5.60 4.99
21 5.57 65.74 25 3.23 3.05 3.22 3.04 3.21 3.03 65 6.17 5.39 5.14 4.88 5.74 5.10
22 5.40 63.70 26 3.26 3.07 3.25 3.06 3.23 3.05 66 6.32 5.53 5.19 4.95 5.88 5.22
23 5.24 61.85 27 3.29 3.09 3.28 3.08 3.26 3.07 67 6.48 5.68 5.24 5.01 6.03 5.35
24 5.10 60.17 28 3.32 3.11 3.30 3.11 3.29 3.09 68 6.64 5.83 5.28 5.08 6.18 5.49
25 4.97 58.62 29 3.36 3.14 3.34 3.13 3.32 3.12 69 6.80 6.00 5.32 5.14 6.35 5.64
26 4.84 57.20 30 3.39 3.16 3.37 3.15 3.35 3.14 70 6.97 6.17 5.35 5.20 6.53 5.79
27 4.73 55.90 31 3.42 3.19 3.40 3.18 3.38 3.16 71 7.15 6.34 5.38 5.26 6.71 5.96
28 4.63 54.69 32 3.46 3.21 3.43 3.20 3.41 3.19 72 7.32 6.53 5.41 5.30 6.91 6.13
29 4.54 53.57 33 3.50 3.24 3.47 3.23 3.44 3.21 73 7.50 6.72 5.43 5.35 7.12 6.32
30 4.45 52.53 34 3.54 3.27 3.50 3.26 3.48 3.24 74 7.67 6.92 5.45 5.38 7.34 6.52
- ----------------------------
35 3.58 3.30 3.54 3.28 3.52 3.27 75 7.85 7.12 5.47 5.42 7.58 6.73
Quarterly instalments 36 3.63 3.33 3.58 3.31 3.55 3.30 76 8.02 7.32 5.48 5.44 7.82 6.96
are 25.32% of the 37 3.67 3.37 3.62 3.35 3.59 3.33 77 8.19 7.53 5.49 5.46 8.09 7.21
annual instalments. 38 3.72 3.40 3.66 3.38 3.64 3.36 78 8.36 7.75 5.50 5.48 8.38 7.47
39 3.77 3.44 3.71 3.41 3.68 3.39 79 8.52 7.96 5.50 5.49 8.67 7.75
Semi-annual 40 3.83 3.47 3.75 3.45 3.72 3.43 80 8.67 8.16 5.51 5.50 9.00 8.05
instalments are 41 3.88 3.51 3.80 3.48 3.77 3.46 81 8.81 8.36 5.51 5.51 9.34 8.39
50.43% of the annual 42 3.94 3.55 3.84 3.52 3.82 3.50 82 8.94 8.55 5.51 5.51 9.70 8.73
instalments. 43 4.00 3.60 3.89 3.56 3.87 3.54 83 9.06 8.73 5.51 5.51 10.10 9.12
44 4.06 3.64 3.94 3.60 3.92 3.58 84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OPTION 5 -- JOINT AND SURVIVOR, 10 YEARS CERTAIN (Minimum Monthly Instalment)
- ------------------------------------------------------------------------------------------------------------------------------------
Female Age
Male -----------------------------------------------------------------------------------------------------------------------------
Age 45 50 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 75
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
45 $3.47 $3.60 $3.72 $3.75 $3.77 $3.79 $3.81 $3.84 $3.86 $3.88 $3.90 $3.91 $3.93 $3.95 $3.97 $3.98 $4.00 $4.01 $4.06
50 3.53 3.70 3.86 3.90 3.93 3.96 4.00 4.03 4.06 4.09 4.12 4.15 4.17 4.20 4.23 4.25 4.27 4.29 4.39
55 3.58 3.78 3.99 4.04 4.08 4.12 4.17 4.21 4.26 4.30 4.34 4.38 4.43 4.47 4.50 4.54 4.58 4.61 4.76
56 3.59 3.79 4.01 4.06 4.11 4.15 4.20 4.25 4.29 4.34 4.39 4.43 4.48 4.52 4.56 4.60 4.64 4.68 4.84
57 3.60 3.80 4.04 4.08 4.13 4.18 4.23 4.28 4.33 4.38 4.43 4.48 4.53 4.57 4.62 4.66 4.70 4.75 4.92
58 3.60 3.82 4.06 4.11 4.16 4.21 4.26 4.32 4.37 4.42 4.47 4.53 4.58 4.63 4.68 4.72 4.77 4.81 5.01
59 3.61 3.83 4.08 4.13 4.18 4.24 4.29 4.35 4.40 4.46 4.52 4.57 4.63 4.68 4.73 4.78 4.83 4.88 5.09
60 3.62 3.84 4.10 4.15 4.21 4.26 4.32 4.38 4.44 4.50 4.56 4.62 4.67 4.73 4.79 4.84 4.90 4.95 5.18
61 3.62 3.85 4.11 4.17 4.23 4.29 4.35 4.41 4.47 4.54 4.60 4.66 4.72 4.78 4.85 4.91 4.96 5.02 5.27
62 3.63 3.86 4.13 4.19 4.25 4.31 4.38 4.44 4.51 4.57 4.64 4.70 4.77 4.84 4.90 4.97 5.03 5.09 5.37
63 3.64 3.87 4.15 4.21 4.27 4.34 4.40 4.47 4.54 4.61 4.68 4.75 4.82 4.89 4.96 5.02 5.09 5.16 5.46
64 3.64 3.88 4.16 4.23 4.29 4.36 4.43 4.50 4.57 4.64 4.71 4.79 4.86 4.93 5.01 5.08 5.16 5.23 5.55
65 3.65 3.89 4.18 4.24 4.31 4.38 4.45 4.52 4.60 4.67 4.75 4.83 4.90 4.98 5.06 5.14 5.22 5.29 5.65
66 3.65 3.89 4.19 4.26 4.33 4.40 4.47 4.55 4.62 4.70 4.78 4.86 4.95 5.03 5.11 5.20 5.28 5.36 5.75
67 3.65 3.90 4.20 4.27 4.34 4.42 4.49 4.57 4.65 4.73 4.81 4.90 4.99 5.07 5.16 5.25 5.34 5.43 5.84
68 3.66 3.91 4.22 4.29 4.36 4.43 4.51 4.59 4.67 4.76 4.84 4.93 5.02 5.12 5.21 5.30 5.40 5.49 5.94
69 3.66 3.91 4.23 4.30 4.37 4.45 4.53 4.61 4.70 4.78 4.87 4.97 5.06 5.16 5.25 5.35 5.45 5.55 6.03
70 3.66 3.92 4.24 4.31 4.38 4.46 4.54 4.63 4.72 4.81 4.90 5.00 5.09 5.19 5.30 5.40 5.50 5.61 6.12
75 3.68 3.94 4.28 4.35 4.43 4.52 4.61 4.70 4.80 4.90 5.01 5.12 5.23 5.35 5.47 5.60 5.73 5.86 6.54
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-----------
No. 79-02 Page Eleven
<PAGE>
********************************************************************************
VARIABLE LIFE INSURANCE POLICY
EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO)
WHOLE LIFE -- INCREASING FACE AMOUNT. Variable Insurance Payable In
Event of Death. Guaranteed Minimum Death Benefit If Premiums Duly
Paid. Face Amount Increases Annually to 150% of Initial Face Amount.
Fixed Premiums Payable For Life. Non-Participating. Investment
Experience Reflected in Benefits.
********************************************************************************
No. 79-02
THE INSURED RICHARD ROE VARIABLE
POLICY OWNER RICHARD ROE LIFE INSURANCE
FACE AMOUNT $100,000 POLICY
POLICY NUMBER SPECIMEN
EQUITABLE
VARIABLE LIFE
INSURANCE COMPANY
[EVLICO LOGO]
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
A Stock Life Insurance Company
Agrees
o To pay the insurance benefits of this policy to the Beneficiary upon
receiving proof of the Insured's death; and
o To provide you (the policy Owner) with the other rights and benefits of this
policy.
These agreements are subject to the provisions of this policy.
THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE
FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR
AS DESCRIBED ON PAGE 5 DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE,
BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT.
THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE OR
DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE.
Premiums are shown on page 3 and are fixed as to amount. They will not vary with
separate account investment experience.
RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you
are not satisfied with it, you may cancel it by returning the policy with a
written request for cancellation to our Administrative Office by the later of:
(a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the
application was signed. If you do this, we will refund the premium that was
paid.
SPECIMEN Secretary SPECIMEN President
Limited Payment Life Plan -- LEVEL FACE AMOUNT. Variable
insurance payable upon death. Guaranteed Minimum Death
Benefit. Fixed premiums payable for Premium Period shown on
page 3 or until earlier death. Non-Participating. Investment
experience reflected in benefits. Investment options described
on page 6.
No.81-01
<PAGE>
[EVLICO LOGO]
1285 Avenue of the Americas, New York, NY 10019
Contents
Insurance benefits 2
Policy owner and beneficiary 4
Premiums, grace, lapse, reinstatement 4
Death Benefit 5
Cash Value 5
Loans 5
The Separate Accounts 6
Investment Options,
allocations, transfers 6
Options on Lapse 7
Exchange of Policy 7
General Provisions 8
Payment Options 9
Basis of Values 11
(Net rates of return, variable adjustment amount, benefit base, calculation of
cash values)
Any additional benefit riders and a copy of the application are included in this
policy after page 12.
IN THIS POLICY:
"We," "our" and "us" mean Equitable Variable Life Insurance Company.
"You" and "your" mean the Owner of the policy at the time an Owner's right is
exercised.
ADMINISTRATIVE OFFICE
The address of our Administrative Office is shown on page 3. You should send
premiums and requests to that address unless instructed otherwise.
INSURANCE BENEFITS
The insurance benefits we pay at the Insured's death include:
o the Death Benefit described on page 5;
o plus any additional benefits due from riders to this policy;
o plus or minus any adjustment for the last premium;
o minus any loan (and loan interest) on the policy.
We will add interest to the resulting amount for the period from the date of
death to the date of payment. It will be computed at the interest rate we are
then paying under the Deposit Option on page 9.
We will pay these benefits only if premiums have been paid as called for by this
policy. However, even if premiums have been discontinued we may still pay
certain benefits. See Options on Lapse, page 7.
Payment of these benefits may also be affected by other provisions of this
policy. See the Suicide Exclusion, Incontestability and Age and Sex clauses on
page 8. Special exclusions or limitations (if any) are listed on page 3
No. 81-01
Page 2
<PAGE>
THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1981
POLICY OWNER RICHARD ROE DATE OF ISSUE JUN 1, 1981
FACE AMOUNT $100,000 ISSUE AGE, SEX 35, MALE
POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE
********************** BENEFITS AND PREMIUMS TABLE *****************************
BENEFITS ANNUAL PREMIUM PREMIUM PERIOD
LIFE INSURANCE - VARIABLE $1,659.00 40 YEARS
THE FIRST PREMIUM IS $1,659.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
SUBSEQUENT PREMIUMS ARE DUE ON JUN 01, 1982 AND EVERY 12 MONTHS THEREAFTER
DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE.
********************** TABLE OF NET ANNUAL PREMIUMS ****************************
BEGINNING OF NET ANNUAL
POLICY YEAR PREMIUM
1 $ 752.00
2 - 4 1,455.00
5 - 40 1,526.00
********************INVESTMENT ALLOCATION OF NET ANNUAL PREMIUMS ***************
SEPARATE ACCOUNT I 50%
SEPARATE ACCOUNT II 50%
******ADMINISTRATIVE OFFICE: EQUITABLE VARIABLE LIFE INSURANCE COMPANY *********
SPECIMEN REGIONAL SERVICE CENTER
100 SPECIMEN ST.
CITY, STATE 10001
V81-01-3
PAGE 3
<PAGE>
THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1981
FACE AMOUNT $100,000 DATE OF ISSUE JUN 1, 1981
POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE
************************* TABULAR CASH VALUES **********************************
THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN
SEE PAGE 5 FOR CASH VALUE PROVISION
INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
<TABLE>
<CAPTION>
INTERIM INTERIM INTERIM
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
MONTH VALUES MONTH VALUES MONTH VALUES
<S> <C> <C> <C> <C> <C>
1 $ 0 5 $ 0 9 $278
2 0 6 16 10 366
3 0 7 104 11 452
4 0 8 192 12 540
</TABLE>
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
<TABLE>
<CAPTION>
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
YEAR VALUES YEAR VALUES YEAR VALUES
<S> <C> <C> <C> <C> <C>
1 $ 540 9 $12,069 17 $26,057
2 1,808 10 13,701 18 27,941
3 3,114 11 15,368 19 29,851
4 4,456 12 17,070 20 31,788
5 5,907 13 18,806 AGE 60 41,808
6 7,393 14 20,574 AGE 62 45,947
7 8,916 15 22,373 AGE 65 52,277
8 10,474 16 24,201 AGE 70 63,165
<FN>
* VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
</FN>
</TABLE>
V81-01-3A
PAGE 3A
<PAGE>
TABLE OF NET SINGLE PREMIUMS
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance. Values
shown are applicable on policy anniversaries. The net single premium as of a
date during a policy year shall be determined by interpolation between the
values applicable on the immediately preceding and immediately following
anniversaries.
<TABLE>
<CAPTION>
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
--------- ------- --------- ------- --------- ------- --------- ------- --------- -------
MALE INSURED
------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.09647 21 $.17350 41 $.32865 61 $.57583 81 $.81560
2 .09871 22 .17890 42 .33918 62 .58929 82 .82496
3 .10126 23 .18450 43 .34995 63 .60272 83 .83394
4 .10397 24 .19031 44 .36096 64 .61610 84 .84259
5 .10685 25 .19635 45 .37222 65 .62940 85 .85096
6 .10990 26 .20263 46 .38370 66 .64260 86 .85909
7 .11312 27 .20915 47 .39541 67 .65565 87 .86704
8 .11650 28 .21591 48 .40733 68 .66851 88 .87488
9 .12005 29 .22293 49 .41945 69 .68114 89 .88268
10 .12377 30 .23021 50 .43176 70 .69350 90 .89050
11 .12764 31 .23775 51 .44424 71 .70559 91 .89841
12 .13166 32 .24556 52 .45688 72 .71744 92 .90648
13 .13581 33 .25366 53 .46968 73 .72908 93 .91479
14 .14008 34 .26205 54 .48261 74 .74057 94 .92350
15 .14447 35 .27073 55 .49568 75 .75194 95 .93291
16 .14897 36 .27970 56 .50886 76 .76319 96 .94339
17 .15360 37 .28896 57 .52214 77 .77427 97 .95520
18 .15835 38 .29850 58 .53550 78 .78512 98 .96810
19 .16323 39 .30830 59 .54892 79 .79566 99 .98063
20 .16828 40 .31835 60 .56237 80 .80583 100 1.00000
</TABLE>
<TABLE>
<CAPTION>
FEMALE INSURED
--------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.08586 21 $.15360 41 $.28896 61 $.52214 81 $.77427
2 .08774 22 .15835 42 .29850 62 .53550 82 .78512
3 .08993 23 .16323 43 .30830 63 .54892 83 .79566
4 .09228 24 .16828 44 .31835 64 .56237 84 .80583
5 .09478 25 .17350 45 .32865 65 .57583 85 .81560
6 .09743 26 .17890 46 .33918 66 .58929 86 .82496
7 .10023 27 .18450 47 .34995 67 .60272 87 .83394
8 .10318 28 .19031 48 .36096 68 .61610 88 .84259
9 .10629 29 .19635 49 .37222 69 .62940 89 .85096
10 .10953 30 .20263 50 .38370 70 .64260 90 .85909
11 .11290 31 .20915 51 .39541 71 .65565 91 .86704
12 .11641 32 .21591 52 .40733 72 .66851 92 .87488
13 .12004 33 .22293 53 .41945 73 .68114 93 .88268
14 .12379 34 .23021 54 .43176 74 .69350 94 .89050
15 .12764 35 .23775 55 .44424 75 .70559 95 .89841
16 .13166 36 .24556 56 .45688 76 .71744 96 .90648
17 .13581 37 .25366 57 .46968 77 .72908 97 .91479
18 .14008 38 .26205 58 .48261 78 .74057 98 .92350
19 .14447 39 .27073 59 .49568 79 .75194 99 .93291
20 .14897 40 .27970 60 .50886 80 .76319 100 .94339
101 .95520
102 .96810
103 .98063
104 1.00000
</TABLE>
V81-01-3B
Page 3B
<PAGE>
POLICY OWNER AND BENEFICIARY
OWNER. The Owner of this policy is the Insured unless otherwise stated in the
application, or later changed. As Owner, you can exercise all the rights in this
policy while the Insured is living. You do not need the consent of anyone who
has only a conditional or future ownership interest in this policy.
BENEFICIARY. The Beneficiary is as stated in the application, unless later
changed. If two or more persons are named, those surviving the Insured will
share equally unless otherwise stated.
We will pay any benefit for which there is no stated Beneficiary living at the
death of the Insured to the children of the insured who then survive, in equal
shares. If none survive, we will pay the estate of the Insured.
CHANGES. While the Insured is living, you may change the Owner or Beneficiary by
written notice in a form satisfactory to us. The change will take effect on the
date you sign the notice, except that it will not apply to any payment we make
or other action we take before we receive the notice at our Administrative
Office. If you change the Beneficiary, any previous arrangement you made under
the Payment Options provision on page 9 is cancelled.
ASSIGNMENT. You may assign this policy, but we will not be bound by an
assignment unless it is in writing and we have received it at our Administrative
Office. Your rights and those of any other person referred to in this policy
will be subject to the assignment. We assume no responsibility for the validity
of any assignment.
PREMIUMS
AMOUNTS AND DUE DATES. Page 3 shows the amounts and due dates of premiums and
the period for which they are to be paid. Each premium is payable on or before
its due date at our Administrative Office.
You may write and ask us to change the frequency of premium payment. If we
approve the change, the new premium will be determined on the rate scale for
this policy.
GRACE PERIOD. We allow a grace period of 31 days for payment of each premium,
after the first premium. The insurance will continue during the grace period. If
a premium is paid during the grace period, then all benefits under this policy
will be the same as if such premium had been paid on its due date.
LAPSE. If a premium is not paid by the end of its grace period, the policy will
lapse as of the premium due date. If this occurs, all insurance ends, except as
stated in Options on Lapse on page 7. Additional benefit riders do not continue
beyond the grace period of an unpaid premium.
REINSTATEMENT. You may reinstate this policy within five years after lapse if:
(1) the policy has not been given up for its net cash value; (2) you provide
evidence of insurability satisfactory to us; and (3) you pay the larger of: (a)
all overdue premiums with interest at 6% per year compounded annually; or (b)
110% of the difference between the following Items (i) and (ii). Item (i) is the
excess of the cash value immediately after reinstatement over the cash value
immediately before reinstatement. Item (ii) is any policy loan, and accrued loan
interest, in effect when any option on lapse became effective, with loan
interest to the date of reinstatement.
Upon reinstatement this policy will have the same Benefit Base and the same
Variable Adjustment Amount as to each separate account (as these are determined
in the Variable Adjustment Amount provision on page 11) as if default had not
occurred. Also, upon reinstatement this policy will have a loan equal to the sum
of the following Items (i) and (ii). Item (i) is any loan, and accrued loan
interest, in effect at the date any option on lapse became effective, with loan
interest to the date of reinstatement. Item (ii) is any loan arising after the
date any option on lapse became effective, with loan interest to the date of
reinstatement.
PREMIUM ADJUSTMENT. We will add to the insurance benefits any part of the last
premium paid that applies to a period beyond the policy month in which the
Insured dies. If the Insured dies during the grace period of an unpaid premium,
we will deduct from the benefits the part of the overdue premium for one policy
month.
V81-013-B
Page 4
<PAGE>
DEATH BENEFIT
The Death Benefit equals:
o the face amount shown on page 3;
o plus the sum, if positive, of the Variable Adjustment Amounts, for each
separate account under this policy in which you have a cash value, for
the policy year in which the Insured dies.
A description of how the Variable Adjustment Amount for each separate account is
determined is on page 11.
CASH VALUE
You may give up this policy for its net cash value at any time while the Insured
is living. The net cash value is the cash value minus any loan and loan
interest.
We will determine the net cash value on the date we receive your signed request
for it at our Administrative Office. The policy will terminate on the date you
send the policy and the request to us.
CASH VALUE. The cash value of the policy will vary daily with the performance of
the separate accounts under this policy in which you have a cash value. See page
12 for a description of how cash values are determined.
LOANS
You may get a loan on this policy while it has a loan value and it is not being
continued as extended term insurance under the Options on Lapse on page 7. This
policy will be the sole security for the loan.
The amount of the loan may not be more than the loan value. Except when used to
pay premiums, a loan must be at least $100 more than any existing loan and loan
interest. Any existing loan and loan interest will be deducted from the new
loan. We may also deduct any unpaid premium then due.
A loan, whether you repay it or not, will have a permanent effect on the
Variable Adjustment Amounts, Death Benefit and cash value under this policy. It
will have no effect on the amount of the premiums payable under this policy.
We will allocate loans to the separate accounts based on your net cash value in
each separate account as of the dates the loans are made. We will allocate loan
repayments to the separate accounts based on the amount of your outstanding
loans as to each separate account as of the dates the repayments are made. See
page 12 for a description of how the cash value in each separate account is
determined.
LOAN VALUE. If this policy has not lapsed; the loan value is 75% of the policy's
cash value. If this policy has lapsed and is being continued as Reduced Paid-up
Insurance under the Options on Lapse on page 7, the loan value is the cash value
on the next policy anniversary, minus interest at the loan rate to that date.
LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%.
Interest is due on each policy anniversary. If the interest is not paid when
due, it will be added to the loan and bear interest at the loan rate.
When a loan plus loan interest first exceeds the cash value, we will mail to you
and any assignee of record at last known addresses a notice that the policy will
terminate if such excess amount is not repaid within 31 days after we mailed
such notice.
REPAYMENT. You may repay a loan and loan interest in whole or in part at any
time while the Insured is living and this policy is in effect. However, if this
policy has lapsed and you are continuing insurance under one of the Options on
Lapse on page 7, any loan that was deducted in determining the benefit on lapse
may not be repaid unless this policy is reinstated. We will deduct any existing
loan and loan interest from any benefits we pay at the Insured's death.
V81-01-5
Page 5
<PAGE>
THE SEPARATE ACCOUNTS
We established and we maintain Separate Accounts I and II under the laws of New
York State. Realized and unrealized gains and losses from the assets of Separate
Accounts I and II are credited or charged against such accounts without regard
to our other income, gains, or losses. Assets are put in Separate Accounts I and
II to support this policy and other variable life insurance policies. Assets may
be put in Separate Accounts I and II for other purposes, but not to support
contracts or policies other than variable life insurance.
We expect the investments in Separate Account I will be, primarily, common
stocks and other equity-type investments. We expect the investments in Separate
Account II will be, primarily, short-term (not to exceed one year) money market
instruments, such as: United States (U.S.) government and U.S. government agency
securities; bank money instruments; time deposits; certificates of deposit; high
grade commercial paper, including master demand notes; and repurchase agreements
covering U.S. government obligations and certificates of deposit. But, we may
invest the assets of Separate Accounts I and II in any legal investments. We
will rely upon our own and outside counsel for advice in this regard.
Instead of making direct investments, we may also operate either Separate
Account I or II as a unit investment trust, or other form. We would invest all
or part of such account's assets in shares or units of a fund. We, an affiliate,
or The Equitable Life Assurance Society of the United States would be the
investment adviser and would invest the assets of the fund as above.
The assets of Separate Accounts I and II are our property. The portion of the
assets of Separate Accounts I and II equal to the reserves and other policy
liabilities with respect to such separate accounts will not be chargeable with
liabilities arising out of any other business we conduct. We may transfer assets
of such separate accounts in excess of such reserves and liabilities to our
general account.
We will value the assets of Separate Accounts I and II on each business day. A
business day is any day on which the New York Stock Exchange is open for
trading.
We have the right to create new separate accounts. We have the right to withdraw
assets of a class of policies to which this policy belongs from either separate
account and put them in another separate account. If we do this, we will
withdraw the same percentage of each investment in such separate account, but
will avoid odd lots and fractions. We also have the right to combine any two or
more separate accounts. The term "Separate Account I" or "Separate Account II"
in this policy shall then refer to any other separate account in which the
assets of a class of policies to which this policy belongs were placed.
We have the right to:
1. register or deregister either separate account under the Investment
Company Act of 1940;
2. run either separate account under the direction of a committee, and to
discharge such committee at any time; and
3. restrict or eliminate any voting rights of policyowners, or other persons
who have voting rights as to either separate account.
CHANCES OF INVESTMENT ADVISER OR INVESTMENT POLICY. Unless otherwise required by
law or regulation, the investment adviser or any investment policy may not be
changed without our consent. If required by law or regulation, the investment
policy of either separate account will not be changed unless approved by the
Superintendent of Insurance of New York State or deemed approved in accordance
with such law or regulation. If so required, the process for getting such
approval is filed with the insurance supervisory official of the jurisdiction in
which this policy is delivered.
INVESTMENT OPTIONS
ALLOCATION OF NET ANNUAL PREMIUMS. If premiums are duly paid, we will allocate
to each separate account at the beginning of each policy year a percentage of
the Net Annual Premium shown on page 3 for that year. Such allocations will be
based on the allocation percentages then in effect. The allocation percentages
for the first policy year are as designated in the application for this policy.
Unless you change them, such percentages shall also apply in later years.
V81-01-5
Page 6
<PAGE>
INVESTMENT OPTIONS CONTINUED
You may change the allocation percentages for policy years after the first by
notifying us in writing of the new percentages. Each allocation percentage
greater than zero must be a whole number of not more than 100%. The sum of the
percentages must equal 100%. A change will take effect on the next policy
anniversary if we receive the notice at our Administrative Office at least 7
days before such anniversary.
TRANSFER OF CASH VALUES. You may ask us to transfer all or part of your cash
value in one of the separate accounts to the other. Only two such transfers may
be made in a policy year. We will make the transfer as of the date we receive
your written request for it at our Administrative Office.
OPTIONS ON LAPSE
You have a number of options if the policy lapses. You may apply for
reinstatement. If there is a net cash value, you may withdraw it and give up the
policy. Or, you may continue insurance under one of the following options:
REDUCED PAID-UP INSURANCE. This is fixed benefit insurance for the Insured's
lifetime and for the amount that the net cash value will buy.
EXTENDED TERM INSURANCE. This is fixed benefit term insurance for an amount
equal to the Death Benefit on the date of lapse, minus any unpaid loan and loan
interest. The insurance will continue from the date of lapse for as long a term
period as the net cash value will buy. In no event, however, will this period be
less than 90 days if premiums have been paid for at least three months before
lapse and there is no loan on this policy. This option is not available if so
stated on page 3.
An Option on Lapse will become effective on the date your written request for it
is received at our Administrative Office. If your request is not received within
three months after the date of lapse, extended term insurance will become
effective automatically at the end of such three month period. Reduced paid-up
insurance will apply instead if the extended term insurance option is not
available.
If the Insured dies after the grace period but within three months from the date
of lapse, the greater of the benefit under reduced paid-up or extended term
insurance will apply. In this case, any restriction on page 3 as to extended
term insurance will not apply.
We will determine the amounts of these options as of the date the option becomes
effective. We will use net cash values as of the date the option becomes
effective, adjusted for any loan transaction on or after that date. A term
period will begin as of the date of lapse (the due date of the unpaid premium).
We will use net single premiums for the Insured's age as of the date of lapse.
EXCHANGE OF POLICY
You may exchange this policy for a policy of permanent fixed benefit insurance
on the life of the Insured. You may make such an exchange within 18 months after
the Date of Issue shown on page 3. We will not require evidence of insurability.
We will require:
1. That this policy be in effect on the date of exchange with all premiums due
having been paid; and
2. Repayment of any loan and loan interest on this policy.
The date of exchange will be the later of: (a) the date you send us this policy
and the signed request on our form for such exchange; or (b) the date we receive
at our Administrative Office any sum due to be paid for such exchange.
THE NEW POLICY. The new policy will be the "Executive Plan" policy being offered
by The Equitable Life Assurance Society of the United States (Equitable) on the
Date of Issue of this policy. It is a policy of permanent fixed benefit life
insurance. The new policy will have the same face amount, Register Date, Date of
Issue, and Issue Age as this policy. Premiums for the new policy will be based
on Equitable's rates in effect on its Register Date for the same class of risk
as under this policy. Any additional benefit riders in this policy will be
included in the new policy only if Equitable was offering them with the new
policy as of its Date of Issue.
V81-01-7
Page 7
<PAGE>
EXCHANGE OF POLICY CONTINUED
Upon request you will be told the amount of the first premium for the new
policy, and of any extra sum required or allowance to be made for a premium or
cash value adjustment that takes appropriate account of the premiums and cash
values under this policy and under the new policy. A detailed statement of the
method of computing such an adjustment has been filed with the insurance
supervisory official of the jurisdiction in which this policy is delivered.
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
required premiums. This policy and the application (a copy of which is attached
at issue) constitute the entire contract. The rights conferred by this policy
are in addition to those provided by applicable Federal and State laws and
regulations.
The contract may not be modified, nor may any of our rights or requirements be
waived, except in writing signed by our President, one of our Vice Presidents,
or by our Secretary or Treasurer.
INCONTESTABILITY. All statements made in the application are representations and
not warranties. We have the right to contest the validity of this policy based
on material misstatements made in the application. However, this policy will
become incontestable after it has been in effect during the lifetime of the
Insured for two years from the Date of Issue shown on page 3.
See any additional benefit riders for modifications that apply to them.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be those that the premium paid would have purchased at the correct age and sex.
SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within
two years after the Date of Issue shown on page 3, our liability will be limited
to the payment of a single sum equal to the premiums paid, minus any loan and
loan interest.
POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, policy
anniversaries and premium periods are measured from the Register Date. Each
policy month begins on the same day in each calendar month as in the Register
Date. If the end of a premium period or policy year is indicated by an age, it
ends on the policy anniversary nearest the birthday on which the Insured reaches
that age.
POLICY CHANGES. You may change this policy to another plan of insurance or add
additional benefit riders or make other changes, subject to our rules at the
time of change.
REPORTS. Each policy year after the first we will give you a report showing the
Death Benefit and the cash value as of the first day of such year. The amount of
any existing loan and the accrued loan interest for the previous policy year
will also be shown. No such reports will be given while this policy is lapsed.
We will also give you such other reports as may be required by law.
BASIS OF COMPUTATION. Cash values, reserves and net single premiums are based on
the Commissioners 1958 Standard Ordinary Mortality Table. For any extended term
insurance, they are based instead on the Commissioners 1958 Extended Term
Insurance Table. Continuous functions are used with interest compounded annually
at 4%.
The cash values and paid-up insurance benefits are equal to or more than those
required by law. A detailed statement of the method of computing values and
benefits has been filed with the insurance supervisory official of the
jurisdiction in which this policy is delivered. The tabular cash value at the
end of each policy year equals the reserve. Reserves referred to in this policy
are not less than reserves determined according to the Commissioners Reserve
Valuation Method. Our expense and mortality results will not adversely affect
the dollar amount of insurance benefits or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. As long as this policy is not
being continued under one of the Options on Lapse, we will make payments under
this policy as follows:
o A cash value will be paid within 7 days after we receive your policy and
request at our Administrative Office;
o A loan will be paid within 7 days after we receive your request at our
Administrative Office; and
o The insurance benefits will be paid within 7 days after we receive at our
Administrative Office proof of the Insured's death and all other
requirements deemed necessary before such payment may be made.
V81-01-7 Page 8
<PAGE>
GENERAL PROVISIONS CONTINUED
We may not be able to sell securities or determine the value of the assets of
the separate accounts if: (1) the New York Stock Exchange is closed; (2) the
Securities and Exchange Commission requires trading to be restricted or declares
an emergency; or (3) the Securities and Exchange Commission by order permits us
to defer payments for the protection of our policy Owners. During such times we
may defer:
1. Determination and payment of cash values;
2. Payment of loans;
3. Determination of a change in a Variable Adjustment Amount, and payment
of any portion of the Death Benefit equal to the Variable Adjustment
Amount;
4. Any requested transfer of cash value; and
5. Use of Insurance Benefits under the Payment Options.
DEFERMENT UNDER OPTIONS ON LAPSE. We may defer payment of a cash value and the
making of a loan for up to six months after we receive a request at our
Administrative Office if this policy is being continued under one of the Options
on Lapse. We will allow interest, at a rate of at least 3% a year, on any cash
value payment we defer for 30 days or more.
PAYMENT OPTIONS
Payments under these options will not be affected by the investment experience
of any separate account after proceeds are applied under such options.
Instead of having the insurance benefits or net cash value paid immediately in
one sum, you can choose another form of payment for all or part (if at least
$2,500). If you do not arrange for this before the Insured dies, the Beneficiary
will have this right when the Insured dies. Arrangements you make, however,
cannot be changed by the Beneficiary after the Insured's death. The options are:
1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with
interest paid at the end of each month, each 3 months, each 6 months or
each 12 months, as chosen.
2. INSTALMENT OPTIONS:
A. FIXED PERIOD: Paid in equal instalments for a specified number of
years (not more than 30). The instalments will not be less than those
shown in the Table of Guaranteed Payments on page 10.
B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the
amount applied, together with interest on the unpaid balance, is used
up.
3. LIFE INCOME OPTIONS:
Paid as a monthly income for life in an amount we determine but not
less than shown in the Table of Guaranteed Payments on page 10. We
guarantee payments for life and in any event for 10 years, 20 years,
or until the payments we make equal the amount applied (called "refund
certain"), according to the "certain" period chosen.
We guarantee interest under Option 1 at the rate of 3% a year and under Option
2 at 3-1/2% a year, or such higher rates as we may determine. We may allow
excess interest under Options 1 and 2.
We reserve the right to change how often we make payments, so that each payment
is for at least $25. The payee under an option may name and change a successor
payee for any amount we would otherwise pay the payee's estate.
Any arrangements involving more than one of the options, or a payee who is not a
natural person (such as a corporation) or who is a fiduciary, must have our
approval. Also, details of all arrangements will be subject to our rules at the
time the arrangement takes effect. These include withdrawal or commutation
rights, designation of payees and successor payees, and evidence of age and
survival.
Choices (or any later changes) under these options will be made and will take
effect in the same way as a change of Beneficiary. Amounts applied under these
options will not be subject to the claims of creditors or to legal process, to
the extent permitted by law.
V8l-01-9 Page 9
<PAGE>
TABLE OF GUARANTEED PAYMENTS
(MINIMUM AMOUNT FOR EACH $1,000 APPLIED)
OPTION 2A
FIXED PERIOD INSTALMENTS
------------------------
Number Monthly Annual
of Years Instal- Instal-
Instalments ment ment
----------- ------- ---------
1 $84.70 $1000.00
2 43.08 508.60
3 29.21 344.86
4 22.28 263.04
5 18.12 213.99
6 15.36 181.32
7 13.38 158.01
8 11.91 140.56
9 10.76 127.00
10 9.84 116.18
11 9.09 107.34
12 8.47 99.98
13 7.94 93.78
14 7.49 88.47
15 7.11 83.89
16 6.77 79.89
17 6.47 76.37
18 6.20 73.25
19 5.97 70.47
20 5.76 67.98
21 5.57 65.74
22 5.40 63.70
23 5.24 61.85
24 5.10 60.17
25 4.97 58.62
26 4.84 57.20
27 4.73 55.90
28 4.63 54.69
29 4.54 53.57
30 4.45 52.53
If instalments are paid each 3 months, they will be 25.32% of the annual
instalments. If they are paid each 6 months, they will be 50.43% of the annual
instalments.
OPTION 3
MONTHLY LIFE INCOME
-------------------
10 Years Certain 10 Years Certain Refund Certain
---------------- ---------------- --------------
AGE Male Female Male Female Male Female
--- ---- ------ ---- ------ ---- ------
50 $4.50 $3.96 $4.27 $3.89 $4.28 $3.87
51 4.58 4.02 4.32 3.94 4.35 3.93
52 4.67 4.09 4.38 4.00 4.42 3.99
53 4.75 4.16 4.44 4.06 4.50 4.05
54 4.85 4.24 4.50 4.12 4.58 4.11
55 4.94 4.32 4.56 4.18 4.66 4.18
56 5.04 4.40 4.62 4.24 4.74 4.25
57 5.15 4.49 4.68 4.31 4.83 4.33
58 5.26 4.58 4.74 4.38 4.93 4.41
59 5.37 4.68 4.81 4.45 5.03 4.49
60 5.49 4.78 4.86 4.52 5.13 4.58
61 5.62 4.89 4.92 4.59 5.24 4.67
62 5.75 5.00 4.98 4.66 5.35 4.77
63 5.88 5.12 5.04 4.73 5.48 4.88
64 6.03 5.25 5.09 4.80 5.60 4.99
65 6.17 5.39 5.14 4.88 5.74 5.10
66 6.32 5.53 5.19 4.95 5.88 5.22
67 6.48 5.68 5.24 5.01 6.03 5.35
68 6.64 5.83 5.28 5.08 6.18 5.49
69 6.80 6.00 5.32 5.14 6.35 5.64
70 6.97 6.17 5.35 5.20 6.53 5.79
71 7.15 6.34 5.38 5.26 6.71 5.96
72 7.32 6.53 5.41 5.30 6.91 6.13
73 7.50 6.72 5.43 5.35 7.12 6.32
74 7.67 6.92 5.45 5.38 7.34 6.52
75 7.85 7.12 5.47 5.42 7.58 6.73
76 8.02 7.32 5.48 5.44 7.82 6.96
77 8.19 7.53 5.49 5.46 8.09 7.21
78 8.36 7.75 5.50 5.48 8.38 7.47
79 8.52 7.96 5.50 5.49 8.67 7.75
80 8.67 8.16 5.51 5.50 9.00 8.05
81 8.81 8.36 5.51 5.51 9.34 8.39
82 8.94 8.55 5.51 5.51 9.70 8.73
83 9.06 8.73 5.51 5.51 10.10 9.12
84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
Income amounts for Life Income Options are based on age nearest birthday when
income starts. Income amounts for ages not shown will be furnished on request.
V81-01-9
Page 10
<PAGE>
BASIS OF VALUES
ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each separate account, the Actual
Net Rate of Return for a policy year reflects the account's:
o investment income;
o plus realized and unrealized capital gains;
o minus realized and unrealized capital losses;
o minus any charges for taxes or amounts set aside as a reserve for taxes;
o minus a charge not exceeding .25% per year for investment management
expenses; and
o minus a charge not exceeding .50% per year for mortality, expenses and
other risks.
The Actual NRR for a period less than a year will be calculated in a consistent
manner.
BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a
pro-rata part of 4% for periods of less than a year.)
If the Actual NRR for all separate accounts always equals the Base NRR, then:
o the Death Benefit will always equal the Face Amount; and
o the Cash Value at the end of each policy year will equal the tabular
cash value shown on page 3A.
VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of
insurance in effect for that policy year due to investment performance in past
years. On each policy anniversary we will determine a new VAA for the next
policy year. We will do this independently for each separate account, taking
into account the Actual NRR for the last policy year.
For the first policy year the VAA for each separate account is zero. For later
policy years, the VAA for each separate account will equal the VAA for that
account for the last policy year, plus the VAA Change Amount for that account. A
VAA does not change during a policy year.
VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount
for each separate account may be positive or negative. It will equal the product
of the following Items (a) and (b), divided by Item (c).
(a) The Actual NRR for the separate account minus the Base NRR for that
policy year.
(b) The Benefit Base for the separate account as of the last policy
anniversary.
(c) The Net Single Premium per $1.00 of VAA for the current policy
anniversary as shown on page 3B.
BENEFIT BASE. For each separate account, the Benefit Base on the Register Date
is the product of the following Items (1) and (2):
(1) The Allocation Percentage designated in the application for this
policy.
(2) The Net Annual Premium for the first policy year.
On policy anniversaries, the Benefit Base for a separate account is the sum of
the following Items (1) and (2):
(1) The allocation percentage for that anniversary, multiplied by the sum
of the following Items (a) and (b):
(a) The Tabular Cash Value on that anniversary.
(b) The Net Annual Premium for that anniversary.
(2) The Net Single Premium for the VAA for that separate account on that
anniversary.
The Net Annual Premiums, Tabular Cash Values and Net Single Premiums are shown
on pages 3, 3A and 3B, respectively.
For each separate account, the VAA Change Amount will also reflect the effect
of:
1. Any policy loans in effect on the last policy anniversary;
V81-01-11
Page 11
<PAGE>
BASIS OF VALUES CONTINUED
2. All new policy loans and repayments during the previous policy year;
and
3. All transfers of cash value to or from that separate account during the
previous policy year.
In addition, if you have changed the allocation percentages, we will reallocate
the VAA's among the separate accounts.
CALCULATION OF CASH VALUES. The cash value of this policy on any date is the sum
of your cash values in each separate account on that date. If no premium is due
and unpaid, your cash value in each separate account on any date is the sum of
the following Items (1), (2) and (3):
(1) The tabular cash value on that date, multiplied by the allocation
percentage for that separate account in effect on the last policy
anniversary.
(2) The Net Single Premium on that date for the current VAA for that
separate account.
(3) If the date is not a policy anniversary, the product of the following
Items (a) and (b):
(a) The Actual NRR for the separate account minus the Base NRR for
the time elapsed since the last policy anniversary.
(b) The Benefit Base for the separate account on the last policy
anniversary.
If a premium is due and unpaid, then within three months after the due date your
cash value in each separate account is the sum of the following Items (1) and
(2):
(1) Your cash value in that separate account as of the due date of the
unpaid premium.
(2) The product of the following Items (a) and (b):
(a) The Actual NRR for the separate account minus the Net NRR for the
time elapsed since such due date.
(b) The cash value on such due date.
For each Separate account, the cash value will also reflect the effect of:
1. Any policy loans in effect on the last policy anniversary;
2. All new policy loans and repayments since the last policy anniversary;
and
3. All transfers of cash value to or from that separate account since the
last policy anniversary.
More than three months after the due date of an unpaid premium, if you continue
the policy under one of the options on lapse, your cash value will equal the
reserve for the policy. In such case, the cash value within 30 days after a
policy anniversary will never be less than the cash value on that anniversary.
If at any time you have a policy loan allocated to a separate account and your
net cash value in that separate account is zero, we will cancel the VAA and the
policy loan as to such separate account and reallocate them to the other
separate account. Also, the premium allocation percentage for such separate
account will be reduced to zero and the percentage for the other separate
account will be increased to 100%.
TABULAR CASH VALUE (TCV). The tables of TCV's on page 3A show interim TCV's at
the end of each month in the first policy year and at the end of later policy
years. We will determine the TCV on other dates in a consistent manner with
allowance for time elapsed and premiums paid. Any TCV's not shown will be
furnished on request.
V81-01-ll
Page 12
<PAGE>
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
VARIABLE
LIFE
INSURANCE Home Office: 1285 Avenue of the Americas, New York, New York 10019
POLICY
Limited Payment Life Plan -- LEVEL FACE AMOUNT. Variable
insurance payable upon death. Guaranteed Minimum Death
Benefit. Fixed premiums payable for Premium Period shown
on page 3 or until earlier death. Non-Participating.
Investment experience reflected in benefits. Investment
options described on page 6.
No. 81-01
SPECIMEN POLICY
NOTE -- Because of variations in state policy form requirements, the policy as
actually issued may differ somewhat from this specimen policy.
THE INSURED RICHARD ROE VARIABLE LIFE INSURANCE POLICY
POLICY OWNER RICHARD ROE EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
INITIAL
FACE AMOUNT $100,000 [EVLICO LOGO]
POLICY NUMBER SPECIMEN
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
A Stock Life Insurance Company
Agrees
o To pay the insurance benefits of this policy to the Beneficiary upon receiving
proof of the Insured's death; and
o To provide you (the policy Owner) with the other rights and benefits of this
policy.
These agreements are subject to the provisions of this policy.
As shown on page 3, the face amount increases at the beginning of each policy
year from the second to the fifteenth. It is constant thereafter at 150% of the
initial face amount.
THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE
INITIAL FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE
EACH YEAR AS DESCRIBED ON PAGE 5 DEPENDING UPON SEPARATE ACCOUNT INVESTMENT
EXPERIENCE, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT FOR THE POLICY YEAR IN
WHICH THE INSURED DIES.
THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE OR
DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE.
Premiums are shown on page 3 and are fixed as to amount. They will not vary with
separate account investment experience.
RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you
are not satisfied with it, you may cancel it by returning the policy with a
written request for cancellation to our Administrative Office by the later of:
(a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the
application was signed. If you do this, we will refund the premium that was
paid.
SPECIMEN Secretary SPECIMEN President
Whole Life Plan -- INCREASING FACE AMOUNT. Variable insurance
payable upon death. Guaranteed Minimum Death Benefit. Face amount
increases annually to 150% of initial face amount. Fixed premiums
payable for life. Non-Participating. Investment experience
reflected in benefits. Investment options described on page 6.
No. 81-02
<PAGE>
[EVLICO LOGO]
1285 Avenue of the Americas, New York
CONTENTS
Insurance benefits 2
Policy owner and beneficiary 4
Premiums, grace, lapse, reinstatement 4
Death Benefit 5
Cash Value 5
Loans 5
The Separate Accounts 6
Investment Options,
allocations, transfers 6
Options on Lapse 7
Exchange of Policy 7
General Provisions 8
Payment Options 9
Basis of Values 11
(Net rates of return, variable adjustment amount, benefit base, calculation of
cash values)
Any additional benefit riders and a copy of the application are included in this
policy after page 12.
IN THIS POLICY:
"We," "our" and "us" mean Equitable Variable Life Insurance Company.
"You" and "your" mean the Owner of the policy at the time an Owner's right is
exercised.
ADMINISTRATIVE OFFICE
The address of our Administrative Office is shown on page 3. You should send
premiums and requests to that address unless instructed otherwise.
INSURANCE BENEFITS
The insurance benefits we pay at the Insured's death include:
o the Death Benefit described on page 5;
o plus any additional benefits due from riders to this policy;
o plus or minus any adjustment for the last premium;
o minus any loan (and loan interest) on the policy.
We will add interest to the resulting amount for the period from the date of
death to the date of payment. It will be computed at the interest rate we are
then paying under the Deposit Option on page 9.
We will pay these benefits only if premiums have been paid as called for by this
policy. However, even if premiums have been discontinued we may still pay
certain benefits. See Options on Lapse, page 7.
Payment of these benefits may also be affected by other provisions of this
policy. See the Suicide Exclusion, Incontestability and Age and Sex clauses on
page 8. Special exclusions or limitations (if any) are listed on page 3.
No.81-02 Page 2
<PAGE>
THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1981
POLICY OWNER RICHARD ROE DATE OF ISSUE JUN 1, 1981
INITIAL
FACE AMOUNT $100,000 ISSUE AGE, SEX 35, MALE
POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE
*************************BENEFITS AND PREMIUMS TABLE****************************
BENEFITS ANNUAL PREMIUM PREMIUM PERIOD
LIFE INSURANCE - VARIABLE $2,320.00 FOR LIFE
THE FIRST PREMIUM IS $2,320.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
SUBSEQUENT PREMIUMS ARE DUE ON JUN 1, 1982 AND EVERY 12 MONTHS THEREAFTER DURING
THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE.
****************************TABLE OF FACE AMOUNTS*******************************
<TABLE>
<CAPTION>
POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT
<S> <C> <C> <C> <C> <C>
1 $100,000 6 $115,900 11 $134,400
2 $103,000 7 $119,400 12 $138,400
3 $106,100 8 $123,000 13 $142,600
4 $109,300 9 $126,700 14 $146,900
5 $112,600 10 $130,500 15 AND OVER $150,000
</TABLE>
**************************** TABLE OF NET ANNUAL PREMIUMS***********************
BEGINNING OF NET ANNUAL
POLICY YEAR PREMIUM
1 $1,259.00
2 - 4 2,045.00
5 AND LATER 2,145.00
*********************INVESTMENT ALLOCATION OF NET ANNUAL PREMIUMS***************
SEPARATE ACCOUNT I 50%
SEPARATE ACCOUNT II 50%
***********ADMINISTRATIVE OFFICE: EQUITABLE LIFE INSURANCE COMPANY*************
SPECIMEN REGIONAL SERVICE CENTER
100 SPECIMEN ST.
CITY, STATE 10001
V81-02-3 PAGE 3
<PAGE>
THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1981
INITIAL
FACE AMOUNT $100,000 DATE OF ISSUE JUN 1, 1981
POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE
*************************TABULAR CASH VALUES************************************
THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN
SEE PAGE 5 FOR CASH VALUE PROVISION
INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
<TABLE>
<CAPTION>
INTERIM INTERIM INTERIM
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
MONTH VALUES MONTH VALUES MONTH VALUES
<S> <C> <C> <C> <C> <C>
1 $ 0 5 $146 9 $ 668
2 0 6 275 10 801
3 0 7 407 11 929
4 14 8 540 12 1062
</TABLE>
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
<TABLE>
<CAPTION>
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
YEAR VALUES YEAR VALUES YEAR VALUES
<S> <C> <C> <C> <C> <C>
1 $ 1,062 9 $18,221 17 $38,251
2 2,959 10 20,622 18 40,884
3 4,912 11 23,062 19 43,546
4 6,917 12 25,534 20 46,235
5 9,077 13 28,033 AGE 60 59,960
6 11,290 14 30,548 AGE 62 65,499
7 13,552 15 33,081 AGE 65 73,755
8 15,864 16 35,650 AGE 70 86,944
<FN>
* VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
</FN>
</TABLE>
V81-02-3A PAGE 3A
<PAGE>
TABLE OF NET SINGLE PREMIUMS
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance. Values
shown are applicable on policy anniversaries. The net single premium as of a
date during a policy year shall be determined by interpolation between the
values applicable on the immediately preceding and immediately following
anniversaries.
<TABLE>
<CAPTION>
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
- --------- ------- --------- ------- --------- ------- --------- ------- --------- -------
MALE INSURED
------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.09647 21 $.17350 41 $.32865 61 $.57583 81 $ .81560
2 .09871 22 .17890 42 .33918 62 .58929 82 .82496
3 .10126 23 .18450 43 .34995 63 .60272 83 .83394
4 .10397 24 .19031 44 .36096 64 .61610 84 .84259
5 .10685 25 .19635 45 .37222 65 .62940 85 .85096
6 .10990 26 .20263 46 .38370 66 .64260 86 .85909
7 .11312 27 .20915 47 .39541 67 .65565 87 .86704
8 .11650 28 .21591 48 .40733 68 .66851 88 .87488
9 .12005 29 .22293 49 .41945 69 .68114 89 .88268
10 .12377 30 .23021 50 .43176 70 .69350 90 .89050
11 .12764 31 .23775 51 .44424 71 .70559 91 .89841
12 .13166 32 .24556 52 .45688 72 .71744 92 .90648
13 .13581 33 .25366 53 .46968 73 .72908 93 .91479
14 .14008 34 .26205 54 .48261 74 .74057 94 .92350
15 .14447 35 .27073 55 .49568 75 .75194 95 .93291
16 .14897 36 .27970 56 .50886 76 .76319 96 .94339
17 .15360 37 .28896 57 .52214 77 .77427 97 .95520
18 .15835 38 .29850 58 .53550 78 .78512 98 .96810
19 .16323 39 .30830 59 .54892 79 .79566 99 .98063
20 .16828 40 .31835 60 .56237 80 .80583 100 1.00000
</TABLE>
<TABLE>
<CAPTION>
FEMALE INSURED
--------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.08586 21 $.15360 41 $.28896 61 $.52214 81 $ .77427
2 .08774 22 .15835 42 .29850 62 .53550 82 .78512
3 .08993 23 .16323 43 .30830 63 .54892 83 .79566
4 .09228 24 .16828 44 .31835 64 .56237 84 .80583
5 .09478 25 .17350 45 .32865 65 .57583 85 .81560
6 .09743 26 .17890 46 .33918 66 .58929 86 .82496
7 .10023 27 .18450 47 .34995 67 .60272 87 .83394
8 .10318 28 .19031 48 .36096 68 .61610 88 .84259
9 .10629 29 .19635 49 .37222 69 .62940 89 .85096
10 .10953 30 .20263 50 .38370 70 .64260 90 .85909
11 .11290 31 .20915 51 .39541 71 .65565 91 .86704
12 .11641 32 .21591 52 .40733 72 .66851 92 .87488
13 .12004 33 .22293 53 .41945 73 .68114 93 .88268
14 .12379 34 .23021 54 .43176 74 .69350 94 .89050
15 .12764 35 .23775 55 .44424 75 .70559 95 .89841
16 .13166 36 .24556 56 .45688 76 .71744 96 .90648
17 .13581 37 .25366 57 .46968 77 .72908 97 .91479
18 .14008 38 .26205 58 .48261 78 .74057 98 .92350
19 .14447 39 .27073 59 .49568 79 .75194 99 .93291
20 .14897 40 .27970 60 .50886 80 .76319 100 .94339
101 .95520
102 .96810
103 .98063
104 1.00000
</TABLE>
V81-02-3B Page 3B
<PAGE>
POLICY OWNER AND BENEFICIARY
OWNER. The Owner of this policy is the Insured unless otherwise stated in the
application, or later changed. As Owner, you can exercise all the rights in this
policy while the Insured is living. You do not need the consent of anyone who
has only a conditional or future ownership interest in this policy.
BENEFICIARY. The Beneficiary is as stated in the application, unless later
changed. If two or more persons are named, those surviving the Insured will
share equally unless otherwise stated.
We will pay any benefit for which there is no stated Beneficiary living at the
death of the Insured to the children of the Insured who then survive, in equal
shares. If none survive, we will pay the estate of the Insured.
CHANGES. While the Insured is living, you may change the Owner or Beneficiary by
written notice in a form satisfactory to us. The change will take effect on the
date you sign the notice, except that it will not apply to any payment we make
or other action we take before we receive the notice at our Administrative
Office. If you change the Beneficiary, any previous arrangement you made under
the Payment Options provision on page 9 is cancelled.
ASSIGNMENT. You may assign this policy, but we will not be bound by an
assignment unless it is in writing and we have received it at our Administrative
Office. Your rights and those of any other person referred to in this policy
will be subject to the assignment. We assume no responsibility for the validity
of any assignment.
PREMIUMS
AMOUNTS AND DUE DATES. Page 3 shows the amounts and due dates of premiums and
the period for which they are to be paid. Each premium is payable on or before
its due date at our Administrative Office.
You may write and ask us to change the frequency of premium payment. If we
approve the change, the new premium will be determined on the rate scale for
this policy.
GRACE PERIOD. We allow a grace period of 31 days for payment of each premium,
after the first premium. The insurance will continue during the grace period. If
a premium is paid during the grace period, then all benefits under this policy
will be the same as if such premium had been paid on its due date.
LAPSE. If a premium is not paid by the end of its grace period, the policy will
lapse as of the premium due date. If this occurs, all insurance ends, except as
stated in Options on Lapse on page 7. Additional benefit riders do not continue
beyond the grace period of an unpaid premium.
REINSTATEMENT. You may reinstate this policy within five years after lapse if:
(1) the policy has not been given up for its net cash value; (2) you provide
evidence of insurability satisfactory to us; and (3) you pay the larger of: (a)
all overdue premiums with interest at 6% per year compounded annually; or (b)
110% of the difference between the following Items (i) and (ii). Item (i) is the
excess of the cash value immediately after reinstatement over the cash value
immediately before reinstatement. Item (ii) is any policy loan, and accrued loan
interest, in effect when any option on lapse became effective, with loan
interest to the date of reinstatement.
Upon reinstatement this policy will have the same Benefit Base and the same
Variable Adjustment Amount as to each separate account (as these are determined
in the Variable Adjustment Amount provision on page 11) as if default had not
occurred. Also, upon reinstatement this policy will have a loan equal to the sum
of the following Items (i) and (ii). Item (i) is any loan, and accrued loan
interest, in effect at the date any option on lapse became effective, with loan
interest to the date of reinstatement. Item (ii) is any loan arising after the
date any option on lapse became effective, with loan interest to the date of
reinstatement.
PREMIUM ADJUSTMENT. We will add to the insurance benefits any part of the last
premium paid that applies to a period beyond the policy month in which the
Insured dies. If the Insured dies during the grace period of an unpaid premium,
we will deduct from the benefits the part of the overdue premium for one policy
month.
V81-02-3B Page 4
<PAGE>
DEATH BENEFIT
The Death Benefit equals:
o the face amount shown on page 3 for the policy year in which the Insured
dies;
o plus the sum, if positive, of the Variable Adjustment Amounts, for each
separate account under this policy in which you have a cash value, for the
policy year in which the Insured dies.
A description of how the Variable Adjustment Amount for each separate account is
determined is on page 11.
CASH VALUE
You may give up this policy for its net cash value at any time while the Insured
is living. The net cash value is the cash value minus any loan and loan
interest.
We will determine the net cash value on the date we receive your signed request
for it at our Administrative Office. The policy will terminate on the date you
send the policy and the request to us.
CASH VALUE. The cash value of the policy will vary daily with the performance of
the separate accounts under this policy in which you have a cash value. See page
12 for a description of how cash values are determined.
LOANS
You may get a loan on this policy while it has a loan value and it is not being
continued as extended term insurance under the Options on Lapse on page 7. This
policy will be the sole security for the loan.
The amount of the loan may not be more than the loan value. Except when used to
pay premiums, a loan must be at least $100 more than any existing loan and loan
interest. Any existing loan and loan interest will be deducted from the new
loan. We may also deduct any unpaid premium then due.
A loan, whether you repay it or not, will have a permanent effect on the
Variable Adjustment Amounts, Death Benefit and cash value under this policy. It
will have no effect on the amount of the premiums payable under this policy.
We will allocate loans to the separate accounts based on your net cash value in
each separate account as of the dates the loans are made. We will allocate loan
repayments to the separate accounts based on the amount of your outstanding
loans as to each separate account as of the dates the repayments are made. See
page 12 for a description of how the cash value in each separate account is
determined.
LOAN VALUE. If this policy has not lapsed, the loan value is 75% of the policy's
cash value. If this policy has lapsed and is being continued as Reduced Paid-up
Insurance under the Options on Lapse on page 7, the loan value is the cash value
on the next policy anniversary, minus interest at the loan rate to that date.
LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%.
Interest is due on each policy anniversary. If the interest is not paid when
due, it will be added to the loan and bear interest at the loan rate.
When a loan plus loan interest first exceeds the cash value, we will mail to you
and any assignee of record at last known addresses a notice that the policy will
terminate if such excess amount is not repaid within 31 days after we mailed
such notice.
REPAYMENT. You may repay a loan and loan interest in whole or in part at any
time while the Insured is living and this policy is in effect. However, if this
policy has lapsed and you are continuing insurance under one of the Options on
Lapse on page 7, any loan that was deducted in determining the benefit on lapse
may not be repaid unless this policy is reinstated. We will deduct any existing
loan and loan interest from any benefits we pay at the Insured's death.
V81-02-5 Page 5
<PAGE>
THE SEPARATE ACCOUNTS
We established and we maintain Separate Accounts I and II under the laws of New
York State. Realized and unrealized gains and losses from the assets of Separate
Accounts I and II are credited or charged against such accounts without regard
to our other income, gains, or losses. Assets are put in Separate Accounts I and
II to support this policy and other variable life insurance policies. Assets may
be put in Separate Accounts I and II for other purposes, but not to support
contracts or policies other than variable life insurance.
We expect the investments in Separate Account I will be, primarily, common
stocks and other equity-type investments. We expect the investments in Separate
Account II will be, primarily, short-term (not to exceed one year) money market
instruments, such as: United States (U.S.) government and U.S. government agency
securities; bank money instruments; time deposits; certificates of deposit; high
grade commercial paper, including master demand notes; and repurchase agreements
covering U.S. government obligations and certificates of deposit. But we may
invest the assets of Separate Accounts I and II in any legal investments. We
will rely upon our own and outside counsel for advice in this regard.
Instead of making direct investments, we may also operate either Separate
Account I or II as a unit investment trust, or other form. We would invest all
or part of such account's assets in shares or units of a fund. We, an affiliate,
or The Equitable Life Assurance Society of the United States would be the
investment adviser and would invest the assets of the fund as above.
The assets of Separate Accounts I and II are our property. The portion of the
assets of Separate Accounts I and II equal to the reserves and other policy
liabilities with respect to such separate accounts will not be chargeable with
liabilities arising out of any other business we conduct. We may transfer assets
of such separate accounts in excess of such reserves and liabilities to our
general account.
We will value the assets of Separate Accounts I and II on each business day. A
business day is any day on which the New York Stock Exchange is open for
trading.
We have the right to create new separate accounts. We have the right to withdraw
assets of a class of policies to which this policy belongs from either separate
account and put them in another separate account. If we do this, we will
withdraw the same percentage of each investment in such separate account, but
will avoid odd lots and fractions. We also have the right to combine any two or
more separate accounts. The term "Separate Account I" or "Separate Account II"
in this policy shall then refer to any other separate account in which the
assets of a class of policies to which this policy belongs were placed.
We have the right to:
1. register or deregister either separate account under the Investment Company
Act of 1940;
2. run either separate account under the direction of a committee, and to
discharge such committee at any time; and
3. restrict or eliminate any voting rights of policyowners, or other persons
who have voting rights as to either separate account.
CHANGES OF INVESTMENT ADVISER OR INVESTMENT POLICY. Unless otherwise required by
law or regulation, the investment adviser or any investment policy may not be
changed without our consent. If required by law or regulation, the investment
policy of either separate account will not be changed unless approved by the
Superintendent of Insurance of New York State or deemed approved in accordance
with such law or regulation. If so required, the process for getting such
approval is filed with the insurance supervisory official of the jurisdiction in
which this policy is delivered.
INVESTMENT OPTIONS
ALLOCATION OF NET ANNUAL PREMIUMS. If premiums are duly paid, we will allocate
to each separate account at the beginning of each policy year a percentage of
the Net Annual Premium shown on page 3 for that year. Such allocations will be
based on the allocation percentages then in effect. The allocation percentages
for the first policy year are as designated in the application for this policy.
Unless you change them, such percentages shall also apply in later years.
V81-02-5 Page 6
<PAGE>
INVESTMENT OPTIONS CONTINUED
You may change the allocation percentages for policy years after the first by
notifying us in writing of the new percentages. Each allocation percentage
greater than zero must be a whole number of not more than 100%. The sum of the
percentages must equal 100%. A change will take effect on the next policy
anniversary if we receive the notice at our Administrative Office at least 7
days before such anniversary.
TRANSFER OF CASH VALUES. You may ask us to transfer all or part of your cash
value in one of the separate accounts to the other. Only two such transfers may
be made in a policy year. We will make the transfer as of the date we receive
your written request for it at our Administrative Office.
OPTIONS ON LAPSE
You have a number of options if the policy lapses. You may apply for
reinstatement. If there is a net cash value, you may withdraw it and give up the
policy. Or, you may continue insurance under one of the following options:
REDUCED PAID-UP INSURANCE. This is fixed benefit insurance for the Insured's
lifetime and for the amount that the net cash value will buy.
EXTENDED TERM INSURANCE. This is fixed benefit term insurance for an amount
equal to the Death Benefit on the date of lapse, minus any unpaid loan and loan
interest. The insurance will continue from the date of lapse for as long a term
period as the net cash value will buy. In no event, however, will this period be
less than 90 days if premiums have been paid for at least three months before
lapse and there is no loan on this policy. This option is not available if so
stated on page 3.
An Option on Lapse will become effective on the date your written request for it
is received at our Administrative Office. If your request is not received within
three months after the date of lapse, extended term insurance will become
effective automatically at the end of such three month period. Reduced paid-up
insurance will apply instead if the extended term insurance option is not
available.
If the Insured dies after the grace period but within three months from the date
of lapse, the greater of the benefit under reduced paid-up or extended term
insurance will apply. In this case, any restriction on page 3 as to extended
term insurance will not apply.
We will determine the amounts of these options as of the date the option becomes
effective. We will use net cash values as of the date the option becomes
effective, adjusted for any loan transaction on or after that date. A term
period will begin as of the date of lapse (the due date of the unpaid premium).
We will use net single premiums for the Insured's age as of the date of lapse.
EXCHANGE OF POLICY
You may exchange this policy for a policy of permanent fixed benefit insurance
on the life of the Insured. You may make such an exchange within 18 months after
the Date of Issue shown on page 3. We will not require evidence of insurability.
We will require:
1. That this policy be in effect on the date of exchange with all premiums due
having been paid; and
2. Repayment of any loan and loan interest on this policy.
The date of exchange will be the later of: (a) the date you send us this policy
and the signed request on our form for such exchange; or (b) the date we receive
at our Administrative Office any sum due to be paid for such exchange.
THE NEW POLICY. The new policy will be the "Executive Plan" policy being offered
by The Equitable Life Assurance Society of the United States (Equitable) on the
Date of Issue of this policy. It is a policy of permanent fixed benefit life
insurance. The new policy will have a face amount equal to the initial face
amount of this policy. It will have the same Register Date, Date of Issue, and
Issue Age as this policy. Premiums for the new policy will be based on
Equitable's rates in effect on its Register Date for the same class of risk as
under this policy. Any additional benefit riders in this policy will be included
in the new policy only if Equitable was offering them with the new policy as of
its Date of Issue.
V81-02-7 Page 7
<PAGE>
EXCHANGE OF POLICY CONTINUED
Upon request you will be told the amount of the first premium for the new
policy, and of any extra sum required or allowance to be made for a premium or
cash value adjustment that takes appropriate account of the premiums and cash
values under this policy and under the new policy. A detailed statement of the
method of computing such an adjustment has been filed with the insurance
supervisory official of the jurisdiction in which this policy is delivered.
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
required premiums. This policy and the application (a copy of which is attached
at issue) constitute the entire contract. The rights conferred by this policy
are in addition to those provided by applicable Federal and State laws and
regulations.
The contract may not be modified, nor may any of our rights or requirements be
waived, except in writing signed by our President, one of our Vice Presidents,
or by our Secretary or Treasurer.
INCONTESTABILITY. All statements made in the application are representations and
not warranties. We have the right to contest the validity of this policy based
on material misstatements made in the application. However, this policy will
become incontestable after it has been in effect during the lifetime of the
Insured for two years from the Date of Issue shown on page 3.
See any additional benefit riders for modifications that apply to them.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be those that the premium paid would have purchased at the correct age and sex.
SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within
two years after the Date of Issue shown on page 3, our liability will be limited
to the payment of a single sum equal to the premiums paid, minus any loan and
loan interest.
POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, policy
anniversaries and premium periods are measured from the Register Date. Each
policy month begins on the same day in each calendar month as in the Register
Date. If the end of a premium period or policy year is indicated by an age, it
ends on the policy anniversary nearest the birthday on which the Insured reaches
that age.
POLICY CHANGES. You may change this policy to another plan of insurance or add
additional benefit riders or make other changes, subject to our rules at the
time of change.
REPORTS. Each policy year after the first we will give you a report showing the
Death Benefit and the cash value as of the first day of such year. The amount of
any existing loan and the accrued loan interest for the previous policy year
will also be shown. No such reports will be given while this policy is lapsed.
We will also give you such other reports as may be required by law.
BASIS OF COMPUTATION. Cash values, reserves and net single premiums are based on
the Commissioners 1958 Standard Ordinary Mortality Table. For any extended term
insurance, they are based instead on the Commissioners 1958 Extended Term
Insurance Table. Continuous functions are used with interest compounded annually
at 4%.
The cash values and paid-up insurance benefits are equal to or more than those
required by law. A detailed statement of the method of computing values and
benefits has been filed with the insurance supervisory official of the
jurisdiction in which this policy is delivered. The tabular cash value at the
end of each policy year equals the reserve. Reserves referred to in this policy
are not less than reserves determined according to the Commissioners Reserve
Valuation Method. Our expense and mortality results will not adversely affect
the dollar amount of insurance benefits or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. As long as this policy is not
being continued under one of the Options on Lapse, we will make payments under
this policy as follows;
o A cash value will be paid within 7 days after we receive your policy and
request at our Administrative Office;
o A loan will be paid within 7 days after we receive your request at our
Administrative Office; and
o The insurance benefits will be paid within 7 days after we receive at our
Administrative Office proof of the Insured's death and all other
requirements deemed necessary before such payment may be made.
V81-02-7 Page 8
<PAGE>
GENERAL PROVISIONS CONTINUED
We may not be able to sell securities or determine the value of the assets of
the separate accounts if: (1) the New York Stock Exchange is closed; (2) the
Securities and Exchange Commission requires trading to be restricted or declares
an emergency; or (3) the Securities and Exchange Commission by order permits us
to defer payments for the protection of our policy Owners. During such times we
may defer:
1. Determination and payment of cash values;
2. Payment of loans;
3. Determination of a change in a Variable Adjustment Amount, and payment of
any portion of the Death Benefit equal to the Variable Adjustment Amount;
4. Any requested transfer of cash value; and
5. Use of Insurance Benefits under the Payment Options.
DEFERMENT UNDER OPTIONS ON LAPSE. We may defer payment of a cash value and the
making of a loan for up to six months after we receive a request at our
Administrative Office if this policy is being continued under one of the Options
on Lapse. We will allow interest, at a rate of at least 3% a year, on any cash
value payment we defer for 30 days or more.
PAYMENT OPTIONS
Payments under these options will not be affected by the investment
experience of any separate account after proceeds are applied under such
options.
Instead of having the insurance benefits or net cash value paid immediately in
one sum, you can choose another form of payment for all or part (if at least
$2,500). If you do not arrange for this before the Insured dies, the Beneficiary
will have this right when the Insured dies. Arrangements you make, however,
cannot be changed by the Beneficiary after the Insured's death. The options are:
1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with
interest paid at the end of each month, each 3 months, each 6 months or each
12 months, as chosen.
2. INSTALMENT OPTIONS:
A. FIXED PERIOD: Paid in equal instalments for a specified number of years
(not more than 30). The instalments will not be less than those shown in
the Table of Guaranteed Payments on page 10.
B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the amount
applied, together with interest on the unpaid balance, is used up.
3. LIFE INCOME OPTIONS:
Paid as a monthly income for life in an amount we determine but not less
than shown in the Table of Guaranteed Payments on page 10. We guarantee
payments for life and in any event for 10 years, 20 years, or until the
payments we make equal the amount applied (called "refund certain"),
according to the "certain" period chosen.
We guarantee interest under Option 1 at the rate of 3% a year and under Option 2
at 3-1/2% a year, or such higher rates as we may determine. We may allow excess
interest under Options 1 and 2.
We reserve the right to change how often we make payments, so that each payment
is for at least $25. The payee under an option may name and change a successor
payee for any amount we would otherwise pay the payee's estate.
Any arrangements involving more than one of the options, or a payee who is not a
natural person (such as a corporation) or who is a fiduciary, must have our
approval. Also, details of all arrangements will be subject to our rules at the
time the arrangement takes effect. These include withdrawal or commutation
rights, designation of payees and successor payees, and evidence of age and
survival.
Choices (or any later changes) under these options will be made and will take
effect in the same way as a change of Beneficiary. Amounts applied under these
options will not be subject to the claims of creditors or to legal process, to
the extent permitted by law.
V81-02-9 Page 9
<PAGE>
TABLE OF GUARANTEED PAYMENTS
(MINIMUM AMOUNT FOR EACH $1,000 APPLIED)
OPTION 2A
FIXED PERIOD INSTALMENTS
------------------------
Number
of Years' Monthly Annual
Instalments Instalment Instalment
----------- ---------- ----------
1 $84.70 $1000.00
2 43.08 508.60
3 29.21 344.86
4 22.28 263.04
5 18.12 213.99
6 15.36 181.32
7 13.38 158.01
8 11.91 140.56
9 10.76 127.00
10 9.84 116.18
11 9.09 107.34
12 8.47 99.98
13 7.94 93.78
14 7.49 88.47
15 7.11 83.89
16 6.77 79.89
17 6.47 76.37
18 6.20 73.25
19 5.97 70.47
20 5.76 67.98
21 5.57 65.74
22 5.40 63.70
23 5.24 61.85
24 5.10 60.17
25 4.97 58.62
26 4.84 57.20
27 4.73 55.90
28 4.63 54.69
29 4.54 53.57
30 4.45 52.53
If instalments are paid each 3 months, they will be 25.32% of the annual
instalments. If they are paid each 6 months, they will be 50.43% of the annual
instalments.
OPTION 3
MONTHLY LIFE INCOME
-------------------
<TABLE>
<CAPTION>
10 Years Certain 20 Years Certain Refund Certain
---------------- ---------------- --------------
AGE Male Female Male Female Male Female
--- ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
50 $4.50 $3.96 $4.27 $3.89 $ 4.28 $3.87
51 4.58 4.02 4.32 3.94 4.35 3.93
52 4.67 4.09 4.38 4.00 4.42 3.99
53 4.75 4.16 4.44 4.06 4.50 4.05
54 4.85 4.24 4.50 4.12 4.58 4.11
55 4.94 4.32 4.56 4.18 4.66 4.18
56 5.04 4.40 4.62 4.24 4.74 4.25
57 5.15 4.49 4.68 4.31 4.83 4.33
58 5.26 4.58 4.74 4.38 4.93 4.41
59 5.37 4.68 4.81 4.45 5.03 4.49
60 5.49 4.78 4.86 4.52 5.13 4.58
61 5.62 4.89 4.92 4.59 5.24 4.67
62 5.75 5.00 4.98 4.66 5.35 4.77
63 5.88 5.12 5.04 4.73 5.48 4.88
64 6.03 5.25 5.09 4.80 5.60 4.99
65 6.17 5.39 5.14 4.88 5.74 5.10
66 6.32 5.53 5.19 4.95 5.88 5.22
67 6.48 5.68 5.24 5.01 6.03 5.35
68 6.64 5.83 5.28 5.08 6.18 5.49
69 6.80 6.00 5.32 5.14 6.35 5.64
70 6.97 6.17 5.35 5.20 6.53 5.79
71 7.15 6.34 5.38 5.26 6.71 5.96
72 7.32 6.53 5.41 5.30 6.91 6.13
73 7.50 6.72 5.43 5.35 7.12 6.32
74 7.67 6.92 5.45 5.38 7.34 6.52
75 7.85 7.12 5.47 5.42 7.58 6.73
76 8.02 7.32 5.48 5.44 7.82 6.96
77 8.19 7.53 5.49 5.46 8.09 7.21
78 8.36 7.75 5.50 5.48 8.38 7.47
79 8.52 7.96 5.50 5.49 8.67 7.75
80 8.67 8.16 5.51 5.50 9.00 8.05
81 8.81 8.36 5.51 5.51 9.34 8.39
82 8.94 8.55 5.51 5.51 9.70 8.73
83 9.06 8.73 5.51 5.51 10.10 9.12
84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
</TABLE>
Income amounts for Life Income Options are based on age nearest birthday when
income starts. Income amounts for ages not shown will be furnished on request.
V81-02-9 Page 10
<PAGE>
BASIS OF VALUES
ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each separate account, the Actual
Net Rate of Return for a policy year reflects the account's:
o investment income;
o plus realized and unrealized capital gains;
o minus realized and unrealized capital losses;
o minus any charges for taxes or amounts set aside as a reserve for taxes;
o minus a charge not exceeding .25% per year for investment management
expenses; and
o minus a charge not exceeding .50% per year for mortality, expenses and
other risks.
The Actual NRR for a period less than a year will be calculated in a consistent
manner.
BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a
pro-rata part of 4% for periods of less than a year.)
If the Actual NRR for all separate accounts always equals the Base NRR, then:
o the Death Benefit will always equal the Face Amount; and
o the Cash Value at the end of each policy year will equal the tabular cash
value shown on page 3A.
VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of
insurance in effect for that policy year due to investment performance in past
years. On each policy anniversary we will determine a new VAA for the next
policy year. We will do this independently for each separate account, taking
into account the Actual NRR for the last policy year.
For the first policy year the VAA for each separate account is zero. For later
policy years, the VAA for each separate account will equal the VAA for that
account for the last policy year, plus the VAA Change Amount for that account. A
VAA does not change during a policy year.
VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount
for each separate account may be positive or negative. It will equal the product
of the following Items (a) and (b), divided by Item (c).
(a) The Actual NRR for the separate account minus the Base NRR for that
policy year.
(b) The Benefit Base for the separate account as of the last policy
anniversary.
(c) The Net Single Premium per $1.00 of VAA for the current policy
anniversary as shown on page 3B.
BENEFIT BASE. For each separate account, the Benefit Base on the Register Date
is the product of the following Items (1) and (2):
(1) The Allocation Percentage designated in the application for this policy.
(2) The Net Annual Premium for the first policy year.
On policy anniversaries, the Benefit Base for a separate account is the sum of
the following Items (1) and (2):
(1) The allocation percentage for that anniversary, multiplied by the sum of
the following Items (a) and (b):
(a) The Tabular Cash Value on that anniversary.
(b) The Net Annual Premium for that anniversary.
(2) The Net Single Premium for the VAA for that separate account on that
anniversary.
The Net Annual Premiums, Tabular Cash Values and Net Single Premiums are shown
on pages 3, 3A and 3B, respectively.
For each separate account, the VAA Change Amount will also reflect the effect
of:
1. Any policy loans in effect on the last policy anniversary;
V81-02-11 Page 11
<PAGE>
BASIS OF VALUES CONTINUED
2. All new policy loans and repayments during the previous policy year; and
3. All transfers of cash value to or from that separate account during the
previous policy year.
In addition, if you have changed the allocation percentages, we will reallocate
the VAA's among the separate accounts.
CALCULATION OF CASH VALUES. The cash value of this policy on any date is the sum
of your cash values in each separate account on that date. If no premium is due
and unpaid, your cash value in each separate account on any date is the sum of
the following Items (1), (2) and (3):
(1) The tabular cash value on that date, multiplied by the allocation
percentage for that separate account in effect on the last policy
anniversary.
(2) The Net Single Premium on that date for the current VAA for that separate
account.
(3) If the date is not a policy anniversary, the product of the following
Items (a) and (b):
(a) The Actual NRR for the separate account minus the Base NRR for the
time elapsed since the last policy anniversary.
(b) The Benefit Base for the separate account on the last policy
anniversary.
If a premium is due and unpaid, then within three months after the due date your
cash value in each separate account is the sum of the following Items (1) and
(2):
(1) Your cash value in that separate account as of the due date of the unpaid
premium.
(2) The product of the following Items (a) and (b):
(a) The Actual NRR for the separate account minus the Net NRR for the
time elapsed since such due date.
(b) The cash value on such due date.
For each separate account, the cash value will also reflect the effect of:
1. Any policy loans in effect on the last policy anniversary;
2. All new policy loans and repayments since the last policy anniversary;
and
3. All transfers of cash value to or from that separate account since the
last policy anniversary.
More than three months after the due date of an unpaid premium, if you continue
the policy under one of the options on lapse, your cash value will equal the
reserve for the policy. In such case, the cash value within 30 days after a
policy anniversary will never be less than the cash value on that anniversary.
If at any time you have a policy loan allocated to a separate account and your
net cash value in that separate account is zero, we will cancel the VAA and the
policy loan as to such separate account and reallocate them to the other
separate account. Also, the premium allocation percentage for such separate
account will be reduced to zero and the percentage for the other separate
account will be increased to 100%.
TABULAR CASH VALUE (TCV). The tables of TCV's on page 3A show interim TCV's at
the end of each month in the first policy year and at the end of later policy
years. We will determine the TCV on other dates in a consistent manner with
allowance for time elapsed and premiums paid. Any TCV's not shown will be
furnished on request.
V81-02-11 Page 12
<PAGE>
VARIABLE EQUITABLE
LIFE VARIABLE LIFE INSURANCE COMPANY
INSURANCE [EVLICO LOGO]
POLICY
Home Office: 1285 Avenue of the Americas, New York, New York 10019
Whole Life Plan -- INCREASING FACE AMOUNT. Variable insurance
payable upon death. Guaranteed Minimum Death Benefit. Face amount
increases annually to 150% of initial face amount. Fixed premiums
payable for life. Non-Participating. Investment experience
reflected in benefits. Investment options described on page 6.
No. 81-02
SPECIMEN POLICY
NOTE -- Because of variations in state policy form
requirements, the policy as actually issued may
differ somewhat from this specimen policy.
THE INSURED RICHARD ROE VARIABLE
LIFE INSURANCE
POLICY OWNER RICHARD ROE POLICY
INITIAL EQUITABLE
FACE AMOUNT $100,000 VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
POLICY NUMBER SPECIMEN
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
A Stock Life Insurance Company
Agrees
o To pay the insurance benefits of this policy to the Beneficiary upon receiving
proof of the Insured's death; and
o To provide you (the policy Owner) with the other rights and benefits of this
policy.
These agreements are subject to the provisions of this policy.
The face amount increases at the rate of 3% at the beginning of each policy
year after the first.
THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE
INITIAL FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE
EACH YEAR AS DESCRIBED ON PAGE 4 DEPENDING UPON SEPARATE ACCOUNT INVESTMENT
EXPERIENCE, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT FOR THE POLICY YEAR IN
WHICH THE INSURED DIES.
THE ACCOUNT VALUE AND THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY.
THEY MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT
EXPERIENCE.
The amount of the single premium for this policy is shown on page 3.
RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you
are not satisfied with it, you may cancel it by returning the policy with a
written request for cancellation to our Administrative Office by the later of:
(a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the
application was signed. If you do this, we will refund the premium that was
paid.
SPECIMEN SPECIMEN
Kevin Keefe Secretary Donald J. Mooney President
Single Premium Whole Life Plan. Variable insurance payable upon
death. Guaranteed Minimum Death Benefit. Face amount increases
annually by 3% at the beginning of each policy year after the
first. Non-Participating. Investment experience reflected in
benefits. Investment options described on page 6.
No. 83-10
<PAGE>
[EVLICO LOGO]
1285 Avenue of the Americas, New York, 10019
CONTENTS
Insurance benefits 2
Policy owner and beneficiary 4
Death Benefit 4
Account Value 4
Cash Value 4
Loans 5
The Separate Accounts 5
Investment Options,
allocations, transfers 6
Exchange of Policy 6
General Provisions 7
Payment Options 8
Basis of Values 10
(Net rates of return, variable adjustment amount, benefit base, calculation of
Account Values)
A copy of the application for this policy is at the back of the policy.
IN THIS POLICY:
"We," "our" and "us" mean Equitable Variable Life Insurance Company.
"You" and "your" mean the Owner of the policy at the time an Owner's right is
exercised.
ADMINISTRATIVE OFFICE
The address of our Administrative Office is shown on page 3. You should send
requests to that address unless instructed otherwise.
INSURANCE BENEFITS
The insurance benefits we pay at the insured's death include:
o the Death Benefit described on page 4;
o minus any loan (and loan interest) on the policy.
We will add interest to the resulting amount for the period from the date of
death to the date of payment. It will be computed at the interest rate we are
then paying under the Deposit Option on page 8.
Payment of these benefits may be affected by other provisions of this policy.
See the Suicide Exclusion, Incontestability and Age and Sex clauses on page 7.
Special exclusions or limitations (if any ) are listed on page 3.
No. 83-10 Page 2
<PAGE>
THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1983
POLICY OWNER RICHARD ROE DATE OF ISSUE JUN 1, 1983
INITIAL
FACE AMOUNT $100,000 ISSUE AGE, SEX 35 MALE
POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE
STATE OF
RESIDENCE SPECIMEN STATE
************************** BENEFITS AND PREMIUMS TABLE *************************
BENEFITS SINGLE PREMIUM
FOR THIS POLICY
LIFE INSURANCE - VARIABLE $71,280.61
THE SINGLE PREMIUM IS $71,280.61 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
THE FOLLOWING DEDUCTIONS ARE MADE FROM THE SINGLE PREMIUM:
ADMINISTRATIVE EXPENSE: $ 200.00
STATE PREMIUM TAX: 1,425.61
THE NET SINGLE PREMIUM AMOUNT ALLOCATED TO THE SEPARATE ACCOUNT(S) IS
$69,655.00.
*************** INVESTMENT ALLOCATION OF NET SINGLE PREMIUM AMOUNT**************
SEPARATE ACCOUNT I 50%
SEPARATE ACCOUNT II 50%
****************************TABLE OF FACE AMOUNTS *****************************
<TABLE>
<CAPTION>
POLICY FACE POLICY FACE POLICY FACE
YEAR AMOUNT YEAR AMOUNT YEAR AMOUNT
<S> <C> <C> <C> <C> <C>
1 $100,000 9 $126,678 17 $160,472
2 103,000 10 130,478 18 165,286
3 106,090 11 134,392 19 170,245
4 109,273 12 138,424 20 175,352
5 112,551 13 142,577 AGE 60 209,379
6 115,928 14 146,854 AGE 62 222,130
7 119,406 15 151,260 AGE 65 242,728
8 122,988 16 155,798 AGE 70 281,388
</TABLE>
******* ADMINISTRATIVE OFFICE: EQUITABLE VARIABLE LIFE INSURANCE COMPANY *******
SPECIMEN REGIONAL SERVICE CENTER
100 SPECIMEN ST.
CITY, STATE 10001
V83-10-3 PAGE 3
0030L/Pg.28
<PAGE>
THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1983
INITIAL
FACE AMOUNT $100,000 DATE OF ISSUE JUN 1, 1983
POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35 MALE
******************************* TABULAR VALUES *********************************
THE ACCOUNT VALUE AND CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN
AMOUNTS SHOWN AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT
SEE PAGE 4 FOR ACCOUNT VALUE AND CASH VALUE PROVISIONS
TABULAR VALUES AT ENDS OF POLICY YEARS
END OF TABULAR TABULAR
POLICY YEAR ACCOUNT VALUES CASH VALUES
1 $ 72,366 $ 66,509
2 75,182 69,740
3 78,105 73,127
4 81,138 76,677
5 84,285 80,398
6 87,548 84,296
7 90,931 88,380
8 94,439 92,660
9 98,076 97,145
10 101,845 101,845
11 105,752 105,752
12 109,799 109,799
13 113,991 113,991
14 118,332 118,332
15 122,826 122,826
16 127,478 127,478
17 132,291 132,291
18 137,271 137,271
19 142,422 142,422
20 147,749 147,749
AGE 60 177,186 177,186
AGE 62 190,354 190,354
AGE 65 211,722 211,722
AGE 70 251,930 251,930
THESE VALUES DO NOT REFLECT LOANS. VALUES NOT SHOWN WILL BE FURNISHED ON
REQUEST.
V83-10-3A PAGE 3A
ak/0177L
<PAGE>
TABLE OF NET SINGLE PREMIUMS
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Increasing
Insurance. Values shown are applicable on policy anniversaries. The net single
premium as of a date during a policy year shall be determined by interpolation
between the values applicable on the immediately preceding and immediately
following anniversaries.
<TABLE>
<CAPTION>
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
- ---------- ------- --------- ------- --------- ------- --------- -------- --------- -------
MALE INSURED
------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.51971 21 $.61724 41 $.73320 61 $.85165 81 $ .93500
2 .52393 22 .62256 42 .73935 62 .85696 82 .93783
3 52832 23 .62793 43 .74551 63 .86215 83 .94052
4 .53278 24 .63335 44 .75167 64 .86727 84 .94309
5 53732 25 .63883 45 .75782 65 .87226 85 .94556
6 .54193 26 .64436 46 .76397 66 .87715 86 .94793
7 .54662 27 .64995 47 .77011 67 .88190 87 .95023
8 .55137 28 .65560 48 .77622 68 .88652 88 .95248
9 .55619 29 .66129 49 .78231 69 .89099 89 .95470
10 .56107 30 .66704 50 .78838 70 .89532 90 .95690
11 .56600 31 .67284 51 .79440 71 .89950 91 .95910
12 .57098 32 .67869 52 .80039 72 .90354 92 .96133
13 .57601 33 .68460 53 .80632 73 .90746 93 .96360
14 .58106 34 .69055 54 .81222 74 .91128 94 .96595
15 .58614 35 .69655 55 .81805 75 .91501 95 .96845
16 .59125 36 .70259 56 .82383 76 .91864 96 .97119
17 .59638 37 .70867 57 .82955 77 .92218 97 .97423
18 .60154 38 .71477 58 .83519 78 .92560 98 .97751
19 .60673 39 .72090 59 .84076 79 .92888 99 .98064
20 .61196 40 .72705 60 .84625 80 .93202 100 1.00000
</TABLE>
FEMALE INSURED
--------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.49309 21 $.58614 41 $.69655 61 $.81805 81 $ .91501
2 .49707 22 .59125 42 .70259 62 .82383 82 .91864
3 .50122 23 .59638 43 .70867 63 .82955 83 .92218
4 .50544 24 .60154 44 .71477 64 .83519 84 .92560
5 .50975 25 .60673 45 .72090 65 .84076 85 .92888
6 .51412 26 .61196 46 .72705 66 .84625 86 .93202
7 .51856 27 .61724 47 .73320 67 .85165 87 .93500
8 .52307 28 .62256 48 .73935 68 .85696 88 .93783
9 .52765 29 .62793 49 .74551 69 .86216 89 .94052
10 .53228 30 .63335 50 .75167 70 .86727 80 .94309
11 .53696 31 .63883 51 .75782 71 .87226 91 .94556
12 .54168 32 .64436 52 .76397 72 .87715 92 .94793
13 .54645 33 .64995 53 .77011 73 .88190 93 .95023
14 .55127 34 .65560 54 .77622 74 .88652 94 .95248
15 .55614 35 .66129 55 .78231 75 .89099 95 .95470
16 .56105 36 .66704 56 .78838 76 .89532 96 .95690
17 .56600 37 .67284 57 .79440 77 .89950 97 .95910
18 .57098 38 .67869 58 .80039 78 .90354 98 .96133
19 .57601 39 .68460 59 .80632 79 .90746 99 .96360
20 .58106 40 .69055 60 .81222 80 .91128 100 .96595
101 .96845
102 .97119
103 .97423
104 .97751
105 .98064
106 1.00000
</TABLE>
V83-10-3B Page 3B
<PAGE>
POLICY OWNER AND BENEFICIARY
OWNER. The Owner of this policy is the Insured unless otherwise stated in the
application, or later changed. As Owner, you can exercise all the rights in this
policy while the Insured is living. You do not need the consent of anyone who
has only a conditional or future ownership interest in this policy.
BENEFICIARY. The Beneficiary is as stated in the application, unless later
changed. If two or more persons are named, those surviving the Insured will
share equally unless otherwise stated.
We will pay any benefit for which there is no stated Beneficiary living at the
death of the Insured to the children of the Insured who then survive, in equal
shares. If none survive, we will pay the estate of the Insured.
CHANGES. While the Insured is living, you may change the Owner or Beneficiary by
written notice in a form satisfactory to us. The change will take effect on the
date you sign the notice, except that it will not apply to any payment we make
or other action we take before we receive the notice at our Administrative
Office. If you change the Beneficiary, any previous arrangement you made under
the Payment Options provision on page 8 is cancelled.
ASSIGNMENT. You may assign this policy, but we will not be bound by an
assignment unless it is in writing and we have received it at our Administrative
Office. Your rights and those of any other person referred to in this policy
will be subject to the assignment. We assume no responsibility for the validity
of any assignment.
DEATH BENEFIT
The Death Benefit equals:
o the face amount shown on page 3 for the policy year in which the Insured
dies.
o plus the sum, if positive, of the Variable Adjustment Amounts, for each
separate account under this policy in which you have a cash value, for
the policy year in which the Insured dies.
However, the Death Benefit will in no event be less than the amount of Paid-up
Whole Life Increasing Insurance that could be purchased by the Account Value at
the Insured's death on the basis of the Table of Net Single Premiums on page 3B.
See page 10 for a description of how the Variable Adjustment Amount for each
separate account is determined.
ACCOUNT VALUE
The policy's Account Value will vary daily with the performance of the separate
accounts in which you have an Account Value under this policy. See page 11 for a
description of how the Account Value is determined.
CASH VALUE
You may give up this policy for its net cash value at any time while the Insured
is living. The net cash value is the cash value minus any loan and loan
interest.
We will determine the net cash value on the date we receive your signed request
for it at our Administrative Office. The policy will terminate on the date you
send the policy and the request to us.
CASH VALUE. The policy's cash value will vary daily with the performance of the
separate accounts in which you have a cash value under this policy.
During the first ten policy years the cash value on any date will be equal to
the product of (1) and (2), where:
(1) is the Account Value on that date; and
(2) is the Tabular Cash Value divided by the Tabular Account Value for that
date.
Tabular Account Values and Tabular Cash Values are shown on page 3A.
After the tenth policy year, the cash value will equal the Account Value.
V83-10-3B Page 4
<PAGE>
LOANS
You may get a loan on this policy while it has a loan value. This policy will be
the sole security for the loan.
The amount of the loan may not be more than the loan value. A loan must be at
least $100 more than any existing loan and loan interest. Any existing loan and
loan interest will be deducted from the new loan.
A loan, whether you repay it or not, will have a permanent effect on the
Variable Adjustment Amounts, Death Benefit, Account Value and cash value under
this policy.
We will allocate loans to the separate accounts based on your net cash value in
each separate account as of the dates the loans are made. we will allocate loan
repayments to the separate accounts based on the amount of your outstanding
loans as to each separate account as of the dates the repayments are made.
LOAN VALUE. The loan value is 90% of the policy's cash value.
LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%.
Interest is due on each policy anniversary. If the interest is not paid when
due, it will be added to the loan and bear interest at the loan rate.
When a loan plus loan interest first exceeds the cash value, we will mail to you
and any assignee of record at last known addresses a notice that the policy will
terminate if such excess amount is not repaid within 31 days after we mailed
such notice.
REPAYMENT. You may repay a loan and loan interest in whole or in part at any
time while the Insured is living and this policy is in effect. We will deduct
any existing loan and loan interest from any benefits we pay at the Insured's
death.
THE SEPARATE ACCOUNTS
We established and we maintain Separate Accounts I and II under the laws of New
York State. Realized and unrealized gains and losses from the assets of Separate
Accounts I and II are credited or charged against such accounts without regard
to our other income, gains, or losses. Assets are put in Separate Accounts I and
II to support this policy and other variable life insurance policies. Assets may
be put in Separate Accounts I and II for other purposes, but not to support
contracts or policies other than variable life insurance.
We expect the investments in Separate Account I will be, primarily, common
stocks and other equity-type investments. We expect the investments in Separate
Account II will be, primarily, short-term (not to exceed one year) money market
instruments, such as: United States (U.S.) government and U.S. government agency
securities; bank money instruments; time deposits; certificates of deposit; high
grade commercial paper, including master demand notes; and repurchase agreements
covering U.S. government obligations and certificates of deposit. But, we may
invest the assets of Separate Accounts I and II in any legal investments. We
will rely upon our own and outside counsel for advice in this regard.
Instead of making direct investments, we may also operate either Separate
Account I or II as a unit investment trust, or other form. We would invest all
or part of such account's assets in shares or units of a fund. We, an affiliate,
or The Equitable Life Assurance Society of the United States would be the
investment adviser and would invest the assets of the fund as above.
The assets of Separate Accounts I and II are our property. The portion of the
assets of Separate Accounts I and II equal to the reserves and other policy
liabilities with respect to such separate accounts will not be chargeable with
liabilities arising out of any other business we conduct. We may transfer assets
of such separate accounts in excess of such reserves and liabilities to our
general account.
We will value the assets of Separate Accounts I and II on each business day. A
business day is any day on which the New York Stock Exchange is open for
trading.
We have the right to create new separate accounts. We have the right to withdraw
assets of a class of policies to which this policy belongs from either
V83-10-5 Page 5
<PAGE>
THE SEPARATE ACCOUNTS CONTINUED
separate account and put them in another separate account. If we do this, we
will withdraw the same percentage of each investment in such separate account,
but will avoid odd lots and fractions. We also have the right to combine any two
or more separate accounts. The term "Separate Account I" or "Separate Account
II" in this policy shall then refer to any other separate account in which the
assets of a class of policies to which this policy belongs were placed.
We have the right to:
1. register or deregister either separate account under the Investment Company
Act of 1940;
2. run either separate account under the direction of a committee, and to
discharge such committee at any time; and
3. restrict or eliminate any voting rights of policyowners, or other persons
who have voting rights as to either separate account.
CHANGES OF INVESTMENT ADVISER OR INVESTMENT POLICY. Unless otherwise required by
law or regulation, the investment adviser or any investment policy may not be
changed without our consent. If required by law or regulation, the investment
policy of either separate account will not be changed unless approved by the
Superintendent of Insurance of New York State or deemed approved in accordance
with such law or regulation. If so required, we have filed the process for
getting such approval with the insurance supervisory official of the
jurisdiction in which this policy is delivered.
INVESTMENT OPTIONS
ALLOCATION OF NET SINGLE PREMIUM. We will allocate to each separate account as
of the Register Date a percentage of the Net Single Premium Amount shown on page
3. Such allocation will be based on the allocation percentages designated in the
application for this policy.
TRANSFER OF ACCOUNT VALUES. You may ask us to transfer all or part of your
Account Value in one of the separate accounts to the other. Only two such
transfers may be made in a policy year. We will make the transfer as of the date
we receive your written request for it at our Administrative Office.
EXCHANGE OF POLICY
You may exchange this policy for a policy of permanent fixed benefit insurance
on the life of the Insured. You may make such an exchange within 18 months after
the Date of Issue shown on page 3. We will not require evidence of insurability.
We will require:
1. That this policy be in effect on the date of exchange; and
2. Repayment of any loan and loan interest on this policy.
The date of exchange will be the later of: (a) the date you send us this policy
and the signed request on our form for such exchange; or (b) the date we receive
at our Administrative Office any sum due to be paid for such exchange.
THE NEW POLICY. The new policy will be the "Single Premium Life Plan" policy
being offered by The Equitable Life Assurance Society of the United States
(Equitable) on the Date of Issue of this policy. It is a policy of permanent
fixed benefit life insurance. The new policy will have a face amount equal to
the initial face amount of this policy. It will have the same Register Date,
Date of Issue, and Issue Age as this policy. The single premium for the new
policy will be based on Equitable's rates in effect on its Register Date for the
same class of risk as under this policy.
Upon request you will be told the amount of the single premium for the new
policy, and of any extra sum required or allowance to be made for a premium or
cash value adjustment that takes appropriate account of the premiums and cash
values under this policy and under the new policy. If so required, we have filed
a detailed statement of the method of computing such an adjustment with the
insurance supervisory official of the jurisdiction in which this policy is
delivered.
V83-10-5 Page 6
<PAGE>
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
single premium for this policy shown on page 3. This policy and the application
(a copy of which is attached at issue) constitute the entire contract. The
rights conferred by this policy are in addition to those provided by applicable
Federal and State laws and regulations.
The contract may not be modified, nor may any of our rights or requirements be
waived, except in writing signed by our President, one of our Vice Presidents,
or by our Secretary or Treasurer.
INCONTESTABILITY. All statements made in the application are representations and
not warranties. We have the right to contest the validity of this policy based
on material misstatements made in the application. However, this policy will
become incontestable after it has been in effect during the lifetime of the
Insured for two years from the Date of Issue shown on page 3.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be those that the premium paid would have purchased at the correct age and sex.
SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within
two years after the Date of Issue shown on page 3, our liability will be limited
to the payment of a single sum equal to the premium paid, minus any loan and
loan interest.
POLICY PERIODS AND ANNIVERSARIES. Policy years and policy anniversaries are
measured from the Register Date. If the end of a policy year is indicated by an
age, it ends on the policy anniversary nearest the birthday on which the Insured
reaches that age.
REPORTS. Each policy year after the first we will give you a report showing the
Death Benefit, the Account Value and the cash value as of the first day of such
year. The amount of any existing loan and the accrued loan interest for the
previous policy year will also be shown. We will also give you such other
reports as may be required by law.
BASIS OF COMPUTATION. Account Values, reserves and net single premiums are based
on the Commissioners 1958 Standard Ordinary Mortality Table. Continuous
functions are used with interest compounded annually at 4%.
The cash values are equal to or more than those required by law. If so required,
we have filed a detailed statement of the method of computing cash values with
the insurance supervisory official of the jurisdiction in which this policy is
delivered. The Tabular Account Value at the end of each policy year equals the
tabular reserve. Our expense and mortality results will not adversely affect the
dollar amount of insurance benefits or Account Values or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. We will make payments under this
policy as follows:
o A cash value will be paid within 7 days after we receive your policy and
request at our Administrative Office;
o A loan will be paid within 7 days after we receive your request at our
Administrative Office; and
o The insurance benefits will be paid within 7 days after we receive at our
Administrative Office proof of the Insured's death and all other
requirements deemed necessary before such payment may be made.
We may not be able to sell securities or determine the value of the assets of
the separate accounts if: (1) the New York Stock Exchange is closed; (2) the
Securities and Exchange Commission requires trading to be restricted or declares
an emergency; or (3) the Securities and Exchange Commission by order permits us
to defer payments for the protection of our policy owners. During such times we
may defer:
1. Determination of Account Values;
2. Determination and payment of cash values;
3. Payment of loans;
4. Determination of a change in a Variable Adjustment Amount, and payment of
any portion of the Death Benefit equal to the Variable Adjustment Amount;
5. Any requested transfer of Account Value; and
6. Use of insurance benefits under the Payment Options.
V83-10-7 Page 7
<PAGE>
PAYMENT OPTIONS
Payments under these options will not be affected by the investment
experience of any separate account after proceeds are applied
under such options.
Instead of having the insurance benefits or net cash value paid immediately in
one sum, you can choose another form of payment for all or part of them. If you
do not arrange for this before the Insured dies, the Beneficiary will have this
right when the Insured dies. Arrangements you make, however, cannot be changed
by the Beneficiary after the Insured's death. The options are:
1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with
interest paid at the end of each month, each 3 months, each 6 months or
each 12 months, as chosen.
2. INSTALMENT OPTIONS:
A. FIXED PERIOD: Paid in equal instalments for a specified number of
years (not more than 30). The instalments will not be less than those
shown in the Table of Guaranteed Payments on page 9.
B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the
amount applied, together with interest on the unpaid balance, is used
up.
3. LIFE INCOME OPTIONS:
Paid as a monthly income for life in an amount we determine but not less
than shown in the Table of Guaranteed Payments on page 9. We guarantee
payments for life and in any event for 10 years, 20 years, or until the
payments we make equal the amount applied (called "refund certain"),
according to the "certain" period chosen.
4. OTHER: We will apply the sum under any other option requested that we make
available at time of the Insured's death or net cash value withdrawal.
We guarantee interest under Option 1 at the rate of 3% a year and under Option 2
at 3-1/2% a year, or such higher rates as we may determine. We may allow excess
interest under Options 1 and 2.
The payee under an option may name and change a successor payee for any amount
we would otherwise pay the payee's estate.
Any arrangements involving more than one of the options, or a payee who is not a
natural person (for example, a corporation) or who is a fiduciary, must have our
approval. Also, details of all arrangements will be subject to our rules at the
time the arrangement takes effect. These include rules on: the minimum amount we
will apply under an option and minimum amounts for installment payments;
withdrawal or commutation rights; naming payees and successor payees; and
proving age and survival.
Choices (or any later changes) under these options will be made and will take
effect in the same way as a change of Beneficiary. Amounts applied under these
options will not be subject to the claims of creditors or to legal process, to
the extent permitted by law.
V83-10-7 Page 8
<PAGE>
TABLE OF GUARANTEED PAYMENTS
MINIMUM AMOUNT FOR EACH $1,000 OF ORIGINAL SUM
OPTION 2
FIXED PERIOD INSTALLMENTS
-------------------------
Number
of Years' Monthly Annual
Installments Instalment Instalment
------------ ---------- ----------
1 $84.70 $1000.00
2 43.08 508.60
3 29.21 344.86
4 22.28 263.04
5 18.12 213.99
6 15.36 181.32
7 13.38 158.01
8 11.91 140.56
9 10.76 127.00
10 9.84 116.18
11 9.09 107.34
12 8.47 99.98
13 7.94 93.78
14 7.49 88.47
15 7.11 83.89
16 6.77 79.89
17 6.47 76.37
18 6.20 73.25
19 5.97 70.47
20 5.76 67.98
21 5.57 65.74
22 5.40 63.70
23 5.24 61.85
24 5.10 60.17
25 4.97 58.62
26 4.84 57.20
27 4.73 55.90
28 4.63 54.69
29 4.54 53.57
30 4.45 52.53
If installments are paid every 3 months, they will be 25.32% of the annual
installments. If they are paid every 6 months, they will be 50.43% of the annual
installments.
OPTION 3
MONTHLY LIFE INCOME
-------------------
<TABLE>
<CAPTION>
10 Years Certain 20 Years Certain Refund Certain
---------------- ---------------- --------------
AGE Male Female Male Female Male Female
--- ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
50 $4.50 $3.96 $4.27 $3.89 $ 4.28 $3.87
51 4.58 4.02 4.32 3.94 4.35 3.93
52 4.67 4.09 4.38 4.00 4.42 3.99
53 4.75 4.16 4.44 4.06 4.50 4.05
54 4.85 4.24 4.50 4.12 4.58 4.11
55 4.94 4.32 4.56 4.18 4.66 4.18
56 5.04 4.40 4.62 4.24 4.74 4.25
57 5.15 4.49 4.68 4.31 4.83 4.33
58 5.26 4.58 4.74 4.38 4.93 4.41
59 5.37 4.68 4.81 4.45 5.03 4.49
60 5.49 4.78 4.86 4.52 5.13 4.58
61 5.62 4.89 4.92 4.59 5.24 4.67
62 5.75 5.00 4.98 4.66 5.35 4.77
63 5.88 5.12 5.04 4.73 5.48 4.88
64 6.03 5.25 5.09 4.80 5.60 4.99
65 6.17 5.39 5.14 4.88 5.74 5.10
66 6.32 5.53 5.19 4.95 5.88 5.22
67 6.48 5.68 5.24 5.01 6.03 5.35
68 6.64 5.83 5.28 5.08 6.18 5.49
69 6.80 6.00 5.32 5.14 6.35 5.64
70 6.97 6.17 5.35 5.20 6.53 5.79
71 7.15 6.34 5.38 5.26 6.71 5.96
72 7.32 6.53 5.41 5.30 6.91 6.13
73 7.50 6.72 5.43 5.35 7.12 6.32
74 7.67 6.92 5.45 5.38 7.34 6.52
75 7.85 7.12 5.47 5.42 7.58 6.73
76 8.02 7.32 5.48 5.44 7.82 6.96
77 8.19 7.53 5.49 5.46 8.09 7.21
78 8.36 7.75 5.50 5.48 8.38 7.47
79 8.52 7.96 5.50 5.49 8.67 7.75
80 8.67 8.16 5.51 5.50 9.00 8.05
81 8.81 8.36 5.51 5.51 9.34 8.39
82 8.94 8.55 5.51 5.51 9.70 8.73
83 9.06 8.73 5.51 5.51 10.10 9.12
84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
</TABLE>
Amounts for Monthly Life Income are based on age nearest birthday when
income starts. Amounts for ages not shown will be furnished on request.
V83-10-9 Page 9
<PAGE>
BASIS OF VALUES
ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each separate account, the Actual
Net Rate of Return for a policy year reflects the account's:
o investment income;
o plus realized and unrealized capital gains;
o minus realized and unrealized capital losses;
o minus any charge for taxes or amounts set aside as a reserve for taxes;
o minus a charge not exceeding .25% per year for investment management
expenses; and
o minus a charge not exceeding .50% per year for mortality, expenses and other
risks.
The Actual NRR for a period less than a year will be calculated in a consistent
manner.
BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a
pro-rata part of 4% for periods of less than a year.)
If the Actual NRR for all separate accounts always equals the Base NRR, then:
o the Death Benefit will always equal the Face Amount; and
o the Account Value at the end of each policy year will equal the Tabular
Account Value shown on page 3A.
VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of
insurance in effect for that policy year due to investment performance in past
years. On each policy anniversary we will determine a new VAA for the next
policy year. We will do this independently for each separate account, taking
into account the Actual NRR for the last policy year.
For the first policy year the VAA for each separate account is zero. For later
policy years, the VAA for each separate account will equal the sum of the VAA
Change Amounts for all prior policy years, including the current year, increased
at 3% compound interest from the Register Date to the current policy
anniversary. A VAA does not change during a policy year.
VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount
for each separate account may be positive or negative. It will equal the product
of the following Items (a) and (b) divided by the product of Items (c) and (d).
(a) The Actual NRR for the separate account minus the Base NRR for that policy
year.
(b) The Benefit Base for the separate account as of the last policy
anniversary.
(c) The Net Single Premium per $1.00 of VAA for the current policy anniversary
as shown on page 3B.
(d) The sum to which One Dollar will increase at 3% compound interest from the
Register Date to the current policy anniversary.
BENEFIT BASE. For each separate account, the Benefit Base on the Register Date
is the product of the following Items (1) and (2):
(1) The Allocation Percentage designated in the application for this policy.
(2) The Net Single Premium Amount shown on page 3.
On policy anniversaries, the Benefit Base for a separate account is the sum of
the following Items (1) and (2), minus Item (3):
(1) The Tabular Account Value on that anniversary, multiplied by the following
amount immediately before that anniversary: The Benefit Base in that
separate account divided by the sum of the Benefit Bases for all separate
accounts in which you have an Account Value.
(2) The Net Single Premium for the VAA for that separate account on that
anniversary.
(3) Any outstanding loan, plus interest for the separate account as of that
policy anniversary.
V83-10-9 Page 10
<PAGE>
BASIS OF VALUES (CONTINUED)
The Net Single Premium Amount, Tabular Account and Cash Values and Net Single
Premiums for the VAA are shown on pages 3, 3A and 3B, respectively.
For each separate account, the VAA Change Amount will also reflect the effect
of:
1. All new policy loans and repayments during the previous policy year; and
2. All transfers of Account Value to or from that separate account during the
previous policy year.
CALCULATION OF ACCOUNT VALUES. The Account Value of this policy on the Register
Date is the net single premium shown on page 3. The Account Value of this policy
on any date after the Register Date is the sum of your Account Values in each
separate account on that date. Your Account Value in each separate account on
any date is the sum of the following Items (1), (2) and (3):
(1) The Tabular Account Value on that date, multiplied by the following amount
immediately before that date: The Account Value in that separate account
divided by the sum of your Account Values in all of the separate accounts.
(2) The Net Single Premium on that date for the current VAA for that separate
account.
(3) If the date is not a policy anniversary, the product of the following
Items (a) and (b):
(a) The Actual NRR for that separate account minus the Base NRR for the
time elapsed since the last policy anniversary.
(b) The Benefit Base for that separate account on the last policy
anniversary.
For each separate account, the Account Value will also reflect the effect of:
1. All new policy loans and repayments since the last policy anniversary; and
2. All transfers of Account Value to or from that separate account since the
last policy anniversary.
If for any reason the Account Value in a separate account is zero, we will
cancel the VAA and any policy loan as to such separate account and reallocate
them to the other separate account.
TABULAR ACCOUNT AND CASH VALUES (TAV and TCV). The tables of TAV's and TCV's on
page 3A show them at the end of the first 20 policy years and at certain
attained ages. We will determine the TAV and TCV on other dates in a consistent
manner with allowance for time elapsed. Any TAV's and TCV's not shown will be
furnished on request.
No. 83-10 Page 11
<PAGE>
- --------------------------------------------------------------------------------
PART 1 OF AN APPLICATION FOR INDIVIDUAL VARIABLE LIFE INSURANCE TO |_|JUV.
EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) |_|OPAI
- --------------------------------------------------------------------------------
1. PROPOSED INSURED
a. Print name as it is to appear on policy.
_______RICHARD_____________________________ROE__________________________________
First Middle Initial Last
b. |X| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______________
c. List all current occupations -- Give Titles(s) and Duties
_______________VICE PRESIDENT -- HEAD OF________________________________________
_______________ACCOUNTING DEPT__________________________________________________
d. Date of Birth 5 1 1948
---------------------- ----
Month Day Year
e. Age Nearest Birthday ___35___
f. Place of Birth: State of ___NEW YORK___
g. Residence: State of ___NEW YORK___
h. |X| Male |_| Female
2. PLAN* INITIAL FACE AMOUNT
|_| Variable Whole Life
|_| Variable Increasing Protection Life ___$ 100,000____
INVESTMENT ALLOCATION (WHOLE NUMBERS ONLY)
Separate Account I Separate Account II
50% + 50% = 100%
________________________ _________________
3. OPTIONAL BENEFITS
|_| Accidental Death Benefit* (Specify Amount): $____________
|_| Disability Premium Waiver*
|_| Option to Purchase Add'l Ins. (Issue ages to 37 only): $____________
Term Riders:
Decreasing Term Per Month
|_| Family Income: ______Years $____________
|_| Mortgage Prot.: ______Years Initial Amt.: $____________
Level Term -- Yearly Renewable
|_| On Insured: $____________
|_| On Additional Insured (See page 2): $____________
|_| Increasing Term
|_| Children's Term (See page 2): $__________Units_______________
*If Proposed Insured is a Child (Issue Age 0-14) see Limitations on p.2.
4. BENEFICIARY FOR INSURANCE ON PROPOSED INSURED. Include FULL
NAME and RELATIONSHIP to Proposed Insured.
MARGARET ROE -- WIFE
________________________________________________________________________________
________________________________________________________________________________
Unless otherwise requested, the contingent beneficiary will be the surviving
children of the Insured, in equal shares. If none survive, payment will be made
to the Insured's estate.
THE BENEFICIARY UNDER ANY TERM INSURANCE on an Additional Insured or on a Child
will be as stated in the riders for those benefits, unless otherwise designated
in Special Instructions.
5. OWNER Owner's Soc. Sec. or Tax No. |0|0|0|0|0|0|0|0|0| |
The Owner is |X| Proposed Insured
|_| Applicant for Child (See 10.c.)
|_| Other (Give Full Name):
____________________________________________________________________________
If "Other", complete the following:
|_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_____________
Relationship to Insured_____________________________________________________
Specify a successor Owner if desired
____________________________________________________________________________
If the Proposed Insured or the Applicant for a Child is not the Owner and if
all persons designated die before the Insured, the Owner will be the estate
of the last of such persons to die except where the Insured is a Child (see
Note in 10.c.).
6. MAILING ADDRESS |_| Business (Give Full Name) |x| Residence
|1|0|0| |S|P|E|C|M|E|N| |A|V|E| | | | | | | | | | | | | | | | |
--------------------------------------------------------------
No. Street Apt.
|N|E|W| |Y|O|R|K| | | | | | | | | | | | | | | | | | | | | | | |
--------------------------------------------------------------
City
|N|E|W| |Y|O|R|K| | | | | | | | | | | | | | | | | | |1|0|0|0|1|
--------------------------------------------------------------
State Zip
7. *PREMIUM PAYMENT PLAN
|_| Annual |_| Semi-Annual |_|Quarterly
|_| Monthly |_| System-Matic (Attach S-M Form)
|_| Military Allotment: Branch _____________________________
Register Date________________________
|_| Salary Allotment: Register Date__________________________
Unit Name_____________________________________________________
Unit/Sub-Unit No. if established:
|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
Divisible by |_| 2 |_| 4 |_| Hold Premium $________________
Payroll No._________________
8. SUITABILITY
a. Have you the Proposed Insured and the Purchaser if
other than the Proposed Insured received a Prospectus
for the policy applied for?
Yes |x| No |_|
Date of Prospectus ______SPECIMEN______
Date of any supplement ______SPECIMEN______
b. Do you understand that, under the policy applied for (exclusive of any
optional benefits), the amount of death benefit above the guaranteed
minimum death benefit and the entire amount of the cash value may
increase or decrease depending upon investment experience?
|X| Yes |_| No
c. With this in mind, is the policy in accord with your insurance
objectives and your anticipated financial needs?
|X| Yes |_| No
9. SPECIAL INSTRUCTIONS
a. |_| Preliminary Term (PT) period of _______ days
ending ___________________ . PT Premium $______
Mo. Day. Yr.
b. |_| Date to save insurance age: _____________
c. |_| Other:
* ISSUE VARIABLE
_________________________________________
SINGLE PREMIUM WHOLE LIFE PLAN.
_________________________________________
_________________________________________
_________________________________________
_________________________________________
_________________________________________
- --------------------------------------------------------------------------------
NOTE: UPON REQUEST, WE WILL FURNISH ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH
BENEFITS AND CASH VALUES, FOR (A) THE VARIABLE LIFE INSURANCE POLICY APPLIED FOR
AND (B) A FIXED BENEFIT LIFE INSURANCE POLICY FOR THE SAME PREMIUM.
- --------------------------------------------------------------------------------
EV4-200N 1
<PAGE>
10.COMPLETE IF PROPOSED INSURED IS A CHILD (ISSUE AGES 0-14).
a. Will there be more life insurance in effect on the Child
than on any older child in the family? |_| Yes |_| No
If yes, explain: ___________________________________________
_____________________________________________________________
b. APPLICANT-COMPLETE IF OTHER THAN THE CHILD.
i. _________________________________________________________
First Name Middle Initial Last Name
ii. |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______
iii.Date of Birth___________________________________19____
Month Day Year
iv. |_| Male |_| Female
v. Relationship to Child:___________________________________
vi. Total Life Insurance now in effect: $ _________________
c. OWNER. If the Applicant is to be the Owner, after the
Applicant's death the Child will be the Owner unless
otherwise designated in Special Instructions (in any such
designation include Owner's FULL NAME, RELATIONSHIP to
Child, and Social Security or Tax Number).
NOTE: Consider designating an adult secondary Owner to
reduce the chance of a minor Child becoming the Owner. If
all persons designated die before the Child, the Owner will
be the Child.
d. OPTIONAL BENEFIT ON APPLICANT.
|_| Supplemental Protective Benefit. Give Applicant's:
i. Age Nearest ii. Place of
Birthday ____________________ Birth____________________
State
iii.Height______Ft.____In. Weight______lbs.
iv. Occupations-Give Title(s) and Duties:___________________________________
____________________________________________________________________________
ALSO ANSWER QUESTIONS ON PAGE 3 AS TO APPLICANT.
e. LIMITATIONS ON CHILD'S ADB AND DPW BENEFITS. If the Accidental Death Benefit
is applied for on the Child, the benefit is payable only if the Child dies
after the Child's first birthday.
If the Disability Premium Waiver Benefit is applied for on the Child, the
benefit is effective only if the Child becomes totally disabled on or after
the Child's 5th birthday.
- --------------------------------------------------------------------------------
11. COMPLETE FOR CHILDREN'S TERM RIDER.
Give Names of Children below and answer the Questions on page 3 as to each
Child.
CHILDREN PROPOSED FOR INSURANCE:
NOTE: To be eligible, children (including stepchildren and legally adopted
children) must not yet have reached their 18th birthday. Coverage does
not begin until a child is 15 days old. DATE OF BIRTH
|Sex| Mo.| Day| Yr.
________________________________________________________________________________
First Name Middle Initial Last Name
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
12. COMPLETE FOR LEVEL TERM YEARLY RENEWABLE RIDER ON ADDITIONAL INSURED.
Complete below and answer the Questions on page 3 as to the Additional Insured.
PROPOSED ADDITIONAL INSURED
a. Print name as it is to appear on the Policy.
________________________________________________________________________________
First Middle Initial Last
b. List all current occupations -- Give Title(s) and Duties.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
c. Date of Birth: Mo.____________ Day___________ Yr. 19_______
d. Age Nearest Birthday _______________________________________
e. Place of Birth: State of __________________________________
f. Residence: State of________________________________________
g. |_| Male |_| Female
h. Owner's Relationship to Additional Insured:_________________
________________________________________________________________
- --------------------------------------------------------------------------------
13. COMPLETE IF USING EXISTING OPTION TO PURCHASE INSURANCE.
i. Existing Individual Policy No. _____________________________
ii. Option Date__________ iii. Option Amount: $________________
iv. |_| Regular Option or
|_| Option on Birth or Adoption of Child
Child's Name___________________________________________
Date of Birth or Adoption______________________________
v. If applying for Disability Premium Waiver, is Proposed Insured now totally
disabled as defined in the Disability Premium Waiver provision of the above
policy? |_| Yes |_| No
This application is made under a provision in the policy indicated above
permitting the purchase of individual life insurance (the "Option Provision").
If this application is made within the time allowed and in accordance with the
other terms in the Option Provision, including timely payment of the full first
premium for the option insurance, then the option insurance shall take effect
upon the terms of the policy EVLICO would issue. Otherwise, the option insurance
shall not take effect.
Answer the Questions on page 3 only if evidence of insurability is required in
connection with an optional benefit or any excess of the insurance amount
applied for over the insurance amount permitted by the Option Provision (the
option insurance).
________________________________________________________________________________
EV4-200N NO. SPECIMEN 2
<PAGE>
OTHER INFORMATION -- AS TO EACH PERSON PROPOSED FOR INSURANCE, ANSWER QUESTIONS
14 AND 15. ALSO ANSWER QUESTIONS 16, 17 AND 18 IF NON-MEDICAL.
14. HAS ANY PERSON PROPOSED FOR INSURANCE:
a. Within the last two years, been convicted of two or more moving violations
or driving under the influence of alcohol or drugs, or had a driver's
license suspended or revoked? (Give full details -- including dates, types
of violation, and reason for license suspension or revocation.)
|_| Yes |X| No
b. Any plan to travel or reside outside the U.S.? (Give full details.)
|_| Yes |X| No
c. Any other life insurance now in effect or application now pending? (State
companies and amounts.)
|_| Yes |X| No
15. HAS ANY PERSON PROPOSED FOR INSURANCE:
a. Within the last year flown other than as a passenger or plan to do so?
|_| Yes |X| No
If yes: Total flying time at present__________ Hours;
Last 12 mos.________Hours; Next 12 mos._______Est. Hours.
(Complete Aviation Supplement for competitive, test,
stunt or military flying, or crop dusting.)
b. Engaged within the last year, or any plan to engage in motor racing on land
or water, underwater diving, sky diving, ballooning, hang-gliding or
parachuting? (If yes, complete Avocation Supplement.) |_| Yes |X} No
c. Ever had an application for life or health insurance declined, that
required an extra premium or was otherwise modified? (Give full details.)
|_| Yes |X| No
d. Replaced or changed any existing insurance or annuity (or any plan to do
so) assuming the insurance applied for will be issued? (State companies,
plans and amts.) |_| Yes |X| No
16. Proposed Insured: Height 6 Ft. 1 In. Weight 185 lbs.
_______ ________ ______
Additional Insured: Height Ft. In. Weight lbs.
_______ ________ ______
17. HAS ANY PERSON PROPOSED FOR INSURANCE:
a. Ever been treated for or had any indication of heart trouble, stroke, high
blood pressure, chest pain, diabetes, tumor or cancer? (Give full details.)
|_| Yes |X| No
b. Within the last 5 years, consulted a physician, or been examined or treated
at a hospital or other medical facility? (Include medical check-ups in the
last 2 years. Do not include colds, minor virus infections, minor injuries,
or normal pregnancy.) (Give full details.)
|X| Yes |_| No
18. HAS ANY PERSON PROPOSED FOR INSURANCE:
a. Within the last ten years repeatedly used barbiturates, amphetamines,
hallucinatory drugs or narcotics? (Give full details.)
|_| Yes |X| No
b. Within the last ten years received counseling or treatment regarding the
use of alcohol or drugs? (Give full details.)
|_| Yes |X|No
19. DETAILS. For each yes answer give Question number, name of person(s)
affected and full details. For 17 and 18 also include conditions, dates,
durations, treatment and results, and names and addresses of physicians and
medical facilities.
No. Name of Person Affected Details
________________________________________________________________________________
- --------------------------------------------------------------------------------
17.b. |RICHARD ROE MEDICAL CHECK-UP 4/1/82 NORMAL.
________________________________________________________________________________
DR. JOHN JONES 100 SPECIMEN ST. NEW YORK, N.Y. 10001
_______________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
20. COMPLETE IF FIRST PREMIUM IS PAID BEFORE THE POLICY IS DELIVERED:
Have the undersigned read and do they agree to the conditions of EVLICO's
Temporary Insurance Agreement, including (i) the requirement that all of the
conditions in that Agreement must be met before any insurance takes effect, and
(ii) the $250,000 insurance amount limitation? |_| YES |_| NO (If "No," a
premium may not be paid before the policy is delivered.)
AMOUNT PAID: $___________. (Draw checks to order of EVLICO.)
AGREEMENT. The signers of this application agree that:
(1) The statements and answers in all parts of this application are true and
complete to the best of my knowledge and belief. EVLICO may rely on them in
acting on this application.
(2) EVLICO's Temporary Insurance Agreement states the conditions that must be
met before any insurance takes effect, if the full first premium for the
policy applied for is paid before the policy is delivered.
(3) Except as stated in the Temporary Insurance Agreement, no insurance shall
take effect on this application: (a) until a policy is delivered and the
full first premium for it is paid while the Proposed Insured is living; (b)
before any Register Date specified in this application; and (c) unless to
the best of my knowledge and belief the statements and answers in all parts
of this application continue to be true and complete, without material
change, as of the time such premium is paid.
(4) No agent or medical examiner has authority to modify this Agreement or the
Temporary Insurance Agreement, nor to waive any EVLICO's rights or
requirements. EVLICO shall not be bound by any information unless it is
stated in application Part 1, 1A or 2.
- ---------------------------------------------------------------------------
SIGNATURE OF AGENT
______/s/ John Q. Agent______
IT IS UNDERSTOOD THAT UNDER THE POLICY APPLIED FOR (EXCLUSIVE OF ANY OPTIONAL
BENEFITS) THE AMOUNT OF THE DEATH BENEFIT ABOVE THE FACE AMOUNT, AND THE CASH
VALUE, MAY INCREASE OR DECREASE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE
ACCOUNT AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
Dated at ______NEW YORK,____N.Y.____________on____6/1_____19__83__
City State
__X /s/ Richard Roe_____________________________________________________________
Signature of Proposed Insured or of Applicant if Proposed Insured is a Child,
Issue Age 0-14.
________________________________________________________________________________
Signature of Additional Insured if required.
________________________________________________________________________________
Signature of Purchaser if not Proposed Insured or Applicant.
(If corp. show firm's name and signature of authorized officer.)
EV4-200N 3
<PAGE>
________________________________________________________________________________
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
Home Office: 1285 Avenue of the Americas, New York, New York 10019
VARIABLE
LIFE
INSURANCE
POLICY
Single Premium Whole Life Plan. Variable insurance payable upon death.
Guaranteed Minimum Death Benefit. Face amount increases annually by 3%
at the beginning of each policy year after the first.
Non-Participating. Investment experience reflected in benefits.
Investment options described on page 6.
No. 83-10
THE INSURED RICHARD ROE VARIABLE
LIFE INSURANCE
POLICY OWNER RICHARD ROE POLICY
EQUITABLE
FACE AMOUNT $100,000 VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
POLICY NUMBER SPECIMEN
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
A Stock Life Insurance Company
Agrees
o To pay the insurance benefits of this policy to the Beneficiary upon receiving
proof of the Insured's death; and
o To provide you (the policy Owner) with the other rights and benefits of this
policy.
These agreements are subject to the provisions of this policy.
THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE
FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR
AS DESCRIBED ON PAGE 4 DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE,
BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT.
THE ACCOUNT VALUE AND THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY.
THEY MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT
EXPERIENCE.
The amount of the single premium for this policy is shown on page 3.
RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you
are not satisfied with it, you may cancel it by returning the policy with a
written request for cancellation to our Administrative Office by the later of:
(a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the
application was signed. If you do this, we will refund the premium that was
paid.
SPECIMEN SPECIMEN
Kevin Keefe Secretary Donald J. Mooney President
Single Premium Whole Life Plan -- Level Face Amount. Variable
insurance payable upon death. Guaranteed Minimum Death Benefit.
Non-Participating. Investment experience reflected in benefits.
Investment options described on page 6.
No. 83-09
<PAGE>
[EVLICO LOGO]
1285 Avenue of the Americas, New York,
CONTENTS
Insurance benefits 2
Policy owner and beneficiary 4
Death Benefit 4
Account Value 4
Cash Value 4
Loans 5
The Separate Accounts 5
Investment Options,
allocations, transfers 6
Exchange of Policy 6
General Provisions 7
Payment Options 8
Basis of Values 10
(Net rates of return, variable adjustment amount, benefit base, calculation of
Account Values)
A copy of the application for this policy is at the back of the policy.
IN THIS POLICY:
"We," "our" and "us" mean Equitable Variable Life Insurance Company.
"You" and "your" mean the Owner of the policy at the time an Owner's right is
exercised.
ADMINISTRATIVE OFFICE
The address of our Administrative Office is shown on page 3. You should send
requests to that address unless instructed otherwise.
INSURANCE BENEFITS
The insurance benefits we pay at the insured's death include:
o the Death Benefit described on page 4;
o minus any loan (and loan interest) on the policy.
We will add interest to the resulting amount for the period from the date of
death to the date of payment. It will be computed at the interest rate we are
then paying under the Deposit Option on page 8.
Payment of these benefits may be affected by other provisions of this policy.
See the Suicide Exclusion, Incontestability and Age and Sex clauses on page 7.
Special exclusions or limitations (if any ) are listed on page 3.
No. 83-09 Page 2
<PAGE>
THE INSURED RICHARD ROE REGISTER DATE JAN 1, 1984
POLICY OWNER RICHARD ROE DATE OF ISSUE JAN 1, 1984
FACE AMOUNT $100,000 ISSUE AGE, SEX 35 MALE
POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE
STATE OF
RESIDENCE SPECIMEN STATE
************************* BENEFITS AND PREMIUMS TABLE **************************
BENEFITS SINGLE PREMIUM
FOR THIS POLICY
LIFE INSURANCE - VARIABLE $25,890.82
THE SINGLE PREMIUM IS $25,890.82 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
THE FOLLOWING DEDUCTIONS ARE MADE FROM THE SINGLE PREMIUM:
ADMINISTRATIVE EXPENSE: $200.00
STATE PREMIUM TAX: 517.82
THE NET SINGLE PREMIUM AMOUNT ALLOCATED TO THE SEPARATE ACCOUNT(S) IS
$25,173.00.
************** INVESTMENT ALLOCATION OF NET SINGLE PREMIUM AMOUNT**************
SEPARATE ACCOUNT I 50%
SEPARATE ACCOUNT II 50%
******* ADMINISTRATIVE OFFICE: EQUITABLE VARIABLE LIFE INSURANCE COMPANY *******
SPECIMEN REGIONAL SERVICE CENTER
100 SPECIMEN ST.
CITY, STATE 10001
V83-09-3 Page 3
<PAGE>
THE INSURED RICHARD ROE REGISTER DATE JAN 1, 1984
FACE AMOUNT $100,000 DATE OF ISSUE JAN 1, 1984
POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35 MALE
******************************** TABULAR VALUES ********************************
THE ACCOUNT VALUE AND CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN
AMOUNTS SHOWN AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT
SEE PAGE 4 FOR ACCOUNT VALUE AND CASH VALUE PROVISIONS
TABULAR VALUES AT ENDS OF POLICY YEARS
<TABLE>
<CAPTION>
END OF TABULAR TABULAR
POLICY YEAR ACCOUNT VALUES CASH VALUES
<S> <C> <C>
1 $26,019 $23,960
2 26,892 24,984
3 27,790 26,050
4 28,712 27,158
5 29,659 28,309
6 30,630 29,504
7 31,623 30,743
8 32,641 32,030
9 33,683 33,364
10 34,748 34,748
11 35,837 35,837
12 36,951 36,951
13 38,089 38,089
14 39,252 39,252
15 40,440 40,440
16 41,653 41,653
17 42,888 42,888
18 44,143 44,143
19 45,416 45,416
20 46,704 46,704
AGE 60 53,364 53,364
AGE 62 56,124 56,124
AGE 65 60,301 60,301
AGE 70 67,206 67,206
</TABLE>
THESE VALUES DO NOT REFLECT LOANS. VALUES NOT SHOWN WILL BE FURNISHED ON
REQUEST.
V83-09-3A Page 3A
<PAGE>
TABLE OF NET SINGLE PREMIUMS
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Level Insurance.
Values shown are applicable on policy anniversaries. The net single premium as
of a date during a policy year shall be determined by interpolation between the
values applicable on the immediately preceding and immediately following
anniversaries.
<TABLE>
<CAPTION>
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
--------- ------- --------- ------- --------- ------- --------- ------- --------- -------
MALE INSURED
------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.08655 21 $.16103 41 $.30630 61 $.54739 81 $ .80702
2 .08901 22 .16584 42 .31623 62 .56124 82 .81756
3 .09165 23 .17087 43 .32641 63 .57516 83 .82774
4 .09441 24 .17613 44 .33683 64 .58909 84 .83745
5 .09731 25 .18165 45 .34748 65 .60301 85 .84665
6 .10038 26 .18744 46 .35837 66 .61689 86 .85536
7 .10361 27 .19351 47 .36951 67 .63072 87 .86362
8 .10702 28 .19985 48 .38089 68 .64453 88 .87153
9 .11061 29 .20646 49 .39252 69 .65831 89 .87920
10 .11436 30 .21334 50 .40440 70 .67206 90 .88679
11 .11828 31 .22049 51 .41653 71 .68574 91 .89444
12 .12232 32 .22790 52 .42888 72 .69929 92 .90237
13 .12645 33 .23558 53 .44143 73 .71262 93 91083
14 .13063 34 .24352 54 .45416 74 .72564 94 .92013
15 .13484 35 .25173 55 .46704 75 .73828 95 .93048
16 .13906 36 .26019 56 .48007 76 .75052 96 .94201
17 .14330 37 .26892 57 .49324 77 .76238 97 .95459
18 .14757 38 .27790 58 .50655 78 .77391 98 .96774
19 .15193 39 .28712 59 .52002 79 .78517 99 .98064
20 .15640 40 .29659 60 .53364 80 .79621 100 1.00000
FEMALE INSURED
--------------
1 $.07178 21 $.13538 41 $.26197 61 $.47686 81 $ .77229
2 .07383 22 .13985 42 .27047 62 .49058 82 .78597
3 .07602 23 .14449 43 .27917 63 .50455 83 .79922
4 .07831 24 .14930 44 .28807 64 .51871 84 .81195
5 .08072 25 .15429 45 .29719 65 .53301 85 .82411
6 .08324 26 .15946 46 .30654 66 .54743 86 .83569
7 .08589 27 .16482 47 .31613 67 .56201 87 .84673
8 .08865 28 .17038 48 .32597 68 .57676 88 .85730
9 .09155 29 .17613 49 .33604 69 .59177 89 .86749
10 .09457 30 .18209 50 .34637 70 .60703 90 .87741
11 .09773 31 .18825 51 .35693 71 .62253 91 .88720
12 .10100 32 .19462 52 .36775 72 .63818 92 .89704
13 .10438 33 .20122 53 .37880 73 .65388 93 .90712
14 .10788 34 .20805 54 .39008 74 .66948 94 .91771
15 .11146 35 .21510 55 .40160 75 .68489 95 .92905
16 .11515 36 .22239 56 .41336 76 .70006 96 .94128
17 .11895 37 .22990 57 .42540 77 .71496 97 .95429
18 .12285 38 .23761 58 .43774 78 .72961 98 .96766
19 .12689 39 .24554 59 .45042 79 .74406 99 .98064
20 .13106 40 .25366 60 .46347 80 .75830 100 1.00000
</TABLE>
V83-09-3B Page 3B
<PAGE>
POLICY OWNER AND BENEFICIARY
OWNER. The Owner of this policy is the Insured unless otherwise stated in the
application, or later changed. As Owner, you can exercise all the rights in this
policy while the Insured is living. You do not need the consent of anyone who
has only a conditional or future ownership interest in this policy.
BENEFICIARY. The Beneficiary is as stated in the application, unless later
changed. If two or more persons are named, those surviving the Insured will
share equally unless otherwise stated.
We will pay any benefit for which there is no stated Beneficiary living at the
death of the Insured to the children of the Insured who then survive, in equal
shares. If none survive, we will pay the estate of the Insured.
CHANGES. While the Insured is living, you may change the Owner or Beneficiary by
written notice in a form satisfactory to us. The change will take effect on the
date you sign the notice, except that it will not apply to any payment we make
or other action we take before we receive the notice at our Administrative
Office. If you change the Beneficiary, any previous arrangement you made under
the Payment Options provision on page 8 is cancelled.
ASSIGNMENT. You may assign this policy, but we will not be bound by an
assignment unless it is in writing and we have received it at our Administrative
Office. Your rights and those of any other person referred to in this policy
will be subject to the assignment. We assume no responsibility for the validity
of any assignment.
DEATH BENEFIT
The Death Benefit equals:
o the face amount shown on page 3;
o plus the sum, if positive, of the Variable Adjustment Amounts, for each
separate account under this policy in which you have a cash value, for the
policy year in which the Insured dies.
However, the Death Benefit will in no event be less than the amount of Paid-up
Whole Life Level Insurance that could be purchased by the Account Value at the
Insured's death on the basis of the Table of Net Single Premiums on page 3B.
See page 10 for a description of how the Variable Adjustment Amount for each
separate account is determined.
ACCOUNT VALUE
The policy's Account Value will vary daily with the performance of the separate
accounts in which you have an Account Value under this policy. See page 11 for a
description of how the Account Value is determined.
CASH VALUE
You may give up this policy for its net cash value at any time while the Insured
is living. The net cash value is the cash value minus any loan and loan
interest.
We will determine the net cash value on the date we receive your signed request
for it at our Administrative Office. The policy will terminate on the date you
send the policy and the request to us.
CASH VALUE. The policy's cash value will vary daily with the performance of the
separate accounts in which you have a cash value under this policy.
During the first ten policy years the cash value on any date will be equal to
the product of (1) and (2), where:
(1) is the Account Value on that date; and
(2) is the Tabular Cash Value divided by the Tabular Account Value for that
date.
Whenever the difference between the Account Value and cash value exceeds 9% of
the single premium for this policy, we will increase the cash value by the
amount of such excess.
Tabular Account Values and Tabular Cash Values are shown on page 3A.
After the tenth policy year, the cash value will equal the Account Value.
V83-09-3B Page 4
<PAGE>
LOANS
You may get a loan on this policy while it has a loan value. This policy will be
the sole security for the loan.
The amount of the loan may not be more than the loan value. A loan must be at
least $100 more than any existing loan and loan interest. Any existing loan and
loan interest will be deducted from the new loan.
A loan, whether you repay it or not, will have a permanent effect on the
Variable Adjustment Amounts, Death Benefit, Account Value and cash value under
this policy.
We will allocate loans to the separate accounts based on your net cash value in
each separate account as of the dates the loans are made. We will allocate loan
repayments to the separate accounts based on the amount of your outstanding
loans as to each separate account as of the dates the repayments are made.
LOAN VALUE. The loan value is 90% of the policy's cash value.
LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%.
Interest is due on each policy anniversary. If the interest is not paid when
due, it will be added to the loan and bear interest at the loan rate.
When a loan plus loan interest first exceeds the cash value, we will mail to you
and any assignee of record at last known addresses a notice that the policy will
terminate if such excess amount is not repaid within 31 days after we mailed
such notice.
REPAYMENT. You may repay a loan and loan interest in whole or in part at any
time while the Insured is living and this policy is in effect. We will deduct
any existing loan and loan interest from any benefits we pay at the Insured's
death.
THE SEPARATE ACCOUNTS
We established and we maintain Separate Accounts I and II under the laws of New
York State. Realized and unrealized gains and losses from the assets of Separate
Accounts I and II are credited or charged against such accounts without regard
to our other income, gains, or losses. Assets are put in Separate Accounts I and
II to support this policy and other variable life insurance policies. Assets may
be put in Separate Accounts I and II for other purposes, but not to support
contracts or policies other than variable life insurance.
We expect the investments in Separate Account I will be, primarily, common
stocks and other equity-type investments. We expect the investments in Separate
Account II will be, primarily, short-term (not to exceed one year) money market
instruments, such as: United States (U.S.) government and U.S. government agency
securities; bank money instruments; time deposits; certificates of deposit; high
grade commercial paper, including master demand notes; and repurchase agreements
covering U.S. government obligations and certificates of deposit. But, we may
invest the assets of Separate Accounts I and II in any legal investments. We
will rely upon our own and outside counsel for advice in this regard.
Instead of making direct investments, we may also operate either Separate
Account I or II as a unit investment trust, or other form. We would invest all
or part of such account's assets in shares or units of a fund. We, an affiliate,
or The Equitable Life Assurance Society of the United States would be the
investment adviser and would invest the assets of the fund as above.
The assets of Separate Accounts I and II are our property. The portion of the
assets of Separate Accounts I and II equal to the reserves and other policy
liabilities with respect to such separate accounts will not be chargeable with
liabilities arising out of any other business we conduct. We may transfer assets
of such separate accounts in excess of such reserves and liabilities to our
general account.
We will value the assets of Separate Accounts I and II on each business day. A
business day is any day on which the New York Stock Exchange is open for
trading.
We have the right to create new separate accounts. We have the right to withdraw
assets of a class of policies to which this policy belongs from either
V83-09-5 Page 5
<PAGE>
THE SEPARATE ACCOUNTS CONTINUED
separate account and put them in another separate account. If we do this, we
will withdraw the same percentage of each investment in such separate account,
but will avoid odd lots and fractions. We also have the right to combine any two
or more separate accounts. The term "Separate Account I" or "Separate Account
II" in this policy shall then refer to any other separate account in which the
assets of a class of policies to which this policy belongs were placed.
We have the right to:
1. register or deregister either separate account under the Investment Company
Act of 1940;
2. run either separate account under the direction of a committee, and to
discharge such committee at any time; and
3. restrict or eliminate any voting rights of policyowners, or other persons
who have voting rights as to either separate account.
CHANGES OF INVESTMENT ADVISER OR INVESTMENT POLICY. Unless otherwise required by
law or regulation, the investment adviser or any investment policy may not be
changed without our consent. If required by law or regulation, the investment
policy of either separate account will not be changed unless approved by the
Superintendent of Insurance of New York State or deemed approved in accordance
with such law or regulation. If so required, we have filed the process for
getting such approval with the insurance supervisory official of the
jurisdiction in which this policy is delivered.
INVESTMENT OPTIONS
ALLOCATION OF NET SINGLE PREMIUM. We will allocate to each separate account as
of the Register Date a percentage of the Net Single Premium Amount shown on page
3. Such allocation will be based on the allocation percentages designated in the
application for this policy.
TRANSFER OF ACCOUNT VALUES. You may ask us to transfer all or part of your
Account Value in one of the separate accounts to the other. Only two such
transfers may be made in a policy year. We will make the transfer as of the date
we receive your written request for it at our Administrative Office.
EXCHANGE OF POLICY
You may exchange this policy for a policy of permanent fixed benefit insurance
on the life of the Insured. You may make such an exchange within 24 months after
the Date of Issue shown on page 3. We will not require evidence of insurability.
We will require:
1. That this policy be in effect on the date of exchange; and
2. Repayment of any loan and loan interest on this policy.
The date of exchange will be the later of: (a) the date you send us this policy
and the signed request on our form for such exchange; or (b) the date we receive
at our Administrative Office any sum due to be paid for such exchange.
THE NEW POLICY. The new policy will be the "Single Premium Life Plan" policy
being offered by The Equitable Life Assurance Society of the United States
(Equitable) on the Date of Issue of this policy. It is a policy of permanent
fixed benefit life insurance. It will have the same face amount, Register Date,
Date of Issue, and Issue Age as this policy. The single premium for the new
policy will be based on Equitable's rates in effect on its Register Date for the
same class of risk as under this policy.
Upon request you will be told the amount of the single premium for the new
policy, and of any extra sum required or allowance to be made for a premium or
cash value adjustment that takes appropriate account of the premiums and cash
values under this policy and under the new policy. If so required, we have filed
a detailed statement of the method of computing such an adjustment with the
insurance supervisory official of the jurisdiction in which this policy is
delivered.
V83-09-5 Page 6
<PAGE>
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
single premium for this policy shown on page 3. This policy and the application
(a copy of which is attached at issue) constitute the entire contract. The
rights conferred by this policy are in addition to those provided by applicable
Federal and State laws and regulations.
The contract may not be modified, nor may any of our rights or requirements be
waived, except in writing signed by our President, one of our Vice Presidents,
or by our Secretary or Treasurer.
INCONTESTABILITY All statements made in the application are representations and
not warranties. We have the right to contest the validity of this policy based
on material misstatements made in the application. However, this policy will
become incontestable after it has been in effect during the lifetime of the
Insured for two years from the Date of Issue shown on page 3.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be those that the premium paid would have purchased at the correct age and sex.
SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within
two years after the Date of Issue shown on page 3, our liability will be limited
to the payment of a single sum equal to the premium paid, minus any loan and
loan interest.
POLICY PERIODS AND ANNIVERSARIES. Policy years and policy anniversaries are
measured from the Register Date. If the end of a policy year is indicated by an
age, it ends on the policy anniversary nearest the birthday on which the Insured
reaches that age.
REPORTS. Each policy year after the first we will give you a report showing the
Death Benefit, the Account Value and the cash value as of the first day of such
year. The amount of any existing loan and the accrued loan interest for the
previous policy year will also be shown. We will also give you such other
reports as may be required by law.
BASIS OF COMPUTATION. Account Values, reserves and net single premiums are based
on the Commissioners 1980 Standard Ordinary Mortality Table. Continuous
functions are used with interest compounded annually at 4%.
The cash values are equal to or more than those required by law. If so required,
we have filed a detailed statement of the method of computing cash values with
the insurance supervisory official of the jurisdiction in which this policy is
delivered. The Tabular Account Value at the end of each policy year equals the
tabular reserve. Our expense and mortality results will not adversely affect the
dollar amount of insurance benefits or Account Values or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. We will make payments under this
policy as follows:
o A cash value will be paid within 7 days after we receive your policy and
request at our Administrative Office;
o A loan will be paid within 7 days after we receive your request at our
Administrative Office; and
o The insurance benefits will be paid within 7 days after we receive at our
Administrative Office proof of the Insured's death and all other
requirements deemed necessary before such payment may be made.
We may not be able to sell securities or determine the value of the assets of
the separate accounts if: (1) the New York Stock Exchange is closed; (2) the
Securities and Exchange Commission requires trading to be restricted or declares
an emergency; or (3) the Securities and Exchange Commission by order permits us
to defer payments for the protection of our policy owners. During such times we
may defer:
1. Determination of Account Values;
2. Determination and payment of cash values;
3. Payment of loans;
4. Determination of a change in a Variable Adjustment Amount, and payment of
any portion of the Death Benefit equal to the Variable Adjustment Amount;
5. Any requested transfer of Account Value; and
6. Use of insurance benefits under the Payment Options.
V83-09-7 Page 7
<PAGE>
PAYMENT OPTIONS
Payments under these options will not be affected by the investment
experience of any separate account after proceeds are applied
under such options.
Instead of having the insurance benefits or net cash value paid immediately in
one sum, you can choose another form of payment for all or part of them. If you
do not arrange for this before the Insured dies, the Beneficiary will have this
right when the Insured dies. Arrangements you make, however, cannot be changed
by the Beneficiary after the Insured's death. The options are:
1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with
interest paid at the end of each month, each 3 months, each 6 months or each
12 months, as chosen.
2. INSTALMENT OPTIONS:
A. FIXED PERIOD: Paid in equal instalments for a specified number of years
(not more than 30). The instalments will not be less than those shown in
the Table of Guaranteed Payments on page 9.
B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the amount
applied, together with interest on the unpaid balance, is used up.
3. LIFE INCOME OPTIONS:
Paid as a monthly income for life in an amount we determine but not less than
shown in the Table of Guaranteed Payments on page 9. We guarantee payments
for life and in any event for 10 years, 20 years, or until the payments we
make equal the amount applied (called "refund certain"), according to the
"certain" period chosen.
4. OTHER: We will apply the sum under any other option requested that we make
available at the time of the Insured's death or net cash value withdrawal.
We guarantee interest under Option 1 at the rate of 3% a year and under Option 2
at 3-1/2% a year, or such higher rates as we may determine. We may allow excess
interest under Options 1 and 2.
The payee under an option may name and change a successor payee for any amount
we would otherwise pay the payee's estate.
Any arrangements involving more than one of the options, or a payee who is not a
natural person (for example, a corporation) or who is a fiduciary, must have our
approval. Also, details of all arrangements will be subject to our rules at the
time the arrangement takes effect. These include rules on: the minimum amount
we will apply under an option and minimum amounts for installment payments;
withdrawal or commutation rights; naming payees and successor payees; and
proving age and survival.
Choices (or any later changes) under these options will be made and will take
effect in the same way as a change of Beneficiary. Amounts applied under these
options will not be subject to the claims of creditors or to legal process, to
the extent permitted by law.
V83-09-7 Page 8
<PAGE>
TABLE OF GUARANTEED PAYMENTS
MINIMUM AMOUNT FOR EACH $1,000 OF ORIGINAL SUM
OPTION 2
FIXED PERIOD INSTALLMENTS
-------------------------
Number
of Years' Monthly Annual
Instalments Instalment Instalment
------------ ----------- -----------
1 $84.70 $1000.00
2 43.08 508.60
3 29.21 344.86
4 22.28 263.04
5 18.12 213.99
6 15.36 181.32
7 13.38 158.01
8 11.91 140.56
9 10.76 127.00
10 9.84 116.18
11 9.09 107.34
12 8.47 99.98
13 7.94 93.78
14 7.49 88.47
15 7.11 83.89
16 6.77 79.89
17 6.47 76.37
18 6.20 73.25
19 5.97 70.47
20 5.76 67.98
21 5.57 65.74
22 5.40 63.70
23 5.24 61.85
24 5.10 60.17
25 4.97 58.62
26 4.84 57.20
27 4.73 55.90
28 4.63 54.69
29 4.54 53.57
30 4.45 52.53
If installments are paid every 3 months, they will be 25.32% of the annual
installments. If they are paid every 6 months, they will be 50.43% of the annual
installments.
OPTION 3
MONTHLY LIFE INCOME
-------------------
<TABLE>
<CAPTION>
10 Years Certain 20 Years Certain Refund Certain
---------------- ---------------- --------------
AGE Male Female Male Female Male Female
--- ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
50 $4.50 $3.96 $4.27 $3.89 $ 4.28 $3.87
51 4.58 4.02 4.32 3.94 4.35 3.93
52 4.67 4.09 4.38 4.00 4.42 3.99
53 4.75 4.16 4.44 4.06 4.50 4.05
54 4.85 4.24 4.50 4.12 4.58 4.11
55 4.94 4.32 4.56 4.18 4.66 4.18
56 5.04 4.40 4.62 4.24 4.74 4.25
57 5.15 4.49 4.68 4.31 4.83 4.33
58 5.26 4.58 4.74 4.38 4.93 4.41
59 5.37 4.68 4.81 4.45 5.03 4.49
60 5.49 4.78 4.86 4.52 5.13 4.58
61 5.62 4.89 4.92 4.59 5.24 4.67
62 5.75 5.00 4.98 4.66 5.35 4.77
63 5.88 5.12 5.04 4.73 5.48 4.88
64 6.03 5.25 5.09 4.80 5.60 4.99
65 6.17 5.39 5.14 4.88 5.74 5.10
66 6.32 5.53 5.19 4.95 5.88 5.22
67 6.48 5.68 5.24 5.01 6.03 5.35
68 6.64 5.83 5.28 5.08 6.18 5.49
69 6.80 6.00 5.32 5.14 6.35 5.64
70 6.97 6.17 5.35 5.20 6.53 5.79
71 7.15 6.34 5.38 5.26 6.71 5.96
72 7.32 6.53 5.41 5.30 6.91 6.13
73 7.50 6.72 5.43 5.35 7.12 6.32
74 7.67 6.92 5.45 5.38 7.34 6.52
75 7.85 7.12 5.47 5.42 7.58 6.73
76 8.02 7.32 5.48 5.44 7.82 6.96
77 8.19 7.53 5.49 5.46 8.09 7.21
78 8.36 7.75 5.50 5.48 8.38 7.47
79 8.52 7.96 5.50 5.49 8.67 7.75
80 8.67 8.16 5.51 5.50 9.00 8.05
81 8.81 8.36 5.51 5.51 9.34 8.39
82 8.94 8.55 5.51 5.51 9.70 8.73
83 9.06 8.73 5.51 5.51 10.10 9.12
84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
</TABLE>
Amounts for Monthly Life Income are based on age nearest birthday when
income starts. Amounts for ages not shown will be furnished on request.
V83-09-9 Page 9
<PAGE>
BASIS OF VALUES
ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each separate account, the Actual
Net Rate of Return for a policy year reflects the account's:
o investment income;
o plus realized and unrealized capital gains;
o minus realized and unrealized capital losses;
o minus any charge for taxes or amounts set aside as a reserve for taxes;
o minus a charge not exceeding .25% per year for investment management
expenses; and
o minus a charge not exceeding .50% per year for mortality, expenses and other
risks.
The Actual NRR for a period less than a year will be calculated in a consistent
manner.
BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a
pro-rata part of 4% for periods of less than a year.)
If the Actual NRR for all separate accounts always equals the Base NRR, then:
o the Death Benefit will always equal the Face Amount; and
o the Account Value at the end of each policy year will equal the Tabular
Account Value shown on page 3A.
VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of
insurance in effect for that policy year due to investment performance in past
years. On each policy anniversary we will determine a new VAA for the next
policy year. We will do this independently for each separate account, taking
into account the Actual NRR for the last policy year.
For the first policy year the VAA for each separate account is zero. For later
policy years, the VAA for each separate account will equal the sum of the VAA
Change Amounts for all prior policy years, including the current year. A VAA
does not change during a policy year.
VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount
for each separate account may be positive or negative. It will equal the product
of the following Items (a) and (b) divided by Item (c).
(a) The Actual NRR for the separate account minus the Base NRR for that policy
year.
(b) The Benefit Base for the separate account as of the last policy
anniversary.
(c) The Net Single Premium per $1.00 of VAA for the current policy anniversary
as shown on page 3B.
BENEFIT BASE. For each separate account, the Benefit Base on the Register Date
is the product of the following Items (1) and (2):
(1) The Allocation Percentage designated in the application for this policy.
(2) The Net Single Premium Amount shown on page 3.
On policy anniversaries, the Benefit Base for a separate account is the sum of
the following Items (1) and (2), minus Item (3):
(1) The Tabular Account Value on that anniversary, multiplied by the
following amount immediately before that anniversary: The Benefit Base in
that separate account divided by the sum of the Benefit Bases for all
separate accounts in which you have an Account Value.
(2) The Net Single Premium for the VAA for that separate account on that
anniversary.
(3) Any outstanding loan, plus interest for the separate account as of that
policy anniversary.
The Net Single Premium Amount, Tabular Account and Cash Values and Net Single
Premiums for the VAA are shown on pages 3, 3A and 3B, respectively.
V83-09-9 Page 10
<PAGE>
BASIS OF VALUES CONTINUED
For each separate account, the VAA Change Amount will also reflect the effect
of:
1. All new policy loans and repayments during the previous policy year; and
2. All transfers of Account Value to or from that separate account during the
previous policy year.
CALCULATION OF ACCOUNT VALUES. The Account Value of this policy on the Register
Date is the net single premium shown on page 3. The Account Value of this policy
on any date after the Register Date is the sum of your Account Values in each
separate account on that date. Your Account Value in each separate account on
any date is the sum of the following Items (1), (2) and (3):
(1) The Tabular Account Value on that date, multiplied by the following amount
immediately before that date: The Account Value in that separate account
divided by the sum of your Account Values in all of the separate accounts.
(2) The Net Single Premium on that date for the current VAA for that separate
account.
(3) If the date is not a policy anniversary, the product of the following
Items (a) and (b):
(a) The Actual NRR for that separate account minus the Base NRR for the
time elapsed since the last policy anniversary.
(b) The Benefit Base for that separate account on the last policy
anniversary.
For each separate account, the Account Value will also reflect the effect of:
1. All new policy loans and repayments since the last policy anniversary; and
2. All transfers of Account Value to or from that separate account since the
last policy anniversary.
If for any reason the Account Value in a separate account is zero, we will
cancel the VAA and any policy loan as to such separate account and reallocate
them to the other separate account.
TABULAR ACCOUNT AND CASH VALUES (TAV and TCV). The tables of TAV's and TCV's on
page 3A show them at the end of the first 20 policy years and at certain
attained ages. We will determine the TAV and TCV on other dates in a consistent
manner with allowance for time elapsed. Any TAV's and TCV's not shown will be
furnished on request.
V83-09-11 Page 11
<PAGE>
- --------------------------------------------------------------------------------
PART 1 OF AN APPLICATION FOR INDIVIDUAL VARIABLE LIFE INSURANCE TO |_|JUV.
EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) |_|OPAI
- --------------------------------------------------------------------------------
1. PROPOSED INSURED
a. Print name to appear on policy.
RICHARD ROE
- --------------------------------------------------------------------------------
First Middle Initial Last
b. |X| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title___________
c. List all current occupations-- Give Titles(s) and Duties
VICE PRESIDENT - HEAD OF
- --------------------------------------------------------------------------------
ACCOUNTING DEPT.
- --------------------------------------------------------------------------------
d. Date of Birth 12 1 1948
---------------------------
Month Day Year
e. Age Nearest Birthday 35
--------------
f. Place of Birth: State of NEW YORK
---------
g. Residence: State of NEW YORK
---------
h. |X| Male |_| Female
i. Are you associated with or employed by a member of National Association of
Securities Dealers, Inc. (NASD)? |_| Yes |X| No
2. PLAN* INITIAL FACE AMOUNT
Single Premium Whole Life-Level Face Amt. $ 100,000
INVESTMENT ALLOCATION (WHOLE NUMBERS ONLY)
Separate Account I Separate Account II
50% + 50% = 100%
------------------------ -----------------
3. OPTIONAL BENEFITS
|_| Accidental Death Benefit* (Specify Amount): $____________
|_| Disability Premium Waiver*
|_| Option to Purchase Add'l Ins. (Issue ages to 37 only): $____________
Term Riders:
Decreasing Term Per Month
|_| Family Income: ______Years $____________
|_| Mortgage Prot.: ______Years Initial Amt.: $____________
Renewable Term Yearly 10 Yr.
|_| On Insured: $____________
|_| On Add'l. Insured (See page 2): $____________
|_| Increasing Term
|_| Children's Term (See page 2): $__________Units______________
*If Proposed Insured is a Child (Issue Age 0-14) see Limitations on p.2.
4. BENEFICIARY FOR INSURANCE ON PROPOSED INSURED. Include FULL
NAME and RELATIONSHIP to Proposed Insured.
MARGARET ROE-WIFE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Unless otherwise requested, the contingent beneficiary will be the surviving
children of the Insured, in equal shares. If none survive, payment will be made
to the Insured's estate.
THE BENEFICIARY UNDER ANY TERM INSURANCE on an Additional Insured or on a Child
will be as stated in the riders, for those benefits, unless otherwise designated
in Special Instructions.
5. OWNER Owner's Soc. Sec. or Tax No. |0|0|0|0|0|0|0|0|0| |
The Owner is |X| Proposed Insured
|_| Applicant for Child (See 10.c.)
|_| Other (Give Full Name):
-----------------------------------------------------------------
If "Other" complete the following:
|_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title
-----------
Relationship to Insured
--------------------------------------------------
Specify a successor Owner if desired
--------------------------------------------------------------------------
If the Proposed Insured or the Applicant for a Child is not the Owner and if
all persons designated die before the Insured, the Owner will be the estate
of the last of such persons to die except where the Insured is a Child (see
Note in 10.c.).
6. MAILING ADDRESS |_| Business (Give Full Name) |x| Residence
|1|0|0| |S|P|E|C|M|E|N| |A|V|E| | | | | | | |
--------------------------------------------------
No. Street Apt.
|N|E|W| |Y|O|R|K| | | | | | | | | | | | | | | | | | | | |
--------------------------------------------------
City
|N|E|W| |Y|O|R|K| | | | | | | | |1|0|0|0|1|
--------------------------------------------------
State Zip
7. *PREMIUM PAYMENT PLAN
|_| Annual |_| Semi-Annual |_|Quarterly
|_| Monthly |_| System-Matic (Attach S-M Form)
|x| Single
|_| Military Allotment: Branch _______________
Register Date____________
|_| Salary Allotment: Register Date_____________
Unit Name________________________________
Unit/Sub-Unit No. if established:
|__|__|__|__|__|__|__|__|__|__|__|__|__|_|_|_|
Divisible by |_| 2 |_| 4 Payroll No.________________
|_| Hold Premium $______________________
8. SUITABILITY
a. Have you the Proposed Insured and the Purchaser if
other than the Proposed Insured received a Prospectus
for the policy applied for?
Yes |x| No |_|
Date of Prospectus SPECIMEN ----------------------------
Date of any supplement SPECIMEN ----------------------------
b. Do you understand that, under the policy applied for (exclusive of any
optional benefits), the amount of death benefit above the guaranteed
minimum death benefit and the entire amount of the cash value may
increase or decrease depending upon investment experience?
|X| Yes |_| NO
c. With this in mind, is the policy in accord with your insurance
objectives and your anticipated financial needs?
|X| Yes |_| NO
9. SPECIAL INSTRUCTIONS
a. |_| Preliminary Term (PT) period of _____ days
ending ____________ . PT Premium $______
Mo. Day. Yr.
b. |_| Date to save insurance age: _____________
c. |_| Check here to request an adjustable policy loan interest rate (if
available) instead of a fixed rate of 5%.
d. Other:
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
- --------------------------------------------------------------------------------
NOTE: UPON REQUEST, WE WILL FURNISH ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH
BENEFITS AND CASH VALUES, FOR (A) THE VARIABLE LIFE INSURANCE POLICY APPLIED FOR
AND (B) A FIXED BENEFIT LIFE INSURANCE POLICY FOR THE SAME PREMIUM.
- --------------------------------------------------------------------------------
EV4-200P 1
<PAGE>
10 COMPLETE IF PROPOSED INSURED IS A CHILD (ISSUE AGES 0-14).
a. Will there be more life insurance in effect on the Child
than on any older child in the family? |_| Yes |_| No
If yes, explain: ___________________________________________
_____________________________________________________________
b. APPLICANT-COMPLETE IF OTHER THAN THE CHILD.
i. _________________________________________________________
First Name Middle Initial Last Name
ii. |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______
iii.Date of Birth___________________________________19____
Month Day Year
iv. |_| Male |_| Female
v. Relationship to Child:___________________________________
vi. Total Life Insurance now in effect: $ _________________
c. OWNER. If the Applicant is to be the Owner, after the
Applicant's death the Child will be the Owner unless
otherwise designated in Special Instructions (in any such
designation include Owner's FULL NAME, RELATIONSHIP to
Child, and Social Security or Tax Number).
NOTE: Consider designating an adult secondary Owner to
reduce the chance of a minor Child becoming the Owner. If
all persons designated die before the Child, the Owner will
be the Child.
d. OPTIONAL BENEFIT ON APPLICANT.
|_| Supplemental Protective Benefit. Give Applicant's:
i. Age Nearest ii. Place of
Birthday ______________ Birth_____________
State
iii.Height______Ft____In. Weight______lbs.
iv. Occupations-Give Title(s) and Duties:__________
-----------------------------------------------------
ALSO ANSWER QUESTIONS ON PAGE 3 AS TO APPLICANT.
e. LIMITATIONS ON CHILD'S ADB AND DPW BENEFITS. If the Accidental Death Benefit
is applied for on the Child, the benefit is payable only if the Child dies
after the Child's first birthday. If the Disability Premium Waiver Benefit
is applied for on the Child, the benefit is effective only if the Child
becomes totally disabled on or after the Child's 5th birthday.
- --------------------------------------------------------------------------------
11. COMPLETE FOR CHILDREN'S TERM RIDER.
Give Names of Children below and answer the Questions on page 3 as to each
Child.
CHILDREN PROPOSED FOR INSURANCE:
NOTE: To be eligible, children (including stepchildren and legally adopted
children) must not yet have reached their 18th birthday. Coverage does
not begin until a child is 15 days old. DATE OF BIRTH
|Sex| Mo.| Day| Yr.
- --------------------------------------------------------------------------------
First Name Middle Initial Last Name
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
12. COMPLETE FOR LEVEL TERM YEARLY RENEWABLE RIDER ON ADDITIONAL INSURED.
Complete below and answer the Questions on page 3 as to the Additional Insured.
PROPOSED ADDITIONAL INSURED
a. Print name as it is to appear on the Policy.
- --------------------------------------------------------------------------------
First Middle Initial Last
b. List all current occupations--Give Title(s) and Duties.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
c. Date of Birth: Mo.__________ Day________ Yr. 19____
d. Age Nearest Birthday _____________________________
e. Place of Birth: State of ____________________________
f. Residence: State of_______________________________
g. |_| Male |_| Female
h. Owner's Relationship to Additional Insured:____________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
13. COMPLETE IF USING EXISTING OPTION TO PURCHASE INSURANCE.
i. Existing Individual Policy No. ________________________
ii. Option Date_______iii. Option Amount: $______________
iv. |_| Regular Option or
|_| Option on Birth or Adoption of Child
Date of Birth or Adoption___________________________
v. If applying for Disability Premium Waiver, is Proposed Insured now
totally disabled as defined in the Disability Premium Waiver
provision of the above policy? |_| Yes |_| No
This application is made under a provision in the policy indicated above
permitting the purchase of individual life insurance (the "Option Provision").
If this application is made within the time allowed and in accordance with the
other terms in the Option Provision, including timely payment of the full first
premium for the option insurance then the option insurance shall take effect
upon the terms of the policy EVLICO would issue. Otherwise, the option insurance
shall not take effect.
Answer the Questions on page 3 only if evidence of insurability is required in
connection with an optional benefit or any excess of the insurance amount
applied for over the insurance amount permitted by the Option Provision (the
option insurance).
EV4-200P NO. SPECIMEN 2
<PAGE>
OTHER INFORMATION -- AS TO EACH PERSON PROPOSED FOR INSURANCE, ANSWER QUESTIONS
14 AND 15. ALSO ANSWER QUESTIONS 16, 17 AND 18 IF NON-MEDICAL.
14. HAS ANY PERSON PROPOSED FOR INSURANCE:
a. Within the last two years, been convicted of two or more moving violations
or driving under the influence of alcohol or drugs, or had a driver's
license suspended or revoked? (Give full details--including dates, types of
violation, and reason for license suspension or revocation.) |_| Yes |X| No
b. Any plan to travel or reside outside the U.S.? (Give full details.)
|_| Yes |X| No
c. Any other life insurance now in effect or application now pending? (State
companies and amounts.)
|_| Yes |X| No
15.a.Within the last year flown other than as a passenger or plan to do so?
|_| Yes |X| No
If yes: Total flying time at present__________ Hours; Last 12 mos.________Hours;
Next 12 mos._______Est. Hours. (Complete Aviation Supplement for competitive,
test, stunt or military flying, or crop dusting.)
b. Engaged within the last year, or any plan to engage in motor racing on land
or water, underwater diving, sky diving, ballooning, hang-gliding or
parachuting? (If yes, complete Avocation Supplement.)
|_| Yes |X} No
c. Ever had an application for life or health insurance declined, that required
an extra premium or was otherwise modified? (Give full details.)
|_| Yes |X| No
d. Replaced or changed any existing insurance or annuity (or any plan to do so)
assuming the insurance applied for will be issued? (State companies, plans and
amounts.)
|_| Yes |X| No
ANSWER QUESTIONS 16, 17 AND 18 ONLY IF NON-MEDICAL
16. Proposed Insured: Height 6 Ft. 1 In. Weight 185 lbs.
------------------------------------------------------
Additional Insured: Height Ft. In. Weight lbs.
-------------------------------------------------------
17. HAS ANY PERSON PROPOSED FOR INSURANCE:
a. Ever been treated for or had any indication of heart trouble, stroke, high
blood pressure, chest pain, diabetes, tumor or cancer? (Give full details.)
|_| Yes |X| No
b. Within the last 5 years, consulted a physician, or been examined or treated
at a hospital or other medical facility? (Include medical check-ups in the
last 2 years. Do not include colds, minor virus infections, minor injuries,
or normal pregnancy.) (Give full details.)
|X| Yes |_| No
18.a.Within the last ten years repeatedly used barbiturates, amphetamines,
hallucinatory drugs or narcotics? (Give full details.)
|_| Yes |X| No
b. Within the last ten years received counseling or treatment regarding the use
of alcohol or drugs? (Give full details.)
|_| Yes |X|No
19. DETAILS. For each yes answer give Question number, name of person(s)
affected and full details. For 17 and 18 also include conditions, dates,
durations, treatment and results, and names and addresses of physicians and
medical facilities.
No. Name of Person Affected Details
- --------------------------------------------------------------------------------
17.B. |RICHARD ROE MEDICAL CHECK-UP 11/1/82 NORMAL
- --------------------------------------------------------------------------------
DR. JOHN JONES 100 SPECIMEN ST. NEW YORK, N.Y. 10001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
20.COMPLETE IF FIRST PREMIUM IS PAID BEFORE THE POLICY IS DELIVERED:
Have the undersigned read and do they agree to the conditions of EVLICO's
Temporary Insurance Agreement, including (i) the requirement that all of the
conditions in that Agreement must be met before any insurance takes effect, and
(ii) the $250,000 insurance amount limitation? |_| YES |_| NO (If "No," a
premium may not be paid before the policy is delivered.) AMOUNT PAID:
$___________. (Draw checks to order of EVLICO.)
AGREEMENT. The signers of this application agree that:
(1) The statements and answers in all parts of this application are true and
complete to the best of my knowledge and belief. EVLICO may rely on them in
acting on this application.
(2) EVLICO's Temporary Insurance Agreement states the conditions that must be
met before any insurance takes effect, if the full first premium for the
policy applied for is paid before the policy is delivered.
(3) Except as stated in the Temporary Insurance Agreement, no insurance shall
take effect on this application: (a) until a policy is delivered and the
full first premium for it is paid while the Proposed Insured is living; (b)
before any Register Date specified in this application; and (c) unless to
the best of my knowledge and belief the statements and answers in all parts
of this application continue to be true and complete, without material
change, as of the time such premium is paid.
(4) No agent or medical examiner has authority to modify this Agreement or the
Temporary Insurance Agreement, nor to waive any EVLICO's rights or
requirements. EVLICO shall not be bound by any information unless it is
stated in application Part 1, 1A or 2.
- ---------------------------------------------------------------------------
Signature of Agent
/s/ John Q. Agent
-----------------
IT IS UNDERSTOOD THAT UNDER THE POLICY APPLIED FOR (EXCLUSIVE OF ANY OPTIONAL
BENEFITS) THE AMOUNT OF THE DEATH BENEFIT ABOVE THE FACE AMOUNT, AND THE CASH
VALUE, MAY INCREASE OR DECREASE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE
ACCOUNT AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
Dated at NEW YORK, N.Y. on 6/1 19 83
-----------------------------------------------------------------------
City State
(X) /s/ Richard Roe
- --------------------------------------------------------------------------------
Signature of Proposed Insured or of Applicant if Proposed Insured is a Child,
Issue Age 0-14.
(X) Richard Roe
- --------------------------------------------
Signature of Additional Insured if required.
- ------------------------------------------------------------
Signature of Purchaser if not Proposed Insured or Applicant.
(If corp. show firm's name and signature of authorized officer)
EV4-200P 3
<PAGE>
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
Home Office: 1285 Avenue of the Americas, New York, New York 10019
VARIABLE
LIFE
INSURANCE
POLICY
Single Premium Whole Life Plan--Level Face Amount. Variable insurance
payable upon death. Guaranteed Minimum Death Benefit.
Non-Participating. Investment experience reflected in benefits.
Investment options described on page 6.
No. 83-09
THE INSURED RICHARD ROE VARIABLE LIFE INSURANCE POLICY
POLICY OWNER RICHARD ROE EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
FACE AMOUNT $100,000 [EVLICO LOGO]
POLICY NUMBER SPECIMEN
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
A Stock Life Insurance Company
Agrees
o To pay the insurance benefits of this policy to the Beneficiary upon
receiving proof of the Insured's death; and
o To provide you (the policy Owner) with the other rights and benefits of this
policy.
These agreements are subject to the provisions of this policy.
THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE
FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR
AS DESCRIBED ON PAGE 5 DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE,
BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT.
THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE OR
DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE.
Premiums are shown on page 3 and are fixed as to amount. They will not vary with
separate account investment experience.
RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you
are not satisfied with it, you may cancel it by returning the policy with a
written request for cancellation to our Administrative Office by the later of:
(a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the
application was signed. If you do this, we will refund the premium that was
paid.
SPECIMEN SPECIMEN
Kevin Keefe Secretary Donald J. Mooney President
Whole Life Plan. Variable insurance payable upon death. Guaranteed Minimum Death
Benefit. Fixed premiums payable for life. Non-Participating. Investment
experience reflected in benefits. Investment options described on pages 6 and 7.
No. 84-11
<PAGE>
[EVLICO LOGO]
1285 Avenue of the Americas, New York, New York
CONTENTS
Insurance benefits 2
Policy owner and beneficiary 4
Premiums, grace, lapse, reinstatement 4
Death Benefit 5
Cash Value 5
Loans 5
The Separate Accounts 6
Investment Options,
allocations, transfers 6
Options on Lapse 7
Exchange of Policy 8
General Provisions 8
Payment Options 10
Basis of Values 12
(Net rates of return, variable adjustment amount, benefit base, calculation of
cash values)
Any additional benefit riders and a copy of the application are at the back of
the policy.
IN THIS POLICY:
"We," "our" and "us" mean Equitable Variable Life Insurance Company.
"You" and "your" mean the Owner of the policy at the time an Owner's right is
exercised.
ADMINISTRATIVE OFFICE
The address of our Administrative Office is shown on page 3. You should send
premiums and requests to that address unless instructed otherwise.
INSURANCE BENEFITS
The insurance benefits we pay at the Insured's death include:
o the Death Benefit described on page 5;
o plus any additional benefits due from riders to this policy;
o plus or minus any adjustment for the last premium;
o minus any loan (and loan interest) on the policy.
We will add interest to the resulting amount for the period from the date of
death to the date of payment. It will be computed at the interest rate we are
then paying under the Deposit Option on page 10.
We will pay these benefits only if premiums have been paid as called for by this
policy. However, even if premiums have been discontinued we may still pay
certain benefits. See Options on Lapse, page 7.
Payment of these benefits may also be affected by other provisions of this
policy. See the Suicide Exclusion, Incontestability, and Age and Sex clauses on
page 8. Special exclusions or limitations (if any) are listed on page 3.
No. 84-11 Page 2
<PAGE>
THE INSURED RICHARD ROE REGISTER DATE FEB 1, 1984
POLICY OWNER RICHARD ROE DATE OF ISSUE FEB 1, 1984
FACE AMOUNT $100,000 ISSUE AGE, SEX 35, MALE
POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE
*************************BENEFITS AND PREMIUMS TABLE****************************
BENEFITS ANNUAL PREMIUM PREMIUM PERIOD
LIFE INSURANCE - VARIABLE $1369.00 FOR LIFE
THE FIRST PREMIUM IS $1369.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
SUBSEQUENT PREMIUMS ARE DUE ON FEB 01, 1985 AND EVERY 12 MONTHS THEREAFTER
DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE.
**************************** TABLE OF NET ANNUAL PREMIUMS***********************
BEGINNING OF NET ANNUAL
POLICY YEAR PREMIUM
1 $ 910.00
2 AND LATER 1210.00
*********************INVESTMENT ALLOCATION OF NET ANNUAL PREMIUMS***************
SEPARATE ACCOUNT I 50%
SEPARATE ACCOUNT II 50%
************ADMINISTRATIVE OFFICE: EQUITABLE LIFE INSURANCE COMPANY************
SPECIMEN REGIONAL SERVICE CENTER
100 SPECIMEN ST.
CITY, STATE 10001
V84-11-3 STANDARD PAGE 3
<PAGE>
THE INSURED RICHARD ROE REGISTER DATE FEB 1, 1984
FACE AMOUNT $100,000 DATE OF ISSUE FEB 1, 1984
POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE
********************************TABULAR VALUES**********************************
TABULAR ACCOUNT VALUES AT ENDS OF POLICY YEARS*
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY ACCOUNT POLICY ACCOUNT POLICY ACCOUNT
YEAR VALUES YEAR VALUES YEAR VALUES
1 $ 741 9 $10,269 17 $22,017
2 1,812 10 11,613 18 23,642
3 2,919 11 12,990 19 25,294
4 4,059 12 14,404 20 26,970
5 5,234 13 15,854 AGE 60 35,717
6 6,442 14 17,341 AGE 62 39,379
7 7,683 15 18,864 AGE 65 44,956
8 8,959 16 20,424 AGE 70 54,270
******************************* TABULAR CASH VALUES ****************************
THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN
AND IS NOT GUARANTEED AS TO DOLLAR AMOUNT
SEE PAGE 5 FOR CASH VALUE PROVISION
<TABLE>
<CAPTION>
INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR*
INTERIM INTERIM INTERIM
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
MONTH VALUES MONTH VALUES MONTH VALUES
<S> <C> <C> <C> <C> <C>
1 $0 5 $ 9 9 $257
2 0 6 71 10 318
3 0 7 133 11 380
4 0 8 195 12 442
</TABLE>
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH
YEAR VALUES YEAR VALUES
1 $ 442 6 $ 5,724
2 1,413 7 6,939
3 2,421 8 8,321
4 3,474 9 9,910
5 4,569 10 11,613
FOR YEARS 11 AND LATER THE TABULAR CASH VALUE IS THE SAME AS THE TABULAR ACCOUNT
VALUE.
* THESE VALUES DO NOT REFLECT LOANS. VALUES NOT SHOWN WILL BE FURNISHED ON
REQUEST.
V84-11-3-A PAGE 3A
<PAGE>
TABLE OF NET SINGLE PREMIUMS
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance. Values
shown are applicable on policy anniversaries. The net single premium as of a
date during a policy year shall be determined by interpolation between the
values applicable on the immediately preceding and immediately following
anniversaries.
<TABLE>
<CAPTION>
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
--------- ------- --------- ------- --------- ------- --------- ------- --------- -------
MALE INSURED
------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.06793 21 $.13298 41 $.26960 61 $.51232 81 $ .78748
2 .06996 22 .13727 42 .27929 62 .52668 82 .79890
3 .07217 23 .14178 43 .28925 63 .54114 83 .80994
4 .07449 24 .14654 44 .29947 64 .55567 84 .82051
5 .07695 25 .15154 45 .30996 65 .57021 85 .83053
6 .07956 26 .15683 46 .32071 66 .58475 86 .84002
7 .08233 27 .16240 47 .33175 67 .59928 87 .84903
8 .08529 28 .16825 48 .34306 68 .61381 88 .85767
9 .08841 29 .17438 49 .35467 69 .62836 89 .86607
10 .09170 30 .18079 50 .36656 70 .64291 90 .87437
11 .09515 31 .18748 51 .37873 71 .65742 91 .88276
12 .09873 32 .19444 52 .39117 72 .67183 92 .89147
13 .10239 33 .20169 53 .40385 73 .68604 93 .90078
14 .10609 34 .20921 54 .41675 74 .69994 94 .91103
15 .10981 35 .21702 55 .42983 75 .71346 95 .92248
16 .11354 36 .22510 56 .44311 76 .72658 96 .93527
17 .11729 37 .23346 57 .45657 77 .73932 97 .94925
18 .12106 38 .24210 58 .47022 78 .75171 98 .96390
19 .12491 39 .25100 59 .48406 79 .76385 99 .97831
20 .12887 40 .26017 60 .49810 80 .77578 100 1.00000
</TABLE>
<TABLE>
<CAPTION>
FEMALE INSURED
--------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.05530 21 $.10974 41 $.22687 61 $.43933 81 $ .74977
2 .05695 22 .11370 42 .23500 62 .45334 82 .76454
3 .05873 23 .11784 43 .24334 63 .46766 83 .77888
4 .06061 24 .12214 44 .25191 64 .48221 84 .79268
5 .06260 25 .12661 45 .26072 65 .49695 85 .80588
6 .06469 26 .13128 46 .26977 66 .51186 86 .81848
7 .06690 27 .13613 47 .27909 67 .52697 87 .83051
8 .06923 28 .14118 48 .28868 68 .54232 88 .84204
9 .07168 29 .14643 49 .29853 69 .55797 89 .85318
10 .07425 30 .15189 50 .30866 70 .57395 90 .86404
11 .07695 31 .15756 51 .31906 71 .59022 91 .87477
12 .07976 32 .16344 52 .32974 72 .60671 92 .88557
13 .08267 33 .16956 53 .34070 73 .62329 93 .89667
14 .08569 34 .17592 54 .35191 74 .63983 94 .90835
15 .08880 35 .18251 55 .36339 75 .65619 95 .92090
16 .09200 36 .18935 56 .37515 76 .67234 96 .93445
17 .09531 37 .19642 57 .38722 77 .68824 97 .94891
18 .09872 38 .20371 58 .39965 78 .70391 98 .96381
19 .10226 39 .21122 59 .41247 79 .71940 99 .97831
20 .10593 40 .21895 60 .42569 80 .73470 100 1.00000
</TABLE>
V84-11-3B Page 3B
<PAGE>
POLICY OWNER AND BENEFICIARY
OWNER. The Owner of this policy is the Insured unless otherwise stated in the
application, or later changed. As Owner, you can exercise all the rights in this
policy while the Insured is living. You do not need the consent of anyone who
has only a conditional or future ownership interest in this policy.
BENEFICIARY. The Beneficiary is as stated in the application, unless later
changed. If two or more persons are named, those surviving the Insured will
share equally unless otherwise stated.
We will pay any benefit for which there is no stated Beneficiary living at the
death of the Insured to the children of the Insured who then survive, in equal
shares. If none survive, we will pay the estate of the Insured.
CHANGES. While the Insured is living, you may change the Owner or Beneficiary by
written notice in a form satisfactory to us. The change will take effect on the
date you sign the notice, except that it will not apply to any payment we make
or other action we take before we receive the notice at our Administrative
Office. If you change the Beneficiary, any previous arrangement you made under
the Payment Options provision on page 10 is cancelled.
ASSIGNMENT. You may assign this policy, but we will not be bound by an
assignment unless it is in writing and we have received it at our Administrative
Office. Your rights and those of any other person referred to in this policy
will be subject to the assignment. We assume no responsibility for the validity
of any assignment.
PREMIUMS
AMOUNTS AND DUE DATES. Page 3 shows the amounts and due dates of premiums and
the period for which they are to be paid. Each premium is payable on or before
its due date at our Administrative Office.
You may write and ask us to change the frequency of premium payment. If we
approve the change, the new premium will be determined on the rate scale for
this policy.
GRACE PERIOD. We allow a grace period of 31 days for payment of each premium,
after the first premium. The insurance will continue during the grace period. If
a premium is paid during the grace period, then all benefits under this policy
will be the same as if such premium had been paid on its due date.
LAPSE. If a premium is not paid by the end of its grace period, the policy will
lapse as of the premium due date. If this occurs, all insurance ends, except as
stated in Options on Lapse on page 7. Additional benefit riders do not continue
beyond the grace period of an unpaid premium.
REINSTATEMENT. You may reinstate this policy within five years after lapse if:
(1) the policy has not been given up for its net cash value; (2) you provide
evidence of insurability satisfactory to us; and (3) you pay the larger of: (a)
all overdue premiums with interest at 6% per year compounded annually; or (b)
110% of the difference between the following Items (i) and (ii). Item (i) is the
excess of the cash value immediately after reinstatement over the cash value
immediately before reinstatement. Item (ii) is any policy loan, and accrued loan
interest, in effect when any option on lapse became effective, with loan
interest to the date of reinstatement. A reinstatement will take effect as of
the date we approve it.
Upon reinstatement this policy will have the same Benefit Base and the same
Variable Adjustment Amount as to each separate account (as these are determined
in the Variable Adjustment Amount provision on page 12) as if default had not
occurred. Also, upon reinstatement this policy will have a loan equal to the sum
of the following Items (i) and (ii). Item (i) is any loan, and accrued loan
interest, in effect at the date any option on lapse became effective, with loan
interest to the date of reinstatement. Item (ii) is any loan arising after the
date any option on lapse became effective, with loan interest to the date of
reinstatement.
PREMIUM ADJUSTMENT. We will add to the insurance benefits any part of the last
premium paid that applies to a period beyond the policy month in which the
Insured dies. If the Insured dies during the grace period of an unpaid premium,
we will deduct from the benefits the part of the overdue premium for one policy
month.
V84-11-3B Page 4
<PAGE>
DEATH BENEFIT
The Death Benefit equals:
o the face amount shown on page 3;
o plus the sum, if positive, of the Variable Adjustment Amounts, for each
separate account in which you have a cash value, for the policy year in
which the Insured dies.
However, the Death Benefit will in no event be less than the amount of Paid-up
Whole Life Insurance that could be bought by the cash value plus the difference
if any between the Tabular Account Value and the Tabular Cash Value at the
Insured's death on the basis of the Table of Net Single Premiums on page 3B.
A description of how the Variable Adjustment Amount for each separate account is
determined is on page 12.
CASH VALUE
You may give up this policy for its net cash value at any time while the Insured
is living. The net cash value is the cash value minus any loan and loan
interest.
We will determine the net cash value on the date we receive your signed request
for it at our Administrative Office. The policy will terminate on the date you
send the policy and the request to us.
CASH VALUE. The cash value of the policy will vary daily with the performance of
the separate accounts in which you have a cash value. See page 13 for a
description of how cash values are determined.
LOANS
You may get a loan on this policy while it has a loan value and it is not being
continued as Fixed Extended Term Insurance under the Options on Lapse on page 7.
This policy will be the sole security for the loan.
The amount of the loan may not be more than the loan value. Except when used to
pay premiums, a loan must be at least $100 more than any existing loan and loan
interest. Any existing loan and loan interest will be deducted from the new
loan. We may also deduct any unpaid premium then due.
A loan, whether you repay it or not, will have a permanent effect on the
Variable Adjustment Amounts, Death Benefit and cash value under this policy. It
will have no effect on the amount of the premiums payable under this policy.
We will allocate loans to the separate accounts based on your net cash value in
each separate account as of the dates the loans are made. We will allocate loan
repayments to the separate accounts based on the amount of your outstanding
loans as to each separate account as of the dates the repayments are made. See
page 13 for a description of how the cash value in each separate account is
determined.
LOAN VALUE. The loan value is a percentage of the cash value on the next premium
due date (or the next policy anniversary if this has become a paid-up policy)
assuming that the Actual Net Rate of Return (see page 12) is exactly 4-1/2% a
year from the date of the loan to such due date or anniversary, discounted at 5-
1/2% a year from the date of the loan to such due date or anniversary. Such
percentage is: (a) 90% during the first ten policy years while the policy is not
lapsed; and (b) 100% after the tenth policy year, and at any time during the
first ten policy years while the policy is lapsed and is being continued under
the Variable or Fixed Reduced Paid-Up Insurance Option.
LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5-1/2%.
Interest is due on each policy anniversary. If the interest is not paid when
due, it will be added to the loan and bear interest at the loan rate.
When a loan plus loan interest first exceeds the cash value, we will mail to you
and any assignee of record at last known addresses a notice that the policy will
terminate if such excess amount is not repaid within 31 days after we mailed
such notice.
REPAYMENT. You may repay a loan and loan interest in whole or in part at any
time while the Insured is living and this policy is in effect. However, if this
policy has lapsed and you are continuing insurance under one of the Options on
Lapse on page 7, any loan that was deducted in determining the benefit on lapse
may not be repaid unless this policy is reinstated. We will deduct any existing
loan and loan interest from any benefits we pay at the Insured's death.
V84-11-5 Page 5
<PAGE>
THE SEPARATE ACCOUNTS
We established and we maintain Separate Accounts I and II under the laws of New
York State. Realized and unrealized gains and losses from the assets of Separate
Accounts I and II are credited or charged against such accounts without regard
to our other income, gains, or losses. Assets are put in Separate Accounts I and
II to support this policy and other variable life insurance policies. Assets may
be put in Separate Accounts I and II for other purposes, but not to support
contracts or policies other than variable life insurance.
We expect the investments in Separate Account I will be, primarily, common
stocks and other equity-type investments. We expect the investments in Separate
Account II will be, primarily, short-term (not to exceed one year) money market
instruments, such as: United States (U.S.) government and U.S. government agency
securities; bank money instruments; time deposits; certificates of deposit; high
grade commercial paper, including master demand notes; and repurchase agreements
covering U.S. government obligations and certificates of deposit. But we may
invest the assets of Separate Accounts I and II in any legal investments. We
will rely upon our own and outside counsel for advice in this regard.
Instead of making direct investments, we may also operate either Separate
Account I or II as a unit investment trust, or other form. We would invest all
or part of such account's assets in shares or units of a fund. We, an affiliate,
or The Equitable Life Assurance Society of the United States would be the
investment adviser and would invest the assets of the fund as above.
The assets of Separate Accounts I and II are our property. The portion of the
assets of Separate Accounts I and II equal to the reserves and other policy
liabilities with respect to such separate accounts will not be chargeable with
liabilities arising out of any other business we conduct. We may transfer assets
of such separate accounts in excess of such reserves and liabilities to our
general account.
We will value the assets of Separate Accounts I and II on each business day. A
business day is any day on which the New York Stock Exchange is open for
trading.
We have the right to create new separate accounts. We have the right to withdraw
assets of a class of policies to which this policy belongs from either separate
account and put them in another separate account. If we do this, we will
withdraw the same percentage of each investment in such separate account, but
will avoid odd lots and fractions. We also have the right to combine any two or
more separate accounts. The term "Separate Account I" or "Separate Account II"
in this policy shall then refer to any other separate account in which the
assets of a class of policies to which this policy belongs were placed.
We have the right to:
1. register or deregister either separate account under the Investment
Company Act of 1940;
2. run either separate account under the direction of a committee, and to
discharge such committee at any time; and
3. restrict or eliminate any voting rights of policyowners, or other persons
who have voting rights as to either separate account.
CHANGES OF INVESTMENT ADVISER OR INVESTMENT POLICY. Unless otherwise required by
law or regulation, the investment adviser or any investment policy may not be
changed without our consent. If required by law or regulation, the investment
policy of either separate account will not be changed unless approved by the
Superintendent of Insurance of New York State or deemed approved in accordance
with such law or regulation. If so required, the process for getting such
approval is filed with the insurance supervisory official of the jurisdiction in
which this policy is delivered.
INVESTMENT OPTIONS
ALLOCATION OF NET ANNUAL PREMIUMS. If premiums are duly paid, we will allocate
to each separate account at the beginning of each policy year a percentage of
the Net Annual Premium shown on page 3 for that year. Such allocations will be
based on the allocation percentages then in effect. The allocation percentages
for the first policy year are as designated in the application for this policy.
Unless you change them, such percentages shall also apply in later years.
V84-11-5 Page 6
<PAGE>
INVESTMENT OPTIONS (CONTINUED)
You may change the allocation percentages for policy years after the first by
notifying us in writing of the new percentages. Each allocation percentage
greater than zero must be a whole number of not more than 100%. The sum of the
percentages must equal 100%. A change will take effect on the next policy
anniversary if we receive the notice at our Administrative Office at least 7
days before such anniversary.
TRANSFER OF BENEFIT BASE. You may ask us to transfer all or part of your Benefit
Base (defined on page 12) in one of the separate accounts to the other. Only two
such transfers may be made in a policy year. We will make the transfer as of the
date we receive your written request for it at our Administrative Office.
OPTIONS ON LAPSE
You have a number of options if the policy lapses. You may apply for
reinstatement. If there is a net cash value, you may withdraw it and give up the
policy. Or, you may continue insurance under one of the following options:
FIXED REDUCED PAID-UP INSURANCE. This is fixed benefit insurance for the
Insured's lifetime and for the amount that the net cash value will buy.
VARIABLE REDUCED PAID-UP INSURANCE. This is variable benefit insurance for the
Insured's lifetime that you may choose if the net cash value is at least $5,000.
The amount of insurance for the policy year in which lapse occurs (the Variable
Reduced Paid-Up Face Amount) is the amount that the net cash value will buy on
the basis of the Table of Net Single Premiums on page 3B. Thereafter, the amount
of insurance equals the amount for the policy year in which lapse occurs plus or
minus the sum of the Variable Adjustment Amounts (whether positive or negative)
for each separate account under this policy in which you have a cash value, for
the policy year in which the Insured dies. However, the amount of insurance will
in no event be less than the amount of Paid-up Whole Life Insurance that could
be bought on the basis of the Table of Net Single Premiums on page 3B by the
cash value at the Insured's death.
FIXED EXTENDED TERM INSURANCE. This is fixed benefit term insurance for an
amount equal to the Death Benefit on the date of lapse, minus any unpaid loan
and loan interest. The insurance will continue from the date of lapse for as
long a term period as the net cash value will buy. In no event, however, will
this period be less than 90 days if premiums have been paid for at least three
months before lapse and there is no loan on this policy. This option is not
available if so stated on page 3.
An Option on Lapse will become effective on the date your written request for it
is received at our Administrative Office. If your request is not received within
three months after the date of lapse, Fixed Extended Term Insurance will become
effective automatically at the end of such three month period. Fixed Reduced
Paid-Up Insurance will apply instead if the Fixed Extended Term Insurance option
is not available.
If the Insured dies after the grace period but within three months after the
date of lapse and before an Option on Lapse becomes effective, the greater of
the benefit under Fixed Reduced Paid-Up or Fixed Extended Term Insurance will
apply. In this case, any restriction on page 3 as to the availability of Fixed
Extended Term Insurance will not apply.
We will determine the amounts of these options as of the date the option becomes
effective. We will use net cash values as of the date the option becomes
effective. A term period will begin as of the date of lapse (the due date of the
unpaid premium). We will use net single premiums for the Insured's age as of the
date of lapse. We will deduct any unpaid loan and loan interest from any
benefits we pay at the Insured's death if a loan is made while the policy is
being continued as Variable or Fixed Reduced Paid-Up Insurance.
V84-11-7 Page 7
<PAGE>
EXCHANGE OF POLICY
You may exchange this policy for a policy of permanent fixed benefit insurance
on the life of the Insured. You may make such an exchange within 24 months after
the Date of Issue shown on page 3. We will not require evidence of insurability.
We will require:
1. That this policy be in effect on the date of exchange with all premiums due
having been paid; and
2. Repayment of any loan and loan interest on this policy.
The date of exchange will be the later of: (a) the date you send us this policy
and the signed request on our form for such exchange; or (b) the date we receive
at our Administrative Office any sum due to be paid for such exchange.
THE NEW POLICY. The new policy will be our Adjustable Life Plan, and will be on
a level premium whole life plan (with premiums payable for life), subject to our
rules in effect on the date of exchange. It will have an insurance amount equal
to the face amount of this policy. The new policy will have the same Register
Date, Date of Issue, and Issue Age as this policy. Premiums for the new policy
will be based on our rates in effect on its Register Date for the same class of
risk as under this policy. Any additional benefit riders in this policy will be
included in the new policy only if we were offering them with the new policy as
of its Date of Issue.
Upon request you will be told the amount of the first premium for the new
policy, and of any extra sum required or allowance to be made for a premium,
cash value or policy account adjustment that takes appropriate account of the
premiums, cash and policy account values under this policy and under the new
policy. A detailed statement of the method of computing such an adjustment has
been filed, if required, with the insurance supervisory official of the
jurisdiction in which this policy is delivered.
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
required premiums. This policy and the application (a copy of which is attached
at issue) constitute the entire contract. The rights conferred by this policy
are in addition to those provided by applicable Federal and State laws and
regulations.
The contract may not be modified, nor may any of our rights or requirements be
waived, except in writing signed by our President, one of our Vice Presidents,
or by our Secretary or Treasurer.
INCONTESTABILITY. All statements made in the application are representations and
not warranties. We have the right to contest the validity of this policy based
on material misstatements made in the application. However, this policy will
become incontestable after it has been in effect during the lifetime of the
Insured for two years from the Date of Issue shown on page 3.
See any additional benefit riders for modifications that apply to them.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be those that the premium paid would have purchased at the correct age and sex.
SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within
two years after the Date of Issue shown on page 3, our liability will be limited
to the payment of a single sum equal to the premiums paid, minus any loan and
loan interest.
POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, policy
anniversaries and premium periods are measured from the Register Date. Each
policy month begins on the same day in each calendar month as in the Register
Date. If the end of a premium period or policy year is indicated by an age, it
ends on the policy anniversary nearest the birthday on which the Insured reaches
that age.
POLICY CHANGES. You may change this policy to another plan of insurance or add
additional benefit riders or make other changes, subject to our rules at the
time of change.
V84-11-7 Page 8
<PAGE>
GENERAL PROVISIONS (CONTINUED)
REPORTS. Each policy year after the first we will give you a report showing the
Death Benefit and the cash value as of the first day of such year. The amount of
any existing loan and the accrued loan interest for the previous policy year
will also be shown. No such reports will be given while this policy is lapsed
except when it is being continued as Variable Reduced Paid-Up Insurance. We will
also give you such other reports as may be required by law.
BASIS OF COMPUTATION. Cash values, reserves and net single premiums are based on
the Commissioners 1980 Standard Ordinary Mortality Table. For any extended term
insurance, they are based instead on the Commissioners 1980 Extended Term
Insurance Table. Continuous functions are used with interest compounded annually
at 4-1/2%.
The cash values and paid-up insurance benefits are equal to or more than those
required by law. If so required, we have filed a detailed statement of the
method of computing values and benefits with the insurance supervisory official
of the jurisdiction in which this policy is delivered. The tabular cash value at
the end of each policy year after the tenth policy year equals the reserve.
Reserves referred to in this policy are not less than reserves determined
according to the Commissioners Reserve Valuation Method. Our expense and
mortality results will not adversely affect the dollar amount of insurance
benefits or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. As long as this policy is not
being continued under one of the fixed benefit Options on Lapse, we will make
payments under this policy as follows:
o A cash value will be paid within 7 days after we receive your policy and
request at our Administrative Office;
o A loan will be paid within 7 days after we receive your request at our
Administrative Office; and
o The insurance benefits will be paid within 7 days after we receive at our
Administrative Office proof of the Insured's death and all other
requirements deemed necessary before such payment may be made.
We may not be able to sell securities or determine the value of the assets of
the separate accounts if: (1) the New York Stock Exchange is closed; (2) the
Securities and Exchange Commission requires trading to be restricted or declares
an emergency; or (3) the Securities and Exchange Commission by order permits us
to defer payments for the protection of our policy Owners. During such times we
may defer:
1. Determination and payment of cash values;
2. Payment of loans;
3. Determination of a change in a Variable Adjustment Amount, and payment of
any portion of the Death Benefit equal to the Variable Adjustment Amount;
4. Any requested transfer of Benefit Base;
5. Use of insurance benefits under the Payment Options; and
6. Determination and payment of any Variable Reduced Paid-Up Insurance.
DEFERMENT UNDER OPTIONS ON LAPSE. We may defer payment of a cash value and the
making of a loan for up to six months after we receive a request at our
Administrative Office if this policy is being continued under one of the fixed
benefit Options on Lapse. We will allow interest, at a rate of at least 3% a
year, on any cash value payment we defer for 30 days or more.
V84-11-9 Page 9
<PAGE>
PAYMENT OPTIONS
Payments under these options will not be affected by the investment experience
of any separate account after proceeds are applied under such options.
Instead of having the insurance benefits or net cash value paid immediately in
one sum, you can choose another form of payment for all or part of them. If you
do not arrange for this before the Insured dies, the Beneficiary will have this
right when the Insured dies. Arrangements you make, however, cannot be changed
by the Beneficiary after the Insured's death. The options are:
1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with
interest paid at the end of each month, each 3 months, each 6 months or each
12 months, as chosen.
2. INSTALMENT OPTIONS:
A. FIXED PERIOD: Paid in equal instalments for a specified number of years
(not more than 30). The instalments will not be less than those shown in
the Table of Guaranteed Payments on page 11.
B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the
amount applied, together with interest on the unpaid balance, is used
up.
3. LIFE INCOME OPTIONS:
Paid as a monthly income for life in an amount we determine but not less
than shown in the Table of Guaranteed Payments on page 11. We guarantee
payments for life and in any event for 10 years, 20 years, or until the
payments we make equal the amount applied (called "refund certain"),
according to the "certain" period chosen.
4. OTHER: We will apply the sum under any other option requested that we make
available at the time of the Insured's death or net cash value withdrawal.
We guarantee interest under Option 1 at the rate of 3% a year and under Option 2
at 3-1/2% a year, or such higher rates as we may determine. We may allow excess
interest under Options 1 and 2.
The payee under an option may name and change a successor payee for any amount
we would otherwise pay the payee's estate.
Any arrangements involving more than one of the options, or a payee who is not a
natural person (for example, a corporation) or who is a fiduciary, must have our
approval. Also, details of all arrangements will be subject to our rules at the
time the arrangement takes effect. These include rules on: the minimum amount we
will apply under an option and minimum amounts for instalment payments;
withdrawal or commutation rights; naming payees and successor payees; and
proving age and survival.
Choices (or any later changes) under these options will be made and will take
effect in the same way as a change of Beneficiary. Amounts applied under these
options will not be subject to the claims of creditors or to legal process, to
the extent permitted by law.
V84-11-9 Page 10
<PAGE>
TABLE OF GUARANTEED PAYMENTS
(MINIMUM AMOUNT FOR EACH $1,000 APPLIED)
OPTION 2A
FIXED PERIOD INSTALMENTS
------------------------
Number
of Years Monthly Annual
Instalments Instalment Instalment
---------- ----------- ----------
1 $84.70 $1000.00
2 43.08 508.60
3 29.21 344.86
4 22.28 263.04
5 18.12 213.99
6 15.36 181.32
7 13.38 158.01
8 11.91 140.56
9 10.76 127.00
10 9.84 116.18
11 9.09 107.34
12 8.47 99.98
13 7.94 93.78
14 7.49 88.47
15 7.11 83.89
16 6.77 79.89
17 6.47 76.37
18 6.20 73.25
19 5.97 70.47
20 5.76 67.98
21 5.57 65.74
22 5.40 63.70
23 5.24 61.85
24 5.10 60.17
25 4.97 58.62
26 4.84 57.20
27 4.73 55.90
28 4.63 54.69
29 4.54 53.57
30 4.45 52.53
If instalments are paid each 3 months, they will be 25.32% of the annual
instalments. If they are paid each 6 months, they will be 50.43% of the annual
instalments.
<TABLE>
<CAPTION>
OPTION 3
MONTHLY LIFE INCOME
-------------------
10 Years Certain 20 Years Certain Refund Certain
--------------------------------- ---------------------------------- ----------------------------------
AGE Male Female Male Female Male Female
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
50 $4.50 $3.96 $4.27 $3.89 $ 4.28 $3.87
51 4.58 4.02 4.32 3.94 4.35 3.93
52 4.67 4.09 4.38 4.00 4.42 3.99
53 4.75 4.16 4.44 4.06 4.50 4.05
54 4.85 4.24 4.50 4.12 4.58 4.11
55 4.94 4.32 4.56 4.18 4.66 4.18
56 5.04 4.40 4.62 4.24 4.74 4.25
57 5.15 4.49 4.68 4.31 4.83 4.33
58 5.26 4.58 4.74 4.38 4.93 4.41
59 5.37 4.68 4.81 4.45 5.03 4.49
60 5.49 4.78 4.86 4.52 5.13 4.58
61 5.62 4.89 4.92 4.59 5.24 4.67
62 5.75 5.00 4.98 4.66 5.35 4.77
63 5.88 5.12 5.04 4.73 5.48 4.88
64 6.03 5.25 5.09 4.80 5.60 4.99
65 6.17 5.39 5.14 4.88 5.74 5.10
66 6.32 5.53 5.19 4.95 5.88 5.22
67 6.48 5.68 5.24 5.01 6.03 5.35
68 6.64 5.83 5.28 5.08 6.18 5.49
69 6.80 6.00 5.32 5.14 6.35 5.64
70 6.97 6.17 5.35 5.20 6.53 5.79
71 7.15 6.34 5.38 5.26 6.71 5.96
72 7.32 6.53 5.41 5.30 6.91 6.13
73 7.50 6.72 5.43 5.35 7.12 6.32
74 7.67 6.92 5.45 5.38 7.34 6.52
75 7.85 7.12 5.47 5.42 7.58 6.73
76 8.02 7.32 5.48 5.44 7.82 6.96
77 8.19 7.53 5.49 5.46 8.09 7.21
78 8.36 7.75 5.50 5.48 8.38 7.47
79 8.52 7.96 5.50 5.49 8.67 7.75
80 8.67 8.16 5.51 5.50 9.00 8.05
81 8.81 8.36 5.51 5.51 9.34 8.39
82 8.94 8.55 5.51 5.51 9.70 8.73
83 9.06 8.73 5.51 5.51 10.10 9.12
84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
</TABLE>
Amounts for Monthly Life Income are based on age nearest birthday when income
starts. Amounts for ages not shown will be furnished on request.
V84-11-11 Page 11
<PAGE>
BASIS OF VALUES
ACTUAL NET RATE OF RETURN (ACTUAL NRR.) For each separate account, the Actual
Net Rate of Return for a policy year reflects the account's:
o investment income;
o plus realized and unrealized capital gains;
o minus realized and unrealized capital losses;
o minus any charges for taxes or amounts set aside as a reserve for taxes;
o minus a charge not exceeding .25% per year for investment management
expenses; and
o minus a charge not exceeding .50% per year for mortality, expenses and
other risks.
The Actual NRR for a period less than a year will be calculated in a consistent
manner.
BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4-1/2% per year. (It is a
pro-rata part of 4-1/2% for periods of less than a year.)
If the Actual NRR for all separate accounts always equals the Base NRR, then:
o the Death Benefit will always equal the Face Amount; and
o the cash value at the end of each policy year will equal the tabular cash
value shown on page 3A.
VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of
insurance in effect for that policy year due to investment performance in past
years. On each policy anniversary we will determine a new VAA for the next
policy year. We will do this independently for each separate account, taking
into account the Actual NRR for the last policy year.
The VAA for each separate account is zero for the first policy year and, if the
policy lapses and the Variable Reduced Paid-Up Insurance option takes effect,
for the remainder of the policy year in which lapse occurs. For other policy
years, the VAA for each separate account will equal the VAA for that account for
the last policy year, plus the VAA Change Amount for that account. A VAA does
not change during a policy year.
VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount
for each separate account may be positive or negative. It will equal the product
of the following Items (1) and (2), divided by Item (3).
(1) The Actual NRR for the separate account minus the Base NRR for that
policy year, or for the part of the policy year since lapse during which
the Variable Reduced Paid-Up Insurance option takes effect.
(2) The Benefit Base for the separate account as of the last policy
anniversary. (For the policy year immediately following a lapse of the
policy where the Variable Reduced Paid-Up Insurance option is in effect,
use instead the net cash value as of the date of lapse.)
(3) The Net Single Premium per $1.00 of VAA for the current policy
anniversary as shown on page 3B.
BENEFIT BASE. For each separate account, the Benefit Base on the Register Date
is the product of the following Items (1) and (2):
(1) The Allocation Percentage designated in the application for this policy.
(2) The Net Annual Premium for the first policy year.
If the policy has not lapsed, on policy anniversaries the Benefit Base for a
separate account is the sum of the following Items (1) and (2), minus item (3):
(1) The allocation percentage for that anniversary, multiplied by the sum of
the following Items (a) and (b):
(a) The Tabular Account Value on that anniversary.
(b) The Net Annual Premium for that anniversary.
(2) The Net Single Premium for the VAA for that separate account on that
anniversary.
(3) Any outstanding loan, plus loan interest, for the separate account as of
that policy anniversary.
V84-11-11 Page 12
<PAGE>
BASIS OF VALUES (CONTINUED)
If the policy has lapsed and the Variable Reduced Paid-Up Insurance option has
taken effect, on policy anniversaries the Benefit Base for a separate account is
the following Item (1) minus Item (2):
(1) The cash value in the separate account on that policy anniversary.
(2) Any outstanding loan, plus loan interest, for the separate account as of
that policy anniversary.
The Net Annual Premiums, Tabular Account Values and Net Single Premiums are
shown on pages 3, 3A and 3B, respectively.
For each separate account, the VAA Change Amount will also reflect the effect
of:
1. All new policy loans and repayments during the previous policy year; and
2. All transfers of Benefit Base to or from that separate account during the
previous policy year.
In addition, if you have changed the allocation percentages, we will reallocate
the VAA's among the separate accounts.
CALCULATION OF CASH VALUES. The cash value of this policy on any date is the sum
of your cash values in each separate account on that date. Your cash value in
each separate account on any date is determined as follows:
(1) While the policy is not lapsed, the sum of the immediately following Items
(a), (c) and (d).
(2) More than three months after the policy has lapsed and while it is being
continued under the Variable Reduced Paid-Up Insurance option, the sum of
the immediately following Items (b), (c) and (d).
(a) the tabular cash value on that date, multiplied by the allocation
percentage for that separate account in effect on the last policy
anniversary.
(b) The product of the following Items (i) and (ii):
(i) The product of the Net Single Premium on that date per $1.00 of
Paid-Up Whole Life Insurance as shown on page 3B, and the Variable
Reduced Paid-Up Face Amount defined on page 7.
(ii) The following amount immediately before the date on which the cash
value is being determined: The cash value in that separate account,
divided by the total cash value in this policy.
(c) The Net Single Premium on that date for the current VAA for that separate
account.
(d) If the date is not a policy anniversary, the product of the following Items
(i) and (ii):
(i) The Actual NRR for the separate account minus the Base NRR for the
time elapsed since the last policy anniversary.
(ii) The Benefit Base for the separate account on the last policy
anniversary.
If a premium is due and unpaid, then within three months after the due date your
cash value in each separate account is the sum of the following Items (1) and
(2):
(1) Your cash value in that separate account as of the due date of the unpaid
premium.
(2) The product of the following Items (a) and (b):
(a) The Actual NRR for the separate account minus the Base NRR for the
time elapsed since such due date.
(b) The cash value in that separate account on such due date.
For each separate account, the cash value will also reflect the effect of:
1. All new policy loans and repayments since the last policy anniversary;
and
2. All transfers of Benefit Base to or from that separate account since the
last policy anniversary.
V84-11-13 Page 13
<PAGE>
BASIS OF VALUES (CONTINUED)
More than three months after the due date of an unpaid premium, if you continue
the policy under one of the fixed benefit Options on Lapse, your cash value will
equal the reserve for the policy. In such case, the cash value within 30 days
after a policy anniversary will never be less than the cash value on that
anniversary.
If you transfer all of the Benefit Base in a separate account to the other
separate account or if you have a policy loan allocated to a separate account
and your Benefit Base in that separate account is zero, we will cancel the VAA
and any policy loan as to such separate account and reallocate them to the other
separate account. Also, the premium allocation percentage for such separate
account will be reduced to zero and the percentage for the other separate
account will be increased to 100%.
TABULAR CASH AND ACCOUNT VALUES (TCV AND TAV). The tables on page 3A show
interim TCV's at the end of each month in the first policy year, and TCV's at
the end of policy years. We will determine the TCV and TAV on other dates in a
consistent manner with allowance for time elapsed and premiums paid. Any TCV's
and TAV's not shown will be furnished on request.
V84-11-13 Page 14
<PAGE>
VARIABLE
LIFE
INSURANCE
POLICY
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
Home Office: 1285 Avenue of the Americas, New York, New York 10019
Whole Life Plan. Variable insurance payable upon death. Guaranteed Minimum Death
Benefit. Fixed premiums payable for life. Non-Participating. Investment
experience reflected in benefits. Investment options described on pages 6 and 7.
No. 84-11
SPECIMEN POLICY
NOTE -- Because of variations in state
policy form requirements, the policy as
actually issued may differ somewhat from
this specimen policy.
THE INSURED RICHARD ROE VARIABLE LIFE INSURANCE POLICY
POLICY OWNER RICHARD ROE EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
FACE AMOUNT $100,000 [EVLICO LOGO]
POLICY NUMBER SPECIMEN
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
A Stock Life Insurance Company
Agrees
o To pay the insurance benefits of this policy to the Beneficiary upon receiving
proof of the Insured's death; and
o To provide you (the policy Owner) with the other rights and benefits of this
policy.
These agreements are subject to the provisions of this policy.
THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE
FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR
AS DESCRIBED ON PAGE 5 DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY,
BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT.
THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE OR
DECREASE DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY.
Premiums are shown on page 3 and are fixed as to amount. They will not vary with
the investment experience of this policy.
RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you
are not satisfied with it, you may cancel it by returning the policy with a
written request for cancellation to our Administrative Office by the later of:
(a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the
application was signed. If you do this, we will refund the premium that was
paid.
SPECIMEN SPECIMEN
Kevin Keefe Secretary Franklin Maisano President
Whole Life Plan. Variable insurance payable upon death. Guaranteed
Minimum Death Benefit. Fixed premiums payable for life.
Non-Participating. Investment experience reflected in benefits.
Investment options described on page 6.
No. 85-11
<PAGE>
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
1285 Avenue of the Americas, New York
CONTENTS
Insurance benefits 2
Policy owner and beneficiary 4
Premiums, grace, lapse, reinstatement 4
Death Benefit 5
Cash Value 5
Loans 5
The Separate Account 6
Investment Options,
allocations, transfers 6
Options on Lapse 7
Exchange of Policy 8
General Provisions 8
Payment Options 10
Basis of Values 12
(Net rates of return, variable adjustment amount, benefit base, calculation of
cash values)
Any additional benefit riders and a copy of the application are at the back of
the policy.
IN THIS POLICY:
"We," "our" and "us" mean Equitable Variable Life Insurance Company.
"You" and "your" mean the Owner of the policy at the time an Owner's right is
exercised.
ADMINISTRATIVE OFFICE
The address of our Administrative Office is shown on page 3. You should send
premiums and requests to that address unless instructed otherwise.
INSURANCE BENEFITS
The insurance benefits we pay at the Insured's death include:
o the Death Benefit described on page 5;
o plus any additional benefits due from riders to this policy;
o plus or minus any adjustment for the last premium;
o minus any loan (and loan interest) on the policy.
We will add interest to the resulting amount for the period from the date of
death to the date of payment. It will be computed at the interest rate we are
then paying under the Deposit Option on page 10.
We will pay these benefits only if premiums have been paid as called for by this
policy. However, even if premiums have been discontinued we may still pay
certain benefits. See Options on Lapse, page 7.
Payment of these benefits may also be affected by other provisions of this
policy. See the Suicide Exclusion, Incontestability, and Age and Sex clauses on
page 8. Special exclusions or limitations (if any) are listed on page 3.
No. 85-11 Page 2
<PAGE>
POLICY INFORMATION
THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985
POLICY OWNER RICHARD ROE DATE OF ISSUE MAR 1, 1985
FACE AMOUNT $100,000 ISSUE AGE, SEX 35 MALE
POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE
************************* BENEFITS AND PREMIUMS TABLE **************************
BENEFITS ANNUAL PREMIUM PREMIUM PERIOD
LIFE INSURANCE - VARIABLE $1369.00 FOR LIFE
THE FIRST PREMIUM IS $1369.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
SUBSEQUENT PREMIUMS ARE DUE ON MAR 01, 1986 AND EVERY 12 MONTHS THEREAFTER
DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE.
**************************** TABLE OF NET ANNUAL PREMIUMS **********************
BEGINNING OF NET ANNUAL
POLICY YEAR PREMIUM
1 $ 910.00
2 AND LATER 1210.00
********************* INVESTMENT ALLOCATION OF NET ANNUAL PREMIUMS *************
INVESTMENT DIVISIONS: COMMON STOCK 50%
MONEY MARKET 50%
****ADMINISTRATIVE OFFICE: EQUITABLE VARIABLE LIFE INSURANCE COMPANY ***********
SPECIMEN REGIONAL SERVICE CENTER
100 SPECIMEN ST.
CITY, STATE 10001
V85-11-3 STANDARD Page 3
<PAGE>
POLICY INFORMATION CONTINUED
THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985
FACE AMOUNT $100,000 DATE OF ISSUE MAR 1, 1985
POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35 MALE
<TABLE>
<CAPTION>
******************************************* TABULAR VALUES ********************************************
TABULAR ACCOUNT VALUES AT ENDS OF POLICY YEARS*
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY ACCOUNT POLICY ACCOUNT POLICY ACCOUNT
YEAR VALUES YEAR VALUES YEAR VALUES
<S> <C> <C> <C> <C> <C>
1 $ 741 9 $10,269 17 $22,017
2 1,812 10 11,613 18 23,642
3 2,919 11 12,990 19 25,294
4 4,059 12 14,404 20 26,970
5 5,234 13 15,854 AGE 60 35,717
6 6,442 14 17,341 AGE 62 39,379
7 7,683 15 18,864 AGE 65 44,956
8 8,959 16 20,424 AGE 70 54,270
</TABLE>
<TABLE>
<CAPTION>
****************************************** TABULAR CASH VALUES ****************************************
THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN
AND IS NOT GUARANTEED AS TO DOLLAR AMOUNT
SEE PAGE 5 FOR CASH VALUE PROVISION
INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR*
INTERIM INTERIM INTERIM
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
MONTH VALUES MONTH VALUES MONTH VALUES
<S> <C> <C> <C> <C> <C>
1 $0 5 $ 9 9 $257
2 0 6 71 10 318
3 0 7 133 11 380
4 0 8 195 12 442
</TABLE>
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
INTERIM INTERIM
END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH
YEAR VALUES YEAR VALUES
1 $ 442 6 $ 5,724
2 1,413 7 6,939
3 2,421 8 8,321
4 3,474 9 9,910
5 4,569 10 11,613
FOR YEARS 11 AND LATER THE TABULAR CASH VALUE IS THE SAME AS THE TABULAR ACCOUNT
VALUE.
*THESE VALUES DO NOT REFLECT LOANS. VALUES NOT SHOWN WILL BE FURNISHED ON
REQUEST.
V85-11-3-A PAGE 3A
<PAGE>
POLICY INFORMATION CONTINUED
TABLE OF NET SINGLE PREMIUMS
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance. Values
shown are applicable on policy anniversaries. The net single premium as of a
date during a policy year shall be determined by interpolation between the
values applicable on the immediately preceding and immediately following
anniversaries.
<TABLE>
<CAPTION>
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
- --------- ------- --------- ------- --------- ------- --------- ------- --------- -------
MALE INSURED
------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.06793 21 $.13298 41 $.26960 61 $.51232 81 $ .78748
2 .06996 22 .13727 42 .27929 62 .52668 82 .79890
3 .07217 23 .14178 43 .28925 63 .54114 83 .80994
4 .07449 24 .14654 44 .29947 64 .55567 84 .82051
5 .07695 25 .15154 45 .30996 65 .57021 85 .83053
6 .07956 26 .15683 46 .32071 66 .58475 86 .84002
7 .08233 27 .16240 47 .33175 67 .59928 87 .84903
8 .08529 28 .16825 48 .34306 68 .61381 88 .85767
9 .08841 29 .17438 49 .35467 69 .62836 89 .86607
10 .09170 30 .18079 50 .36656 70 .64291 90 .87437
11 .09515 31 .18748 51 .37873 71 .65742 91 .88276
12 .09873 32 .19444 52 .39117 72 .67183 92 .89147
13 .10239 33 .20169 53 .40385 73 .68604 93 .90078
14 .10609 34 .20921 54 .41675 74 .69994 94 .91103
15 .10981 35 .21702 55 .42983 75 .71346 95 .92248
16 .11354 36 .22510 56 .44311 76 .72658 96 .93527
17 .11729 37 .23346 57 .45657 77 .73932 97 .94925
18 .12106 38 .24210 58 .47022 78 .75171 98 .96390
19 .12491 39 .25100 59 .48406 79 .76385 99 .97831
20 .12887 40 .26017 60 .49810 80 .77578 100 1.00000
FEMALE INSURED
--------------
1 $.05530 21 $.10974 41 $.22687 61 $.43933 81 $ .74977
2 .05695 22 .11370 42 .23500 62 .45334 82 .76454
3 .05873 23 .11784 43 .24334 63 .46766 83 .77888
4 .06061 24 .12214 44 .25191 64 .48221 84 .79268
5 .06260 25 .12661 45 .26072 65 .49695 85 .80588
6 .06469 26 .13128 46 .26977 66 .51186 86 .81848
7 .06690 27 .13613 47 .27909 67 .52697 87 .83051
8 .06923 28 .14118 48 .28868 68 .54232 88 .84204
9 .07168 29 .14643 49 .29853 69 .55797 89 .85318
10 .07425 30 .15189 50 .30866 70 .57395 90 .86404
11 .07695 31 .15756 51 .31906 71 .59022 91 .87477
12 .07976 32 .16344 52 .32974 72 .60671 92 .88557
13 .08267 33 .16956 53 .34070 73 .62329 93 .89667
14 .08569 34 .17592 54 .35191 74 .63983 94 .90835
15 .08880 35 .18251 55 .36339 75 .65619 95 .92090
16 .09200 36 .18935 56 .37515 76 .67234 96 .93445
17 .09531 37 .19642 57 .38722 77 .68824 97 .94891
18 .09872 38 .20371 58 .39965 78 .70391 98 .96381
19 .10226 39 .21122 59 .41247 79 .71940 99 .97831
20 .10593 40 .21895 60 .42569 80 .73470 100 1.00000
</TABLE>
V85-11-3B Page 3B
<PAGE>
POLICY INFORMATION CONTINUED
DESCRIPTION OF INVESTMENT DIVISIONS
THE ASSETS IN EACH INVESTMENT DIVISION ARE INVESTED IN SHARES OF A DESIGNATED
PORTFOLIO OF AN INVESTMENT COMPANY. EACH PORTFOLIO REPRESENTS A DIFFERENT CLASS
(OR SERIES) OF SHARES ISSUED BY THE HUDSON RIVER FUND, INC.
COMMON STOCK DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE,
PRIMARILY, COMMON STOCKS AND OTHER EQUITY-TYPE INVEST-
MENTS.
MONEY MARKET DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE,
PRIMARILY, SHORT-TERM (NOT TO EXCEED ONE YEAR) MONEY
MARKET INSTRUMENTS, SUCH AS: UNITED STATES (U.S.)
GOVERNMENT AND U.S. GOVERNMENT AGENCY SECURITIES; BANK
MONEY INSTRUMENTS; TIME DEPOSITS; CERTIFICATES OF
DEPOSIT; HIGH GRADE COMMERCIAL PAPER, INCLUDING MASTER
DEMAND NOTES; AND REPURCHASE AGREEMENTS COVERING U.S.
GOVERNMENT OBLIGATIONS AND CERTIFICATES OF DEPOSIT.
INVESTMENT RESULTS WILL REFLECT FLUCTUATIONS IN MARKET VALUES OF SECURITIES.
PLEASE REFER TO THE CURRENT PROSPECTUS FOR THE HUDSON RIVER FUND, INC. FOR A
COMPLETE DESCRIPTION OF THE FUND AND THE DESIGNATED PORTFOLIOS.
V85-11-3C PAGE 3C
<PAGE>
POLICY OWNER AND BENEFICIARY
OWNER. The Owner of this policy is the Insured unless otherwise stated in the
application, or later changed. As Owner, you can exercise all the rights in this
policy while the Insured is living. You do not need the consent of anyone who
has only a conditional or future ownership interest in this policy.
BENEFICIARY. The Beneficiary is as stated in the application, unless later
changed. If two or more persons are named, those surviving the Insured will
share equally unless otherwise stated.
We will pay any benefit for which there is no stated Beneficiary living at the
death of the Insured to the children of the Insured who then survive, in equal
shares. If none survive, we will pay the estate of the Insured.
CHANGES. While the Insured is living, you may change the Owner or Beneficiary by
written notice in a form satisfactory to us. The change will take effect on the
date you sign the notice, except that it will not apply to any payment we make
or other action we take before we receive the notice at our Administrative
Office. If you change the Beneficiary, any previous arrangement you made under
the Payment Options provision on page 10 is cancelled.
ASSIGNMENT. You may assign this policy, but we will not be bound by an
assignment unless it is in writing and we have received it at our Administrative
Office. Your rights and those of any other person referred to in this policy
will be subject to the assignment. We assume no responsibility for the validity
of any assignment.
PREMIUMS
AMOUNTS AND DUE DATES. Page 3 shows the amounts and due dates of premiums and
the period for which they are to be paid. Each premium is payable on or before
its due date at our Administrative Office.
You may write and ask us to change the frequency of premium payment. If we
approve the change, the new premium will be determined on the rate scale for
this policy.
GRACE PERIOD. We allow a grace period of 31 days for payment of each premium,
after the first premium. The insurance will continue during the grace period. If
a premium is paid during the grace period, then all benefits under this policy
will be the same as if such premium had been paid on its due date.
LAPSE. If a premium is not paid by the end of its grace period, the policy will
lapse as of the premium due date. If this occurs, all insurance ends, except as
stated in Options on Lapse on page 7. Additional benefit riders do not continue
beyond the grace period of an unpaid premium.
REINSTATEMENT. You may reinstate this policy within five years after lapse if:
(1) the policy has not been given up for its net cash value; (2) you provide
evidence of insurability satisfactory to us; and (3) you pay the larger of: (a)
all overdue premiums with interest at 6% per year compounded annually; or (b)
110% of the difference between the following Items (i) and (ii). Item (i) is the
excess of the cash value immediately after reinstatement over the cash value
immediately before reinstatement. Item (ii) is any policy loan, and accrued loan
interest, in effect when any option on lapse became effective, with loan
interest to the date of reinstatement. A reinstatement will take effect as of
the date we approve it.
Upon reinstatement this policy will have the same Benefit Base and the same
Variable Adjustment Amount as to each investment division (as these are
determined in the Variable Adjustment Amount provision on page 12) as if default
had not occurred. Also, upon reinstatement this policy will have a loan equal to
the sum of the following Items (i) and (ii). Item (i) is any loan, and accrued
loan interest, in effect at the date any option on lapse became effective, with
loan interest to the date of reinstatement. Item (ii) is any loan arising after
the date any option on lapse became effective, with loan interest to the date of
reinstatement.
PREMIUM ADJUSTMENT. We will add to the insurance benefits any part of the last
premium paid that applies to a period beyond the policy month in which the
Insured dies. If the Insured dies during the grace period of an unpaid premium,
we will deduct from the benefits the part of the overdue premium for one policy
month.
V85-11-4 Page 4
<PAGE>
DEATH BENEFIT
The Death Benefit equals:
o the face amount shown on page 3;
o plus the sum, if positive, of the Variable Adjustment Amounts, for each
investment division in which you have a cash value, for the policy year
in which the Insured dies.
However, the Death Benefit will in no event be less than the amount of Paid-up
Whole Life Insurance that could be bought by the cash value plus the difference
if any between the Tabular Account Value and the Tabular Cash Value at the
Insured's death on the basis of the Table of Net Single Premiums on page 3B.
A description of how the Variable Adjustment Amount for each investment division
is determined is on page 12.
CASH VALUE
You may give up this policy for its net cash value at any time while the Insured
is living. The net cash value is the cash value minus any loan and loan
interest.
We will determine the net cash value on the date we receive your signed request
for it at our Administrative Office. The policy will terminate on the date you
send the policy and the request to us.
CASH VALUE. The cash value of the policy will vary daily with the performance of
the investment divisions in which you have a cash value. See page 13 for a
description of how cash values are determined.
LOANS
You may get a loan on this policy while it has a loan value and it is not being
continued as Fixed Extended Term Insurance under the Options on Lapse on page 7.
This policy will be the sole security for the loan.
The amount of the loan may not be more than the loan value. Except when used to
pay premiums, a loan must be at least $100 more than any existing loan and loan
interest. Any existing loan and loan interest will be deducted from the new
loan. We may also deduct any unpaid premium then due.
A loan, whether you repay it or not, will have a permanent effect on the
Variable Adjustable Amounts, Death Benefit and cash value under this policy. It
will have no effect on the amount of the premiums payable under this policy.
We will allocate loans to the investment divisions based on your net cash value
in each investment division as of the dates the loans are made. We will allocate
loan repayments to the investment divisions based on the amount of your
outstanding loans as to each investment division as of the dates repayments are
made. See page 13 for a description of how the cash value in each investment
division is determined.
LOAN VALUE. The loan value is a percentage of the cash value on the next premium
due date (or the next policy anniversary if this has become a paid-up policy)
assuming that the Actual Net Rate of Return (see page 12) is exactly 4-1/2% a
year from the date of the loan to such due date or anniversary, discounted at
5-1/2% a year from the date of the loan to such due date or anniversary. Such
percentage is: (a) 90% during the first ten policy years while the policy is not
lapsed; and (b) 100% after the tenth policy year, and at any time during the
first ten policy years while the policy is lapsed and is being continued under
the Variable or Fixed Reduced Paid-Up Insurance Option.
LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5-1/2%.
Interest is due on each policy anniversary. If the interest is not paid when
due, it will be added to the loan and bear interest at the loan rate.
When a loan plus loan interest first exceeds the cash value, we will mail to you
and any assignee of record at last known addresses a notice that the policy will
terminate if such excess amount is not repaid within 31 days after we mailed
such notice.
REPAYMENT. You may repay a loan and loan interest in whole or in part at any
time while the Insured is living and this policy is in effect. However, if this
policy has lapsed and you are continuing insurance under one of the Options on
Lapse on page 7, any loan that was deducted in determining the benefit on lapse
may not be repaid unless this policy is reinstated. We will deduct any existing
loan and loan interest from any benefits we pay at the Insured's death.
V85-11-4 Page 5
<PAGE>
THE SEPARATE ACCOUNT
The Separate Account is our Separate Account I (in unit investment trust form).
We established and we maintain it under the laws of New York State. Realized and
unrealized gains and losses from the assets of the Separate Account are credited
or charged against it without regard to our other income, gains, or losses.
Assets are put in the Separate Account to support this policy and other variable
life insurance policies. Assets may be put in the Separate Account for other
purposes, but not to support contracts or policies other than variable life
insurance.
The assets of the Separate Account are our property. The portion of its assets
equal to the reserves and other policy liabilities with respect to the Separate
Account will not be chargeable with liabilities arising out of any other
business we conduct. We may transfer assets of the Separate Account in excess of
such reserves and liabilities to our general account. We may transfer assets of
an investment division in excess of the reserves and other liabilities with
respect to that division to another investment division or to our general
account.
We will value the assets of each investment division on each business day. A
business day is generally any day on which the New York Stock Exchange is open
for trading.
INVESTMENT DIVISIONS. The Separate Account consists of "investment divisions".
Each division may invest its assets in a separate class (or series) of shares of
a designated investment company. Each class represents a separate portfolio in
the investment company. The investment divisions available on the Register Date
are described on page 3C. If we add or remove investment divisions, we will send
you a new Page 3C reflecting this.
We have the right to change designated investment companies. We have the right
to add or remove investment divisions. We have the right to withdraw assets of a
class of policies to which this policy belongs from an investment division and
put them in another investment division. We also have the right to combine any
two or more investment divisions. The term "investment division" in this policy
shall then refer to any other investment division in which the assets of a class
of policies to which this policy belongs were placed. If we make any such change
we will send you a new Page 3C reflecting it.
We have the right to:
1. register or deregister the Separate Account under the Investment Company
Act of 1940;
2. run the Separate Account under the direction of a committee, and to
discharge such committee at any time;
3. restrict or eliminate any voting rights of policyowners, or other
persons who have voting rights as to the Separate Account; and
4. operate the Separate Account by making direct investments or in any
other form. If we do so, we may invest the assets of the Separate
Account in any legal investments. We will rely upon our own and outside
counsel for advice in this regard. Also, unless otherwise required by
law or regulation, the investment advisor or any investment policy may
not be changed without our consent.
CHANGE IN INVESTMENT OBJECTIVE OR POLICY. We will notify you of any material
change in an investment objective or policy of any investment company that is
invested in by an investment division to which net premiums have been allocated
under this policy.
If required by law or regulation, the investment policy of the Separate Account
will not be changed unless approved by the Superintendent of Insurance of New
York State or deemed approved in accordance with such law or regulation. If so
required, the process for getting such approval is filed with the insurance
supervisory official of the jurisdiction in which this policy is delivered.
INVESTMENT OPTIONS
ALLOCATION OF NET ANNUAL PREMIUMS. If premiums are duly paid, we will allocate
to each investment division at the beginning of each policy year a percentage of
the Net Annual Premium shown on page 3 for that year. Such allocations will be
based on the allocation percentages then in effect. The allocation percentages
for the first policy year are as designated in the application for this policy.
Unless you change them, such percentages shall also apply in later years.
V85-11-6 Page 6
<PAGE>
INVESTMENT OPTIONS CONTINUED
You may change the allocation percentages for policy years after the first by
notifying us in writing of the new percentages. Each allocation percentage
greater than zero must be a whole number of not more than 100%. The sum of the
percentages must equal 100%. A change will take effect on the next policy
anniversary if we receive the notice at our Administrative Office at least 7
days before such anniversary.
TRANSFER OF BENEFIT BASE. You may ask us to transfer all or part of your Benefit
Base (defined on page 12) in one investment division to another. Only two such
transfers may be made in a policy year. We will make the transfer as of the date
we receive your written request for it at our Administrative Office.
OPTIONS ON LAPSE
You have a number of options if the policy lapses. You may apply for
reinstatement. If there is a net cash value, you may withdraw it and give up the
policy. Or, you may continue insurance under one of the following options:
FIXED REDUCED PAID-UP INSURANCE. This is fixed benefit insurance for the
Insured's lifetime and for the amount that the net cash value will buy.
VARIABLE REDUCED PAID-UP INSURANCE. This is variable benefit insurance for the
Insured's lifetime that you may choose if the net cash value is at least $5,000.
The amount of insurance for the policy year in which lapse occurs (the Variable
Reduced Paid-Up Face Amount) is the amount that the net cash value will buy on
the basis of the Table of Net Single Premiums on page 3B. Thereafter, the amount
of insurance equals the amount for the policy year in which lapse occurs plus or
minus the sum of the Variable Adjustment Amounts (whether positive or negative)
for each investment division under this policy in which you have a cash value,
for the policy year in which the Insured dies. However, the amount of insurance
will in no event be less than the amount of Paid-up Whole Life Insurance that
could be bought on the basis of the Table of Net Single Premiums on page 3B by
the cash value at the Insured's death.
FIXED EXTENDED TERM INSURANCE. This is fixed benefit term insurance for an
amount equal to the Death Benefit on the date of lapse, minus any unpaid loan
and loan interest. The insurance will continue from the date of lapse for as
long a term period as the net cash value will buy. In no event, however, will
this period be less than 90 days if premiums have been paid for at least three
months before lapse and there is no loan on this policy. This option is not
available if so stated on page 3.
An Option on Lapse will become effective on the date your written request for it
is received at our Administrative Office. If your request is not received within
three months after the date of lapse, Fixed Extended Term Insurance will become
effective automatically at the end of such three month period. Fixed Reduced
Paid-Up Insurance will apply instead if the Fixed Extended Term Insurance option
is not available.
If the Insured dies after the grace period but within three months after the
date of lapse and before an Option on Lapse becomes effective, the greater of
the benefit under Fixed Reduced Paid-Up or Fixed Extended Term Insurance will
apply. In this case, any restriction on page 3 as to the availability of Fixed
Extended Term Insurance will not apply.
We will determine the amounts of these options as of the date the option becomes
effective. We will use net cash values as of the date the option becomes
effective. A term period will begin as of the date of lapse (the due date of the
unpaid premium). We will use net single premiums for the Insured's age as of the
date of lapse. We will deduct any unpaid loan and loan interest from any
benefits we pay at the Insured's death if a loan is made while the policy is
being continued as Variable or Fixed Reduced Paid-Up Insurance.
V85-11-6 Page 7
<PAGE>
EXCHANGE OF POLICY
You may exchange this policy for a policy of permanent fixed benefit insurance
on the life of the Insured. You may make such an exchange within 24 months after
the Date of Issue shown on page 3. We will not require evidence of insurability.
We will require:
1. That this policy be in effect on the date of exchange with all premiums due
having been paid; and
2. Repayment of any loan and loan interest on this policy.
The date of exchange will be the later of: (a) the date you send us this policy
and the signed request on our form for such exchange; or (b) the date we receive
at our Administrative Office any sum due to be paid for such exchange.
THE NEW POLICY. The new policy will be our Adjustable Life Plan, and will be on
a level premium whole life plan (with premiums payable for life), subject to our
rules in effect on the date of exchange. It will have an insurance amount equal
to the face amount of this policy. The new policy will have the same Register
Date, Date of Issue, and Issue Age as this policy. Premiums for the new policy
will be based on our rates in effect on its Register Date for the same class of
risk as under this policy. Any additional benefit riders in this policy will be
included in the new policy only if we were offering them with the new policy as
of its Date of Issue.
Upon request you will be told the amount of the first premium for the new
policy, and of any extra sum required or allowance to be made for a premium,
cash value or policy account adjustment that takes appropriate account of the
premiums, cash and policy account values under this policy and under the new
policy. A detailed statement of the method of computing such an adjustment has
been filed, if required, with the insurance supervisory official of the
jurisdiction in which this policy is delivered.
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
required premiums. This policy and the application (a copy of which is attached
at issue) constitute the entire contract. The rights conferred by this policy
are in addition to those provided by applicable Federal and State laws and
regulations.
The contract may not be modified, nor may any of our rights or requirements be
waived, except in writing signed by our President, one of our Vice Presidents,
or by our Secretary or Treasurer.
INCONTESTABILITY. All statements made in the application are representations and
not warranties. We have the right to contest the validity of this policy based
on material misstatements made in the application. However, this policy will
become incontestable after it has been in effect during the lifetime of the
Insured for two years from the Date of Issue shown on page 3.
No statement shall be used to contest a claim unless contained in the
application.
See any additional benefit riders for modifications of this provision that apply
to them.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be those that the premium paid would have purchased at the correct age and sex.
SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within
two years after the Date of Issue shown on page 3, our liability will be limited
to the payment of a single sum equal to the premiums paid, minus any loan and
loan interest.
POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, policy
anniversaries and premium periods are measured from the Register Date. Each
policy month begins on the same day in each calendar month as in the Register
Date. If the end of a premium period or policy year is indicated by an age, it
ends on the policy anniversary nearest the birthday on which the Insured reaches
that age.
POLICY CHANGES. You may change this policy to another plan of insurance or add
additional benefit riders or make other changes, subject to our rules at the
time of change.
V85-11-8 PAGE 8
<PAGE>
GENERAL PROVISIONS CONTINUED
REPORTS. Each policy year after the first we will give you a report showing the
Death Benefit and the cash value as of the first day of such year. The amount of
any existing loan and the accrued loan interest for the previous policy year
will also be shown. No such reports will be given while this policy is lapsed
except when it is being continued as Variable Reduced Paid-Up Insurance. We will
also give you such other reports as may be required by law.
BASIS OF COMPUTATION. Cash values, reserves and net single premiums are based on
the Commissioners 1980 Standard Ordinary Mortality Table. For any extended term
insurance, they are based instead on the Commissioners 1980 Extended Term
Insurance Table. Continuous functions are used with interest compounded annually
at 4-1/2%.
The cash values and paid-up insurance benefits are equal to or more than those
required by law. If so required, we have filed a detailed statement of the
method of computing values and benefits with the insurance supervisory official
of the jurisdiction in which this policy is delivered. The tabular cash value at
the end of each policy year after the tenth policy year equals the reserve.
Reserves referred to in this policy are not less than reserves determined
according to the Commissioners Reserve Valuation Method. Our expense and
mortality results will not adversely affect the dollar amount of insurance
benefits or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. As long as this policy is not
being continued under one of the fixed benefit Options on Lapse, we will make
payments under this policy as follows:
o A cash value will be paid within 7 days after we receive your policy and
request at our Administrative Office;
o A loan will be paid within 7 days after we receive your request at our
Administrative Office; and
o The insurance benefits will be paid within 7 days after we receive at
our Administrative Office proof of the Insured's death and all other
requirements deemed necessary before such payment may be made.
We may not be able to determine the value of the assets of the investment
divisions if: (1) the New York Stock Exchange is closed; (2) the Securities and
Exchange Commission requires trading to be restricted or declares an emergency;
or (3) the Securities and Exchange Commission by order permits us to defer
payments for the protection of our policy Owners. During such times we may
defer:
1. Determination and payment of cash values;
2. Payment of loans;
3. Determination of a change in a Variable Adjustment Amount, and payment
of any portion of the Death Benefit equal to the Variable Adjustment
Amount;
4. Any requested transfer of Benefit Base;
5. Use of insurance benefits under the Payment Options; and
6. Determination and payment of any Variable Reduced Paid-Up Insurance.
DEFERMENT UNDER OPTIONS ON LAPSE. We may defer payment of a cash value and the
making of a loan for up to six months after we receive a request at our
Administrative Office if this policy is being continued under one of the fixed
benefit Options on Lapse. We will allow interest, at a rate of at least 3% a
year, on any cash value payment we defer for 30 days or more.
V85-11-8 PAGE 9
<PAGE>
PAYMENT OPTIONS
Payments under these options will not be affected by the investment experience
of any investment division after proceeds are applied under such options.
Instead of having the insurance benefits or net cash value paid immediately in
one sum, you can choose another form of payment for all or part of them. If you
do not arrange for this before the Insured dies, the Beneficiary will have this
right when the Insured dies. Arrangements you make, however, cannot be changed
by the Beneficiary after the Insured's death. The options are:
1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with
interest paid at the end of each month, each 3 months, each 6 months or
each 12 months, as chosen.
2. INSTALMENT OPTIONS:
A. FIXED PERIOD: Paid in equal instalments for a specified number of
years (not more than 30). The instalments will not be less than those
shown in the Table of Guaranteed Payments on page 11.
B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the
amount applied, together with interest on the unpaid balance, is used
up.
3. LIFE INCOME OPTIONS:
Paid as a monthly income for life in an amount we determine but not
less than shown in the Table of Guaranteed Payments on page 11. We
guarantee payments for life and in any event for 10 years, 20 years,
or until the payments we make equal the amount applied (called "refund
certain"), according to the "certain" period chosen.
4. OTHER: We will apply the sum under any other option requested that we make
available at the time of the Insured's death or net cash value withdrawal.
We guarantee interest under Option 1 at the rate of 3% a year and under Option 2
at 3-1/2% a year, or such higher rates as we may determine. We may allow excess
interest under Options 1 and 2.
The payee under an option may name and change a successor payee for any amount
we would otherwise pay the payee's estate.
Any arrangements involving more than one of the options, or a payee who is not a
natural person (for example, a corporation) or who is a fiduciary, must have our
approval. Also, details of all arrangements will be subject to our rules at the
time the arrangement takes effect. These include rules on: the minimum amount we
will apply under an option and minimum amounts for instalment payments;
withdrawal or commutation rights; naming payees and successor payees; and
proving age and survival.
Choices (or any later changes) under these options will be made and will take
effect in the same way as a change of Beneficiary. Amounts applied under these
options will not be subject to the claims of creditors or to legal process, to
the extent permitted by law.
V85-11-10 Page 10
<PAGE>
TABLE OF GUARANTEED PAYMENTS
(MINIMUM AMOUNT FOR EACH $1,000 APPLIED)
OPTION 2A
FIXED PERIOD INSTALMENTS
------------------------
Number
of Years' Monthly Annual
Instalments Instalment Instalment
----------- ---------- ----------
1 $84.70 $1000.00
2 43.08 508.60
3 29.21 344.86
4 22.28 263.04
5 18.12 213.99
6 15.36 181.32
7 13.38 158.01
8 11.91 140.56
9 10.76 127.00
10 9.84 116.18
11 9.09 107.34
12 8.47 99.98
13 7.94 93.78
14 7.49 88.47
15 7.11 83.89
16 6.77 79.89
17 6.47 76.37
18 6.20 73.25
19 5.97 70.47
20 5.76 67.98
21 5.57 65.74
22 5.40 63.70
23 5.24 61.85
24 5.10 60.17
25 4.97 58.62
26 4.84 57.20
27 4.73 55.90
28 4.63 54.69
29 4.54 53.57
30 4.45 52.53
If instalments are paid each 3 months, they will be 25.32% of the annual
instalments. If they are paid each 6 months, they will be 50.43% of the annual
instalments.
<TABLE>
<CAPTION>
OPTION 3
MONTHLY LIFE INCOME
-------------------
10 Years Certain 20 Years Certain Refund Certain
---------------------- ----------------------- ----------------------
AGE Male Female Male Female Male Female
--- ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
50 $4.50 $3.96 $4.27 $3.89 $ 4.28 $3.87
51 4.58 4.02 4.32 3.94 4.35 3.93
52 4.67 4.09 4.38 4.00 4.42 3.99
53 4.75 4.16 4.44 4.06 4.50 4.05
54 4.85 4.24 4.50 4.12 4.58 4.11
55 4.94 4.32 4.56 4.18 4.66 4.18
56 5.04 4.40 4.62 4.24 4.74 4.25
57 5.15 4.49 4.68 4.31 4.83 4.33
58 5.26 4.58 4.74 4.38 4.93 4.41
59 5.37 4.68 4.81 4.45 5.03 4.49
60 5.49 4.78 4.86 4.52 5.13 4.58
61 5.62 4.89 4.92 4.59 5.24 4.67
62 5.75 5.00 4.98 4.66 5.35 4.77
63 5.88 5.12 5.04 4.73 5.48 4.88
64 6.03 5.25 5.09 4.80 5.60 4.99
65 6.17 5.39 5.14 4.88 5.74 5.10
66 6.32 5.53 5.19 4.95 5.88 5.22
67 6.48 5.68 5.24 5.01 6.03 5.35
68 6.64 5.83 5.28 5.08 6.18 5.49
69 6.80 6.00 5.32 5.14 6.35 5.64
70 6.97 6.17 5.35 5.20 6.53 5.79
71 7.15 6.34 5.38 5.26 6.71 5.96
72 7.32 6.53 5.41 5.30 6.91 6.13
73 7.50 6.72 5.43 5.35 7.12 6.32
74 7.67 6.92 5.45 5.38 7.34 6.52
75 7.85 7.12 5.47 5.42 7.58 6.73
76 8.02 7.32 5.48 5.44 7.82 6.96
77 8.19 7.53 5.49 5.46 8.09 7.21
78 8.36 7.75 5.50 5.48 8.38 7.47
79 8.52 7.96 5.50 5.49 8.67 7.75
80 8.67 8.16 5.51 5.50 9.00 8.05
81 8.81 8.36 5.51 5.51 9.34 8.39
82 8.94 8.55 5.51 5.51 9.70 8.73
83 9.06 8.73 5.51 5.51 10.10 9.12
84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
</TABLE>
Amounts for Monthly Life Income are based on age nearest birthday when income
starts. Amounts for ages not shown will be furnished on request.
V85-11-10 PAGE 11
<PAGE>
BASIS OF VALUES
ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each investment division, the Actual
NRR for a policy year reflects the division's:
o dividends received from the investment company;
o plus realized and unrealized capital gains of the division's investment
in the investment company;
o minus realized and unrealized capital losses of the division's
investment in the investment company;
o minus any charges for taxes or amounts set aside as a reserve for taxes;
o minus a charge not exceeding .50% per year for mortality and expense
risks.
The Actual NRR for each investment division will be increased to the extent that
expenses of the investment division exceed the charges for securities brokers'
commissions, transfer taxes, and other fees relating to securities transactions
and a charge for investment management expenses of .25% per year.
The Actual NRR for a period less than a year will be calculated in a consistent
manner.
BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4-1/2% per year. (It is a
pro-rata part of 4-1/2% for periods of less than a year.)
If the Actual NRR for all investment divisions always equals the Base NRR, then:
o the Death Benefit will always equal the Face Amount; and
o the cash value at the end of each policy year will equal the tabular
cash value shown on page 3A.
VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of
insurance in effect for that policy year due to investment performance in past
years. On each policy anniversary we will determine a new VAA for the next
policy year. We will do this independently for each investment division, taking
into account the Actual NRR for the last policy year.
The VAA for each investment division is zero for the first policy year and, if
the policy lapses and the Variable Reduced Paid-Up Insurance option takes
effect, for the remainder of the policy year in which lapse occurs. For other
policy years, the VAA for each investment division will equal the VAA for that
account for the last policy year, plus the VAA Change Amount for that division.
A VAA does not change during a policy year.
VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount
for each investment division may be positive or negative. It will equal the
product of the following Items (1) and (2), divided by Item (3).
(1) The Actual NRR for the investment division minus the Base NRR for that
policy year, or for the part of the policy year since lapse during which
the Variable Reduced Paid-Up Insurance option takes effect.
(2) The Benefit Base for the investment division as of the last policy
anniversary. (For the policy year immediately following a lapse of the
policy where the Variable Reduced Paid-Up Insurance option is in effect,
use instead the net cash value as of the date of lapse.)
(3) The Net Single Premium per $1.00 of VAA for the current policy
anniversary as shown on page 3B.
BENEFIT BASE. For each investment division, the Benefit Base on the Register
Date is the product of the following Items (1) and (2):
(1) The Allocation Percentage designated in the application for this policy.
(2) The Net Annual Premium for the first policy year.
If the policy has not lapsed, on policy anniversaries the Benefit Base for an
investment division is the sum of the following Items (1) and (2), minus item
(3):
(1) The allocation percentage for that anniversary, multiplied by the sum of
the following Items (a) and (b):
(a) The Tabular Account Value on that anniversary.
(b) The Net Annual Premium for that anniversary.
V85-11-12 Page 12
<PAGE>
BASIS OF VALUES CONTINUED
(2) The Net Single Premium for the VAA for that investment division on that
anniversary.
(3) Any outstanding loan, plus loan interest, for the investment division as
of that policy anniversary.
If the policy has lapsed and the Variable Reduced Paid-Up Insurance option has
taken effect, on policy anniversaries the Benefit Base for an investment
division is the following Item (1) minus Item (2):
(1) The cash value in the investment division on that policy anniversary.
(2) Any outstanding loan, plus loan interest, for the investment division as
of that policy anniversary.
The Net Annual Premiums, Tabular Account Values and Net Single Premiums are
shown on pages 3, 3A and 3B, respectively.
For each investment division, the VAA Change Amount will also reflect the effect
of:
1. All new policy loans and repayments during the previous policy year; and
2. All transfers of Benefit Base to or from that investment division during
the previous policy year.
In addition, if you have changed the allocation percentages, we will reallocate
the VAA's among the investment divisions.
CALCULATION OF CASH VALUES. The cash value of this policy on any date is the sum
of your cash values in each investment division on that date. Your cash value in
each investment division on any date is determined as follows:
(1) While the policy is not lapsed, the sum of the immediately following Items
(a), (c) and (d).
(2) More than three months after the policy has lapsed and while it is being
continued under the Variable Reduced Paid-Up Insurance option, the sum of
the immediately following Items (b), (c) and (d).
(a) The tabular cash value on that date, multiplied by the allocation percentage
for that investment division in effect on the last policy anniversary.
(b) The product of the following Items (i) and (ii):
(i) The product of the Net Single Premium on that date per $1.00 of
Paid-Up Whole Life Insurance as shown on page 3B, and the Variable
Reduced Paid-Up Face Amount defined on page 7.
(ii) The following amount immediately before the date on which the cash
value is being determined: The cash value in that investment division,
divided by the total cash value in this policy.
(c) The Net Single Premium on that date for the current VAA for that investment
division.
(d) If the date is not a policy anniversary, the product of the following Items
(i) and (ii):
(i) The Actual NRR for the investment division minus the Base NRR for the
time elapsed since the last policy anniversary.
(ii) The Benefit Base for the investment division on the last policy
anniversary.
If a premium is due and unpaid, then within three months after the due date your
cash value in each investment division is the sum of the following Items (1) and
(2):
(1) Your cash value in that investment division as of the due date of the
unpaid premium.
(2) The product of the following Items (a) and (b):
(a) The Actual NRR for the investment division minus the Base NRR for
the time elapsed since such due date.
(b) The cash value in that investment division on such due date.
For each investment division, the cash value will also reflect the effect of:
1. All new policy loans and repayments since the last policy anniversary;
and
2. All transfers of Benefit Base to or from that investment division since
the last policy anniversary.
V85-11-12 Page 13
<PAGE>
BASIS OF VALUES CONTINUED
More than three months after the due date of an unpaid premium, if you continue
the policy under one of the fixed benefit Options on Lapse, your cash value will
equal the reserve for the policy. In such case, the cash value within 30 days
after a policy anniversary will never be less than the cash value on that
anniversary.
If you transfer all of the Benefit Base in an investment division to another
investment division or if you have a policy loan allocated to an investment
division and your Benefit Base in that investment division is zero, we will
cancel the VAA and any policy loan as to such investment division and reallocate
them to each other investment division proportionately. Also, the premium
allocation percentage for such investment division will be reduced to zero and
the percentage for each other investment division will be increased
proportionately.
TABULAR CASH AND ACCOUNT VALUES (TCV AND TAV). The tables on page 3A show
interim TCV's at the end of each month in the first policy year, and TCV's at
the end of policy years. We will determine the TCV and TAV on other dates in a
consistent manner with allowance for time elapsed and premiums paid. Any TCV's
and TAV's not shown will be furnished on request.
V85-11-14 Page 14
<PAGE>
- --------------------------------------------------------------------------------
PART 1 OF AN APPLICATION FOR INDIVIDUAL VARIABLE LIFE INSURANCE TO |_|JUV.
EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) |_|OPAI
- --------------------------------------------------------------------------------
1. PROPOSED INSURED
a. Print name as it is to appear on policy.
_______RICHARD___________________________ROE____________________________________
First Middle Initial Last
b. |X| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title___________
c. List all current occupations -- Give Titles(s) and Duties
_____________CORPORATE ATTORNEY_________________________________________________
________________________________________________________________________________
d. Date of Birth: Mo.__3__ Day__1__ Yr. 19__50__
e. Age Nearest Birthday: ___35___
f. Place of Birth: State of ___NEW YORK___
g. Residence: State of ___NEW YORK___
h. |X| Male |_| Female
2. PLAN INITIAL FACE AMOUNT
____VARIABLE WHOLE LIFE________________________________________ $__100,000_____
If Flexible Prem., will the Death Benefit include the value of the Account?
|_| No (Option A) |_| Yes (Option B)
INVESTMENT DIVISION ALLOCATION (WHOLE NUMBERS ONLY)
Common Stock __50%__ _________________ ______________%
Money Market __50___ _________________ ______________
____________ _______ _________________ ______________
____________ _______ _________________ ______________
____________ _______ _________________ ______________
____________ _______ _________________ ______________
100%
3. OPTIONAL BENEFITS
|_| Accidental Death Benefit* (Specify Amount): $____________
|_| Option to Purchase Add'l Ins. (Issue ages to 37 only): $____________
|_| Disability Premium Waiver* |_| Disability Benefit-Flexible Prem. Pol.*
|_| Waive Cost of Insurance
|_| Credit $ _______ per _________________
Term Riders:
Decreasing Term Per Month
|_| Family Income: ______Years $____________
|_| Mortgage Prot.: ______Years Initial Amt.: $____________
Renewable Term Yearly 10 Yr.
|_| On Insured: |_| |_| $____________
|_| On Add'l. Insured (See page 2): |_| |_| $____________
|_| Increasing Term
|_| Children's Term (See page 2): $__________Units______________
*If Proposed Insured is a Child (Issue Age 0-14) see Limitations on p.2.
4. BENEFICIARY FOR INSURANCE ON PROPOSED INSURED. Include FULL
NAME and RELATIONSHIP to Proposed Insured.
__________________________MARGARET H. ROE, WIFE_____________________________
____________________________________________________________________________
Unless otherwise requested, the contingent beneficiary will be the surviving
children of the Insured, in equal shares. If none survive, payment will be
made to the Insured's estate.
THE BENEFICIARY UNDER ANY TERM INSURANCE RIDER on an Additional Insured or
on a Child will be as stated in those riders, unless otherwise designated in
Special Instructions.
5. OWNER Owner's Soc. Sec. or Tax No. |0|0|0|0|0|0|0|0|0| |
The Owner is |X| Proposed Insured |_| Applicant for Child (See 10.c.)
|_| Other (Give Full Name):
____________________________________________________________________________
If "Other," complete the following:
|_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title________________
Relationship to Insured_____________________________________________________
Specify a successor Owner if desired
____________________________________________________________________________
If the Proposed Insured or the Applicant for a Child is not the Owner and if
all persons designated die before the Insured, the Owner will be the estate
of the last of such persons to die except where the Insured is a Child (see
Note in 10.c.).
6. MAILING ADDRESS |_| Business (Give Full Name) |x| Residence
|1|0|0|_|S|P|E|C|M|E|N|_|S|T|R|E|E|T|_|_|_|_|_|1|F|_|_|_|
No. Street Apt.
|N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
City
|N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|1|0|0|0|1|
State Zip
7. PREMIUM PAYMENT PLAN
Check mode, and if Flexible Premium complete the following:
Initial Prem. Payment $ _________________________________
Planned Periodic Prems. $ _______________________________
|_| Do not send premium reminder notices
|x| Annual |_| Semi-Annual |_|Quarterly
|_| Monthly |_| System-Matic (Attach S-M Form)
|_| Single
|_| Military Allotment: Branch __________________________
Register Date_____________________
|_| Salary Allotment: Register Date_____________________
Unit Name______________________________________________
Unit/Sub-Unit No. if established:
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Divisible by |_| 2 |_| 4 Payroll No.________________
|_| Hold Premium $______________________
8. SUITABILITY
a. Have you the Proposed Insured and the Purchaser if other than the
Proposed Insured received: (i) a Prospectus for the policy applied for?
|X| Yes |_| No
Date of Prospectus ______SPECIMEN____________________________
Date of any supplement ______SPECIMEN________________________
(ii) a Prospectus for The Hudson River Fund, Inc.
|X| Yes |_| No
Date of Prospectus ______SPECIMEN____________________________
Date of any supplement ______SPECIMEN________________________
b. Do you understand that, under the policy applied for (exclusive of any
optional benefits), the amount of the death benefit and the cash
surender value may increase or decrease depending upon investment
experience (if the policy has a guaranteed minimum death benefit or
cash surrender value it is only the amount above such minimum that may
increase or decrease)? |X| Yes |_| No
c. With this in mind, is the policy in accord with your insurance
objectives and your anticipated financial needs? |X| Yes |_| No
9. SPECIAL INSTRUCTIONS
a. |_| Preliminary Term (PT) period of ________ days
ending _______________ . PT Premium $_______
Mo. Day Yr.
b. |_| Date to save insurance age: _____________
c. |_| Check here to request an adjustable policy loan interest rate
(if available) instead of a fixed rate.
d. Other:
_________________________________________
_________________________________________
_________________________________________
_________________________________________
_________________________________________
- --------------------------------------------------------------------------------
NOTE: UPON REQUEST, WE WILL FURNISH ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH
BENEFITS AND CASH VALUES, FOR (A) THE VARIABLE LIFE INSURANCE POLICY APPLIED FOR
AND (B) A FIXED BENEFIT LIFE INSURANCE POLICY FOR THE SAME PREMIUM.
- --------------------------------------------------------------------------------
EV4-200Q 1
<PAGE>
10. COMPLETE IF PROPOSED INSURED IS A CHILD (ISSUE AGES 0-14).
a. Will there be more life insurance in effect on the Child
than on any older child in the family? |_| Yes |_| No
If yes, explain: ___________________________________________
_____________________________________________________________
b. APPLICANT-COMPLETE IF OTHER THAN THE CHILD.
i. _________________________________________________________
First Name Middle Initial Last Name
ii. |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______
iii. Date of Birth___________________________________19____
Month Day Year
iv. |_| Male |_| Female
v. Relationship to Child:___________________________________
vi. Total Life Insurance now in effect: $ _________________
c. OWNER. If the Applicant is to be the Owner, after the
Applicant's death the Child will be the Owner unless
otherwise designated in Special Instructions (in any such
designation include Owner's FULL NAME, RELATIONSHIP to
Child, and Social Security or Tax Number).
NOTE: Consider designating an adult secondary Owner to
reduce the chance of a minor Child becoming the Owner. If
all persons designated die before the Child, the Owner will
be the Child.
d. OPTIONAL BENEFIT ON APPLICANT.
|_| Supplemental Protective Benefit. Give Applicant's:
i. Age Nearest ii. Place of
Birthday ______________ Birth_____________
State
iii. Height______Ft.____In. Weight______lbs.
iv. Occupations-Give Title(s) and Duties:_________________________________
________________________________________________________________________
ALSO ANSWER QUESTIONS ON PAGE 3 AS TO APPLICANT.
e. LIMITATIONS ON CHILD'S ADB AND DPW BENEFITS. If the Accidental Death Benefit
is applied for on the Child, the benefit is payable only if the Child dies
after the Child's first birthday.
If the Disability Premium Waiver Benefit is applied for on the Child, the
benefit is effective only if the Child becomes totally disabled on or after
the Child's 5th birthday.
- --------------------------------------------------------------------------------
11. COMPLETE FOR CHILDREN'S TERM RIDER.
Give Names of Children below and answer the Questions on page 3 as to each
Child.
CHILDREN PROPOSED FOR INSURANCE:
NOTE: To be eligible, children (including stepchildren and legally adopted
children) must not yet have reached their 18th birthday. Coverage
does not begin until a child is 15 days old. DATE OF BIRTH
First Name Middle Initial Last Name |SEX| MO.| DAY| YR.
- --------------------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
12. COMPLETE FOR RENEWABLE TERM RIDER ON ADDITIONAL INSURED.
Complete below and answer the Questions on page 3 as to the Additional Insured.
PROPOSED ADDITIONAL INSURED
a. Print name as it is to appear on the Policy.
________________________________________________________________________________
First Middle Initial Last
b. List all current occupations -- Give Title(s) and Duties.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
c. Date of Birth: Mo.__________ Day________ Yr. 19____
d. Age Nearest Birthday _______________________________
e. Place of Birth: State of __________________________
f. Residence: State of________________________________
g. |_| Male |_| Female
h. Owner's Relationship to Additional Insured:_________________________________
________________________________________________________________________________
- --------------------------------------------------------------------------------
13. COMPLETE IF USING EXISTING OPTION TO PURCHASE INSURANCE.
i. Existing Individual Policy No. _________________________
ii. Option Date_______ iii. Option Amount: $______________
iv. |_| Regular Option or
|_| Option on Birth or Adoption of Child
Child's Name _______________________________________
Date of Birth or Adoption___________________________
v. If applying for Disability Premium Waiver, is Proposed Insured now
totally disabled as defined in the Disability Premium Waiver
provision of the above policy? |_| Yes |_| No
This application is made under a provision in the policy indicated above
permitting the purchase of individual life insurance (the "Option Provision").
If this application is made within the time allowed and in accordance with the
other terms in the Option Provision, including timely payment of the full first
premium for the option insurance, then the option insurance shall take effect
upon the terms of the policy EVLICO would issue. Otherwise, the option insurance
shall not take effect.
Answer the Questions on page 3 only if evidence of insurability is required in
connection with an optional benefit or any excess of the insurance amount
applied for over the insurance amount permitted by the Option Provision (the
option insurance).
EV4-200Q 2
<PAGE>
OTHER INFORMATION -- HAS ANY PERSON PROPOSED FOR INSURANCE:
14.a. Ever had a driver's license suspended or revoked or, within the last three
years, been convicted of two or more moving violations or driving under the
influence of alcohol or drugs? (Give full details -- including dates, types of
violation, and reason for license suspension or revocation.) |_| Yes |X| No
b. Any plan to travel or reside outside the U.S.? (Give full details.)
|_| Yes |X| No
c. Any other life insurance now in effect or application now pending? (State
companies and amounts.) |_| Yes |X| No
d. Smoked cigarettes within the last 12 months? |_| Yes |X| No
15.a. Within the last year flown other than as a passenger or plan to do so?
|_| Yes |X| No
If yes: Total flying time at present________________ Hours;
Last 12 mos.________Hours; Next 12 mos._________Est. Hours.
(Complete Aviation Supplement for pilot instruction; competitive, test,
stunt or military flying; or crop dusting.)
b. Engaged within the last year, or any plan to engage in motor racing on land
or water, underwater diving, sky diving, ballooning, hang-gliding or
parachuting? (If yes, complete Avocation Supplement.) |_| Yes |X| No
c. Ever had an application for life or health insurance declined, that required
an extra premium or was otherwise modified? (Give full details.) |_| Yes |X| No
d. Replaced or changed any existing insurance or annuity (or any plan to do so)
assuming the insurance applied for will be issued? (State companies, plans and
amounts.) |_| Yes |X| No
ANSWER QUESTIONS 16, 17 AND 18 ONLY IF NON-MEDICAL.
16. Proposed Insured:__________Height___6____Ft.____1____In. Weight__185__lbs.
Additional Insured:________Height________Ft._________In. Weight_______lbs.
HAS ANY PERSON PROPOSED FOR INSURANCE:
17.a. Ever been treated for or had any indication of heart trouble, stroke, high
blood pressure, chest pain, diabetes, tumor or cancer? (Give full details.)
|_| Yes |X| No
b. In the last 5 years, consulted a physician, or been examined or treated at a
hospital or other medical facility? (Include medical check-ups in the last 2
years. Do not include colds, minor virus infections, minor injuries, or normal
pregnancy.) (Give full details.) |_| Yes |X| No
18.a. In the last ten years used barbiturates, amphetamines, hallucinatory drugs
or narcotics? (Give full details.) |_| Yes |X| No
b. In the last ten years received counseling or treatment for the use of alcohol
or drugs? (Give full details.) |_| Yes |X| No
19. DETAILS. For each yes answer give Question number, name of person(s)
affected and full details. For 17 and 18 also include conditions, dates,
durations, treatment and results, and names and addresses of physicians and
medical facilities.
No. Name of Person Affected Details
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
20. COMPLETE IF FIRST PREMIUM IS PAID BEFORE THE POLICY IS DELIVERED:
Have the undersigned read and do they agree to the conditions of EVLICO's
Temporary Insurance Agreement, including (i) the requirement that all of the
conditions in that Agreement must be met before any insurance takes effect, and
(ii) the $250,000 insurance amount limitation? |_| YES |_| NO (If "No," a
premium may not be paid before the policy is delivered.)
AMOUNT PAID: $___________. (Draw checks to order of EVLICO.)
AGREEMENT. Each signer of this application agrees that:
(1) The statements and answers in all parts of this application are true and
complete to the best of my knowledge and belief. EVLICO may rely on them in
acting on this application.
(2) EVLICO's Temporary Insurance Agreement states the conditions that must be
met before any insurance takes effect, if the full first premium for the
policy applied for is paid before the policy is delivered.
(3) EXCEPT AS STATED IN THE TEMPORARY INSURANCE AGREEMENT, NO INSURANCE SHALL
TAKE EFFECT ON THIS APPLICATION: (A) UNTIL A POLICY IS DELIVERED AND THE
FULL FIRST PREMIUM FOR IT IS PAID WHILE THE PROPOSED INSURED IS LIVING; (B)
BEFORE ANY REGISTER DATE SPECIFIED IN THIS APPLICATION; AND (C) UNLESS TO
THE BEST OF MY KNOWLEDGE AND BELIEF THE STATEMENTS AND ANSWERS IN ALL PARTS
OF THIS APPLICATION CONTINUE TO BE TRUE AND COMPLETE, WITHOUT MATERIAL
CHANGE, AS OF THE TIME SUCH PREMIUM IS PAID.
(4) No agent or medical examiner has authority to modify this Agreement or the
Temporary Insurance Agreement, nor to waive any of EVLICO's rights or
requirements. EVLICO shall not be bound by any information unless it is
stated in application Part 1, 1A or 2.
- --------------------------------------------------------------------------------
Signature of Agent________/s/ John Q. Agent_____________________________________
IT IS UNDERSTOOD THAT UNDER THE POLICY APPLIED FOR (EXCLUSIVE OF ANY OPTIONAL
BENEFITS) THE AMOUNT OF THE DEATH BENEFIT AND THE CASH SURRENDER VALUE MAY
INCREASE OR DECREASE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT
AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT (IF THE POLICY HAS A GUARANTEED
MINIMUM DEATH BENEFIT OR CASH SURRENDER VALUE IT IS ONLY THE AMOUNT ABOVE SUCH
MINIMUM THAT MAY INCREASE OR DECREASE).
Dated at __NEW YORK_____NY__________________on___3/1_____19__85__
City State
(X)___/s/ Richard Roe___________________________________________________________
Signature of Proposed Insured or of Applicant if Proposed Insured is a Child,
Issue Age 0-14.
________________________________________________________________________________
Signature of Additional Insured if required.
________________________________________________________________________________
Signature of Purchaser if not Proposed Insured or Applicant.
(If corp. show firm's name and signature of authorized officer.)
EV4-200Q 3
<PAGE>
VARIABLE EQUITABLE
LIFE VARIABLE LIFE INSURANCE COMPANY
INSURANCE [EVLICO LOGO]
POLICY Home Office: 1285 Avenue of the Americas, New York, New York 10019
Whole Life Plan. Variable insurance payable upon death. Guaranteed
Minimum Death Benefit. Fixed premiums payable for life.
Non-Participating. Investment experience reflected in benefits.
Investment options described on page 6.
No. 85-11
THE INSURED RICHARD ROE VARIABLE
LIFE INSURANCE
POLICY OWNER RICHARD ROE POLICY
FACE AMOUNT $100,000 EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
POLICY NUMBER SPECIMEN
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
A Stock Life Insurance Company
Agrees
o To pay the insurance benefits of this policy to the Beneficiary upon receiving
proof of the Insured's death; and
o To provide you (the policy Owner) with the other rights and benefits of this
policy.
These agreements are subject to the provisions of this policy.
THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE
FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR
AS DESCRIBED ON PAGE 4 DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY,
BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT.
THE ACCOUNT VALUE AND THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY.
THEY MAY INCREASE OR DECREASE DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS
POLICY.
The amount of the single premium for this policy is shown on page 3.
RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you
are not satisfied with it, you may cancel it by returning the policy with a
written request for cancellation to our Administrative Office by the later of:
(a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the
application was signed. If you do this, we will refund the premium that was
paid.
SPECIMEN SPECIMEN
Kevin Keefe Secretary Franklin Maisano President
Single Premium Whole Life Plan -- Level Face Amount. Variable insurance
payable upon death. Guaranteed Minimum Death Benefit. Non-Participating.
Investment experience reflected in benefits. Investment options described
on page 6.
No. 85-09
<PAGE>
VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
1285 Avenue of the Americas, New York, New York 10019
CONTENTS
Insurance benefits 2
Policy owner and beneficiary 4
Death Benefit 4
Account Value 4
Cash Value 4
Loans 5
The Separate Account 5
Investment Options,
allocations, transfers 6
Exchange of Policy 6
General Provisions 7
Payment Options 8
Basis of Values 10
(Net rates of return, variable adjustment amount, benefit base, calculation of
Account Values)
A copy of the application for this policy is at the back of the policy.
IN THIS POLICY:
"We," "our" and "us" mean Equitable Variable Life Insurance Company.
"You" and "your" mean the Owner of the policy at the time an Owner's right is
exercised.
ADMINISTRATIVE OFFICE
The address of our Administrative Office is shown on page 3. You should send
requests to that address unless instructed otherwise.
INSURANCE BENEFITS
The insurance benefits we pay at the insured's death include:
o the Death Benefit described on page 4;
o minus any loan (and loan interest) on the policy.
We will add interest to the resulting amount for the period from the date of
death to the date of payment. It will be computed at the interest rate we are
then paying under the Deposit Option on page 8.
Payment of these benefits may be affected by other provisions of this policy.
See the Suicide Exclusion, Incontestability and Age and Sex clauses on page 7.
Special exclusions or limitations (if any) are listed on page 3.
No. 85-09 Page 2
<PAGE>
POLICY INFORMATION
THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985
POLICY OWNER RICHARD ROE DATE OF ISSUE MAR 1, 1985
FACE AMOUNT $100,000 ISSUE AGE, SEX 35, MALE
POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE
STATE OF
RESIDENCE SPECIMEN STATE
************************** BENEFITS AND PREMIUMS TABLE *************************
BENEFITS SINGLE PREMIUM
FOR THIS POLICY
LIFE INSURANCE - VARIABLE $25,890.82
THE SINGLE PREMIUM IS $25,890.82 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
THE FOLLOWING DEDUCTIONS ARE MADE FROM THE SINGLE PREMIUM:
ADMINISTRATIVE EXPENSE: $200.00
STATE PREMIUM TAX: 517.82
THE NET SINGLE PREMIUM AMOUNT ALLOCATED TO THE SEPARATE ACCOUNT IS $25,173.00.
************** INVESTMENT ALLOCATION OF NET SINGLE PREMIUM AMOUNT **************
INVESTMENT DIVISIONS: COMMON STOCK 50%
MONEY MARKET 50%
******* ADMINISTRATIVE OFFICE: EQUITABLE VARIABLE LIFE INSURANCE COMPANY *******
SPECIMEN REGIONAL SERVICE CENTER
100 SPECIMEN ST.
CITY, STATE 10001
V85-09-3 Page 3
<PAGE>
POLICY INFORMATION CONTINUED
THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985
FACE AMOUNT $100,000 DATE OF ISSUE MAR 1, 1985
POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE
********************************** TABULAR VALUES *****************************
THE ACCOUNT VALUE AND CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN
AMOUNTS SHOWN AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT
SEE PAGE 4 FOR ACCOUNT VALUE AND CASH VALUE PROVISIONS
TABULAR VALUES AT ENDS OF POLICY YEARS
END OF TABULAR TABULAR
POLICY YEAR ACCOUNT VALUES CASH VALUES
1 $26,019 $23,960
2 26,892 24,984
3 27,790 26,050
4 28,712 27,158
5 29,659 28,309
6 30,630 29,504
7 31,623 30,743
8 32,641 32,030
9 33,683 33,364
10 34,748 34,748
11 35,837 35,837
12 36,951 36,951
13 38,089 38,089
14 39,252 39,252
15 40,440 40,440
16 41,653 41,653
17 42,888 42,888
18 44,143 44,143
19 45,416 45,416
20 46,704 46,704
AGE 60 53,364 53,364
AGE 62 56,124 56,124
AGE 65 60,301 60,301
AGE 70 67,206 67,206
THESE VALUES DO NOT REFLECT LOANS. VALUES NOT SHOWN WILL BE FURNISHED ON
REQUEST.
V85-09-3A Page 3A
<PAGE>
POLICY INFORMATION CONTINUED
TABLE OF NET SINGLE PREMIUMS
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Level Insurance.
Values shown are applicable on policy anniversaries. The net single premium as
of a date during a policy year shall be determined by interpolation between the
values applicable on the immediately preceding and immediately following
anniversaries.
<TABLE>
<CAPTION>
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
- --------- ------- --------- ------- --------- ------- --------- ------- --------- -------
MALE INSURED
------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.08655 21 $.16103 41 $.30630 61 $.54739 81 $ .80702
2 .08901 22 .16584 42 .31623 62 .56124 82 .81756
3 .09165 23 .17087 43 .32641 63 .57516 83 .82774
4 .09441 24 .17613 44 .33683 64 .58909 84 .83745
5 .09731 25 .18165 45 .34748 65 .60301 85 .84665
6 .10038 26 .18744 46 .35837 66 .61689 86 .85536
7 .10361 27 .19351 47 .36951 67 .63072 87 .86362
8 .10702 28 .19985 48 .38089 68 .64453 88 .87153
9 .11061 29 .20646 49 .39252 69 .65831 89 .87920
10 .11436 30 .21334 50 .40440 70 .67206 90 .88679
11 .11828 31 .22049 51 .41653 71 .68574 91 .89444
12 .12232 32 .22790 52 .42888 72 .69929 92 .90237
13 .12645 33 .23558 53 .44143 73 .71262 93 .91083
14 .13063 34 .24352 54 .45416 74 .72564 94 .92013
15 .13484 35 .25173 55 .46704 75 .73828 95 .93048
16 .13906 36 .26019 56 .48007 76 .75052 96 .94201
17 .14330 37 .26892 57 .49324 77 .76238 97 .95459
18 .14757 38 .27790 58 .50655 78 .77391 98 .96774
19 .15193 39 .28712 59 .52002 79 .78517 99 .98064
20 .15640 40 .29659 60 .53364 80 .79621 100 1.00000
</TABLE>
FEMALE INSURED
--------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.07178 21 $.13538 41 $.26197 61 $.47686 81 $ .77229
2 .07383 22 .13985 42 .27047 62 .49058 82 .78597
3 .07602 23 .14449 43 .27917 63 .50455 83 .79922
4 .07831 24 .14930 44 .28807 64 .51871 84 .81195
5 .08072 25 .15429 45 .29719 65 .53301 85 .82411
6 .08324 26 .15946 46 .30654 66 .54743 86 .83569
7 .08589 27 .16482 47 .31613 67 .56201 87 .84673
8 .08865 28 .17038 48 .32597 68 .57676 88 .85730
9 .09155 29 .17613 49 .33604 69 .59177 89 .86749
10 .09457 30 .18209 50 .34637 70 .60703 90 .87741
11 .09773 31 .18825 51 .35693 71 .62253 91 .88720
12 .10100 32 .19462 52 .36775 72 .63818 92 .89704
13 .10438 33 .20122 53 .37880 73 .65388 93 .90712
14 .10788 34 .20805 54 .39008 74 .66948 94 .91771
15 .11146 35 .21510 55 .40160 75 .68489 95 .92905
16 .11515 36 .22239 56 .41336 76 .70006 96 .94128
17 .11895 37 .22990 57 .42540 77 .71496 97 .95429
18 .12285 38 .23761 58 .43774 78 .72961 98 .96766
19 .12689 39 .24554 59 .45042 79 .74406 99 .98064
20 .13106 40 .25366 60 .46347 80 .75830 100 1.00000
</TABLE>
V85-09-3B Page 3B
<PAGE>
POLICY INFORMATION CONTINUED
DESCRIPTION OF INVESTMENT DIVISIONS
THE ASSETS IN EACH INVESTMENT DIVISION ARE INVESTED IN SHARES OF A DESIGNATED
PORTFOLIO OF AN INVESTMENT COMPANY. EACH PORTFOLIO REPRESENTS A DIFFERENT CLASS
(OR SERIES) OF SHARES ISSUED BY THE HUDSON RIVER FUND, INC.
COMMON STOCK DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE,
PRIMARILY, COMMON STOCKS AND OTHER EQUITY-TYPE
INVESTMENTS.
MONEY MARKET DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE,
PRIMARILY, SHORT-TERM (NOT TO EXCEED ONE YEAR) MONEY
MARKET INSTRUMENTS, SUCH AS: UNITED STATES (U.S.)
GOVERNMENT AND U.S. GOVERNMENT AGENCY SECURITIES; BANK
MONEY INSTRUMENTS; TIME DEPOSITS; CERTIFICATES OF
DEPOSIT; HIGH GRADE COMMERCIAL PAPER, INCLUDING MASTER
DEMAND NOTES; AND REPURCHASE AGREEMENTS COVERING U.S.
GOVERNMENT OBLIGATIONS AND CERTIFICATES OF DEPOSIT.
INVESTMENT RESULTS WILL REFLECT FLUCTUATIONS IN MARKET VALUES OF SECURITIES.
PLEASE REFER TO THE CURRENT PROSPECTUS FOR THE HUDSON RIVER FUND, INC. FOR A
COMPLETE DESCRIPTION OF THE FUND AND THE DESIGNATED PORTFOLIOS.
V85-09-3C Page 3C
<PAGE>
POLICY OWNER AND BENEFICIARY
OWNER. The Owner of this policy is the Insured unless otherwise stated in the
application, or later changed. As Owner, you can exercise all the rights in this
policy while the Insured is living. You do not need the consent of anyone who
has only a conditional or future ownership interest in this policy.
BENEFICIARY. The Beneficiary is as stated in the application, unless later
changed. If two or more persons are named, those surviving the Insured will
share equally unless otherwise stated.
We will pay any benefit for which there is no stated Beneficiary living at the
death of the Insured to the children of the Insured who then survive, in equal
shares. If none survive, we will pay the estate of the Insured.
CHANGES. While the Insured is living, you may change the Owner or Beneficiary by
written notice in a form satisfactory to us. The change will take effect on the
date you sign the notice, except that it will not apply to any payment we make
or other action we take before we receive the notice at our Administrative
Office. If you change the Beneficiary, any previous arrangement you made under
the Payment Options provision on page 8 is cancelled.
ASSIGNMENT. You may assign this policy, but we will not be bound by an
assignment unless it is in writing and we have received it at our Administrative
Office. Your rights and those of any other person referred to in this policy
will be subject to the assignment. We assume no responsibility for the validity
of any assignment.
DEATH BENEFIT
The Death Benefit equals:
o the face amount shown on page 3;
o plus the sum, if positive, of the Variable Adjustment Amounts, for each
investment division under this policy in which you have a cash value, for
the policy year in which the Insured dies.
However, the Death Benefit will in no event be less than the amount of Paid-up
Whole Life Level Insurance that could be purchased by the Account Value at the
Insured's death on the basis of the Table of Net Single Premiums on page 3B.
See page 10 for a description of how the Variable Adjustment Amount for each
investment division is determined.
ACCOUNT VALUE
The policy's Account Value will vary daily with the performance of the
investment divisions in which you have Account Value under this policy. See page
11 for a description of how the Account Value is determined.
CASH VALUE
You may give up this policy for its net cash value at any time while the Insured
is living. The net cash value is the cash value minus any loan and loan
interest.
We will determine the net cash value on the date we receive your signed request
for it at our Administrative Office. The policy will terminate on the date you
send the policy and the request to us.
CASH VALUE. The policy's cash value will vary daily with the performance of the
investment divisions in which you have a cash value under this policy.
During the first ten policy years the cash value on any date will be equal to
the product of (1) and (2), where:
(1) is the Account Value on that date; and
(2) is the Tabular Cash Value divided by the Tabular Account Value for that
date.
Whenever the difference between the Account Value and cash value exceeds 9% of
the single premium for this policy, we will increase the cash value by the
amount of such excess.
Tabular Account Values and Tabular Cash Values are shown on page 3A.
After the tenth policy year, the cash value will equal the Account Value.
V85-09-4 Page 4
<PAGE>
LOANS
You may get a loan on this policy while it has a loan value. This policy will be
the sole security for the loan.
The amount of the loan may not be more than the loan value. A loan must be at
least $100 more than any existing loan and loan interest. Any existing loan and
loan interest will be deducted from the new loan.
A loan, whether you repay it or not, will have a permanent effect on the
Variable Adjustment Amounts, Death Benefit, Account Value and cash value under
this policy.
We will allocate loans to the investment divisions based on your net cash value
in each investment division as of the dates the loans are made. We will allocate
loan repayments to the investment divisions based on the amount of your
outstanding loans as to each investment division as of the dates the repayments
are made.
LOAN VALUE. The loan value is 90% of the policy's cash value.
LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%.
Interest is due on each policy anniversary. If the interest is not paid when
due, it will be added to the loan and bear interest at the loan rate.
When a loan plus loan interest first exceeds the cash value, we will mail to you
and any assignee of record at last known addresses a notice that the policy will
terminate if such excess amount is not repaid within 31 days after we mailed
such notice.
REPAYMENT. You may repay a loan and loan interest in whole or in part at any
time while the Insured is living and this policy is in effect. We will deduct
any existing loan and loan interest from any benefits we pay at the Insured's
death.
THE SEPARATE ACCOUNT
The Separate Account is our Separate Account I (in unit investment trust form).
We established and we maintain it under the laws of New York State. Realized and
unrealized gains and losses from the assets of the Separate Account are credited
or charged against it without regard to our other income, gains, or losses.
Assets are put in the Separate Account to support this policy and other variable
life insurance policies. Assets may be put in the Separate Account for other
purposes, but not to support contracts or policies other than variable life
insurance.
The assets of the Separate Account are our property. The portion of its assets
equal to the reserves and other policy liabilities with respect to the Separate
Account will not be chargeable with liabilities arising out of any other
business we conduct. We may transfer assets of the Separate Account in excess of
such reserves and liabilities to our general account. We may transfer assets of
an investment division in excess of the reserves and other liabilities with
respect to that division to another investment division or to our general
account.
We will value the assets of each investment division on each business day. A
business day is generally any day on which the New York Stock Exchange is open
for trading.
INVESTMENT DIVISIONS. The Separate Account consists of "investment divisions".
Each division may invest its assets in a separate class (or series) of shares of
a designated investment company. Each class represents a separate portfolio in
the investment company. The investment divisions available on the Register Date
are described on Page 3C. If we add or remove investment divisions, we will send
you a new Page 3C reflecting this.
We have the right to change designated investment companies. We have the right
to add or remove investment divisions. We have the right to withdraw assets of a
class of policies to which this policy belongs from an investment division and
put them in another investment division. We also have the right to combine any
two or more investment divisions. The term "investment division" in this policy
shall then refer to any other investment division in which the assets of a class
of policies to which this policy belongs were placed. If we make any such change
we will send you a new Page 3C reflecting it.
V85-09-4 Page 5
<PAGE>
THE SEPARATE ACCOUNT CONTINUED
We have the right to:
1. register or deregister either Separate Account under the Investment
Company Act of 1940;
2. run the Separate Account under the direction of a committee, and to
discharge such committee at any time;
3. restrict or eliminate any voting rights of policyowners, or other persons
who have voting rights as to the Separate Account; and
4. operate the Separate Account by making direct investments or in any other
form. If we do so, we may invest the assets of the Separate Account in any
legal investments. We will rely upon our own and outside counsel for
advice in this regard. Also, unless otherwise required by law or
regulation, the investment advisor or any investment policy may not be
changed without our consent.
CHANGE IN INVESTMENT OBJECTIVE OR POLICY. We will notify you of any material
change in an investment objective or policy of any investment company that is
invested in by an investment division to which net premiums have been allocated
under this policy.
If required by law or regulation, the investment policy of the Separate Account
will not be changed unless approved by the Superintendent of Insurance of New
York State or deemed approved in accordance with such law or regulation. If so
required, the process for getting such approval is filed with the insurance
supervisory official of the jurisdiction in which this policy is delivered.
INVESTMENT OPTIONS
ALLOCATION OF NET SINGLE PREMIUM. We will allocate to each investment division
as of the Register Date a percentage of the Net Single Premium Amount shown on
page 3. Such allocation will be based on the allocation percentages designated
in the application for this policy.
TRANSFER OF ACCOUNT VALUES. You may ask us to transfer all or part of your
Account Value in one investment division to another. Only two such transfers may
be made in a policy year. We will make the transfer as of the date we receive
your written request for it at our Administrative Office.
EXCHANGE OF POLICY
You may exchange this policy for a policy of permanent fixed benefit insurance
on the life of the Insured. You may make such an exchange within 24 months after
the Date of Issue shown on page 3. We will not require evidence of insurability.
We will require:
1. That this policy be in effect on the date of exchange; and
2. Repayment of any loan and loan interest on this policy.
The date of exchange will be the later of: (a) the date you send us this policy
and the signed request on our form of such exchange; or (b) the date we receive
at our Administrative Office any sum due to be paid for such exchange.
THE NEW POLICY. The new policy will be the "Single Premium Life Plan" policy
being offered by The Equitable Life Assurance Society of the United States
(Equitable) on the Date of Issue of this policy. It is a policy of permanent
fixed benefit life insurance. It will have the same face amount, Register Date,
Date of Issue, and Issue Age as this policy. The single premium for the new
policy will be based on Equitable's rates in effect on its Register Date for the
same class of risk as under this policy.
Upon request you will be told the amount of the single premium for the new
policy, and of any extra sum required or allowance to be made for a premium or
cash value adjustment that takes appropriate account of the premiums and cash
values under this policy and under the new policy. If so required, we have filed
a detailed statement of the method of computing such an adjustment with the
insurance supervisory official of the jurisdiction in which this policy is
delivered.
V85-09-6 Page 6
<PAGE>
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
single premium for this policy shown on page 3. This policy and the application
(a copy of which is attached at issue) constitute the entire contract. The
rights conferred by this policy are in addition to those provided by applicable
Federal and State laws and regulations.
The contract may not be modified, nor may any of our rights or requirements be
waived, except in writing signed by our President, one of our Vice Presidents,
or by our Secretary or Treasurer.
INCONTESTABILITY. All statements made in the application are representations and
not warranties. We have the right to contest the validity of this policy based
on material misstatements made in the application. However, this policy will
become incontestable after it has been in effect during the lifetime of the
Insured for two years from the Date of Issue shown on page 3.
No statement shall be used to contest a claim unless contained in the
application.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be those that the premium paid would have purchased at the correct age and sex.
SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within
two years after the Date of Issue shown on page 3, our liability will be limited
to the payment of a single sum equal to the premium paid, minus any loan and
loan interest.
POLICY PERIODS AND ANNIVERSARIES. Policy years and policy anniversaries are
measured from the Register Date. If the end of a policy year is indicated by an
age, it ends on the policy anniversary nearest the birthday on which the Insured
reaches that age.
REPORTS. Each policy year after the first we will give you a report showing the
Death Benefit, the Account Value and the cash value as of the first day of such
year. The amount of any existing loan and the accrued loan interest for the
previous policy year will also be shown. We will also give you such other
reports as may be required by law.
BASIS OF COMPUTATION. Account Values, reserves and net single premiums are based
on the Commissioners 1980 Standard Ordinary Mortality Table. Continuous
functions are used with interest compounded annually at 4%.
The cash values are equal to or more than those required by law. If so required,
we have filed a detailed statement of the method of computing cash values with
the insurance supervisory official of the jurisdiction in which this policy is
delivered. The Tabular Account Value at the end of each policy year equals the
tabular reserve. Our expense and mortality results will not adversely affect the
dollar amount of insurance benefits or Account Values or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. We will make payments under this
policy as follows:
o A cash value will be paid within 7 days after we receive your policy and
request at our Administrative Office;
o A loan will be paid within 7 days after we receive your request at our
Administrative Office; and
o The insurance benefits will be paid within 7 days after we receive at our
Administrative Office proof of the Insured's death and all other
requirements deemed necessary before such payment may be made.
We may not be able to determine the value of the assets of the investment
divisions if: (1) the New York Stock Exchange is closed; (2) the Securities and
Exchange Commission requires trading to be restricted or declares an emergency;
or (3) the Securities and Exchange Commission by order permits us to defer
payments for the protection of our policy owners. During such times we may
defer:
1. Determination of Account Values;
2. Determination and payment of cash values;
3. Payment of loans;
4. Determination of a change in a Variable Adjustment Amount, and payment of
any portion of the Death Benefit equal to the Variable Adjustment Amount;
5. Any requested transfer of Account Value; and
6. Use of insurance benefits under the Payment Options.
V85-09-6 Page 7
<PAGE>
PAYMENT OPTIONS
Payments under these options will not be affected by the investment
experience of any investment division after proceeds are applied
under such options.
Instead of having the insurance benefits or net cash value paid immediately in
one sum, you can choose another form of payment for all or part of them. If you
do not arrange for this before the Insured dies, the Beneficiary will have this
right when the Insured dies. Arrangements you make, however, cannot be changed
by the Beneficiary after the Insured's death. The options are:
1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with
interest paid at the end of each month, each 3 months, each 6 months or each
12 months, as chosen.
2. INSTALMENT OPTIONS:
A. FIXED PERIOD: Paid in equal instalments for a specified number of years
(not more than 30). The instalments will not be less than those shown in
the Table of Guaranteed Payments on page 9.
B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the
amount applied, together with interest on the unpaid balance, is used up.
3. LIFE INCOME OPTIONS:
Paid as a monthly income for life in an amount we determine but not less
than shown in the Table of Guaranteed Payments on page 9. We guarantee
payments for life and in any event for 10 years, 20 years, or until the
payments we make equal the amount applied (called "refund certain"),
according to the "certain" period chosen.
4. OTHER: We will apply the sum under any other option requested that we make
available at the time of the Insured's death or net cash value withdrawal.
We guarantee interest under Option 1 at the rate of 3% a year and under Option 2
at 3-1/2% a year, or such higher rates as we may determine. We may allow excess
interest under Options 1 and 2.
The payee under an option may name and change a successor payee for any amount
we would otherwise pay the payee's estate.
Any arrangements involving more than one of the options, or a payee who is not a
natural person (for example, a corporation) or who is a fiduciary, must have our
approval. Also, details of all arrangements will be subject to our rules at the
time the arrangement takes effect. These include rules on: the minimum amount we
will apply under an option and minimum amounts for installment payments;
withdrawal or commutation rights; naming payees and successor payees; and
proving age and survival.
Choices (or any later changes) under these options will be made and will take
effect in the same way as a change of Beneficiary. Amounts applied under these
options will not be subject to the claims of creditors or to legal process, to
the extent permitted by law.
V85-09-8 Page 8
<PAGE>
TABLE OF GUARANTEED PAYMENTS
MINIMUM AMOUNT FOR EACH $1,000 OF ORIGINAL SUM
OPTION 2
FIXED PERIOD INSTALLMENTS
-------------------------
Number Monthly Annual
of Years' Instal- Instal-
Installments ment ment
------------ -------- ---------
1 $84.70 $1000.00
2 43.08 508.60
3 29.21 344.86
4 22.28 263.04
5 18.12 213.99
6 15.36 181.32
7 13.38 158.01
8 11.91 140.56
9 10.76 127.00
10 9.84 116.18
11 9.09 107.34
12 8.47 99.98
13 7.94 93.78
14 7.49 88.47
15 7.11 83.89
16 6.77 79.89
17 6.47 76.37
18 6.20 73.25
19 5.97 70.47
20 5.76 67.98
21 5.57 65.74
22 5.40 63.70
23 5.24 61.85
24 5.10 60.17
25 4.97 58.62
26 4.84 57.20
27 4.73 55.90
28 4.63 54.69
29 4.54 53.57
30 4.45 52.53
If installments are paid every 3 months, they will be 25.32% of the annual
installments. If they are paid every 6 months, they will be 50.43% of the annual
installments.
<TABLE>
<CAPTION>
OPTION 3
MONTHLY LIFE INCOME
-------------------
10 Years Certain 20 Years Certain Refund Certain
---------------- ---------------- --------------
AGE Male Female Male Female Male Female
--- ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
50 $4.50 $3.96 $4.27 $3.89 $4.28 $3.87
51 4.58 4.02 4.32 3.94 4.35 3.93
52 4.67 4.09 4.38 4.00 4.42 3.99
53 4.75 4.16 4.44 4.06 4.50 4.05
54 4.85 4.24 4.50 4.12 4.58 4.11
55 4.94 4.32 4.56 4.18 4.66 4.18
56 5.04 4.40 4.62 4.24 4.74 4.25
57 5.15 4.49 4.68 4.31 4.83 4.33
58 5.26 4.58 4.74 4.38 4.93 4.41
59 5.37 4.68 4.81 4.45 5.03 4.49
60 5.49 4.78 4.86 4.52 5.13 4.58
61 5.62 4.89 4.92 4.59 5.24 4.67
62 5.75 5.00 4.98 4.66 5.35 4.77
63 5.88 5.12 5.04 4.73 5.48 4.88
64 6.03 5.25 5.09 4.80 5.60 4.99
65 6.17 5.39 5.14 4.88 5.74 5.10
66 6.32 5.53 5.19 4.95 5.88 5.22
67 6.48 5.68 5.24 5.01 6.03 5.35
68 6.64 5.83 5.28 5.08 6.18 5.49
69 6.80 6.00 5.32 5.14 6.35 5.64
70 6.97 6.17 5.35 5.20 6.53 5.79
71 7.15 6.34 5.38 5.26 6.71 5.96
72 7.32 6.53 5.41 5.30 6.91 6.13
73 7.50 6.72 5.43 5.35 7.12 6.32
74 7.67 6.92 5.45 5.38 7.34 6.52
75 7.85 7.12 5.47 5.42 7.58 6.73
76 8.02 7.32 5.48 5.44 7.82 6.96
77 8.19 7.53 5.49 5.46 8.09 7.21
78 8.36 7.75 5.50 5.48 8.38 7.47
79 8.52 7.96 5.50 5.49 8.67 7.75
80 8.67 8.16 5.51 5.50 9.00 8.05
81 8.81 8.36 5.51 5.51 9.34 8.39
82 8.94 8.55 5.51 5.51 9.70 8.73
83 9.06 8.73 5.51 5.51 10.10 9.12
84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
</TABLE>
Amounts for Monthly Life Income are based on age nearest birthday when income
starts. Amounts for ages not shown will be furnished on request.
V85-09-8 Page 9
<PAGE>
BASIS OF VALUES
ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each investment division, the Actual
NRR for a policy year reflects the division's:
o dividends received from the investment company;
o plus realized and unrealized capital gains of the division's investment in
the investment company;
o minus realized and unrealized capital losses of the division's investment
in the investment company;
o minus any charges for taxes or amounts set aside as a reserve for taxes;
o minus a charge not exceeding .50% per year for mortality and expense
risks.
The Actual NRR for each investment division will be increased to the extent that
expenses of the investment division exceed the charges for securities brokers'
commissions, transfer taxes, and other fees relating to securities transactions
and a charge for investment management expenses of .25% per year.
The Actual NRR for a period less than a year will be calculated in a consistent
manner.
BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a
pro-rata part of 4% for periods of less than a year.)
If the Actual NRR for all investment divisions always equals the Base NRR, then:
o the Death Benefit will always equal the Face Amount; and
o the Account Value at the end of each policy year will equal the Tabular
Account Value shown on page 3A.
VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of
insurance in effect for that policy year due to investment performance in past
years. On each policy anniversary we will determine a new VAA for the next
policy year. We will do this independently for each investment division, taking
into account the Actual NRR for the last policy year.
For the first policy year the VAA for each investment division is zero. For
later policy years, the VAA for each investment division will equal the sum of
the VAA Change Amounts for all prior policy years, including the current year. A
VAA does not change during a policy year.
VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount
for each investment division may be positive or negative. It will equal the
product of the following Items (a) and (b) divided by Item (c).
(a) The Actual NRR for the investment division minus the Base NRR for that
policy year.
(b) The Benefit Base for the investment division as of the last policy
anniversary.
(c) The Net Single Premium per $1.00 of VAA for the current policy
anniversary as shown on page 3B.
BENEFIT BASE. For each investment division, the Benefit Base on the Register
Date is the product of the following Items (1) and (2):
(1) The Allocation Percentage designated in the application for this policy.
(2) The Net Single Premium Amount shown on page 3.
On policy anniversaries, the Benefit Base for an investment division is the sum
of the following Items (1) and (2), minus Item (3):
(1) The Tabular Account Value on that anniversary, multiplied by the
following amount immediately before that anniversary: The Benefit Base
in that investment division divided by the sum of the Benefit Bases for
all investment divisions in which you have an Account Value.
(2) The Net Single Premium for the VAA for that investment division on that
anniversary.
(3) Any outstanding loan, plus interest for the investment division as of
that policy anniversary.
The Net Single Premium Amount, Tabular Account and Cash Values and Net Single
Premiums for the VAA are shown on pages 3, 3A and 3B, respectively.
V85-09-10 Page 10
<PAGE>
BASIS OF VALUES (CONTINUED)
For each investment division, the VAA Change Amount will also reflect the effect
of:
1. All new policy loans and repayments during the previous policy year; and
2. All transfers of Account Value to or from that investment division
during the previous policy year.
CALCULATION OF ACCOUNT VALUES. The Account Value of this policy on the Register
Date is the net single premium shown on page 3. The Account Value of this policy
on any date after the Register Date is the sum of your Account Values in each
investment division on that date. Your Account Value in each investment division
on any date is the sum of the following Items (1), (2) and (3):
(1) The tabular cash value on that date, multiplied by the following amount
immediately before that date: The Account Value in that investment
division divided by the sum of your Account Values in all of the
investment divisions.
(2) The Net Single Premium on that date for the current VAA for that
investment division.
(3) If the date is not a policy anniversary, the product of the following
Items (a) and (b):
(a) The Actual NRR for the investment division minus the Base NRR for
the time elapsed since the last policy anniversary.
(b) The Benefit Base for that investment division on the last policy
anniversary.
For each investment division, the Account Value will also reflect the effect of:
1. All new policy loans and repayments since the last policy anniversary;
and
2. All transfers of Account Value to or from that investment division since
the last policy anniversary.
If for any reason the Account Value in an investment division is zero, we will
cancel the VAA and any policy loan as to such investment division and reallocate
them to each other investment division proportionately.
TABULAR ACCOUNT AND CASH VALUES (TAV AND TCV). The tables of TAV's and TCV's on
page 3A show them at the end of the first 20 policy years and at certain
attained ages. We will determine the TAV and TCV on other dates in a consistent
manner with allowance for time elapsed. Any TAV's and TCV's not shown will be
furnished on request.
V85-09 Page 11
<PAGE>
- --------------------------------------------------------------------------------
PART 1 OF AN APPLICATION FOR INDIVIDUAL VARIABLE LIFE INSURANCE TO |_|JUV.
EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) |_|OPAI
- --------------------------------------------------------------------------------
1. PROPOSED INSURED
a. Print name as it is to appear on policy.
_______RICHARD___________________________ROE____________________________________
First Middle Initial Last
b. |X| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title___________
c. List all current occupations -- Give Title(s) and Duties
_____________CORPORATE ATTORNEY_________________________________________________
________________________________________________________________________________
d. Date of Birth: Mo.__3__ Day__1__ Yr. 19__50__
e. Age Nearest Birthday: ___35___
f. Place of Birth: State of ___NEW YORK___
g. Residence: State of ___NEW YORK___
h. |X| Male |_| Female
2. PLAN INITIAL FACE AMOUNT
____SINGLE PREMIUM VARIABLE LIFE______________________ $______________
If Flexible Prem., will the Death Benefit include the value of the Account?
|_| No (Option A) |_| Yes (Option B)
INVESTMENT DIVISION ALLOCATION (WHOLE NUMBERS ONLY)
Common Stock __50%__ _________________ ___________%
Money Market __50___ _________________ ___________
_______________ _______ _________________ ___________
_______________ _______ _________________ ___________
_______________ _______ _________________ ___________
_______________ _______ _________________ ___________
100%
3. OPTIONAL BENEFITS
|_| Accidental Death Benefit* (Specify Amount): $____________
|_| Option to Purchase Add'l Ins. (Issue ages to 37 only): $____________
|_| Disability Premium Waiver* |_| Disability Benefit-Flexible Prem. Pol.*
|_| Waive Cost of Insurance
|_| Credit $_____________ per _____________
Term Riders:
Decreasing Term Per Month
|_| Family Income: ______Years $____________
|_| Mortgage Prot.: ______Years Initial Amt.: $____________
Renewable Term Yearly 10 Yr.
|_| On Insured: |_| |_| $____________
|_| On Add'l. Insured (See page 2): |_| |_| $____________
|_| Increasing Term
|_| Children's Term (See page 2): $__________Units______________
*If Proposed Insured is a Child (Issue Age 0-14) see Limitations on p.2.
4. BENEFICIARY FOR INSURANCE ON PROPOSED INSURED. Include FULL NAME and
RELATIONSHIP to Proposed Insured.
____________________________MARGARET H. ROE, WIFE__________________________
____________________________________________________________________________
Unless otherwise requested, the contingent beneficiary will be the surviving
children of the Insured, in equal shares. If none survive, payment will be
made to the Insured's estate.
THE BENEFICIARY UNDER ANY TERM INSURANCE RIDER on an Additional Insured or
on a Child will be as stated in those riders, unless otherwise designated in
Special Instructions.
5. OWNER Owner's Soc. Sec. or Tax No. |0|0|0|0|0|0|0|0|0| |
The Owner is |X| Proposed Insured |_| Applicant for Child (See 10.c.)
|_| Other (Give Full Name):
____________________________________________________________________________
If "Other," complete the following:
|_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_____________
Relationship to Insured_____________________________________________________
Specify a successor Owner if desired
____________________________________________________________________________
If the Proposed Insured or the Applicant for a Child is not the Owner and if
all persons designated die before the Insured, the Owner will be the estate
of the last of such persons to die except where the Insured is a Child (see
Note in 10.c.).
6. MAILING ADDRESS |_| Business (Give Full Name) |x| Residence
|1|0|0|_|S|P|E|C|M|E|N|_|S|T|.|_|_|_|_|_|_|_|_|_|0|9|_|_|
No. Street Apt.
|N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
City
|N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|1|0|0|0|1|
State Zip
7. PREMIUM PAYMENT PLAN
Check mode, and if Flexible Premium complete the following:
Initial Prem. Payment $ _______________________________
Planned Periodic Prems. $ _____________________________
|_| Do not send premium reminder notices
| | Annual |_| Semi-Annual |_|Quarterly
|_| Monthly |_| System-Matic (Attach S-M Form)
|X| Single
|_| Military Allotment: Branch __________________________
Register Date_____________________
|_| Salary Allotment: Register Date_____________________
Unit Name______________________________________________
Unit/Sub-Unit No. if established:
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Divisible by |_| 2 |_| 4 Payroll No.________________
|_| Hold Premium $______________________
8. SUITABILITY
a. Have you the Proposed Insured and the Purchaser if other than the Proposed
Insured received: (i) a Prospectus for the policy applied for?
|_|Yes |_| No
Date of Prospectus _________________________________________
Date of any supplement _____________________________________
(ii) a Prospectus for The Hudson River Fund, Inc.
|_|Yes |_| No
Date of Prospectus _________________________________________
Date of any supplement _____________________________________
b. Do you understand that, under the policy applied for (exclusive of any
optional benefits), the amount of the death benefit and the cash surender
value may increase or decrease depending upon investment experience (if the
policy has a guaranteed minimum death benefit or cash surrender value it is
only the amount above such minimum that may increase or decrease)?
|_| Yes |_| No
c. With this in mind, is the policy in accord with your insurance objectives
and your anticipated financial needs? |_| Yes |_| No
9. SPECIAL INSTRUCTIONS
a. |_| Preliminary Term (PT) period of ________ days
ending _______________ . PT Premium $_______
Mo. Day Yr.
b. |_| Date to save insurance age: _____________
c. |_| Check here to request an adjustable policy loan interest rate
(if available) instead of a fixed rate.
d. Other:
_________________________________________
_________________________________________
_________________________________________
_________________________________________
_________________________________________
- --------------------------------------------------------------------------------
NOTE: UPON REQUEST, WE WILL FURNISH ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH
BENEFITS AND CASH VALUES, FOR (A) THE VARIABLE LIFE INSURANCE POLICY APPLIED FOR
AND (B) A FIXED BENEFIT LIFE INSURANCE POLICY FOR THE SAME PREMIUM.
- --------------------------------------------------------------------------------
EV4-200Q 1
<PAGE>
10. COMPLETE IF PROPOSED INSURED IS A CHILD (ISSUE AGES 0-14).
a. Will there be more life insurance in effect on the Child
than on any older child in the family? |_| Yes |_| No
If yes, explain: ___________________________________________
_____________________________________________________________
b. APPLICANT-COMPLETE IF OTHER THAN THE CHILD.
i. _________________________________________________________
First Name Middle Initial Last Name
ii. |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______
iii. Date of Birth___________________________________19____
Month Day Year
iv. |_| Male |_| Female
v. Relationship to Child:___________________________________
vi. Total Life Insurance now in effect: $ _________________
c. OWNER. If the Applicant is to be the Owner, after the
Applicant's death the Child will be the Owner unless
otherwise designated in Special Instructions (in any such
designation include Owner's FULL NAME, RELATIONSHIP to
Child, and Social Security or Tax Number).
NOTE: Consider designating an adult secondary Owner to
reduce the chance of a minor Child becoming the Owner. If
all persons designated die before the Child, the Owner will
be the Child.
d. OPTIONAL BENEFIT ON APPLICANT.
|_| Supplemental Protective Benefit. Give Applicant's:
i. Age Nearest ii. Place of
Birthday ______________ Birth_____________
State
iii. Height______Ft.____In. Weight______lbs.
iv. Occupations-Give Title(s) and Duties:__________________________________
________________________________________________________________________
ALSO ANSWER QUESTIONS ON PAGE 3 AS TO APPLICANT.
e. LIMITATIONS ON CHILD'S ADB AND DPW BENEFITS. If the Accidental Death Benefit
is applied for on the Child, the benefit is payable only if the Child dies
after the Child's first birthday.
If the Disability Premium Waiver Benefit is applied for on the Child, the
benefit is effective only if the Child becomes totally disabled on or after
the Child's 5th birthday.
- --------------------------------------------------------------------------------
11. COMPLETE FOR CHILDREN'S TERM RIDER.
Give Names of Children below and answer the Questions on page 3 as to each
Child.
CHILDREN PROPOSED FOR INSURANCE:
NOTE: To be eligible, children (including stepchildren and legally adopted
children) must not yet have reached their 18th birthday. Coverage
does not begin until a child is 15 days old. DATE OF BIRTH
- --------------------------------------------------------------------------------
First Name Middle Initial Last Name |SEX| MO.| DAY| YR.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
12. COMPLETE FOR RENEWABLE TERM RIDER ON ADDITIONAL INSURED.
Complete below and answer the Questions on page 3 as to the Additional Insured.
PROPOSED ADDITIONAL INSURED
a. Print name as it is to appear on the Policy.
________________________________________________________________________________
First Middle Initial Last
b. List all current occupations -- Give Title(s) and Duties.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
c. Date of Birth: Mo.__________ Day________ Yr. 19____
d. Age Nearest Birthday _______________________________
e. Place of Birth: State of __________________________
f. Residence: State of________________________________
g. |_| Male |_| Female
h. Owner's Relationship to Additional Insured:_________________________________
________________________________________________________________________________
- --------------------------------------------------------------------------------
13. COMPLETE IF USING EXISTING OPTION TO PURCHASE INSURANCE.
i. Existing Individual Policy No. _________________________
ii. Option Date_______ iii. Option Amount: $______________
iv. |_| Regular Option or
|_| Option on Birth or Adoption of Child
Child's Name _______________________________________
Date of Birth or Adoption___________________________
v. If applying for Disability Premium Waiver, is Proposed Insured now
totally disabled as defined in the Disability Premium Waiver
provision of the above policy? |_| Yes |_| No
This application is made under a provision in the policy indicated above
permitting the purchase of individual life insurance (the "Option Provision").
If this application is made within the time allowed and in accordance with the
other terms in the Option Provision, including timely payment of the full first
premium for the option insurance, then the option insurance shall take effect
upon the terms of the policy EVLICO would issue. Otherwise, the option insurance
shall not take effect.
Answer the Questions on page 3 only if evidence of insurability is required in
connection with an optional benefit or any excess of the insurance amount
applied for over the insurance amount permitted by the Option Provision (the
option insurance).
EV4-200Q 2
<PAGE>
OTHER INFORMATION -- HAS ANY PERSON PROPOSED FOR INSURANCE:
14.a. Ever had a driver's license suspended or revoked or, within the last three
years, been convicted of two or more moving violations or driving under the
influence of alcohol or drugs? (Give full details -- including dates, types of
violation, and reason for license suspension or revocation.) |_| Yes |X| No
b. Any plan to travel or reside outside the U.S.? (Give full details.)
|_| Yes |X| No
c. Any other life insurance now in effect or application now pending? (State
companies and amounts.) |_| Yes |X| No
d. Smoked cigarettes within the last 12 months? |_| Yes |X| No
15.a. In the last year flown other than as a passenger or plan to do so?
|_| Yes |X| No
If yes: Total flying time at present________________ Hours;
Last 12 mos.________Hours; Next 12 mos._________Est. Hours.
(Complete Aviation Supplement for pilot instruction; competitive, test,
stunt or military flying; or crop dusting.)
b. Engaged within the last year, or any plan to engage in motor racing on land
or water, underwater diving, sky diving, ballooning, hang-gliding or
parachuting? (If yes, complete Avocation Supplement.) |_| Yes |X| No
c. Ever had an application for life or health insurance declined, that required
an extra premium or was otherwise modified? (Give full details.) |_| Yes |X| No
d. Replaced or changed any existing insurance or annuity (or any plan to do so)
assuming the insurance applied for will be issued? (State companies, plans and
amounts.) |_| Yes |X| No
ANSWER QUESTIONS 16, 17 AND 18 ONLY IF NON-MEDICAL.
16. Proposed Insured:__________Height___6____Ft.____1____In. Weight__185__lbs.
Additional Insured:________Height________Ft._________In. Weight_______lbs.
HAS ANY PERSON PROPOSED FOR INSURANCE:
17.a. Ever been treated for or had any indication of heart trouble, stroke, high
blood pressure, chest pain, diabetes, tumor or cancer? (Give full details.)
|_| Yes |X| No
b. In the last 5 years, consulted a physician, or been examined or treated at a
hospital or other medical facility? (Include medical check-ups in the last 2
years. Do not include colds, minor virus infections, minor injuries, or normal
pregnancy.) (Give full details.) |_| Yes |X| No
18.a. In the last 10 years used barbiturates, amphetamines, hallucinatory drugs
or narcotics? (Give full details.) |_| Yes |X| No
b. In the last 10 years received counseling or treatment regarding the use of
alcohol or drugs? (Give full details.) |_| Yes |X|No
19. DETAILS. For each yes answer give Question number, name of person(s)
affected and full details. For 17 and 18 also include conditions, dates,
durations, treatment and results, and names and addresses of physicians and
medical facilities.
No. Name of Person Affected Details
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
20. COMPLETE IF FIRST PREMIUM IS PAID BEFORE THE POLICY IS DELIVERED:
Have the undersigned read and do they agree to the conditions of EVLICO's
Temporary Insurance Agreement, including (i) the requirement that all of the
conditions in that Agreement must be met before any insurance takes effect, and
(ii) the $250,000 insurance amount limitation? |_| YES |_| NO (If "No," a
premium may not be paid before the policy is delivered.)
AMOUNT PAID: $___________. (Draw checks to order of EVLICO.)
AGREEMENT. Each signer of this application agrees that:
(1) The statements and answers in all parts of this application are true and
complete to the best of my knowledge and belief. EVLICO may rely on them in
acting on this application.
(2) EVLICO's Temporary Insurance Agreement states the conditions that must be
met before any insurance takes effect, if the full first premium for the
policy applied for is paid before the policy is delivered.
(3) EXCEPT AS STATED IN THE TEMPORARY INSURANCE AGREEMENT, NO INSURANCE SHALL
TAKE EFFECT ON THIS APPLICATION: (A) UNTIL A POLICY IS DELIVERED AND THE
FULL FIRST PREMIUM FOR IT IS PAID WHILE THE PROPOSED INSURED IS LIVING; (B)
BEFORE ANY REGISTER DATE SPECIFIED IN THIS APPLICATION; AND (C) UNLESS TO
THE BEST OF MY KNOWLEDGE AND BELIEF THE STATEMENTS AND ANSWERS IN ALL PARTS
OF THIS APPLICATION CONTINUE TO BE TRUE AND COMPLETE, WITHOUT MATERIAL
CHANGE, AS OF THE TIME SUCH PREMIUM IS PAID.
(4) No agent or medical examiner has authority to modify this Agreement or the
Temporary Insurance Agreement, nor to waive any of EVLICO's rights or
requirements. EVLICO shall not be bound by any information unless it is
stated in application Part 1, 1A or 2.
- --------------------------------------------------------------------------------
Signature of Agent________/s/ John Q. Agent_____________________________________
IT IS UNDERSTOOD THAT UNDER THE POLICY APPLIED FOR (EXCLUSIVE OF ANY OPTIONAL
BENEFITS) THE AMOUNT OF THE DEATH BENEFIT AND THE CASH SURRENDER VALUE MAY
INCREASE OR DECREASE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT
AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT (IF THE POLICY HAS A GUARANTEED
MINIMUM DEATH BENEFIT OR CASH SURRENDER VALUE IT IS ONLY THE AMOUNT ABOVE SUCH
MINIMUM THAT MAY INCREASE OR DECREASE).
Dated at __NEW YORK_____NY__________________on___3/1_____19__85__
City State
(X)___/s/ Richard Roe___________________________________________________________
Signature of Proposed Insured or of Applicant if Proposed Insured is a Child,
Issue Age 0-14.
________________________________________________________________________________
Signature of Additional Insured if required.
________________________________________________________________________________
Signature of Purchaser if not Proposed Insured or Applicant.
(If corp. show firm's name and signature of authorized officer.)
EV4-200Q 3
<PAGE>
VARIABLE
LIFE
INSURANCE
POLICY
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
Home Office: 1285 Avenue of the Americas, New York, New York 10019
Single Premium Whole Life Plan -- Level Face Amount. Variable
insurance payable upon death. Guaranteed Minimum Death Benefit.
Non-Participating. Investment experience reflected in benefits.
Investment options described on page 6.
No. 85-09
THE INSURED RICHARD ROE VARIABLE
LIFE INSURANCE
POLICY OWNER RICHARD ROE POLICY
EQUITABLE
FACE AMOUNT $100,000 VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
POLICY NUMBER SPECIMEN
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
A Stock Life Insurance Company
Agrees
o To pay the insurance benefits of this policy to the Beneficiary upon receiving
proof of the Insured's death; and
o To provide you (the policy Owner) with the other rights and benefits of this
policy.
These agreements are subject to the provisions of this policy.
THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE
FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR
AS DESCRIBED ON PAGE 5 DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY,
BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT.
THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE OR
DECREASE DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY.
Premiums are shown on page 3 and are fixed as to amount. They will not vary with
the investment experience of this policy.
RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you
are not satisfied with it, you may cancel it by returning the policy with a
written request for cancellation to our Administrative Office by the later of:
(a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the
application was signed. If you do this, we will refund the premium that was
paid.
SPECIMEN SPECIMEN
Kevin Keefe Secretary Franklin Maisano President
Limited Payment Life Plan -- LEVEL FACE AMOUNT. Variable insurance
payable upon death. Guaranteed Minimum Death Benefit. Fixed premiums
payable for Premium Period shown on page 3 or until earlier death.
Non-Participating. Investment experience reflected in benefits.
Investment options described on page 6.
No. 85-01
<PAGE>
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
1285 Avenue of the Americas, New York, New York 10019
- ----------
CONTENTS
Insurance benefits 2
Policy owner and beneficiary 4
Premiums, grace, lapse, reinstatement 4
Death Benefit 5
Cash Value 5
Loans 5
The Separate Account 6
Investment Options,
allocations, transfers 6
Options on Lapse 7
Exchange of Policy 7
General Provisions 8
Payment Options 9
Basis of Values 11
(Net rates of return, variable adjustment amount, benefit base, calculation of
cash values)
Any additional benefit riders and a copy of the application are included in this
policy after page 12.
IN THIS POLICY:
"We," "our" and "us" mean Equitable Variable Life Insurance Company.
"You" and "your" mean the Owner of the policy at the time an Owner's right is
exercised.
ADMINISTRATIVE OFFICE
The address of our Administrative Office is shown on page 3. You should send
premiums and requests to that address unless instructed otherwise.
INSURANCE BENEFITS
The insurance benefits we pay at the Insured's death include:
o the Death Benefit described on page 5;
o plus any additional benefits due from riders to this policy;
o plus or minus any adjustment for the last premium;
o minus any loan (and loan interest) on the policy.
We will add interest to the resulting amount for the period from the date of
death to the date of payment. It will be computed at the interest rate we are
then paying under the Deposit Option on page 9.
We will pay these benefits only if premiums have been paid as called for by this
policy. However, even if premiums have been discontinued we may still pay
certain benefits. See Options on Lapse, page 7.
Payment of these benefits may also be affected by other provisions of this
policy. See the Suicide Exclusion, Incontestability and Age and Sex clauses on
page 8. Special exclusions or limitations (if any) are listed on page 3.
No. 85-01 Page 2
<PAGE>
POLICY INFORMATION
THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985
POLICY OWNER RICHARD ROE DATE OF ISSUE MAR 1, 1985
FACE AMOUNT $100,000 ISSUE AGE, SEX 35, MALE
POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE
*************************** BENEFITS AND PREMIUMS TABLE ************************
BENEFITS ANNUAL PREMIUM PREMIUM PERIOD
LIFE INSURANCE - VARIABLE $1,659.00 40 YEARS
THE FIRST PREMIUM IS $1,659.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
SUBSEQUENT PREMIUMS ARE DUE ON MAR 1, 1986 AND EVERY 12 MONTHS THEREAFTER DURING
THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE.
************************** TABLE OF NET ANNUAL PREMIUMS ************************
BEGINNING OF NET ANNUAL
POLICY YEAR PREMIUM
1 $ 752.00
2 - 4 1,455.00
5 - 40 1,526.00
****************** INVESTMENT ALLOCATION OF NET ANNUAL PREMIUMS ****************
INVESTMENT DIVISIONS: COMMON STOCK 50%
MONEY MARKET 50%
*****ADMINISTRATIVE OFFICE: EQUITABLE VARIABLE LIFE INSURANCE COMPANY***********
SPECIMEN REGIONAL SERVICE CENTER
100 SPECIMEN ST.
CITY, STATE 10001
V85-01-3 Page 3
<PAGE>
POLICY INFORMATION CONTINUED
THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985
FACE AMOUNT $100,000 DATE OF ISSUE MAR 1, 1985
POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE
****************************** TABULAR CASH VALUES *****************************
THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN
SEE PAGE 5 FOR CASH VALUE PROVISION
INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
INTERIM INTERIM INTERIM
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
MONTH VALUES MONTH VALUES MONTH VALUES
1 $0 5 $ 0 9 $278
2 0 6 16 10 366
3 0 7 104 11 452
4 0 8 192 12 540
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
YEAR VALUES YEAR VALUES YEAR VALUES
1 $ 540 9 $12,069 17 $26,057
2 1,808 10 13,701 18 27,941
3 3,114 11 15,368 19 29,851
4 4,456 12 17,070 20 31,788
5 5,907 13 18,806 AGE 60 41,808
6 7,393 14 20,574 AGE 62 45,947
7 8,916 15 22,373 AGE 65 52,277
8 10,474 16 24,201 AGE 70 63,165
*VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
V85-01-3A Page 3A
<PAGE>
POLICY INFORMATION CONTINUED
TABLE OF NET SINGLE PREMIUMS
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance. Values
shown are applicable on policy anniversaries. The net single premium as of a
date during a policy year shall be determined by interpolation between the
values applicable on the immediately preceding and immediately following
anniversaries.
<TABLE>
<CAPTION>
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
- --------- ------- --------- ------- --------- ------- --------- ------- --------- -------
MALE INSURED
------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.09647 21 $.17350 41 $.32865 61 $.57583 81 $ .81560
2 .09871 22 .17890 42 .33918 62 .58929 82 .82496
3 .10126 23 .18450 43 .34995 63 .60272 83 .83394
4 .10397 24 .19031 44 .36096 64 .61610 84 .84259
5 .10685 25 .19635 45 .37222 65 .62940 85 .85096
6 .10990 26 .20263 46 .38370 66 .64260 86 .85909
7 .11312 27 .20915 47 .39541 67 .65565 87 .86704
8 .11650 28 .21591 48 .40733 68 .66851 88 .87488
9 .12005 29 .22293 49 .41945 69 .68114 89 .88268
10 .12377 30 .23021 50 .43176 70 .69350 90 .89050
11 .12764 31 .23775 51 .44424 71 .70559 91 .89841
12 .13166 32 .24556 52 .45688 72 .71744 92 .90648
13 .13581 33 .25366 53 .46968 73 .72908 93 .91479
14 .14008 34 .26205 54 .48261 74 .74057 94 .92350
15 .14447 35 .27073 55 .49568 75 .75194 95 .93291
16 .14897 36 .27970 56 .50886 76 .76319 96 .94339
17 .15360 37 .28896 57 .52214 77 .77427 97 .95520
18 .15835 38 .29850 58 .53550 78 .78512 98 .96810
19 .16323 39 .30830 59 .54892 79 .79566 99 .98063
20 .16828 40 .31835 60 .56237 80 .80583 100 1.00000
FEMALE INSURED
--------------
1 $.08586 21 $.15360 41 $.28896 61 $.52214 81 $ .77427
2 .08774 22 .15835 42 .29850 62 .53550 82 .78512
3 .08993 23 .16323 43 .30830 63 .54892 83 .79566
4 .09228 24 .16828 44 .31835 64 .56237 84 .80583
5 .09478 25 .17350 45 .32865 65 .57583 85 .81560
6 .09743 26 .17890 46 .33918 66 .58929 86 .82496
7 .10023 27 .18450 47 .34995 67 .60272 87 .83394
8 .10318 28 .19031 48 .36096 68 .61610 88 .84259
9 .10629 29 .19635 49 .37222 69 .62940 89 .85096
10 .10953 30 .20263 50 .38370 70 .64260 90 .85909
11 .11290 31 .20915 51 .39541 71 .65565 91 .86704
12 .11641 32 .21591 52 .40733 72 .66851 92 .87488
13 .12004 33 .22293 53 .41945 73 .68114 93 .88268
14 .12379 34 .23021 54 .43176 74 .69350 94 .89050
15 .12764 35 .23775 55 .44424 75 .70559 95 .89841
16 .13166 36 .24556 56 .45688 76 .71744 96 .90648
17 .13581 37 .25366 57 .46968 77 .72908 97 .91479
18 .14008 38 .26205 58 .48261 78 .74057 98 .92350
19 .14447 39 .27073 59 .49568 79 .75194 99 .93291
20 .14897 40 .27970 60 .50886 80 .76319 100 .94339
101 .95520
102 .96810
103 .98063
104 1.00000
</TABLE>
V85-01-3B Page 3B
<PAGE>
POLICY INFORMATION CONTINUED
DESCRIPTION OF INVESTMENT DIVISIONS
THE ASSETS IN EACH INVESTMENT DIVISION ARE INVESTED IN SHARES OF A DESIGNATED
PORTFOLIO OF AN INVESTMENT COMPANY. EACH PORTFOLIO REPRESENTS A DIFFERENT CLASS
(OR SERIES) OF SHARES ISSUED BY THE HUDSON RIVER FUND, INC.
COMMON STOCK DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE,
PRIMARILY, COMMON STOCKS AND OTHER EQUITY-TYPE
INVESTMENTS.
MONEY MARKET DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE,
PRIMARILY, SHORT-TERM (NOT TO EXCEED ONE YEAR) MONEY
MARKET INSTRUMENTS, SUCH AS: UNITED STATES (U.S.)
GOVERNMENT AND U.S. GOVERNMENT AGENCY SECURITIES; BANK
MONEY INSTRUMENTS; TIME DEPOSITS; CERTIFICATES OF
DEPOSIT; HIGH GRADE COMMERCIAL PAPER, INCLUDING MASTER
DEMAND NOTES; AND REPURCHASE AGREEMENTS COVERING U.S.
GOVERNMENT OBLIGATIONS AND CERTIFICATES OF DEPOSIT.
INVESTMENT RESULTS WILL REFLECT FLUCTUATIONS IN MARKET VALUES OF SECURITIES.
PLEASE REFER TO THE CURRENT PROSPECTUS FOR THE HUDSON RIVER FUND, INC. FOR
A COMPLETE DESCRIPTION OF THE FUND AND THE DESIGNATED PORTFOLIOS.
V85-01-3C Page 3C
<PAGE>
POLICY OWNER AND BENEFICIARY
OWNER. The Owner of this policy is the Insured unless otherwise stated in the
application, or later changed. As Owner, you can exercise all the rights in this
policy while the Insured is living. You do not need the consent of anyone who
has only a conditional or future ownership interest in this policy.
BENEFICIARY. The Beneficiary is stated in the application, unless later changed.
If two or more persons are named, those surviving the Insured will share equally
unless otherwise stated.
We will pay any benefit for which there is no stated Beneficiary living at the
death of the Insured to the children of the Insured who then survive, in equal
shares. If none survive, we will pay the estate of the Insured.
CHANGES. While the Insured is living, you may change the Owner or Beneficiary by
written notice in a form satisfactory to us. The change will take effect on the
date you sign the notice, except that it will not apply to any payment we make
or other action we take before we receive the notice at our Administrative
Office. If you change the Beneficiary, any previous arrangement you made under
the Payment Options provision on page 9 is cancelled.
ASSIGNMENT. You may assign this policy, but we will not be bound by an
assignment unless it is in writing and we have received it at our Administrative
Office. Your rights and those of any other person referred to in this policy
will be subject to the assignment. we assume no responsibility for the validity
of any assignment.
PREMIUMS
AMOUNTS AND DUE DATES. Page 3 shows the amounts and due dates of premiums and
the period for which they are to be paid. Each premium is payable on or before
its due date at our Administrative Office.
You may write and ask us to change the frequency of premium payment. If we
approve the change, the new premium will be determined on the rate scale for
this policy.
GRACE PERIOD. We allow a grace period of 31 days for payment of each premium,
after the first premium. The insurance will continue during the grace period. If
a premium is paid during the grace period, then all benefits under this policy
will be the same as if such premium had been paid on its due date.
LAPSE. If a premium is not paid by the end of its grace period, the policy will
lapse as the premium due date. If this occurs, all insurance ends, except as
stated in Options on Lapse on page 7. Additional benefit riders do not continue
beyond the grace period of an unpaid premium.
REINSTATEMENT. You may reinstate this policy within five years after lapse if:
(1) the policy has not been given up for its net cash value; (2) you provide
evidence of insurability satisfactory to us; and (3) you pay the larger of: (a)
all overdue premiums with interest at 6% per year compounded annually; or (b)
110% of difference between the following Items (i) and (ii). Item (i) is the
excess of the cash value immediately after reinstatement over the cash value
immediately before reinstatement. Item (ii) is any policy loan, and accrued loan
interest, in effect when any option on lapse became effective, with loan
interest to the date of reinstatement.
Upon reinstatement this policy will have the same Benefit Base and the same
Variable Adjustment Amount as to each investment division (as these are
determined in the Variable Adjustment Amount provision on page 11) as if default
had not occurred. Also, upon reinstatement this policy will have a loan equal to
the sum of the following Items (i) and (ii). Item (i) is any loan, and accrued
loan interest, in effect at the date any option on lapse became effective, with
loan interest to the date of reinstatement. Item (ii) is any loan arising after
the date any option on lapse became effective, with loan interest to the date of
reinstatement.
PREMIUM ADJUSTMENT. We will add to the insurance benefits any part of the last
premium paid that applies to a period beyond the policy month in which the
Insured dies. If the Insured dies during the grace period of an unpaid premium,
we will deduct from the benefits the part of the overdue premium for one policy
month.
V85-01-4 Page 4
<PAGE>
DEATH BENEFIT
The Death Benefit equals:
o the face amount shown on page 3;
o plus the sum, if positive, of the Variable Adjustment Amounts, for each
investment division under this policy in which you have a cash value, for
the policy year in which the Insured dies.
A description of how the Variable Adjustment Amount for each investment division
is determined is on page 11.
CASH VALUE
You may give up this policy for its net cash value at any time while the Insured
is living. The net cash value is the cash value minus any loan and loan
interest.
We will determine the net cash value on the date we receive your signed request
for it at our Administrative Office. The policy will terminate on the date you
send the policy and the request to us.
CASH VALUE. The cash value of the policy will vary daily with the performance of
the investment divisions under this policy in which you have a cash value. See
page 12 for a description of how cash values are determined.
LOANS
You may get a loan on this policy while it has a loan value and it is not being
continued as extended term insurance under the Options on Lapse on page 7. This
policy will be the sole security for the loan.
The amount of the loan may not be more than the loan value. Except when used to
pay premiums, a loan must be at least $100 more than any existing loan and loan
interest. Any existing loan and loan interest will be deducted from the new
loan. We may also deduct any unpaid premium then due.
A loan, whether you repay it or not, will have a permanent effect on the
Variable Adjustment Amounts, Death Benefit and cash value under this policy. It
will have no effect on the amount of the premiums payable under this policy.
We will allocate loans to the investment divisions based on your net cash value
in each investment division as of the dates the loans are made. We will allocate
loan repayments to the investment divisions based on the amount of your
outstanding loans as to each investment division as of the dates the repayments
are made. See page 12 for a description of how the cash value in each investment
division is determined.
LOAN VALUE. If this policy has not lapsed, the loan value is 90% of the policy's
cash value. If this policy has lapsed and is being continued as Reduced Paid-up
Insurance under the Options on Lapse on page 7, the loan value is the cash value
on the next policy anniversary, minus interest at the loan rate to that date.
LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%.
Interest is due on each policy anniversary. If the interest is not paid when
due, it will be added to the loan and bear interest at the loan rate.
When a loan plus loan interest first exceeds the cash value, we will mail to you
and any assignee of record at last known addresses a notice that the policy will
terminate if such excess amount is not repaid within 31 days after we mailed
such notice.
REPAYMENT. You may repay a loan and loan interest in whole or in part at any
time while the Insured is living and this policy is in effect. However, if this
policy has lapsed and you are continuing insurance under one of the Options on
Lapse on page 7, any loan that was deducted in determining the benefit on lapse
may not be repaid unless this policy is reinstated. We will deduct any existing
loan and loan interest from any benefits we pay at the Insured's death.
V85-01-4 Page 5
<PAGE>
THE SEPARATE ACCOUNT
The Separate Account is our Separate Account I (in unit investment trust form).
We established and we maintain it under the laws of New York State. Realized and
unrealized gains and losses from the assets of the Separate Account are credited
or charged against it without regard to our other income, gains, or losses.
Assets are put in the Separate Account to support this policy and other variable
life insurance policies. Assets may be put in the Separate Account for other
purposes, but not to support contracts or policies other than variable life
insurance.
The assets of the Separate Account are our property. The portion of its assets
equal to the reserves and other policy liabilities with respect to the Separate
Account will not be chargeable with liabilities arising out of any other
business we conduct. We may transfer assets of the Separate Account in excess of
such reserves and liabilities to our general account. We may transfer assets of
an investment division in excess of the reserves and other liabilities with
respect to that division to another investment division or to our general
account.
We will value the assets of each investment division on each business day. A
business day is generally any day on which the New York Stock Exchange is open
for trading.
INVESTMENT DIVISIONS. The Separate Account consists of "investment divisions."
Each division may invest its assets in a separate class (or series) of shares of
a designated investment company. Each class represents a separate portfolio in
the investment company. The investment divisions available on the Register Date
are described on Page 3C. If we add or remove investment divisions, we will send
you a new Page 3C reflecting this.
We have the right to change designated investment companies. We have the right
to add or remove investment divisions. We have the right to withdraw assets of a
class of policies to which this policy belongs from an investment division and
put them in another investment division. We also have the right to combine any
two or more investment divisions. The term "investment division" in this policy
shall refer to any other investment division in which the assets of a class of
policies to which this policy belongs were placed. If we make any such change we
will send you a new Page 3C reflecting it.
We have the right to:
1. register or deregister the Separate Account under the Investment
Company Act of 1940;
2. run the Separate Account under the direction of a committee, and to
discharge such committee, at any time;
3. restrict or eliminate any voting rights of policy owners, or other
persons who have voting rights as to the Separate Account; and
4. operate the Separate Account by making direct investments or in any
other form. If we do so, we may invest the assets of the Separate
Account in any legal investments. We will rely upon our own and
outside counsel for advice in this regard. Also, unless otherwise
required by law or regulation, the investment advisor or any
investment policy may not be changed without our consent.
CHANGE IN INVESTMENT OBJECTIVE OR POLICY. We will notify you of any material
change in an investment objective or policy of any investment company that is
invested in by an investment division to which net premiums have been allocated
under this policy.
If required by law or regulation, the investment policy of the separate Account
will not be changed unless approved by the Superintendent of Insurance of New
York State or deemed approved in accordance with such law or regulation. If so
required, the process for getting such approval is filed with the insurance
supervisory official of the jurisdiction in which this policy is delivered.
INVESTMENT OPTIONS
ALLOCATION OF NET ANNUAL PREMIUMS. If premiums are duly paid, we will allocate
to each investment division at the beginning of each policy year a percentage of
the Net Annual Premium shown on page 3 for that year. Such allocations will be
based on the allocation percentages then in effect. The allocation percentages
for the first policy year are as designated in the application for this policy.
Unless you change them, such percentages shall also apply in later years.
V85-01-6 Page 6
<PAGE>
INVESTMENT OPTIONS CONTINUED
You may change the allocation percentages for policy years after the first by
notifying us in writing of the new percentages. Each allocation percentage
greater than zero must be a whole number of not more than 100%. The sum of the
percentages must equal 100%. A change will take effect on the next policy
anniversary if we receive the notice at our Administrative Office at least 7
days before such anniversary.
TRANSFER OF CASH VALUES. You may ask us to transfer all or part of your cash
value in one investment division to another. Only two such transfers may be made
in a policy year. We will make the transfer as of the date we receive your
written request for it at our Administrative Office.
OPTIONS ON LAPSE
You have a number of options if the policy lapses. You may apply for
reinstatement. If there is a net cash value, you may withdraw it and give up the
policy. Or, you may continue insurance under one of the following options:
REDUCED PAID-UP INSURANCE. This fixed benefit insurance for the Insured's
lifetime and for the amount that the net cash value will buy.
EXTENDED TERM INSURANCE. This is fixed benefit term insurance for an amount
equal to the Death Benefit on the date of lapse, minus any unpaid loan and loan
interest. The insurance will continue from the date of lapse for as long a term
period as the net cash value will buy. In no event, however, will this period be
less than 90 days if premiums have been paid for at least three months before
lapse and there is no loan on this policy. This option is not available if so
stated on page 3.
An Option on Lapse will become effective on the date your written request for it
is received at our Administrative Office. If your request is not received within
three months after the date of lapse, extended term insurance will become
effective automatically at the end of such three month period. Reduced paid-up
insurance will apply instead if the extended term insurance option is not
available.
If the Insured dies after the grace period but within three months from the date
of lapse, the greater of the benefit under reduced paid-up or extended term
insurance will apply. In this case, any restriction on page 3 as to extended
term insurance will not apply.
We will determine the amounts of these options as of the date the option becomes
effective. We will use net cash values as of the date the option becomes
effective, adjusted for any loan transaction on or after that date. A term
period will begin as of the date of lapse (the due date of the unpaid premium).
We will use net single premiums for the Insured's age as of the date of lapse.
EXCHANGE OF POLICY
You may exchange this policy for a policy of permanent fixed benefit insurance
on the life of the Insured. You may make such an exchange within 18 months after
the Date of Issue shown on page 3. We will not require evidence of insurability.
We will require:
1. That this policy be in effect on the date of exchange with all premiums due
having been paid; and
2. Repayment of any loan and loan interest on this policy.
The date of exchange will be the later of: (a) the date you send us this policy
and the signed request on our form of such exchange; or (b) the date we receive
at our Administrative Office any sum due to be paid for such exchange.
THE NEW POLICY. The new policy will be the "Executive Plan" policy being offered
by The Equitable Life Assurance Society of the United States (Equitable) on the
Date of Issue of this policy. It is a policy of permanent fixed benefit life
insurance. The new policy will have the same face amount, Register Date, Date of
Issue, and Issue Age as this policy. Premiums for the new policy will be based
on Equitable's rates in effect on its Register Date for the same class of risk
as under this policy. Any additional benefit riders in this policy will be
included in the new policy only if Equitable was offering them with the new
policy as of its Date of Issue.
V85-01-6 Page 7
<PAGE>
EXCHANGE OF POLICY CONTINUED
Upon request you will be told the amount of the first premium for the new
policy, and of any extra sum required or allowance to be made for a premium or
cash value adjustment that takes appropriate account of the premiums and cash
values under this policy and under the new policy. A detailed statement of the
method of computing such and adjustment has been filed with the insurance
supervisory official of the jurisdiction in which this policy is delivered.
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
required premiums. This policy and the application (a copy of which is attached
at issue) constitute the entire contract. The rights conferred by this policy
are in addition to those provided by applicable Federal and State laws and
regulations.
The contract may not be modified, nor may any of our rights or requirements be
waived, except in writing signed by our President, one of our Vice Presidents,
or by our Secretary or Treasurer.
INCONTESTABILITY All statements made in the application are representations and
not warranties. We have the right to contest the validity of this policy based
on material misstatements made in the application. However, this policy will
become incontestable after it has been in effect during the lifetime of the
Insured for two years from the Date of Issue shown on page 3.
No statement shall be used to contest a claim unless contained in the
application.
See any additional benefit riders for modifications of this provision that apply
to them.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be those that the premium paid would have purchased at the correct age and sex.
SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within
two years after the Date of Issue shown on page 3, our liability will be limited
to the payment of a single sum equal to the premiums paid minus any loan and
loan interest.
POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, policy
anniversaries and premium periods are measured from the Register Date. Each
policy month begins on the same day in each calendar month as in the Register
Date. If the end of a premium period or policy year is indicated by an age, it
ends on the policy anniversary nearest the birthday on which the Insured reaches
that age.
POLICY CHANGES. You may change this policy to another plan of insurance or add
additional benefit riders or make other changes, subject to our rules at the
time of change.
REPORTS. Each policy year after the first we will give you a report showing the
Death Benefit and the cash value as of the first day of such year. The amount of
any existing loan and the accrued loan interest for the previous policy year
will also be shown. No such reports will be given while this policy is lapsed.
We will also give you such other reports as may be required by law.
BASIS OF COMPUTATION. Cash values, reserves and net single premiums are based on
the Commissioners 1958 Standard Ordinary Mortality Table. For any extended term
insurance, they are based instead on the Commissioners 1958 Extended Term
Insurance Table. Continuous functions are used with interest compounded annually
at 4%.
The cash values and paid-up insurance benefits are equal to or more than those
required by law. A detailed statement of the method of computing values and
benefits has been filed with the insurance supervisory official of the
jurisdiction in which this policy is delivered. The tabular cash value at the
end of each policy year equals the reserve. Reserves referred to in this policy
are not less than reserves determined according to the Commissioners Reserve
Valuation Method. Our expense and mortality results will not adversely affect
the dollar amount of insurance benefits or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. As long as this policy is not
being continued under one of the Options on Lapse, we will make payments under
this policy as follows:
o A cash value will be paid within 7 days after we receive your policy
and request at our Administrative Office; and
o A loan will be paid within 7 days after we receive your request at our
Administrative Office; and
V85-01-8 Page 8
<PAGE>
GENERAL PROVISIONS CONTINUED
o The insurance benefits will be paid within 7 days after we receive at
our Administrative Office proof of the Insured's death and all other
requirements deemed necessary before such payment may be made.
We may not be able to determine the value of the assets of the investment
divisions if: (1) the New York Stock Exchange is closed; (2) the Securities and
Exchange Commission requires trading to be restricted or declares an emergency;
or (3) the Securities and Exchange Commission by order permits us to defer
payments for the protection of our policy Owners. During such times we may
defer:
1. Determination and payment of cash values;
2. Payment of loans;
3. Determination of a change in a Variable Adjustment Amount, and payment
of any portion of the Death Benefit equal to the Variable Adjustment
Amount;
4. Any requested transfer of cash value; and
5. Use of Insurance Benefits under the Payment Options.
DEFERMENT UNDER OPTIONS ON LAPSE. We may defer payment of a cash value and the
making of a loan for up to six months after we receive a request at our
Administrative Office if this policy is being continued under one of the Options
on Lapse. We will allow interest, at a rate of at least 3% a year, on any cash
value payment we defer for 30 days or more.
PAYMENT OPTIONS
Payments under these options will not be affected by the investment experience
of any investment division after proceeds are applied under such options.
Instead of having the insurance benefits or net cash value paid immediately in
one sum, you can choose another form of payment of all or part (if at least
$2,500). If you do not arrange for this before the Insured dies, the Beneficiary
will have this right when the Insured dies. Arrangements you make, however,
cannot be changed by the Beneficiary after the Insured's death. The options are:
1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with
interest paid at the end of each month, each 3 months, each 6 months or
each 12 months, as chosen.
2. INSTALMENT OPTIONS:
A. FIXED PERIOD: Paid in equal instalments for a specified number of
years (not more than 30). The instalments will not be less than those
shown in the Table of Guaranteed Payments on page 10.
B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the
amount applied, together with interest on the unpaid balance, is used
up.
3. LIFE INCOME OPTIONS:
Paid as a monthly income for life in an amount we determine but not
less than shown in the Table of Guaranteed Payments on page 10.
We guarantee payments for life and in any event for 10 years, 20
years, or until the payments we make equal the amount applied (called
"refund certain"), according to the "certain" period chosen.
We guarantee interest under Option 1 at the rate of 3% a year and under Option 2
at 3-1/2% a year, or such higher rates as we may determine. We may allow excess
interest under Options 1 and 2.
We reserve the right to change how often we make payments, so that each payment
is for at least $25. The payee under an option may name and change a successor
payee for any amount we would otherwise pay the payee's estate.
Any arrangements involving more than one of the options, or a payee who is not a
natural person (such as a corporation) or who is a fiduciary, must have our
approval. Also, details of all arrangements will be subject to our rules at the
time the arrangement takes effect. These include withdrawal or commutation
rights, designation of payees and successor payees, and evidence of age and
survival.
Choices (or any later changes) under these options will be made and will take
effect in the same way as a change of Beneficiary. Amounts applied under these
options will not be subject to the claims of creditors or to legal process, to
the extent permitted by law.
V85-01-8 Page 9
<PAGE>
TABLE OF GUARANTEED PAYMENTS
(MINIMUM AMOUNT FOR EACH $1,000 APPLIED)
OPTION 2A
FIXED PERIOD INSTALMENTS
------------------------
Number
of Years' Monthly Annual
Instalments Instalment Instalment
------------ ----------- -----------
1 $84.70 $1000.00
2 43.08 508.60
3 29.21 344.86
4 22.28 263.04
5 18.12 213.99
6 15.36 181.32
7 13.38 158.01
8 11.91 140.56
9 10.76 127.00
10 9.84 116.18
11 9.09 107.34
12 8.47 99.98
13 7.94 93.78
14 7.49 88.47
15 7.11 83.89
16 6.77 79.89
17 6.47 76.37
18 6.20 73.25
19 5.97 70.47
20 5.76 67.98
21 5.57 65.74
22 5.40 63.70
23 5.24 61.85
24 5.10 60.17
25 4.97 58.62
26 4.84 57.20
27 4.73 55.90
28 4.63 54.69
29 4.54 53.57
30 4.45 52.53
If instalments are paid each 3 months, they will be 25.32% of the annual
instalments. If they are paid each 6 months, they will be 50.43% of the annual
instalments.
OPTION 3
MONTHLY LIFE INCOME
-------------------
<TABLE>
<CAPTION>
10 Years Certain 20 Years Certain Refund Certain
---------------- ---------------- --------------
AGE Male Female Male Female Male Female
--- ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
50 $4.50 $3.96 $4.27 $3.89 $4.28 $3.87
51 4.58 4.02 4.32 3.94 4.35 3.93
52 4.67 4.09 4.38 4.00 4.42 3.99
53 4.75 4.16 4.44 4.06 4.50 4.05
54 4.85 4.24 4.50 4.12 4.58 4.11
55 4.94 4.32 4.56 4.18 4.66 4.18
56 5.04 4.40 4.62 4.24 4.74 4.25
57 5.15 4.49 4.68 4.31 4.83 4.33
58 5.26 4.58 4.74 4.38 4.93 4.41
59 5.37 4.68 4.81 4.45 5.03 4.49
60 5.49 4.78 4.86 4.52 5.13 4.58
61 5.62 4.89 4.92 4.59 5.24 4.67
62 5.75 5.00 4.98 4.66 5.35 4.77
63 5.88 5.12 5.04 4.73 5.48 4.88
64 6.03 5.25 5.09 4.80 5.60 4.99
65 6.17 5.39 5.14 4.88 5.74 5.10
66 6.32 5.53 5.19 4.95 5.88 5.22
67 6.48 5.68 5.24 5.01 6.03 5.35
68 6.64 5.83 5.28 5.08 6.18 5.49
69 6.80 6.00 5.32 5.14 6.35 5.64
70 6.97 6.17 5.35 5.20 6.53 5.79
71 7.15 6.34 5.38 5.26 6.71 5.96
72 7.32 6.53 5.41 5.30 6.91 6.13
73 7.50 6.72 5.43 5.35 7.12 6.32
74 7.67 6.92 5.45 5.38 7.34 6.52
75 7.85 7.12 5.47 5.42 7.58 6.73
76 8.02 7.32 5.48 5.44 7.82 6.96
77 8.19 7.53 5.49 5.46 8.09 7.21
78 8.36 7.75 5.50 5.48 8.38 7.47
79 8.52 7.96 5.50 5.49 8.67 7.75
80 8.67 8.16 5.51 5.50 9.00 8.05
81 8.81 8.36 5.51 5.51 9.34 8.39
82 8.94 8.55 5.51 5.51 9.70 8.73
83 9.06 8.73 5.51 5.51 10.10 9.12
84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
</TABLE>
Income amounts for Life Income Options are based on age nearest birthday when
income starts. Income amounts for ages not shown will be furnished on request.
V85-01-10 Page 10
<PAGE>
BASIS OF VALUES
ACTUAL NET RATE OF RETURN (Actual NRR). For each investment division, the Actual
NRR for a policy year reflects the division's:
o dividends received from the investment company;
o plus realized and unrealized capital gains of the division's
investment in the investment company;
o minus realized and unrealized capital losses of the division's
investment in the investment company;
o minus any charge for taxes or amounts set aside as a reserve for
taxes;
o minus a charge not exceeding .50% per year for mortality and expense
risks.
The Actual NRR for each investment division will be increased to the extent that
expenses of the investment division exceed the charges for securities brokers'
commissions, transfer taxes, and other fees relating to securities transactions
and a charge for investment management expenses of .25% per year.
The actual NRR for a period less than a year will be calculated in a consistent
manner.
BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a
pro-rata part of 4% for periods of less than a year.)
If the Actual NRR for all investment divisions always equals the Base NRR, then:
o the Death Benefit will always equal the Face Amount; and
o the Cash Value at the end of each policy year will equal the tabular
cash value shown on page 3A.
VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of
insurance in effect for that policy year due to investment performance in past
years. On each policy anniversary we will determine a new VAA for the next
policy year. We will do this independently for each investment division, taking
into account the Actual NRR for the first policy year.
For the first policy year the VAA for each investment division is zero. For
later policy years, the VAA for each investment division will equal the VAA for
that division for the last policy year, plus the VAA Change Amount for that
division. A VAA does not change during a policy year.
VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount
for each investment division may be positive or negative. It will equal the
product of the following Items (a) and (b) divided by Item (c).
(a) The Actual NRR for the investment division minus the Base NRR for that
policy year.
(b) The Benefit Base for the investment division as of the last policy
anniversary.
(c) The Net Single Premium per $1.00 of VAA for the current policy
anniversary as shown on page 3B.
BENEFIT BASE. For each investment division, the Benefit Base on the Register
Date is the product of the following Items (1) and (2):
(1) The Allocation Percentage designated in the application for this
policy.
(2) The Net Annual Premium for the first policy year.
On policy anniversaries, the Benefit Base for an investment division is the sum
of the following Items (1) and (2):
(1) The allocation percentage for that anniversary, multiplied by the sum
of the following Items (a) and (b)
(a) The Tabular Cash Value on that anniversary.
(b) The Net Annual Premium for that anniversary.
(2) The Net Single Premium for the VAA for that investment division on
that anniversary.
V85-01-10 Page 11
<PAGE>
BASIS OF VALUES CONTINUED
The Net Annual Premium, Tabular Cash Values and Net Single Premiums are shown on
pages 3, 3A and 3B, respectively.
For each investment division, the VAA Change Amount will also reflect the effect
of:
1. Any policy loans in effect on the last policy anniversary;
2. All new policy loans and repayments during the previous policy year;
and
3. All transfers of cash value to or from that investment division during
the previous policy year.
In addition, if you have changed the allocation percentages, we will reallocate
the VAA's among the investment divisions.
CALCULATION OF CASH VALUES. The cash value of this policy on any date is the sum
of your cash values in each investment division on that date. If no premium is
due and unpaid, your cash value in each investment division on any date is the
sum of the following Items (1), (2) and (3):
(1) The tabular cash value on that date, multiplied by the allocation
percentage for that investment division in effect on the last policy
anniversary.
(2) The Net Single Premium on that date for the current VAA for that
investment division.
(3) If the date is not a policy anniversary, the product of the following
Items (a) and (b):
(a) The Actual NRR for the investment division minus the Base NRR for
the time lapsed since the last policy anniversary.
(b) The Benefit Base for the investment division on the last policy
anniversary.
If a premium is due and unpaid, then within three months after the due date your
cash value in each investment division is the sum of the following Items (1) and
(2):
(1) Your cash value in that investment division as of the due date of the
unpaid premium.
(2) The product of the following Items (a) and (b):
(a) The Actual NRR for the investment division minus the Net NRR for
the time elapsed since such due date.
(b) The cash value on such due date.
For each investment division, the cash value will also reflect the effect of:
1. Any policy loans in effect on the last policy anniversary;
2. All new policy loans and repayments since the last policy anniversary;
and
3. All transfers of cash value to or from that investment division since
the last policy anniversary.
More than three months after the due date of an unpaid premium, if you continue
the policy under one of the options on lapse, your cash value will equal the
reserve for the policy. In such case, the cash value within 30 days after a
policy anniversary will never be less than the cash value on that anniversary.
If at any time you have a policy loan allocated to an investment division and
your net cash value in that investment division is zero, we will cancel the VAA
and the policy loan as to such investment division and reallocate them to each
other investment division proportionately. Also, the premium allocation
percentage for such investment division will be reduced to zero and the
percentage for each other investment division will be increased proportionately.
TABULAR CASH VALUE (TCV). The tables of TCV's on page 3A show interim TCV's at
the end of each month in the first policy year and at the end of later policy
years. We will determine the TCV on other dates in a consistent manner with
allowance for time elapsed and premiums paid. Any TCV's not shown will be
furnished on request.
V85-01-12 Page 12
<PAGE>
- --------------------------------------------------------------------------------
PART 1 OF AN APPLICATION FOR INDIVIDUAL VARIABLE LIFE INSURANCE TO |_|JUV.
EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) |_|OPAI
- --------------------------------------------------------------------------------
1. PROPOSED INSURED
a. Print name as it is to appear on policy.
_______RICHARD___________________________ROE____________________________________
First Middle Initial Last
b. |X| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title___________
c. List all current occupations -- Give Titles(s) and Duties
_____________CORPORATE ATTORNEY_________________________________________________
________________________________________________________________________________
d. Date of Birth: Mo.__3__ Day__1__ Yr. 19__50__
e. Age Nearest Birthday: ___35___
f. Place of Birth: State of ___NEW YORK___
g. Residence: State of ___NEW YORK___
h. |X| Male |_| Female
2. PLAN INITIAL FACE AMOUNT
____WHOLE LIFE LEVEL FACE AMOUNT________________________________ $__100,000_____
If Flexible Prem., will the Death Benefit include the value of the Account?
|_| No (Option A) |_| Yes (Option B)
INVESTMENT DIVISION ALLOCATION (WHOLE NUMBERS ONLY)
Common Stock __50%__ _________________ ______________%
Money Market __50___ _________________ ______________
____________ _______ _________________ ______________
____________ _______ _________________ ______________
____________ _______ _________________ ______________
____________ _______ _________________ ______________
100%
3. OPTIONAL BENEFITS
|_| Accidental Death Benefit* (Specify Amount): $____________
|_| Option to Purchase Add'l Ins. (Issue ages to 37 only): $____________
|_| Disability Premium Waiver* |_| Disability Benefit-Flexible Prem. Pol.*
|_| Waive Cost of Insurance
|_| Credit $_____________ per _____________
Term Riders:
Decreasing Term Per Month
|_| Family Income: ______Years $____________
|_| Mortgage Prot.: ______Years Initial Amt.: $____________
Renewable Term Yearly 10 Yr.
|_| On Insured: |_| |_| $____________
|_| On Add'l. Insured (See page 2): |_| |_| $____________
|_| Increasing Term
|_| Children's Term (See page 2): $__________Units______________
*If Proposed Insured is a Child (Issue Age 0-14) see Limitations on p.2.
4. BENEFICIARY FOR INSURANCE ON PROPOSED INSURED. Include FULL
NAME and RELATIONSHIP to Proposed Insured.
__________________________MARGARET H. ROE, WIFE_____________________________
____________________________________________________________________________
Unless otherwise requested, the contingent beneficiary will be the surviving
children of the Insured, in equal shares. If none survive, payment will be
made to the Insured's estate.
THE BENEFICIARY UNDER ANY TERM INSURANCE RIDER on an Additional Insured or
on a Child will be as stated in those riders, unless otherwise designated in
Special Instructions.
5. OWNER Owner's Soc. Sec. or Tax No. |0|0|0|0|0|0|0|0|0| |
The Owner is |X| Proposed Insured |_| Applicant for Child (See 10.c.)
|_| Other (Give Full Name):
____________________________________________________________________________
If "Other," complete the following:
|_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_____________
Relationship to Insured_____________________________________________________
Specify a successor Owner if desired
____________________________________________________________________________
If the Proposed Insured or the Applicant for a Child is not the Owner and if
all persons designated die before the Insured, the Owner will be the estate
of the last of such persons to die except where the Insured is a Child (see
Note in 10.c.).
6. MAILING ADDRESS |_| Business (Give Full Name) |x| Residence
|1|0|0|_|S|P|E|C|M|E|N|_|S|T|.|_|_|_|_|_|_|_|_|_|0|1|_|_|
No. Street Apt.
|N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
City
|N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|1|0|0|0|1|
State Zip
7. PREMIUM PAYMENT PLAN
Check mode, and if Flexible Premium complete the following:
Initial Prem. Payment $ _______________________________
Planned Periodic Prems. $ _____________________________
|_| Do not send premium reminder notices
|x| Annual |_| Semi-Annual |_|Quarterly
|_| Monthly |_| System-Matic (Attach S-M Form)
|_| Single
|_| Military Allotment: Branch ______________________
Register Date_________________
|_| Salary Allotment: Register Date_________________
Unit Name__________________________________________
Unit/Sub-Unit No. if established:
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Divisible by |_| 2 |_| 4 Payroll No.________________
|_| Hold Premium $______________________
8. SUITABILITY
a. Have you the Proposed Insured and the Purchaser if other than the Proposed
Insured received: (i) a Prospectus for the policy applied for?
Yes |x| No |_|
Date of Prospectus ______SPECIMEN____________________________
Date of any supplement ______SPECIMEN________________________
(ii) a Prospectus for The Hudson River Fund, Inc.
Yes |x| No |_|
Date of Prospectus ______SPECIMEN____________________________
Date of any supplement ______SPECIMEN________________________
b. Do you understand that, under the policy applied for (exclusive of any
optional benefits), the amount of the death benefit and the cash surender
value may increase or decrease depending upon investment experience (if the
policy has a guaranteed minimum death benefit or cash surrender value it is
only the amount above such minimum that may increase or decrease)?
|X| Yes |_| No
c. With this in mind, is the policy in accord with your insurance objectives
and your anticipated financial needs? |X| Yes |_| No
9. SPECIAL INSTRUCTIONS
a. |_| Preliminary Term (PT) period of ________ days
ending _______________ . PT Premium $_______
Mo. Day Yr.
b. |_| Date to save insurance age: _____________
c. |_| Check here to request an adjustable policy loan interest rate
(if available) instead of a fixed rate.
d. Other:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
- --------------------------------------------------------------------------------
NOTE: UPON REQUEST, WE WILL FURNISH ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH
BENEFITS AND CASH VALUES, FOR (A) THE VARIABLE LIFE INSURANCE POLICY APPLIED FOR
AND (B) A FIXED BENEFIT LIFE INSURANCE POLICY FOR THE SAME PREMIUM.
- --------------------------------------------------------------------------------
EV4-200Q 1
<PAGE>
10. COMPLETE IF PROPOSED INSURED IS A CHILD (ISSUE AGES 0-14).
a. Will there be more life insurance in effect on the Child
than on any older child in the family? |_| Yes |_| No
If yes, explain: ___________________________________________
_____________________________________________________________
b. APPLICANT-COMPLETE IF OTHER THAN THE CHILD.
i. _________________________________________________________
First Name Middle Initial Last Name
ii. |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______
iii. Date of Birth___________________________________19____
Month Day Year
iv. |_| Male |_| Female
v. Relationship to Child:___________________________________
vi. Total Life Insurance now in effect: $ _________________
c. OWNER. If the Applicant is to be the Owner, after the
Applicant's death the Child will be the Owner unless
otherwise designated in Special Instructions (in any such
designation include Owner's FULL NAME, RELATIONSHIP to
Child, and Social Security or Tax Number).
NOTE: Consider designating an adult secondary Owner to
reduce the chance of a minor Child becoming the Owner. If
all persons designated die before the Child, the Owner will
be the Child.
d. OPTIONAL BENEFIT ON APPLICANT.
|_| Supplemental Protective Benefit. Give Applicant's:
i. Age Nearest ii. Place of
Birthday ______________ Birth_____________
State
iii. Height______Ft.____In. Weight______lbs.
iv. Occupations-Give Title(s) and Duties:_________________________________
________________________________________________________________________
ALSO ANSWER QUESTIONS ON PAGE 3 AS TO APPLICANT.
e. LIMITATIONS ON CHILD'S ADB AND DPW BENEFITS. If the Accidental Death Benefit
is applied for on the Child, the benefit is payable only if the Child dies
after the Child's first birthday.
If the Disability Premium Waiver Benefit is applied for on the Child, the
benefit is effective only if the Child becomes totally disabled on or after
the Child's 5th birthday.
- --------------------------------------------------------------------------------
11. COMPLETE FOR CHILDREN'S TERM RIDER.
Give Names of Children below and answer the Questions on page 3 as to each
Child.
CHILDREN PROPOSED FOR INSURANCE:
NOTE: To be eligible, children (including stepchildren and legally adopted
children) must not yet have reached their 18th birthday. Coverage
does not begin until a child is 15 days old. DATE OF BIRTH
First Name Middle Initial Last Name |SEX| MO.| DAY| YR.
- --------------------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
12. COMPLETE FOR RENEWABLE TERM RIDER ON ADDITIONAL INSURED.
Complete below and answer the Questions on page 3 as to the Additional Insured.
PROPOSED ADDITIONAL INSURED
a. Print name as it is to appear on the Policy.
________________________________________________________________________________
First Middle Initial Last
b. List all current occupations -- Give Title(s) and Duties.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
c. Date of Birth: Mo.__________ Day________ Yr. 19____
d. Age Nearest Birthday _______________________________
e. Place of Birth: State of __________________________
f. Residence: State of________________________________
g. |_| Male |_| Female
h. Owner's Relationship to Additional Insured:_________________________________
________________________________________________________________________________
- --------------------------------------------------------------------------------
13. COMPLETE IF USING EXISTING OPTION TO PURCHASE INSURANCE.
i. Existing Individual Policy No. _________________________
ii. Option Date_______ iii. Option Amount: $______________
iv. |_| Regular Option or
|_| Option on Birth or Adoption of Child
Child's Name _______________________________________
Date of Birth or Adoption___________________________
v. If applying for Disability Premium Waiver, is Proposed Insured now
totally disabled as defined in the Disability Premium Waiver
provision of the above policy? |_| Yes |_| No
This application is made under a provision in the policy indicated above
permitting the purchase of individual life insurance (the "Option Provision").
If this application is made within the time allowed and in accordance with the
other terms in the Option Provision, including timely payment of the full first
premium for the option insurance, then the option insurance shall take effect
upon the terms of the policy EVLICO would issue. Otherwise, the option insurance
shall not take effect.
Answer the Questions on page 3 only if evidence of insurability is required in
connection with an optional benefit or any excess of the insurance amount
applied for over the insurance amount permitted by the Option Provision (the
option insurance).
EV4-200Q 2
<PAGE>
OTHER INFORMATION -- HAS ANY PERSON PROPOSED FOR INSURANCE:
14.a. Ever had a driver's license suspended or revoked or, within the last three
years, been convicted of two or more moving violations or driving under the
influence of alcohol or drugs? (Give full details -- including dates, types of
violation, and reason for license suspension or revocation.) |_| Yes |X| No
b. Any plan to travel or reside outside the U.S.? (Give full details.)
|_| Yes |X| No
c. Any other life insurance now in effect or application now pending? (State
companies and amounts.) |_| Yes |X| No
d. Smoked cigarettes within the last 12 months? |_| Yes |X| No
15.a. In the last year flown other than as a passenger or plan to do so?
|_| Yes |X| No
If yes: Total flying time at present________________ Hours;
Last 12 mos.________Hours; Next 12 mos._________Est. Hours.
(Complete Aviation Supplement for pilot instruction; competitive, test,
stunt or military flying; or crop dusting.)
b. Engaged within the last year, or any plan to engage in motor racing on land
or water, underwater diving, sky diving, ballooning, hang-gliding or
parachuting? (If yes, complete Avocation Supplement.) |_| Yes |X| No
c. Ever had an application for life or health insurance declined, that required
an extra premium or was otherwise modified? (Give full details.) |_| Yes |X| No
d. Replaced or changed any existing insurance or annuity (or any plan to do so)
assuming the insurance applied for will be issued? (State companies, plans and
amounts.) |_| Yes |X| No
ANSWER QUESTIONS 16, 17 AND 18 ONLY IF NON-MEDICAL.
16. Proposed Insured:__________Height___6____Ft.____1____In. Weight__185__lbs.
Additional Insured:________Height________Ft._________In. Weight_______lbs.
HAS ANY PERSON PROPOSED FOR INSURANCE:
17.a. Ever been treated for or had any indication of heart trouble, stroke, high
blood pressure, chest pain, diabetes, tumor or cancer? (Give full details.)
|_| Yes |X| No
b. In the last 5 years, consulted a physician, or been examined or treated at a
hospital or other medical facility? (Include medical check-ups in the last 2
years. Do not include colds, minor virus infections, minor injuries, or normal
pregnancy.) (Give full details.) |_| Yes |X| No
18.a. In the last ten years used barbiturates, amphetamines, hallucinatory drugs
or narcotics? (Give full details.) |_| Yes |X| No
b. In the last ten years received counseling or treatment for the use of alcohol
or drugs? (Give full details.)
|_| Yes |X|No
19. DETAILS. For each yes answer give Question number, name of person(s)
affected and full details. For 17 and 18 also include conditions, dates,
durations, treatment and results, and names and addresses of physicians and
medical facilities.
No. Name of Person Affected Details
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
20. COMPLETE IF FIRST PREMIUM IS PAID BEFORE THE POLICY IS DELIVERED:
Have the undersigned read and do they agree to the conditions of EVLICO's
Temporary Insurance Agreement, including (i) the requirement that all of the
conditions in that Agreement must be met before any insurance takes effect, and
(ii) the $250,000 insurance amount limitation? |_| YES |_| NO (If "No," a
premium may not be paid before the policy is delivered.)
AMOUNT PAID: $___________. (Draw checks to order of EVLICO.)
AGREEMENT. Each signer of this application agrees that:
(1) The statements and answers in all parts of this application are true and
complete to the best of my knowledge and belief. EVLICO may rely on them in
acting on this application.
(2) EVLICO's Temporary Insurance Agreement states the conditions that must be
met before any insurance takes effect, if the full first premium for the
policy applied for is paid before the policy is delivered.
(3) EXCEPT AS STATED IN THE TEMPORARY INSURANCE AGREEMENT, NO INSURANCE SHALL
TAKE EFFECT ON THIS APPLICATION: (A) UNTIL A POLICY IS DELIVERED AND THE
FULL FIRST PREMIUM FOR IT IS PAID WHILE THE PROPOSED INSURED IS LIVING; (B)
BEFORE ANY REGISTER DATE SPECIFIED IN THIS APPLICATION; AND (C) UNLESS TO
THE BEST OF MY KNOWLEDGE AND BELIEF THE STATEMENTS AND ANSWERS IN ALL PARTS
OF THIS APPLICATION CONTINUE TO BE TRUE AND COMPLETE, WITHOUT MATERIAL
CHANGE, AS OF THE TIME SUCH PREMIUM IS PAID.
(4) No agent or medical examiner has authority to modify this Agreement or the
Temporary Insurance Agreement, nor to waive any of EVLICO's rights or
requirements. EVLICO shall not be bound by any information unless it is
stated in application Part 1, 1A or 2.
- --------------------------------------------------------------------------------
Signature of Agent________/s/ John Q. Agent_____________________________________
IT IS UNDERSTOOD THAT UNDER THE POLICY APPLIED FOR (EXCLUSIVE OF ANY OPTIONAL
BENEFITS) THE AMOUNT OF THE DEATH BENEFIT AND THE CASH SURRENDER VALUE MAY
INCREASE OR DECREASE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT
AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT (IF THE POLICY HAS A GUARANTEED
MINIMUM DEATH BENEFIT OR CASH SURRENDER VALUE IT IS ONLY THE AMOUNT ABOVE SUCH
MINIMUM THAT MAY INCREASE OR DECREASE).
Dated at __NEW YORK_____NY__________________on___3/1_____19__85__
City State
(X)___/s/ Richard Roe___________________________________________________________
Signature of Proposed Insured or of Applicant if Proposed Insured is a Child,
Issue Age 0-14.
________________________________________________________________________________
Signature of Additional Insured if required.
________________________________________________________________________________
Signature of Purchaser if not Proposed Insured or Applicant.
(If corp. show firm's name and signature of authorized officer.)
EV4-200Q 3
<PAGE>
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
Home Office: 1285 Avenue of the Americas, New York, New York 10019
VARIABLE
LIFE
INSURANCE
POLICY
Limited Payment Life Plan -- LEVEL FACE AMOUNT. Variable insurance
payable upon death. Guaranteed Minimum Death Benefit. Fixed premiums
payable for Premium Period shown on page 3 or until earlier death.
Non-Participating. Investment experience reflected in benefits.
Investment options described on page 6.
No. 85-01
VARIABLE
LIFE INSURANCE
POLICY
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
THE INSURED RICHARD ROE
POLICY OWNER RICHARD ROE
INITIAL
FACE AMOUNT $100,000
POLICY NUMBER SPECIMEN
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
A Stock Life Insurance Company
Agrees
o To pay the insurance benefits of this policy to the Beneficiary upon
receiving proof of the Insured's death; and
o To provide you (the policy Owner) with the other rights and benefits of this
policy.
These agreements are subject to the provisions of this policy.
As shown on page 3, the face amount increases at the beginning of each policy
year from the second to the fifteenth. It is constant thereafter at 150% of the
initial face amount.
THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE
FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR
AS DESCRIBED ON PAGE 5 DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY,
BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT FOR THE POLICY YEAR IN WHICH THE
INSURED DIES.
THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE OR
DECREASE DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY.
Premiums are shown on page 3 and are fixed as to amount. They will not vary with
the investment experience of this policy.
RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you
are not satisfied with it, you may cancel it by returning the policy with a
written request for cancellation to our Administrative Office by the later of:
(a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the
application was signed. If you do this, we will refund the premium that was
paid.
SPECIMEN SPECIMEN
Kevin Keefe Secretary Franklin Maisano President
Whole Life Plan -- INCREASING FACE AMOUNT. Variable insurance payable upon
death. Guaranteed Minimum Death Benefit. Face amount increases annually to 150%
of initial face amount. Fixed premiums payable for life. Non-Participating.
Investment experience reflected in benefits. Investment options described on
pages 6.
No. 85-02
<PAGE>
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
1285 Avenue of the Americas, New York
CONTENTS
Insurance benefits 2
Policy owner and beneficiary 4
Premiums, grace, lapse, reinstatement 4
Death Benefit 5
Cash Value 5
Loans 5
The Separate Account 6
Investment Options,
allocations, transfers 6
Options on Lapse 7
Exchange of Policy 7
General Provisions 8
Payment Options 9
Basis of Values 11
(Net rates of return, variable adjustment amount, benefit base, calculation of
cash values)
Any additional benefit riders and a copy of the application are at the back of
the policy after page 12.
IN THIS POLICY:
"We," "our" and "us" mean Equitable Variable Life Insurance Company.
"You" and "your" mean the Owner of the policy at the time an Owner's right is
exercised.
ADMINISTRATIVE OFFICE
The address of our Administrative Office is shown on page 3. You should send
premiums and requests to that address unless instructed otherwise.
INSURANCE BENEFITS
The insurance benefits we pay at the Insured's death include:
o the Death Benefit described on page 5;
o plus any additional benefits due from riders to this policy;
o plus or minus any adjustment for the last premium;
o minus any loan (and loan interest) on the policy.
We will add interest to the resulting amount for the period from the date of
death to the date of payment. It will be computed at the interest rate we are
then paying under the Deposit Option on page 9.
We will pay these benefits only if premiums have been paid as called for by this
policy. However, even if premiums have been discontinued we may still pay
certain benefits. See Options on Lapse, page 7.
Payment of these benefits may also be affected by other provisions of this
policy. See the Suicide Exclusion, Incontestability, and Age and Sex clauses on
page 8. Special exclusions or limitations (if any) are listed on page 3.
No. 85-02 Page 2
<PAGE>
POLICY INFORMATION
THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985
POLICY OWNER RICHARD ROE DATE OF ISSUE MAR 1, 1985
INITIAL
FACE AMOUNT $100,000 ISSUE AGE, SEX 35, MALE
POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE
**************************BENEFITS AND PREMIUMS TABLE***************************
BENEFITS ANNUAL PREMIUM PREMIUM PERIOD
LIFE INSURANCE - VARIABLE $2,320.00 FOR LIFE
THE FIRST PREMIUM IS $2,320.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
SUBSEQUENT PREMIUMS ARE DUE ON MAR 1, 1986 AND EVERY 12 MONTHS THEREAFTER DURING
THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE.
*****************************TABLE OF FACE AMOUNTS******************************
<TABLE>
<CAPTION>
POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT
<S> <C> <C> <C> <C> <C>
1 $100,000 6 $115,900 11 $134,400
2 $103,000 7 $119,400 12 $138,400
3 $106,100 8 $123,000 13 $142,600
4 $109,300 9 $126,700 14 $146,900
5 $112,600 10 $130,500 15 AND OVER $150,000
</TABLE>
**************************** TABLE OF NET ANNUAL PREMIUMS***********************
BEGINNING OF NET ANNUAL
POLICY YEAR PREMIUM
1 $1,259.00
2 - 5 2,045.00
5 AND LATER 2,145.00
*********************INVESTMENT ALLOCATION OF NET ANNUAL PREMIUMS***************
INVESTMENT DIVISIONS: COMMON STOCK 50%
MONEY MARKET 50%
***********ADMINISTRATIVE OFFICE: EQUITABLE LIFE INSURANCE COMPANY**************
SPECIMEN REGIONAL SERVICE CENTER
100 SPECIMEN ST.
CITY, STATE 10001
V85-02-3 Page 3
<PAGE>
POLICY INFORMATION CONTINUED
THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985
INITIAL
FACE AMOUNT $100,000 DATE OF ISSUE MAR 1, 1985
POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE
******************************* TABULAR CASH VALUES ****************************
THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN
SEE PAGE 5 FOR CASH VALUE PROVISION
INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
<TABLE>
<CAPTION>
INTERIM INTERIM INTERIM
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
MONTH VALUES MONTH VALUES MONTH VALUES
<C> <C> <C> <C> <C> <C>
1 $ 0 5 $146 9 $ 668
2 0 6 275 10 801
3 0 7 407 11 929
4 14 8 540 12 1062
</TABLE>
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
<TABLE>
<CAPTION>
END OF TABULAR END OF TABULAR END OF TABULAR
POLICY CASH POLICY CASH POLICY CASH
YEAR VALUES YEAR VALUES YEAR VALUES
<C> <C> <C> <C> <C> <C>
1 $ 1,062 9 $18,221 17 $38,251
2 2,959 10 20,622 18 40,884
3 4,912 11 23,062 19 43,546
4 6,917 12 25,534 20 46,235
5 9,077 13 28,033 AGE 60 59,960
6 11,290 14 30,548 AGE 62 65,499
7 13,552 15 33,081 AGE 65 86,944
</TABLE>
*VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
V85-02-3A PAGE 3A
<PAGE>
POLICY INFORMATION CONTINUED
TABLE OF NET SINGLE PREMIUMS
For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance. Values
shown are applicable on policy anniversaries. The net single premium as of a
date during a policy year shall be determined by interpolation between the
values applicable on the immediately preceding and immediately following
anniversaries.
<TABLE>
<CAPTION>
Age of Age of Age of Age of Age of
Insured Net Insured Net Insured Net Insured Net Insured Net
(Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single
Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium
- --------- ------- --------- ------- --------- ------- --------- ------- --------- -------
MALE INSURED
------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.09647 21 $.17350 41 $.32865 61 $.57583 81 $ .81560
2 .09871 22 .17890 42 .33918 62 .58929 82 .82496
3 .10126 23 .18450 43 .34995 63 .60272 83 .83394
4 .10397 24 .19031 44 .36096 64 .61610 84 .84259
5 .10685 25 .19635 45 .37222 65 .62940 85 .85096
6 .10990 26 .20263 46 .38370 66 .64260 86 .85909
7 .11312 27 .20915 47 .39541 67 .65565 87 .86704
8 .11650 28 .21591 48 .40733 68 .66851 88 .87488
9 .12005 29 .22293 49 .41945 69 .68114 89 .88268
10 .12377 30 .23021 50 .43176 70 .69350 90 .89050
11 .12764 31 .23775 51 .44424 71 .70559 91 .89841
12 .13166 32 .24556 52 .45688 72 .71744 92 .90648
13 .13581 33 .25366 53 .46968 73 .72908 93 .91479
14 .14008 34 .26205 54 .48261 74 .74057 94 .92350
15 .14447 35 .27073 55 .49568 75 .75194 95 .93291
16 .14897 36 .27970 56 .50886 76 .76319 96 .94339
17 .15360 37 .28896 57 .52214 77 .77427 97 .95520
18 .15835 38 .29850 58 .53550 78 .78512 98 .96810
19 .16323 39 .30830 59 .54892 79 .79566 99 .98063
20 .16828 40 .31835 60 .56237 80 .80583 100 1.00000
</TABLE>
<TABLE>
<CAPTION>
FEMALE INSURED
--------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $.08586 21 $.15360 41 $.28896 61 $.52214 81 $ .77427
2 .08774 22 .15835 42 .29850 62 .53550 82 .78512
3 .08993 23 .16323 43 .30830 63 .54892 83 .79566
4 .09228 24 .16828 44 .31835 64 .56237 84 .80583
5 .09478 25 .17350 45 .32865 65 .57583 85 .81560
6 .09743 26 .17890 46 .33918 66 .58929 86 .82496
7 .10023 27 .18450 47 .34995 67 .60272 87 .83394
8 .10318 28 .19031 48 .36096 68 .61610 88 .84259
9 .10629 29 .19635 49 .37222 69 .62940 89 .85096
10 .10953 30 .20263 50 .38370 70 .64260 90 .85909
11 .11290 31 .20915 51 .39541 71 .65565 91 .86704
12 .11641 32 .21591 52 .40733 72 .66851 92 .87488
13 .12004 33 .22293 53 .41945 73 .68114 93 .88268
14 .12379 34 .23021 54 .43176 74 .69350 94 .89050
15 .12764 35 .23775 55 .44424 75 .70559 95 .89841
16 .13166 36 .24556 56 .45688 76 .71744 96 .90648
17 .13581 37 .25366 57 .46968 77 .72908 97 .91479
18 .14008 38 .26205 58 .48261 78 .74057 98 .92350
19 .14447 39 .27073 59 .49568 79 .75194 99 .93291
20 .14897 40 .27970 60 .50886 80 .76319 100 .94339
101 .95520
102 .96810
103 .98063
104 1.00000
</TABLE>
V85-02-3B Page 3B
<PAGE>
POLICY INFORMATION CONTINUED
DESCRIPTION OF INVESTMENT DIVISIONS
THE ASSETS IN EACH INVESTMENT DIVISION ARE INVESTED IN SHARES OF A DESIGNATED
PORTFOLIO OF AN INVESTMENT COMPANY. EACH PORTFOLIO REPRESENTS A DIFFERENT CLASS
(OR SERIES) OF SHARES ISSUED BY THE HUDSON RIVER FUND, INC.
COMMON STOCK DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE,
PRIMARILY, COMMON STOCKS AND OTHER EQUITY-TYPE
INVESTMENTS.
MONEY MARKET DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE,
PRIMARILY, SHORT-TERM (NOT TO EXCEED ONE YEAR) MONEY
MARKET INSTRUMENTS, SUCH AS: UNITED STATES (U.S.)
GOVERNMENT AND U.S. GOVERNMENT AGENCY SECURITIES; BANK
MONEY INSTRUMENTS; TIME DEPOSITS; CERTIFICATES OF
DEPOSIT; HIGH GRADE COMMERCIAL PAPER, INCLUDING MASTER
DEMAND NOTES; AND REPURCHASE AGREEMENTS COVERING U.S.
GOVERNMENT OBLIGATIONS AND CERTIFICATES OF DEPOSIT.
INVESTMENT RESULTS WILL REFLECT FLUCTUATIONS IN MARKET VALUES OF SECURITIES.
PLEASE REFER TO THE CURRENT PROSPECTUS FOR THE HUDSON RIVER FUND, INC. FOR A
COMPLETE DESCRIPTION OF THE FUND AND THE DESIGNATED PORTFOLIOS.
V85-02-3C PAGE 3C
<PAGE>
POLICY OWNER AND BENEFICIARY
OWNER. The owner of this policy is the Insured unless otherwise stated in the
application, or later changed. As Owner, you can exercise all the rights in this
policy while the Insured is living. You do not need the consent of anyone who
has only a conditional or future ownership interest in this policy.
BENEFICIARY. The Beneficiary is as stated in the application, unless later
changed. If two or more persons are named, those surviving the Insured will
share equally unless otherwise stated.
We will pay any benefit for which there is no stated Beneficiary living at the
death of the Insured to the children of the Insured who then survive, in equal
shares. If none survive, we will pay the estate of the Insured.
CHANGES. While the Insured is living, you may change the Owner or Beneficiary by
written notice in a form satisfactory to us. The change will take effect on the
date you sign the notice, except that it will not apply to any payment we make
or other action we take before we receive the notice at our Administrative
Office. If you change the Beneficiary, any previous arrangement you made under
the Payment Options provision on page 9 is cancelled.
ASSIGNMENT. You may assign this policy, but we will not be bound by an
assignment unless it is in writing and we have received it at our Administrative
Office. Your rights and those of any other person referred to in this policy
will be subject to the assignment. We assume no responsibility for the validity
of any assignment.
PREMIUMS
AMOUNTS AND DUE DATES. Page 3 shows the amounts and due dates of premiums and
the period for which they are to be paid. Each premium is payable on or before
its due date at our Administrative Office.
You may write and ask us to change the frequency of premium payment. If we
approve the change, the new premium will be determined on the rate scale for
this policy.
GRACE PERIOD. We allow a grace period of 31 days for payment of each premium,
after the first premium. The insurance will continue during the grace period. If
a premium is paid during the grace period, then all benefits under this policy
will be the same as if such premium had been paid on its due date.
LAPSE. If a premium is not paid by the end of its grace period, the policy will
lapse as of the premium due date. If this occurs, all insurance ends, except as
stated in Options on Lapse on page 7. Additional benefit riders do not continue
beyond the grace period of an unpaid premium.
REINSTATEMENT. You may reinstate this policy within five years after lapse if:
(1) the policy has not been given up for its net cash value; (2) you provide
evidence of insurability satisfactory to us; and (3) you pay the larger of: (a)
all overdue premiums with interest at 6% per year compounded annually; or (b)
100% of the difference between the following Items (i) and (ii). Item (i) is the
excess of the cash value immediately after reinstatement over the cash value
immediately before reinstatement. Item (ii) is any policy loan, and accrued loan
interest, in effect when any option on lapse became effective, with loan
interest to the date of reinstatement.
Upon reinstatement this policy will have the same Benefit Base and the same
Variable Adjustment Amount as to each investment division (as these are
determined in the Variable Adjustment Amount provision on page 11) as if default
had not occurred. Also, upon reinstatement this policy will have a loan equal to
the sum of the following Items (i) and (ii). Item (i) is any loan, and accrued
loan interest, in effect at the date any option on lapse became effective, with
loan interest to the date of reinstatement. Item (ii) is any loan arising after
the date any option on lapse became effective, with loan interest to the date of
reinstatement.
PREMIUM ADJUSTMENT. We will add to the insurance benefits any part of the last
premium paid that applies to a period beyond the policy month in which the
Insured dies. If the Insured dies during the grace period of an unpaid premium,
we will deduct from the benefits the part of the overdue premium for one policy
month.
V85-02-4 Page 4
<PAGE>
DEATH BENEFIT
The Death Benefit equals:
o the face amount shown on page 3 for the policy year in which the Insured
dies;
o plus the sum, if positive, of the Variable Adjustment Amounts, for each
investment division under this policy in which you have a cash value, of
the policy year in which the Insured dies.
A description of how the Variable Adjustment Amount for each investment division
is determined is on page 11.
CASH VALUE
You may give up this policy for its net cash value at any time while the Insured
is living. The net cash value is the cash value minus any loan and loan
interest.
We will determine the net cash value on the date we receive your signed request
for it at our Administrative Office. The policy will terminate on the date you
send the policy and the request to us.
CASH VALUE. The cash value of the policy will vary daily with the performance of
the investment divisions under this policy in which you have a cash value. See
page 12 for a description of how cash values are determined.
LOANS
You may get a loan on this policy while it has a loan value and it is not being
continued as extended term insurance under the Options on Lapse on page 7. This
policy will be the sole security for the loan.
The amount of the loan may not be more than the loan value. Except when used to
pay premiums, a loan must be at least $100 more than any existing loan and loan
interest. Any existing loan and loan interest will be deducted from the new
loan. We may also deduct any unpaid premium then due.
A loan, whether you repay it or not, will have a permanent effect on the
Variable Adjustment Amounts, Death Benefit and cash value under this policy. It
will have no effect on the amount of the premiums payable under this policy.
We will allocate loans to the investment division based on your net cash value
in each investment division as of the dates the loans are made. We will allocate
loan repayments to the investment divisions based on the amount of your
outstanding loans as to each investment division as of the dates the repayments
are made. See page 12 for a description of how the cash value in each investment
division is determined.
LOAN VALUE. If this policy has not lapsed, the loan value is 90% of the policy's
cash value. If this policy has lapsed and is being continued as Reduced Paid-up
Insurance under the Options on Lapse on page 7, the loan value is the cash value
on the next policy anniversary, minus interest at the loan rate to that date.
LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%.
Interest is due on each policy anniversary. If the interest is not paid when
due, it will be added to the loan and bear interest at the loan rate.
When a loan plus loan interest first exceeds the cash value, we will mail to you
and any assignee of record at last known addresses a notice that the policy will
terminate if such excess amount is not repaid within 31 days after we mailed
such notice.
REPAYMENT. You may repay a loan and loan interest in whole or in part at any
time while the Insured is living and this policy is in effect. However, if this
policy has lapsed and you are continuing insurance under one of the Options on
Lapse on page 7, any loan that was deducted in determining the benefit on lapse
may not be repaid unless this policy is reinstated. We will deduct any existing
loan and loan interest from any benefits we pay at the Insured's death.
V85-02-4 Page 5
<PAGE>
THE SEPARATE ACCOUNT
The Separate Account is our Separate Account I (in unit investment trust form).
We established and we maintain it under the laws of New York State. Realized and
unrealized gains and losses from the assets of the Separate Account are credited
or charged against it without regard to our other income, gains, or losses.
Assets are put in the Separate Account to support this policy and other variable
life insurance policies. Assets may be put in Separate Account for other
purposes, but not to support contracts or policies other than variable life
insurance.
The assets of the Separate Account are our property. The portion of its assets
equal to the reserves and other policy liabilities with respect to the Separate
Account will not be chargeable with liabilities arising out of any other
business we conduct. We may transfer assets of the Separate Account in excess of
such reserves and liabilities to our general account. We may transfer assets of
an investment division in excess of the reserves and other liabilities with
respect to that division to another investment division or to our general
account.
We will value the assets of investment division on each business day. A business
day is generally any day on which the New York Stock Exchange is open for
trading.
INVESTMENT DIVISIONS. The Separate Account consists of "investment divisions."
Each division may invest its assets in a separate class (or series) of shares of
a designated investment company. Each class represents a separate portfolio in
the investment company. The investment divisions available on the Register Date
are described on page 3C. If we add or remove investment divisions, we will send
you a new Page 3C reflecting this.
We have the right to change designated investment companies. We have the right
to add or remove investment divisions. We have the right to withdraw assets of a
class of policies to which this policy belongs from an investment division and
put them in another investment division. We also have the right to combine any
two or more investment divisions. The term "investment division" in this policy
shall then refer to any other investment division in which the assets of a class
of policies to which this policy belongs were placed. If we make any such change
we will send you a new Page 3C reflecting it.
We have the right to:
1. register or deregister the Separate Account under the Investment Company
Act of 1940;
2. run the Separate Account under the direction of a committee, and to
discharge such committee at any time;
3. restrict or eliminate any voting rights of policyowners, or other persons
who have voting rights as to the Separate Account; and
4. operate the Separate Account by making direct investments or in any other
form. If we do so, we may invest the assets of the Separate Account in any
legal investments. We will rely upon our own and outside counsel for
advice in this regard. Also, unless otherwise required by law or
regulation, the investment advisor or any investment policy may not be
changed without our consent.
CHANGE IN INVESTMENT OBJECTIVE OR POLICY. We will notify you of any material
change in an investment objective or policy of any investment company that is
invested in by an investment division to which net premiums have been allocated
under this policy.
If required by law or regulation, the investment policy of the Separate Account
will not be changed unless approved by the Superintendent of Insurance of New
York State or deemed approved in accordance with such law or regulation. If so
required, the process for getting such approval is filed with the insurance
supervisory official of the jurisdiction in which this policy is delivered.
INVESTMENT OPTIONS
ALLOCATION OF NET ANNUAL PREMIUMS. If premiums are duly paid, we will allocate
to each investment division at the beginning of each policy year a percentage of
the Net Annual Premium shown on page 3 for that year. Such allocations will be
based on the allocation percentages then in effect. The allocation percentages
for the first policy year are as designated in the application for this policy.
Unless you change them, such percentages shall also apply in later years.
V85-02-6 Page 6
<PAGE>
INVESTMENT OPTIONS CONTINUED
You may change the allocation percentages for policy years after the first by
notifying us in writing of the new percentage. Each allocation percentage
greater than zero must be a whole number of not more than 100%. The sum of the
percentages must equal 100%. A change will take effect on the next policy
anniversary if we receive the notice at our Administrative Office at least 7
days before such anniversary.
TRANSFER OF CASH VALUES. You may ask us to transfer all or a part of your cash
value in one investment division to another. Only two such transfers may be made
in a policy year. We will make the transfer as of the date we receive your
written request for it at our Administrative Office.
OPTIONS ON LAPSE
You have a number of options if the policy lapses. You may apply for
reinstatement. If there is a net cash value, you may withdraw it and give up the
policy. Or, you may continue insurance under one of the following options:
REDUCED PAID-UP INSURANCE. This is fixed benefit insurance for the Insured's
lifetime and for the amount that the net cash value will buy.
EXTENDED TERM INSURANCE. This is fixed benefit term insurance for an amount
equal to the Death Benefit on the date of lapse, minus any unpaid loan and loan
interest. The insurance will continue from the date of lapse for as long a term
period as the net cash value will buy. In no event, however, will this period be
less than 90 days if premiums have been paid for at least three months before
lapse and there is no loan on this policy. This option is not available if so
stated on page 3.
An Option on Lapse will become effective on the date your written request for it
is received at our Administrative Office. If your request is not received within
three months after the date of lapse, extended term insurance will become
effective automatically at the end of such three month period. Reduced paid-up
insurance will apply instead if the extended term insurance option is not
available.
If the Insured dies after the grace period but within three months from the date
of lapse, the greater of the benefit under reduced paid-up or extended term
insurance will apply. In this case, any restriction on page 3 as to extended
term insurance will not apply.
We will determine the amounts of these options as of the date the option becomes
effective. We will use net cash values as of the date the option becomes
effective, adjusted for any loan transaction on or after that date. A term
period will begin as of the date of lapse (the due date of the unpaid premium).
We will use net single premiums for the Insured's age as of the date of lapse.
EXCHANGE OF POLICY
You may exchange this policy for a policy of permanent fixed benefit insurance
on the life of the Insured. You may make such an exchange within 18 months after
the Date of Issue shown on page 3. We will not require evidence of insurability.
We will require:
1. That this policy be in effect on the date of exchange with all premiums due
having been paid; and
2. Repayment of any loan and loan interest on this policy.
The date of exchange will be the later of: (a) the date you send us this policy
and the signed request on our form for such exchange; or (b) the date we receive
at our Administrative Office any sum due to be paid for such exchange.
THE NEW POLICY. The new policy will be the "Executive Plan" policy being offered
by The Equitable Life Assurance Society of the United States (Equitable) on the
Date of Issue of this policy. It is a policy of permanent fixed benefit life
insurance. The new policy will have a face amount equal to the initial face
amount of this policy. It will have the same Register Date, Date of Issue, and
Issue Age as this policy. Premiums for the new policy will be based on
Equitable's rates in effect on its Register Date for the same class of risk as
under this policy. Any additional benefit riders in this policy will be included
in the new policy only if Equitable was offering them with the new policy as of
its Date of Issue.
V85-02-6 Page 7
<PAGE>
EXCHANGE OF POLICY CONTINUED
Upon request you will be told the amount of the first premium for the new
policy, and of any extra sum required or allowance to be made for a premium or
cash value adjustment that takes appropriate account of the premiums and cash
values under this policy and under the new policy. A detailed statement of the
method of computing such an adjustment has been filed with the insurance
supervisory official of the jurisdiction in which this policy is delivered.
GENERAL PROVISIONS
THE CONTRACT. This insurance is granted in consideration of payment of the
required premiums. This policy and the application (a copy of which is attached
at issue) constitute the entire contract. The rights conferred by this policy
are in addition to those provided by applicable Federal and State laws and
regulations.
The contract may not be modified, nor may any of our rights or requirements be
waived, except in writing signed by our President, one of our Vice Presidents,
or by our Secretary or Treasurer.
INCONTESTABILITY. All statements made in the application are representations and
not warranties. We have the right to contest the validity of this policy based
on material misstatements made in the application. However, this policy will
become incontestable after it has been in effect during the lifetime of the
Insured for two years from the Date of Issue shown on page 3.
No statement shall be used to contest a claim unless contained in the
application.
See any additional benefit riders for modifications of this provision that apply
to them.
AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will
be those that the premium paid would have purchased at the correct age and sex.
SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within
two years after the Date of Issue shown on page 3, our liability will be limited
to the payment of a single sum equal to the premiums paid, minus any loan and
loan interest.
POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, policy
anniversaries and premium periods are measured from the Register Date. Each
policy month begins on the same day in each calendar month as in the Register
Date. If the end of a premium period or policy year is indicated by an age, it
ends on the policy anniversary nearest the birthday on which the Insured reaches
that age.
POLICY CHANGES. You may change this policy to another plan of insurance or add
additional benefit riders or make other changes, subject to our rules at the
time of change.
REPORTS. Each policy year after the first we will give you a report showing the
Death Benefit and the cash value as of the first day of such year. The amount of
any existing loan and the accrued loan interest for the previous policy year
will also be shown. No such reports will be given while this policy is lapsed.
We will also give you such other reports as may be required by law.
BASIS OF COMPUTATION. Cash values, reserves and net single premiums are based on
the Commissioners 1958 Standard Ordinary Mortality Table. For any extended term
insurance, they are based instead on the Commissioners 1958 Extended Term
Insurance Table. Continuous functions are used with interest compounded annually
at 4%.
The cash values and paid-up insurance benefits are equal to or more than those
required by law. A detailed statement of the method of computing values and
benefits has been filed with the insurance supervisory official of the
jurisdiction in which this policy is delivered. The tabular cash value at the
end of each policy year equals the reserve. Reserves referred to in this policy
are not less than reserves determined according to the Commissioners Reserve
Valuation Method. Our expense and mortality results will not adversely affect
the dollar amount of insurance benefits or cash values.
DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. As long as this policy is not
being continued under one of the Options on Lapse, we will make payments under
this policy as follows:
o A cash value will be paid within 7 days after we receive your policy and
request at our Administrative Office;
o A loan will be paid within 7 days after we receive your request at our
Administrative Office; and
o The insurance benefits will be paid within 7 days after we receive at our
Administrative Office proof of the Insured's death and all other
requirements deemed necessary before such payment may be made.
V85-02-8 Page 8
<PAGE>
GENERAL PROVISIONS CONTINUED
We may not be able to determine the value of the assets of the investment
divisions if: (1) the New York Stock Exchange is closed; (2) the Securities and
Exchange Commission requires trading to restricted or declares an emergency; or
(3) the Securities and Exchange Commission by order permits us to defer payments
for the protection of our policy Owners. During such times we may defer:
1. Determination and payment of cash values;
2. Payment of loans;
3. Determination of a change in a Variable Adjustment Amount, and payment of
any portion of the Death Benefit equal to the Variable Adjustment Amount;
4. Any requested transfer of cash value; and
5. Use of Insurance Benefits under the Payment Options.
DEFERMENT UNDER OPTIONS OF LAPSE. We may defer payments of a cash value and the
making of a loan for up to six months after we receive a request at our
Administrative Office if this policy is being continued under one of the Options
on Lapse. We will allow interest, at a rate of at least 3% a year, on any cash
value payment we defer for 30 days or more.
PAYMENT OPTIONS
Payments under these options will not be affected by the investment experience
of any investment division after proceeds are applied under such options.
Instead of having the insurance benefits or net cash value paid immediately in
one sum, you can choose another form of payment for all or part(if at least
$2,500). If you do not arrange for this before the Insured dies, the Beneficiary
will have this right when the Insured dies. Arrangements you make, however,
cannot be changed by the Beneficiary after the Insured's death. The options are:
1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with
interest paid at the end of each month, each 3 months, each 6 months or each
12 months, as chosen.
2. INSTALMENT OPTIONS:
A. FIXED PERIOD: Paid in equal instalments for a specified number of years
(not more than 30). The instalments will not be less than those shown in
the Table of Guaranteed Payments on page 10.
B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the amount
applied, together with interest on the unpaid balance, is used up.
3. LIFE INCOME OPTIONS:
Paid as a monthly income for life in an amount we determine but not less than
shown in the Table of Guaranteed Payments on page 10. We guarantee payments
for life and in any event for 10 years, 20 years, or until the payments we
make equal the amount applied (called "refund certain"), according to the
"certain" period chosen.
We guarantee interest under Option 1 at the rate of 3% a year and under Option 2
at 3-1/2% a year, or such higher rates as we may determine. We may allow excess
interest under Options 1 and 2.
We reserve the right to change how often we make payments, so that each payment
is for at least $25. The payee under an option may name and change a successor
payee for any amount we would otherwise pay the payee's estate.
Any arrangements involving more than one of the options, or a payee who is not a
natural person (such as a corporation) or who is a fiduciary, must have our
approval. Also, details of all arrangements will be subject to our rules at the
time arrangement takes effect. These include withdrawal or commutation rights,
designation of payees and successor payees, and evidence of age and survival.
Choices (or any later changes) under these options will be made and will take
effect in the same way as a change of Beneficiary. Amounts applied under these
options will not be subject to the claims of creditors or to legal process, to
the extent permitted by law.
V85-02-8 Page 9
<PAGE>
TABLE OF GUARANTEED PAYMENTS
(MINIMUM AMOUNT FOR EACH $1,000 APPLIED)
OPTION 2A
FIXED PERIOD INSTALMENTS
------------------------
Number
of Years' Monthly Annual
Instalments Instalment Instalment
----------- ---------- ----------
1 $84.70 $1000.00
2 43.08 508.60
3 29.21 344.86
4 22.28 263.04
5 18.12 213.99
6 15.36 181.32
7 13.38 158.01
8 11.91 140.56
9 10.76 127.00
10 9.84 116.18
11 9.09 107.34
12 8.47 99.98
13 7.94 93.78
14 7.49 88.47
15 7.11 83.89
16 6.77 79.89
17 6.47 76.37
18 6.20 73.25
19 5.97 70.47
20 5.76 67.98
21 5.57 65.74
22 5.40 63.70
23 5.24 61.85
24 5.10 60.17
25 4.97 58.62
26 4.84 57.20
27 4.73 55.90
28 4.63 54.69
29 4.54 53.57
30 4.45 52.53
If instalments are paid each 3 months, they will be 25.32% of the annual
instalments. If they are paid each 6 months, they will be 50.43% of the annual
instalments.
<TABLE>
<CAPTION>
OPTION 3
MONTHLY LIFE INCOME
-------------------
10 Years Certain 20 Years Certain Refund Certain
---------------------- ---------------------- -----------------------
AGE Male Female Male Female Male Female
--- ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
50 $4.50 $3.96 $4.27 $3.89 $ 4.28 $3.87
51 4.58 4.02 4.32 3.94 4.35 3.93
52 4.67 4.09 4.38 4.00 4.42 3.99
53 4.75 4.16 4.44 4.06 4.50 4.05
54 4.85 4.24 4.50 4.12 4.58 4.11
55 4.94 4.32 4.56 4.18 4.66 4.18
56 5.04 4.40 4.62 4.24 4.74 4.25
57 5.15 4.49 4.68 4.31 4.83 4.33
58 5.26 4.58 4.74 4.38 4.93 4.41
59 5.37 4.68 4.81 4.45 5.03 4.49
60 5.49 4.78 4.86 4.52 5.13 4.58
61 5.62 4.89 4.92 4.59 5.24 4.67
62 5.75 5.00 4.98 4.66 5.35 4.77
63 5.88 5.12 5.04 4.73 5.48 4.88
64 6.03 5.25 5.09 4.80 5.60 4.99
65 6.17 5.39 5.14 4.88 5.74 5.10
66 6.32 5.53 5.19 4.95 5.88 5.22
67 6.48 5.68 5.24 5.01 6.03 5.35
68 6.64 5.83 5.28 5.08 6.18 5.49
69 6.80 6.00 5.32 5.14 6.35 5.64
70 6.97 6.17 5.35 5.20 6.53 5.79
71 7.15 6.34 5.38 5.26 6.71 5.96
72 7.32 6.53 5.41 5.30 6.91 6.13
73 7.50 6.72 5.43 5.35 7.12 6.32
74 7.67 6.92 5.45 5.38 7.34 6.52
75 7.85 7.12 5.47 5.42 7.58 6.73
76 8.02 7.32 5.48 5.44 7.82 6.96
77 8.19 7.53 5.49 5.46 8.09 7.21
78 8.36 7.75 5.50 5.48 8.38 7.47
79 8.52 7.96 5.50 5.49 8.67 7.75
80 8.67 8.16 5.51 5.50 9.00 8.05
81 8.81 8.36 5.51 5.51 9.34 8.39
82 8.94 8.55 5.51 5.51 9.70 8.73
83 9.06 8.73 5.51 5.51 10.10 9.12
84 9.16 8.90 5.51 5.51 10.52 9.53
85 & over 9.26 9.05 5.51 5.51 10.96 9.97
</TABLE>
Income amounts for Life Income Options are based on age nearest birthday when
income starts. Income amounts for ages not shown will be furnished on request.
V85-02-10 PAGE 10
<PAGE>
BASIS OF VALUES
ACTUAL NET RATE OF RETURN (ACTUAL NRR.) For each investment division, the Actual
NRR for a policy year reflects the division's:
o dividends received from the investment company;
o plus realized and unrealized capital gains of the division's investment in
the investment company;
o minus realized and unrealized capital losses of the division's investment
in the investment company;
o minus any charges for taxes or amounts set aside as a reserve for taxes;
o minus a charge not exceeding .50% per year for mortality and expense
risks.
The Actual NRR for each investment division will be increased to the extent that
expenses of the investment division exceed the charges for securities brokers'
commissions, transfer taxes, and other fees relating to securities transactions
and a charge for investment management expenses of .25% per year.
The Actual NRR for a period less than a year will be calculated in a consistent
manner.
BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a
pro-rata part of 4% for periods of less than a year.)
If the Actual NRR for all investment divisions always equals the Base NRR, then:
o the Death Benefit will always equal the Face Amount; and
o the Cash Value at the end of each policy year will equal the tabular cash
value shown on page 3A.
VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of
insurance in effect for that policy year due to investment performance in past
years. On each policy anniversary we will determine a new VAA for the next
policy year. We will do this independently for each investment division, taking
into account the Actual NRR for the last policy year.
For the first policy year the VAA for each investment division is zero. For
later policy years, the VAA for each investment division will equal the VAA for
that division for the last policy year, plus the VAA Change Amount for that
division. A VAA does not change during a policy year.
VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount
for each investment division may be positive or negative. It will equal the
product of the following Items (a) and (b), divided by Item (c).
(a) The Actual NRR for the investment division minus the Base NRR for that
policy year.
(b) The Benefit Base for the investment division as of the last policy
anniversary.
(c) The Net Single Premium per $1.00 of VAA for the current policy
anniversary as shown on page 3B.
BENEFIT BASE. For each investment division, the Benefit Base on the Register
Date is the product of the following Items (1) and (2):
(1) The Allocation Percentage designated in the application for this policy.
(2) The Net Annual Premium for the first policy year.
On policy anniversaries, the Benefit Base for an investment division is the sum
of the following Items (1) and (2):
(1) The allocation percentage for that anniversary, multiplied by the sum of
the following Items (a) and (b):
(a) The Tabular Cash Value on that anniversary.
(b) The Net Annual Premium for that anniversary.
(2) The Net Single Premium for the VAA for that investment division on that
anniversary.
The Net Annual Premiums, Tabular Cash Values and Net Single Premiums are shown
on pages 3, 3A and 3B, respectively.
V85-02-10 Page 11
<PAGE>
BASIS OF VALUES CONTINUED
For each investment division, the VAA Change Amount will also reflect the effect
of:
1. Any policy loans in effect on the last policy anniversary;
2. All new policy loans and repayments during the previous policy year; and
3. All transfers of cash value to or from that investment division during the
previous policy year.
In addition, if you have changed the allocation percentages, we will reallocate
the VAA's among the investment divisions.
CALCULATION OF CASH VALUES. The cash value of this policy on any date is the sum
of your cash values in each investment division on that date. If no premium is
due and unpaid, your cash value in each investment division on any date is the
sum of the following Items (1), (2) and (3):
(1) The tabular cash value on that date, multiplied by the allocation
percentage for that investment division in effect on the last policy
anniversary.
(2) The Net single Premium on that date for the current VAA for that
investment division.
(3) If the date is not a policy anniversary, the product of the following
Items (a) and (b):
(a) The Actual NRR for the investment division minus the Base NRR for the
time elapsed since the last policy anniversary.
(b) The Benefit Base for the investment division on the last policy
anniversary.
If a premium is due and unpaid, then within three months after the due date your
cash value in each investment division is the sum of the following Items (1) and
(2):
(1) Your cash value in that investment division as of the due date of the
unpaid premium.
(2) The product of the following Items (a) and (b):
(a) The Actual NRR for the investment division minus the Net NRR for the
time elapsed since such due date.
(b) The cash value on such due date.
For each investment division, the cash value will also reflect the effect of:
1. Any policy loans in effect on the last policy anniversary;
2. All new policy loans and repayments since the last policy anniversary; and
3. All transfers of cash value to or from that investment division since the
last policy anniversary.
More than three months after the due date of an unpaid premium, if you continue
the policy under one of the options on lapse, your cash value will equal the
reserve for the policy. In such case, the cash value within 30 days after a
policy anniversary will never be less than the cash value on that anniversary.
If at any time you have a policy loan allocated to an investment division and
your net cash value in that investment division is zero, we will cancel the VAA
and the policy loan as to such investment division and reallocate them to each
other investment division proportionately. Also, the premium allocation
percentage for such investment division will be reduced to zero and the
percentage for each other investment division will be increased proportionately.
TABULAR CASH VALUE (TCV). The tables of TCV's on page 3A show interim TCV's at
the end of each month in the first policy year and at the end of later policy
years. We will determine the TCV on other dates in a consistent manner with
allowance for time elapsed and premiums paid. Any TCV's not shown will be
furnished on request.
V85-02-12 Page 12
<PAGE>
- --------------------------------------------------------------------------------
PART 1 OF AN APPLICATION FOR INDIVIDUAL VARIABLE LIFE INSURANCE TO |_|JUV.
EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) |_|OPAI
- --------------------------------------------------------------------------------
1. PROPOSED INSURED
a. Print name as it is to appear on policy.
_______RICHARD___________________________ROE____________________________________
First Middle Initial Last
b. |X| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title___________
c. List all current occupations -- Give Titles(s) and Duties
_____________CORPORATE ATTORNEY_________________________________________________
________________________________________________________________________________
d. Date of Birth: Mo.__3__ Day__1__ Yr. 19__50__
e. Age Nearest Birthday: ___35___
f. Place of Birth: State of ___NEW YORK___
g. Residence: State of ___NEW YORK___
h. |X| Male |_| Female
2. PLAN INITIAL FACE AMOUNT
____VARIABLE INCREASING PROTECTOR LIFE__________________________$__100,000_____
If Flexible Prem., will the Death Benefit include the value of the Account?
|_| No (Option A) |_| Yes (Option B)
INVESTMENT DIVISION ALLOCATION (WHOLE NUMBERS ONLY)
Common Stock __50%__ _________________ ______________%
Money Market __50___ _________________ ______________
____________ _______ _________________ ______________
____________ _______ _________________ ______________
____________ _______ _________________ ______________
____________ _______ _________________ ______________
100%
3. OPTIONAL BENEFITS
|_| Accidental Death Benefit* (Specify Amount): $____________
|_| Option to Purchase Add'l Ins. (Issue ages to 37 only): $____________
|_| Disability Premium Waiver* |_| Disability Benefit-Flexible Prem. Pol.*
|_| Waive Cost of Insurance
|_| Credit $_____________ per _____________
Term Riders:
Decreasing Term Per Month
|_| Family Income: ______Years $____________
|_| Mortgage Prot.: ______Years Initial Amt.: $____________
Renewable Term Yearly 10 Yr.
|_| On Insured: |_| |_| $____________
|_| On Add'l. Insured (See page 2): |_| |_| $____________
|_| Increasing Term
|_| Children's Term (See page 2): $__________Units______________
*If Proposed Insured is a Child (Issue Age 0-14) see Limitations on p.2.
4. BENEFICIARY FOR INSURANCE ON PROPOSED INSURED. Include FULL
NAME and RELATIONSHIP to Proposed Insured.
__________________________MARGARET H. ROE, WIFE_____________________________
____________________________________________________________________________
Unless otherwise requested, the contingent beneficiary will be the surviving
children of the Insured, in equal shares. If none survive, payment will be
made to the Insured's estate.
THE BENEFICIARY UNDER ANY TERM INSURANCE RIDER on an Additional Insured or
on a Child will be as stated in those riders, unless otherwise designated in
Special Instructions.
5. OWNER Owner's Soc. Sec. or Tax No. |0|0|0|0|0|0|0|0|0| |
The Owner is |X| Proposed Insured |_| Applicant for Child (See 10.c.)
|_| Other (Give Full Name):
____________________________________________________________________________
If "Other," complete the following:
|_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_____________
Relationship to Insured_____________________________________________________
Specify a successor Owner if desired
____________________________________________________________________________
If the Proposed Insured or the Applicant for a Child is not the Owner and if
all persons designated die before the Insured, the Owner will be the estate
of the last of such persons to die except where the Insured is a Child (see
Note in 10.c.).
6. MAILING ADDRESS |_| Business (Give Full Name) |x| Residence
|1|0|0|_|S|P|E|C|M|E|N|_|A|V|E|_|_|_|_|_|_|_|_|_|2|1|_|_|
No. Street Apt.
|N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|
City
|N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|1|0|0|0|1|
State Zip
7. PREMIUM PAYMENT PLAN
Check mode, and if Flexible Premium complete the following:
Initial Prem. Payment $ _______________________________
Planned Periodic Prems. $ _____________________________
|_| Do not send premium reminder notices
|x| Annual |_| Semi-Annual |_|Quarterly
|_| Monthly |_| System-Matic (Attach S-M Form)
|_| Single
|_| Military Allotment: Branch ______________________
Register Date_________________
|_| Salary Allotment: Register Date_________________
Unit Name______________________________________________
Unit/Sub-Unit No. if established:
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Divisible by |_| 2 |_| 4 Payroll No.________________
|_| Hold Premium $______________________
8. SUITABILITY
a. Have you the Proposed Insured and the Purchaser if other than the Proposed
Insured received: (i) a Prospectus for the policy applied for?
|x| Yes |_| No
Date of Prospectus ______SPECIMEN____________________________
Date of any supplement ______SPECIMEN________________________
(ii) a Prospectus for The Hudson River Fund, Inc.
|x| Yes |_| No
Date of Prospectus ______SPECIMEN____________________________
Date of any supplement ______SPECIMEN________________________
b. Do you understand that, under the policy applied for (exclusive of any
optional benefits), the amount of the death benefit and the cash surender
value may increase or decrease depending upon investment experience (if the
policy has a guaranteed minimum death benefit or cash surrender value it is
only the amount above such minimum that may increase or decrease)?
|X| Yes |_| No
c. With this in mind, is the policy in accord with your insurance objectives
and your anticipated financial needs?
|X| Yes |_| No
9. SPECIAL INSTRUCTIONS
a. |_| Preliminary Term (PT) period of ________ days
ending _______________ . PT Premium $_______
Mo. Day Yr.
b. |_| Date to save insurance age: _____________
c. |_| Check here to request an adjustable policy loan interest rate
(if available) instead of a fixed rate.
d. Other:
_________________________________________
_________________________________________
_________________________________________
_________________________________________
_________________________________________
- --------------------------------------------------------------------------------
NOTE: UPON REQUEST, WE WILL FURNISH ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH
BENEFITS AND CASH VALUES, FOR (A) THE VARIABLE LIFE INSURANCE POLICY APPLIED FOR
AND (B) A FIXED BENEFIT LIFE INSURANCE POLICY FOR THE SAME PREMIUM.
- --------------------------------------------------------------------------------
EV4-200Q 1
<PAGE>
10. COMPLETE IF PROPOSED INSURED IS A CHILD (ISSUE AGES 0-14).
a. Will there be more life insurance in effect on the Child
than on any older child in the family? |_| Yes |_| No
If yes, explain: ___________________________________________
_____________________________________________________________
b. APPLICANT-COMPLETE IF OTHER THAN THE CHILD.
i. _________________________________________________________
First Name Middle Initial Last Name
ii. |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______
iii. Date of Birth___________________________________19____
Month Day Year
iv. |_| Male |_| Female
v. Relationship to Child:___________________________________
vi. Total Life Insurance now in effect: $ _________________
c. OWNER. If the Applicant is to be the Owner, after the
Applicant's death the Child will be the Owner unless
otherwise designated in Special Instructions (in any such
designation include Owner's FULL NAME, RELATIONSHIP to
Child, and Social Security or Tax Number).
NOTE: Consider designating an adult secondary Owner to
reduce the chance of a minor Child becoming the Owner. If
all persons designated die before the Child, the Owner will
be the Child.
d. OPTIONAL BENEFIT ON APPLICANT.
|_| Supplemental Protective Benefit. Give Applicant's:
i. Age Nearest ii. Place of
Birthday ______________ Birth_____________
State
iii. Height______Ft.____In. Weight______lbs.
iv. Occupations-Give Title(s) and Duties:__________________________________
_______________________________________________________________________
ALSO ANSWER QUESTIONS ON PAGE 3 AS TO APPLICANT.
e. LIMITATIONS ON CHILD'S ADB AND DPW BENEFITS. If the Accidental Death Benefit
is applied for on the Child, the benefit is payable only if the Child dies
after the Child's first birthday.
If the Disability Premium Waiver Benefit is applied for on the Child, the
benefit is effective only if the Child becomes totally disabled on or after
the Child's 5th birthday.
- --------------------------------------------------------------------------------
11. COMPLETE FOR CHILDREN'S TERM RIDER.
Give Names of Children below and answer the Questions on page 3 as to each
Child.
CHILDREN PROPOSED FOR INSURANCE:
NOTE: To be eligible, children (including stepchildren and legally adopted
children) must not yet have reached their 18th birthday. Coverage
does not begin until a child is 15 days old. DATE OF BIRTH
First Name Middle Initial Last Name |SEX| MO.| DAY| YR.
- --------------------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
12. COMPLETE FOR RENEWABLE TERM RIDER ON ADDITIONAL INSURED.
Complete below and answer the Questions on page 3 as to the Additional Insured.
PROPOSED ADDITIONAL INSURED
a. Print name as it is to appear on the Policy.
________________________________________________________________________________
First Middle Initial Last
b. List all current occupations -- Give Title(s) and Duties.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
c. Date of Birth: Mo.__________ Day________ Yr. 19____
d. Age Nearest Birthday _______________________________
e. Place of Birth: State of __________________________
f. Residence: State of________________________________
g. |_| Male |_| Female
h. Owner's Relationship to Additional Insured:_________________________________
________________________________________________________________________________
- --------------------------------------------------------------------------------
13. COMPLETE IF USING EXISTING OPTION TO PURCHASE INSURANCE.
i. Existing Individual Policy No. _________________________
ii. Option Date_______ iii. Option Amount: $______________
iv. |_| Regular Option or
|_| Option on Birth or Adoption of Child
Child's Name _______________________________________
Date of Birth or Adoption___________________________
v. If applying for Disability Premium Waiver, is Proposed Insured now
totally disabled as defined in the Disability Premium Waiver
provision of the above policy? |_| Yes |_| No
This application is made under a provision in the policy indicated above
permitting the purchase of individual life insurance (the "Option Provision").
If this application is made within the time allowed and in accordance with the
other terms in the Option Provision, including timely payment of the full first
premium for the option insurance, then the option insurance shall take effect
upon the terms of the policy EVLICO would issue. Otherwise, the option insurance
shall not take effect.
Answer the Questions on page 3 only if evidence of insurability is required in
connection with an optional benefit or any excess of the insurance amount
applied for over the insurance amount permitted by the Option Provision (the
option insurance).
EV4-200Q 2
<PAGE>
OTHER INFORMATION -- HAS ANY PERSON PROPOSED FOR INSURANCE:
14.a. Ever had a driver's license suspended or revoked or, within the last three
years, been convicted of two or more moving violations or driving under the
influence of alcohol or drugs? (Give full details -- including dates, types of
violation, and reason for license suspension or revocation.) |_| Yes |X| No
b. Any plan to travel or reside outside the U.S.? (Give full details.)
|_| Yes |X| No
c. Any other life insurance now in effect or application now pending? (State
companies and amounts.) |_| Yes |X| No
d. Smoked cigarettes within the last 12 months? |_| Yes |X| No
15.a. In the last year flown other than as a passenger or plan to do so?
|_| Yes |X| No
If yes: Total flying time at present________________ Hours;
Last 12 mos.________Hours; Next 12 mos._________Est. Hours.
(Complete Aviation Supplement for pilot instruction; competitive, test,
stunt or military flying; or crop dusting.)
b. Engaged within the last year, or any plan to engage in motor racing on land
or water, underwater diving, sky diving, ballooning, hang-gliding or
parachuting? (If yes, complete Avocation Supplement.) |_| Yes |X| No
c. Ever had an application for life or health insurance declined, that required
an extra premium or was otherwise modified? (Give full details.) |_| Yes |X| No
d. Replaced or changed any existing insurance or annuity (or any plan to do so)
assuming the insurance applied for will be issued? (State companies, plans and
amounts.) |_| Yes |X| No
ANSWER QUESTIONS 16, 17 AND 18 ONLY IF NON-MEDICAL.
16. Proposed Insured:__________Height___6____Ft.____1____In. Weight__185__lbs.
Additional Insured:________Height________Ft._________In. Weight_______lbs.
HAS ANY PERSON PROPOSED FOR INSURANCE:
17.a. Ever been treated for or had any indication of heart trouble, stroke, high
blood pressure, chest pain, diabetes, tumor or cancer? (Give full details.)
|_| Yes |X| No
b. In the last 5 years, consulted a physician, or been examined or treated at a
hospital or other medical facility? (Include medical check-ups in the last 2
years. Do not include colds, minor virus infections, minor injuries, or normal
pregnancy.) (Give full details.) |_| Yes |X| No
18.a. In the last ten years used barbiturates, amphetamines, hallucinatory drugs
or narcotics? (Give full details.) |_| Yes |X| No
b. In the last ten years received counseling or treatment regarding the use of
alcohol or drugs? (Give full details.) |_| Yes |X|No
19. DETAILS. For each yes answer give Question number, name of person(s)
affected and full details. For 17 and 18 also include conditions, dates,
durations, treatment and results, and names and addresses of physicians and
medical facilities.
No. Name of Person Affected Details
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
20. COMPLETE IF FIRST PREMIUM IS PAID BEFORE THE POLICY IS DELIVERED:
Have the undersigned read and do they agree to the conditions of EVLICO's
Temporary Insurance Agreement, including (i) the requirement that all of the
conditions in that Agreement must be met before any insurance takes effect, and
(ii) the $250,000 insurance amount limitation? |_| YES |_| NO (If "No," a
premium may not be paid before the policy is delivered.)
AMOUNT PAID: $___________. (Draw checks to order of EVLICO.)
AGREEMENT. Each signer of this application agrees that:
(1) The statements and answers in all parts of this application are true and
complete to the best of my knowledge and belief. EVLICO may rely on them in
acting on this application.
(2) EVLICO's Temporary Insurance Agreement states the conditions that must be
met before any insurance takes effect, if the full first premium for the
policy applied for is paid before the policy is delivered.
(3) EXCEPT AS STATED IN THE TEMPORARY INSURANCE AGREEMENT, NO INSURANCE SHALL
TAKE EFFECT ON THIS APPLICATION: (A) UNTIL A POLICY IS DELIVERED AND THE
FULL FIRST PREMIUM FOR IT IS PAID WHILE THE PROPOSED INSURED IS LIVING; (B)
BEFORE ANY REGISTER DATE SPECIFIED IN THIS APPLICATION; AND (C) UNLESS TO
THE BEST OF MY KNOWLEDGE AND BELIEF THE STATEMENTS AND ANSWERS IN ALL PARTS
OF THIS APPLICATION CONTINUE TO BE TRUE AND COMPLETE, WITHOUT MATERIAL
CHANGE, AS OF THE TIME SUCH PREMIUM IS PAID.
(4) No agent or medical examiner has authority to modify this Agreement or the
Temporary Insurance Agreement, nor to waive any of EVLICO's rights or
requirements. EVLICO shall not be bound by any information unless it is
stated in application Part 1, 1A or 2.
- --------------------------------------------------------------------------------
Signature of Agent________/s/ John Q. Agent_____________________________________
IT IS UNDERSTOOD THAT UNDER THE POLICY APPLIED FOR (EXCLUSIVE OF ANY OPTIONAL
BENEFITS) THE AMOUNT OF THE DEATH BENEFIT AND THE CASH SURRENDER VALUE MAY
INCREASE OR DECREASE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT
AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT (IF THE POLICY HAS A GUARANTEED
MINIMUM DEATH BENEFIT OR CASH SURRENDER VALUE IT IS ONLY THE AMOUNT ABOVE SUCH
MINIMUM THAT MAY INCREASE OR DECREASE).
Dated at __NEW YORK_____NY__________________on___3/1_____19__85__
City State
(X)___/s/ Richard Roe___________________________________________________________
Signature of Proposed Insured or of Applicant if Proposed Insured is a Child,
Issue Age 0-14.
________________________________________________________________________________
Signature of Additional Insured if required.
________________________________________________________________________________
Signature of Purchaser if not Proposed Insured or Applicant.
(If corp. show firm's name and signature of authorized officer.)
EV4-200Q 3
<PAGE>
VARIABLE
LIFE
INSURANCE
POLICY
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
[EVLICO LOGO]
Home Office: 1285 Avenue of the Americas, New York New York 10019
Whole Life Plan -- INCREASING FACE AMOUNT. Variable insurance payable
upon death. Guaranteed Minimum Death Benefit. Face amount increases
annually to 150% of initial face amount. Fixed premiums payable for
life. Non-Participating. Investment experience reflected in benefits.
Investment options described on page 6.
No. 85-02
SEPARATE ACCOUNT II In this rider, "we," "our" and
RIDER "us" mean Equitable Variable Life
Insurance Company. "You" and "your"
mean the Owner of the policy at the
time an Owner's right is exercised.
- --------------------------------------------------------------------------------
This rider is made part of your policy as of the date of issue of this rider. It
should be attached to and kept with your policy.
Date of Issue of this Rider:
1. Net Annual Premiums for policy years beginning on and after the Date of
Issue of this Rider will be allocated to Separate Account I or to Separate
Account II, or will be divided between the two accounts, in accordance with
the Investment Options provision in this Rider.
2. The policy's net cash value will equal the sum of your net cash values in
each separate account. The Death Benefit will equal the sum of the following
amounts for the policy year in which the Insured dies:
o the face amount;
o plus the sum, if positive, of the Variable Adjustment Amounts for
each separate account in which you have a cash value.
3. The following provisions are added to your policy:
SEPARATE ACCOUNT II
We established and we maintain Separate Account II under the laws of New
York State. Realized and unrealized gains and losses from the assets of
Separate Account II are credited or charged against such account without
regard to our other income, gains, or losses. Assets are put in Separate
Account II to support this policy and other variable life insurance
policies. Assets may be put in Separate Account II for other purposes, but
not to support contracts or policies other than variable life insurance.
We expect the investments in Separate Account II will be, primarily,
short-term (not to exceed one year) money market instruments, such as:
United States (U.S.) government and U.S. government agency securities; bank
money instruments; time deposits; certificates of deposit; high grade
commercial paper, including master demand notes; and repurchase agreements
covering U.S. government obligations and certificates of deposit. But, we
may invest the assets of Separate Account II in any legal investments. We
will rely upon our own and outside counsel for advice in this regard.
Instead of making direct investments, we may also operate Separate Account
II as a unit investment trust, or other form. We would invest all or part of
such account's assets in shares or units of a fund. We, an affiliate, or The
Equitable Life Assurance Society of the United States would be the
investment adviser and would invest the assets of the fund as above.
The assets of Separate Account II are our property. The portion of the
assets of Separate Account II equal to the reserves and other policy
liabilities with respect to such separate account will not be chargeable
with liabilities arising out of any other business we conduct. We may
transfer assets of such separate account in excess of such reserves and
liabilities to our general account.
We will value the assets of Separate Account II on each business day. A
business day is any day on which the New York Stock Exchange is open for
trading.
We have the right to withdraw assets of a class of policies to which this
policy belongs from any separate account and put them in another separate
account. If we do this, we will withdraw the same percentage of each
investment in such separate account, but will avoid odd lots and fractions.
The term "Separate Account II" in this policy shall then refer to any other
separate account in which the assets of a class of policies to which this
policy belongs were placed.
We have the right to:
1. register or deregister Separate Account II under the investment Company
Act of 1940;
(Continued on Back)
R81-100
<PAGE>
2. run Separate Account II under the direction of a committee, and to
discharge such committee at any time; and
3. restrict or eliminate any voting rights of policyowners, or other
persons who have voting rights as to Separate Account II.
CHANGES OF INVESTMENT ADVISER OR INVESTMENT POLICY. Unless otherwise
required by law or regulation, the investment adviser or any investment
policy may not be changed without our consent. If required by law or
regulation, the investment policy of Separate Account II will not be changed
unless approved by the Superintendent of Insurance of New York State or
deemed approved in accordance with such law or regulation. If so required,
the process for getting such approval is filed with the insurance
supervisory official of the jurisdiction in which this policy is delivered.
INVESTMENT OPTIONS
ALLOCATION OF NET ANNUAL PREMIUMS. At the beginning of each policy year that
starts on or after the Date of Issue of this Rider, we will allocate that
year's Net Annual Premium shown on Page Three to either or both separate
accounts based on the allocation percentages then in effect. We will only
make such allocations if premiums are duly paid. The allocation percentages
for the policy year in which such Date of Issue falls are 100% to Separate
Account I and 0% to Separate Account II. Unless you change them, such
percentages shall also apply in later years.
You may change the allocation percentages for later policy years by
notifying us in writing of the new percentages. Each allocation percentage
greater than zero must be a whole number of not more than 100%. The sum of
the percentages must equal 100%. A change will take effect on the next
policy anniversary if we receive the notice at our Administrative Office at
least 7 days before such anniversary.
TRANSFER OF CASH VALUES. You may ask us to transfer all or part of your cash
value in one of the separate accounts to the other. (This also applies to
your cash value in Separate Account I on the Date of Issue of this Rider.)
Only two such transfers may be made in a policy year. We will make the
transfer as of the date we receive your written request for it at our
Administrative Office.
LOAN ALLOCATIONS AND REPAYMENTS. We will allocate loans to the separate
accounts based on your net cash value in each separate account as of the
dates the loans are made. We will allocate loan repayments to the separate
accounts based on the amount of your outstanding loans as to each separate
account as of the dates the repayments are made.
4. References in the policy to Separate Account I shall hereafter mean both
Separate Accounts I and II, except that:
a. The provision "Separate Account I" shall apply only to Separate Account
I; and
b. The following provisions shall be read separately as to each separate
account:
Separate Account Index
Actual and Base Net Rates of Return
Variable Adjustment Amount (VAA)
Cash Value (In determining the cash value as to a separate account, the
tabular cash value will be multiplied by the allocation percentage
for that separate account in effect on the last policy anniversary.
If at any time you have a policy loan allocated to a separate
account and your net cash value in that separate account is zero,
we will cancel the VAA and the policy loan as to such separate
account and reallocate them to the other separate account. Also,
the premium allocation percentage for such separate account will be
reduced to zero and the percentage for the other separate account
will be increased to 100%.)
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
/s/ Kevin Keefe /s/ Donald J. Mooney
--------------- --------------------
Kevin Keefe Secretary Donald J. Mooney President
R81-100
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
The policy to which this endorsement is attached is amended as follows:
The first sentence of the "Loan Value" provision is changed to read:
If this policy has not lapsed, the loan value is 90% of the policy's cash
value.
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SPECIMEN SPECIMEN
Kevin Keefe Secretary Donald J. Mooney President
S.83-23
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
ENDORSED ON THIS POLICY ON ITS DATE OF ISSUE:
Whenever the difference between the policy's Account Value and cash value
exceeds 9% of the single premium for the policy, we will increase the cash value
by the amount of such excess.
/s/ Kevin Keefe /s/ Donald J. Mooney
Kevin Keefe Secretary Donald J. Mooney President
S.83-41
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
The policy to which this endorsement is attached is amended as follows:
The second sentence in the second paragraph of the "Loans" provision is changed
to read:
The loan value of this policy, if no premium is in default beyond the grace
period, is an amount equal to 90% of the cash value determined in accordance
with the Cash Value provision on page eight.
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SPECIMEN SPECIMEN
Kevin Keefe Secretary Donald J. Mooney President
S.83-61
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
THE INSURED RICHARD ROE SPECIMEN POLICY NUMBER
REGISTER DATE APRIL 1, 1984 MAY 1, 1984 VARIABILITY EFFECTIVE DATE
Endorsed on this policy on its Date of Issue:
1. For purposes of determining the VAA Change Amount for each separate account
on the first policy anniversary of this policy, Items (1) and (2) of "VAA
Change Amount" on page 12 are changed to read as follows:
(1) The Actual NRR for the separate account from the Variability Effective
Date to the first policy anniversary, minus the pro-rated portion of
the Base NRR covering the same period. Or, if the Variable Reduced
Paid-Up Insurance option is elected in the first policy year, the
Actual NRR for the separate account from the date that such option
takes effect, minus the pro-rated portion of the Base NRR covering the
same period.
(2) The Benefit Base for the separate account as of the Register Date. (If
the Variable Reduced Paid-Up Insurance option has been elected in the
first policy year, the Benefit Base is the net cash value as of the
date of lapse.)
2. For purposes of determining the cash value on any date during the first
policy year, the first paragraph of "Calculation of Cash Values" on page 13
is changed to read as follows:
The cash value of this policy on any date is the sum of your cash values in
each separate account on that date. Your cash value in each separate
account on any date during the first policy year is determined as follows:
(1) While the policy is not lapsed, the sum of the immediately following
Items (a), (c) and (d).
(2) More than three months after the policy has lapsed and while it is
being continued under the Variable Reduced Paid-Up Insurance option,
the sum of the immediately following Items (b), (c) and (d).
(a) The tabular cash value on that date, multiplied by the allocation
percentage for that separate account in effect on the Register
Date.
(b) The product of the following Items (i) and (ii):
(i) The product of the Net Single Premium on that date per
$1,000 of Paid-Up Whole Life Insurance as shown on page 3B,
and the Variable Reduced Paid-Up Face Amount defined on page
7.
(ii) The following amount immediately before the date on which
the cash value is being determined: The cash value in that
separate account, divided by the total cash value in this
policy.
(c) The Net Single Premium on that date for the current VAA for that
separate account.
(d) If the date is not a policy anniversary, the product of the
following Items (i) and (ii):
(i) The Actual NRR for the separate account for the time elapsed
since the Variability Effective Date minus the Base NRR for
the same period.
(ii) The Benefit Base for the separate account on the Register
Date.
SPECIMEN SPECIMEN
Kevin Keefe Secretary Donald J. Mooney President
S84-81
UNIT INVESTMENT
TRUST ENDORSEMENT
In this endorsement, "we" and "our" mean Equitable
Variable Life Insurance Company. "You" means the
owner of the policy at the time an owner's right
is exercised.
- --------------------------------------------------------------------------------
EFFECTIVE DATE: [FEBRUARY 15, 1985]
This endorsement is made part of your policy as of its Effective Date. It should
be attached to and kept with your policy.
On the Effective Date of this endorsement we exercised our right under the
policy to operate Separate Accounts I and II as a unit investment trust. As a
result, the assets in Separate Account II have been transferred to Separate
Account I by merger, and Separate Account II is ended. Separate Account I is now
operating in unit investment trust form. It is referred to herein as "the
Separate Account." It is made up of investment divisions.
The investment assets of the former Separate Account I have been exchanged for
shares of the common stock portfolio of The Hudson River Fund, Inc., "the
investment company." Those shares are in the common stock investment division of
the Separate Account.
The investment assets of the former Separate Account II have been exchanged for
shares of the money market portfolio of the investment company. Those shares are
in the money market investment division of the Separate Account.
Future allocations of Net Annual Premiums will be on the basis of the allocation
percentages in effect immediately before the Effective Date of this endorsement
unless you change them. That is, premiums that would otherwise have been
allocated to the former Separate Account I will be allocated to the common stock
investment division. Premiums that would otherwise have been allocated to the
former Separate Account II will be allocated to the money market investment
division.
Any policy loan outstanding on the Effective Date of this endorsement will be
allocated as it had been allocated between the former Separate Accounts I and
II.
As a result of this change in operations, as of the Effective Date of this
endorsement, the policy to which this endorsement is attached is amended as
follows:
1. The phrase "separate account investment experience" wherever it appears on
the first page of the policy is replaced by the phrase "the investment
experience of this policy."
2. The terms "Separate Account I" and Separate Account II" in the Investment
Allocation section on Page 3 of the policy are changed to "Common Stock
Division" and "Money Market Division," respectively.
3. All other references in the policy, and in any other endorsement to the
policy, to Separate Account I or II and to the Separate Accounts are
changed to "the Separate Account."
4. References in the policy, and in any other endorsement to the policy, to
"the separate accounts," "a separate account" and "each separate account"
are changed to "the investment divisions," "an investment division" and
"each investment division," respectively.
5. The section entitled "The Separate Accounts" is replaced by the following:
THE SEPARATE ACCOUNT
The Separate Account is our Separate Account I (in unit investment trust form).
We established and we maintain it under the laws of New York State. Realized and
unrealized gains and losses from the assets of the Separate Account are credited
or charged against it without regard to our other income, gains, or losses.
Assets are put in the Separate Account to support this policy and other variable
life insurance policies. Assets may be put in the Separate Account for other
purposes, but not to support contracts or policies other than variable life
insurance.
The assets of the Separate Account are our property. The portion of its assets
equal to the reserves and other policy liabilities with respect to the Separate
Account will not be chargeable with liabilities arising out of any other
business we conduct. We may transfer assets of the Separate Account in excess of
such reserves and liabilities to our general account. We may transfer assets of
an investment division in excess of the reserves and other liabilities with
respect to that division to another investment division or to our general
account.
We will value the assets of each investment division on each business day. A
business day is any day on which the New York Stock Exchange is open for
trading.
INVESTMENT DIVISIONS. The Separate Account consists of "investment divisions."
Each division may invest its assets in separate class (or series) of shares of a
designated investment company. Each class represents a separate portfolio in the
investment company. The investment divisions available on the Effective Date of
this endorsement are described on Page 3 of this endorsement. If we add or
remove investment divisions, we will send you a new page reflecting this.
We have the right to change designated investment companies. We have the right
to add or remove investment divisions. We
S.85-99 Unit Investment Trust Endorsement Page 1
<PAGE>
have the right to withdraw assets of a class of policies to which this policy
belongs from an investment division and put them in another investment division.
We also have the right to combine any two or more investment divisions. The
term "investment division" in this policy shall then refer to any other
investment division in which the assets of a class of policies to which this
policy belongs were placed. If we make any such change we will send you a new
Page 3 for this endorsement reflecting it.
We have the right to:
1. register or deregister the Separate Account under the Investment Company
Act of 1940;
2. run the Separate Account under the direction of a committee, and to
discharge such committee at any time;
3. restrict or eliminate any voting rights of policy owners, or other persons
who have voting rights as to the Separate Account; and
4. operate the Separate Account by making direct investments or in any other
form. If we do so, we may invest the assets of the Separate Account in any
legal investments. We will rely upon our own and outside counsel for advice
in this regard. Also, unless otherwise required by law or regulation, the
investment advisor or any investment policy may not be changed without our
consent.
CHANGE IN INVESTMENT OBJECTIVE OR POLICY. We will notify you of any material
change in an investment objective or policy of any investment company that is
invested in by an investment division to which net premiums have been allocated
under this policy.
If required by law or regulation, the investment policy of the Separate Account
will not be changed unless approved by the Superintendent of Insurance of New
York State or deemed approved in accordance with such law or regulation. If so
required, the process for getting such approval is filed with the insurance
supervisory official of the jurisdiction in which this policy is delivered.
6. On Page 7 of the policy, the phrase "to the other" in the third line on the
right side of the page is changed to "to another."
7. The section entitled "Actual Net Rate of Return" is replaced by the
following:
ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each investment division, the Actual
NRR for a policy year reflects the division's:
o dividends received from the investment company;
o plus realized and unrealized capital gains of the division's investment
in the investment company;
o minus realized and unrealized capital losses of the division's
investment in the investment company;
o minus any charges for taxes or amounts set aside as a reserve for
taxes;
o minus a charge not exceeding .50% per year for mortality and expense
risks.
The Actual NRR for each investment division will be increased to the extent that
expenses of the investment division exceed the charges for securities brokers'
commissions, transfer taxes, and other fees relating to securities transactions
and a charge for investment management expenses of .25% per year.
The Actual NRR for a period less than a year will be calculated in a consistent
manner.
8. In the last paragraph of the section entitled "Calculation of Cash Values":
a. The phrase "to the other separate account" appearing at the end of the
first sentence is replaced by "to each other investment division
proportionately."
b. The second sentence is replaced by the following: Also, the premium
allocation percentage for such investment division will be reduced to
zero and the percentage for each other investment division will be
increased proportionately.
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SPECIMEN Secretary SPECIMEN President
Kevin Keefe Franklin Maisano
S.85-99 Unit Investment Trust Endorsement Page 2
<PAGE>
DESCRIPTION OF INVESTMENT DIVISIONS
THE ASSETS IN EACH INVESTMENT DIVISION ARE INVESTED IN SHARES OF A DESIGNATED
PORTFOLIO OF AN INVESTMENT COMPANY. EACH PORTFOLIO REPRESENTS A DIFFERENT CLASS
(OR SERIES) OF SHARES ISSUED BY THE HUDSON RIVER FUND, INC.
COMMON STOCK DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE,
PRIMARILY, COMMON STOCKS AND OTHER EQUITY-TYPE
INVESTMENTS.
MONEY MARKET DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE,
PRIMARILY, SHORT-TERM (NOT TO EXCEED ONE YEAR) MONEY
MARKET INSTRUMENTS, SUCH AS: UNITED STATES (U.S.)
GOVERNMENT AND U.S. GOVERNMENT AGENCY SECURITIES; BANK
MONEY INSTRUMENTS; TIME DEPOSITS; CERTIFICATES OF
DEPOSIT; HIGH GRADE COMMERCIAL PAPER, INCLUDING MASTER
DEMAND NOTES; AND REPURCHASE AGREEMENTS COVERING U.S.
GOVERNMENT OBLIGATIONS AND CERTIFICATES OF DEPOSIT.
INVESTMENT RESULTS WILL REFLECT FLUCTUATIONS IN MARKET VALUES OF SECURITIES.
PLEASE REFER TO THE CURRENT PROSPECTUS FOR THE HUDSON RIVER FUND, INC. FOR A
COMPLETE DESCRIPTION OF THE FUND AND THE DESIGNATED PORTFOLIOS.
S.85-99 Page 3
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
ENDORSEMENT
THE INSURED POLICY NUMBER
REGISTER DATE VARIABILITY EFFECTIVE DATE
Endorsed on this policy on its Date of Issue:
1. For purposes of determining the VAA Change Amount for each investment
division on the first policy anniversary of this policy, Items (1) and (2)
of the section entitled "VAA Change Amount" are changed to read as follows:
(1) The Actual NRR for the investment division from the Variability
Effective Date to the first policy anniversary, minus the pro-rated
portion of the Base NRR covering the same period. Or, if the Variable
Reduced Paid-Up Insurance option is elected in the first policy year,
the Actual NRR for the investment division from the date that such
option takes effect, minus the pro-rated portion of the Base NRR
covering the same period.
(2) The Benefit Base for the investment division as of the Register Date.
(If the Variable Reduced Paid-Up Insurance option has been elected in
the first policy year, the Benefit Base is the net cash value as of
the date of lapse.)
2. For purposes of determining the cash value on any date during the first
policy year, the first paragraph of the section entitled "Calculation of
Cash Values" is changed to read as follows:
The cash value of this policy on any date is the sum of your cash values in
each investment division on that date. Your cash value in each investment
division on any date during the first policy year is determined as follows:
(1) While the policy is not lapsed, the sum of the immediately following
Items (a), (c) and (d).
(2) More than three months after the policy has lapsed and while it is
being continued under the Variable Reduced Paid-Up Insurance option,
the sum of the immediately following Items (b), (c) and (d).
(a) The tabular cash value on that date, multiplied by the allocation
percentage for that investment division in effect on the Register
Date.
(b) The product of the following Items (i) and (ii):
(i) The product of the Net Single Premium on that date per
$1,000 of Paid-Up Whole Life Insurance as shown on page 3B,
and the Variable Reduced Paid-Up Face Amount defined in the
provision entitled "Options on Lapse".
(ii) The following amount immediately before the date on which
the cash value is being determined: The cash value in that
investment division, divided by the total cash value in this
policy.
(c) The Net Single Premium on that date for the current VAA for that
investment division.
(d) If the date is not a policy anniversary, the product of the
following Items (i) and (ii):
(i) The Actual NRR for the investment division for the time
elapsed since the Variability Effective Date minus the Base
NRR for the same period.
(ii) The Benefit Base for the investment division on the Register
Date.
SPECIMEN SPECIMEN
Kevin Keefe Secretary Franklin Maisano President
S.85-81
ADJUSTMENT LOAN
INTEREST RATE
In this endorsement "we" means Equitable Variable Life
Insurance Company. "You" means the owner of the policy
at the time an owner's right is exercised.
- --------------------------------------------------------------------------------
The policy to which this endorsement is attached is amended as follows:
1. The "Loan Interest" provision is changed to read:
LOAN INTEREST. Interest on a loan accrues daily at an adjustable loan
interest rate. A rate will be determined in accordance with the following
paragraphs as of the beginning of each policy year and it will apply to any
new or outstanding loan under the policy during that policy year. However,
if this endorsement is added to the policy after the policy has been issued,
this provision will apply only as to policy years that begin after this
endorsement is added.
Subject to the following paragraph, the loan interest rate for a policy year
shall be the greater of: (1) The "Published Monthly Average", as defined
below, for the calendar month that ends two months before the beginning of
that policy year; or (2) the interest rate used to compute Tabular Account
Values for this policy for that policy year plus 1% a year. "Published
Monthly Average" means the Monthly Average Corporates yield shown in Moody's
Corporate Bond Yield Averages published by Moody's Investors Service, Inc.,
or any successor thereto. If such averages are no longer published, we will
use such other averages as may be established by regulation by the insurance
supervisory official of the jurisdiction in which the policy is delivered.
However, the loan interest rate for a policy year after the first will be
the same as it was for the immediately preceding policy year if the formula
in the above paragraph would produce a change of less than 1/2 of 1% from
the rate for such preceding year.
We will notify you of the initial loan interest rate when you make a loan.
We will also give you advance written notice of any increase in the interest
rate on any outstanding loan.
Loan interest is due on each policy anniversary. If the interest is not paid
when due, it will be added to the loan and bear interest at the loan rate.
When a loan plus loan interest first equals or exceeds the cash value, we
will mail to you and any assignee of record at last known addresses a notice
that the policy will terminate if such excess amount is not repaid within 31
days after we mail such notice.
2. The "Basis of Values" section of the policy is changed as follows:
a. The following provision is added:
ACTUAL LOAN NET RATE OF RETURN (Actual Loan NRR). For each investment
division, the Actual Loan Net Rate of Return for a policy year is:
o the loan interest rate for that policy year;
o minus a charge not exceeding .75% per year for expenses of processing
and administering policy loans, and for mortality and expense risks;
and
o minus any charges for taxes or amounts set aside as a reserve for
taxes.
The Actual Loan NRR for a period less than a year will be calculated in
a consistent manner.
b. The "VAA Change Amount" provision is changed to read:
For each policy year after the first, the VAA Change Amount for each
investment division may be positive or negative. It will equal the sum
of the following Items (1) and (2), divided by Item (3). Item (1)
applies to the unloaned amount in the investment division, and Item (2)
applies to any loaned amount in the investment division.
S.85-83 Adjustable Loan Interest Rate
(continue on back)
<PAGE>
(1) The product of the following Items (a) and (b):
(a) The Actual NRR for the investment division minus the Base
NRR for that policy year, or for the part of the policy year
since lapse during which the Variable Reduced Paid-Up
Insurance option takes effect.
(b) The Benefit Base for the investment division as of the last
policy anniversary. (For the policy year immediately
following a lapse of the policy where the Variable
Reduced-Up Insurance option takes effect, use instead the
net cash value as of the date of lapse.)
(2) The product of the following Items (a) and (b):
(a) The Actual Loan NRR minus the Base NRR for that policy year.
(b) Any outstanding loan allocated to the investment division as
of the last policy anniversary. (For any policy year in
which lapse occurs and the Variable Reduced Paid-Up
Insurance Option takes effect, this amount is taken as zero
whether or not there was an outstanding loan allocated to
the investment division as of the last policy anniversary.)
(3) The Net Single Premium for $1.00 of VAA for the current policy
anniversary as shown on page 3B.
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
SPECIMEN SPECIMEN
Kevin Keefe Secretary Franklin Maisano President
S.85-83
ACCELERATED DEATH BENEFIT RIDER
DISCLOSURE. THE RECEIPT OF THE ACCELERATED DEATH BENEFIT AMOUNT MAY BE TAXABLE.
YOU SHOULD SEEK ASSISTANCE FROM YOUR PERSONAL TAX ADVISOR PRIOR TO ELECTING THE
BENEFIT.
In this rider "we, "our" and "us" mean Equitable Variable Life Insurance
Company. "You" means the Owner of the policy at the time an Owner's right is
exercised. "This Policy" means the policy to which this rider is attached.
POLICY NUMBER:
- --------------------------------------------------------------------------------
THIS RIDER'S BENEFIT. We will pay an accelerated death benefit in the amount
requested by the Owner, if the Insured is terminally ill, subject to the
provisions of this rider. We will pay an accelerated death benefit under this
policy only once and in one lump sum.
The maximum accelerated death benefit you may receive is the lesser of:
1. 75% of the death benefit payable under this policy, less any policy
loan and loan interest, and
2. $500,000.
The maximum aggregate amount of Accelerated Death Benefit payments that will be
paid under all policies issued by us on the life of the Insured is $500,000.
For purposes of this benefit, the death benefit does not include any accidental
death benefits, non-convertible term riders or convertible term riders not in
their conversion period or any benefits payable because of the death of any
person other than the Insured.
There is no premium or cost of insurance charge for this rider.
We reserve the right to deduct a processing charge of up to $250.00 per policy
from the accelerated death benefit payment.
We reserve the right to set a minimum of $5,000 on the amount you may receive
under this rider.
To be eligible for this benefit you must provide satisfactory evidence to us
that the Insured's life expectancy is six months or less. This evidence must
include, but is not limited to, certification by a physician licensed to
practice medicine in the United States or Canada and who is acting within the
scope of such license. A physician does not include the Owner, the Insured or a
member of either's family.
HOW THIS RIDER RELATES TO THE POLICY. This rider is a part of the policy. Its
benefits are subject to all the terms of this rider and the policy. This rider
has no cash or loan value. This rider is non-participating.
INTEREST. Interest will be charged on the amount of the Accelerated Death
Benefit and on any unpaid premium we advance after the payment of an Accelerated
Death Benefit. The interest rate at the time the Accelerated Death Benefit
payment is made will not exceed the greater of the following on such date:
1. the yield on a 90-day treasury bill; or
2. the maximum adjustable policy loan interest rate permitted in the state
in which this policy is delivered.
EFFECT OF ACCELERATED DEATH BENEFIT PAYMENT ON THE POLICY. The Accelerated Death
Benefit payment, plus any accrued interest will be treated as a lien against the
policy values. The amount of the lien will be pro-rated against the policy's net
cash surrender value, if any, and the net amount at risk. (The net amount at
risk is defined as the death benefit of the policy minus the cash surrender
value, if any.)
For variable life policies, the portion of the cash surrender value that is on
lien and is allocated to investment divisions of the Separate Account will be
transferred to and maintained as a part of the unloaned Guaranteed Investment
Division (GID). You may tell us how much of the accelerated payment is to be
transferred from each investment division. Units will be redeemed from each
investment division sufficient to cover the amount that is on lien and
transferred to the unloaned portion of the GID. If you do not tell us how to
allocate the payment, we will allocate it based on our rules then in effect. For
variable life policies that do not have a GID, the portion of the cash surrender
value that is on lien will be transferred to and maintained in the Money Market
Division of our Separate Account. Such transfers will occur as of the date we
approve an Accelerated Death Benefit payment. The amount payable at death under
the policy will be reduced by the full amount of the lien and any other
indebtedness outstanding under the policy. The Owner's access to the policy's
cash surrender value will be limited to the excess of the policy's cash
surrender value over the amount of the lien secured against the cash surrender
value and any other outstanding policy loans and loan interest.
R94-102 Accelerated Death Benefit Rider
<PAGE>
If premiums are required to be paid under the policy, they will continue to be
due after the payment of the accelerated payment. If any premium is not paid
when due, the amount of the unpaid premium will be added to the lien.
If the policy is a flexible premium life policy, and the net cash surrender
value is not large enough to cover a monthly deduction, Equitable Variable will
advance a premium sufficient enough to keep the policy in force for up to six
months following the date we approve an Accelerated Death Benefit payment. This
premium advance will be added to the lien.
If a Disability Premium Waiver Rider is in effect under the policy, this
policy's premiums or monthly deductions will be waived as of the date we approve
an Accelerated Death Benefit payment.
RIDER LIMITATIONS. Your right to be paid under the Accelerated Death Benefit
Rider is subject to the following conditions:
1. The policy must be in force other than as extended term insurance.
2. For term insurance policies, there must be at least one year left before
the final term expiry date.
3. For adjustable life policies (Equitable Life Account), if policy is term
insurance or paid-up extended term insurance, there must be at least one
year left before the final term expiry date.
4. You must make a claim in writing in a form that is satisfactory to us.
5. If the policy is collaterally assigned, except to us as security for a
policy loan or an Accelerated Death Benefit lien, we must receive a full
release of this assignment for the election of this benefit.
6. An Accelerated Death Benefit payment must be approved in writing by any
irrevocable beneficiary.
7. For joint last to die policies, a claim may be made under the rider only
after the death of the first of the Insureds to die.
8. You may not be eligible for the Accelerated Death benefit if we are
notified that:
a) you are required by law to elect this rider's benefit in order to
meet the claims of creditors, whether in bankruptcy or otherwise; or
b) you are required by a government agency to elect this rider's benefit
in order to apply for, obtain, or keep a government benefit or
entitlement.
9. You may request only one Accelerated Death Benefit Amount to be paid per
policy.
10. We may require examination of the Insured by our medial representatives
at our expense as part of any proof to establish eligibility for benefits
under this rider.
WHEN THIS RIDER WILL TERMINATE. You may terminate this rider by asking us in
writing in a form satisfactory to us and by sending the rider to our
Administrative Office. The effective date of the termination will be the
beginning of the policy month which coincides with or next follows the date we
receive your request. Once this rider has been terminated, another Accelerated
Death Benefit rider cannot be attached to the policy.
This rider will terminate when the policy terminates. If at any time the amount
of the lien equals the total death benefit the policy will terminate.
Termination will occur 31 days after we have mailed notice to the last known
address of the Owner, unless the full amount of the lien is repaid within 31
days of the notice.
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
/s/ Molly K. Heines /s/ Joseph J. Melone
- ------------------- --------------------
Molly K. Heines Joseph J. Melone
Vice President & Secretary Chairman & Chief Executive Officer
R94-102 Accelerated Death Benefit Rider
[Form of Legal Opinion and Consent]
[Date]
The Equitable Life Assurance Society of the United States
787 Seventh Avenue
New York, NY 10019
Dear Sirs:
This opinion is furnished in connection with the filing of a Registration
Statement on Form S-6, File No. [ - ] ("Registration Statement") of Separate
Account I ("Separate Account I") of The Equitable Life Assurance Society of the
United States ("Equitable"). The Registration Statement covers an indefinite
amount of premiums funding variable life insurance policies ("Policies") issued
by Equitable Variable Life Insurance Company ("Equitable Variable"). Equitable
Variable, a wholly-owned subsidiary of Equitable, is expected to be merged with
and into Equitable on January 1, 1997. Upon consummation of the merger, Policies
issued prior thereto by Equitable Variable will become obligations of Equitable.
This opinion assumes consummation of the merger and compliance with regulatory
requirements relating thereto. Although the Policies are no longer being offered
for sale. Equitable will continue to collect premiums under the Policies. Net
premiums received under the Policies will be allocated by Equitable to Separate
Account I to the extent directed by owners of the Policies.
I have examined all such corporate records of Equitable and such other
documents and laws as I consider appropriate as a basis for the opinion
hereinafter expressed. On the basis of such examination, it is my opinion that:
1. Equitable is a corporation duly organized and validly existing under the
laws of the State of New York.
2. Separate Account I has been duly established by Equitable pursuant to
the laws of the State of New York, under which income, gains and losses, whether
or not realized, from assets allocated to Separate Account I, are to be, in
accordance with the Policies, credited to or charged against Separate Account I
without regard to other income, gains or losses of Equitable.
3. Assets allocated to Separate Account I will be owned by Equitable;
Equitable will not be a trustee with respect thereto. The Policies provide that
the portion
<PAGE>
of the assets of Separate Account I equal to the reserves and other Policy
liabilities with respect to Separate Account I will not be chargeable with
liabilities arising out of any other business Equitable may conduct. Equitable
reserves the right to transfer assets of Separate Account I in excess of such
reserves and other Policy liabilities to the general account of Equitable.
4. Upon consummation of the merger, the Policies (including any Units duly
credited thereunder) will be duly authorized and will constitute validly issued
and binding obligations of Equitable in accordance with their terms.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
-----------------
[Name]
45238-1
NAME CHANGE ENDORSEMENT
In this endorsement, "your" means the Owner of the policy at the time an Owner's
right is exercised.
- --------------------------------------------------------------------------------
EFFECTIVE DATE: JANUARY 1, 1997
This endorsement is made part of your policy as of its Effective Date. It should
be attached to and kept with your policy.
Effective January 1, 1997, Equitable Variable Life Insurance Company merged into
The Equitable Life Assurance Society of the United States.
The Equitable Life Assurance Society of the United States is now responsible for
all the liabilities and obligations of Equitable Variable Life Insurance Company
under this policy. Wherever the name Equitable Variable Life Insurance Company
appears in this policy, the name The Equitable Life Assurance Society of the
United States is hereby substituted. In all other respects, the terms and
provisions of this policy remain unchanged and in full force and effect.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
/s/ Pauline Sherman /s/ James M. Benson
Pauline Sherman, James M. Benson,
Vice President & Secretary President & Chief Executive Officer
S.97-1
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
2 Penn Plaza, Area 21-F
New York, New York 10121
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
NEW YORK, N.Y.
(EVLICO LOGO)
JOSEPH O. NORTH, JR., FSA, MAAA
Vice President and Actuary
March 25, 1985
Equitable Variable Life Insurance Company
1285 Avenue of the Americas
New York, NY 10019
The opinion is furnished in connection with the filing of a Post-Effective
Amendment No. 26 to Registration Statement No. 2-54015 on Form S-6
("Post-Effective Amendment No. 26") by Separate Account I of Equitable Variable
Life Insurance Company ("Separate Account") and Equitable Variable Life
Insurance Company ("EVLICO") covering an indefinite amount of premiums to be
received under EVLICO's Single Premium Variable Whole Life Insurance Policies
("Policies") to be offered by EVLICO. Under the Policies, amounts will be
allocated by EVLICO to Separate Account I of EVLICO as described in the
prospectus included in Post-Effective Amendment No. 26 ("Prospectus").
I participated in the preparation of the Policies and I am familiar with their
provisions. I am also familiar with the description contained in the Prospectus.
In my opinion:
1. The illustrations of death benefits, account values, cash surrender
values and accumulated premiums for the Policies on pages 23 through
30, based on the assumptions stated in the illustrations, are
consistent with the provisions of the Policies. The rate structure of
the Policies has not been designed so as to make the relationship
between premiums and benefits, as shown in the illustrations, appear to
be correspondingly more favorable to a prospective purchaser of
Policies for male and female ages 5, 25, 40 or 55 than to prospective
purchasers of Policies for a male or female at other ages.
2. The information with respect to the Policies contained in i) the
illustration of amounts allocated to the Separate Account on page 11 of
the Prospectus and ii) the illustration of changes in death benefit on
page 18 of the Prospectus, based on the assumptions stated in the
illustrations, is consistent with the provisions of the policies.
3. The table of illustrative premium rates with respect to the Policies on
page 32 of the Prospectus contains the premium rates to be charged by
EVLICO for Policies with initial face amounts, issue ages and sex, and
state premium tax shown in the table.
4. The examples of death benefits, account values and cash surrender
values for the Policies on pages 7 and 8 of the Prospectus, based on
the Net Returns of the Common Stock Division and the Money Market
Divisions of the Separate Account and the assumptions stated with the
examples, are consistent with the provisions of the Policies. The rate
structure of the Policies has not been designed so as to make the
relationship between premiums and benefits, as shown in the examples,
appear to be correspondingly more favorable to a prospective purchaser
of Policies for a male at other ages or for a female.
I hereby consent to the use of this opinion as an exhibit to Post-Effective
Amendment No. 26 and to the reference to my name under the heading "Financial
and Actuarial Experts" in the Prospectus.
Very truly yours,
/s/ Joseph O. North, Jr.
------------------------
Joseph O. North, Jr.
Vice President and Actuary
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
2 Penn Plaza, Area 21-F
New York, New York 10121
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
NEW YORK, N.Y.
(EVLICO LOGO)
JOSEPH O. NORTH, JR., FSA, MAAA
Vice President and Actuary
March 25, 1985
Equitable Variable Life Insurance Company
1285 Avenue of the Americas
New York, NY 10019
Gentlemen:
This opinion is furnished in connection with the filing of a Post-Effective
Amendment No. 26 to Registration Statement No. 2-54015 on Form S-6
("Post-Effective Amendment No. 26) by Separate Account I of Equitable Variable
Life Insurance Company ("Separate Account") and Equitable Variable Life
Insurance Company ("EVLICO") covering an indefinite amount of premiums to be
received under EVLICO's Periodic Premium Variable Whole Life Insurance Policies
("Policies") to be offered by EVLICO. Under the Policies, amounts will be
allocated by EVLICO to Separate Account I of EVLICO as described in the
prospectuses included in Post-Effective Amendment No. 26 ("Prospectuses").
I participated in the preparation of the Policies and I am familiar with
their provisions. I am also familiar with the description contained in the
Prospectus. In my opinion:
1. The illustrations of death benefits, account values, and/or cash
surrender values and accumulated premiums for the Policies on pages 25
through 36 for The Champion(TM) policy and pages 23 through 34 for the
Basic and Expanded policies, based on the assumptions stated in the
illustrations, are consistent with the provisions of the Policies. The
rate structures of the Policies has not been designed so as to make the
relationship between premiums and benefits, as shown in the
illustrations, appear to be correspondingly more favorable to a
prospective purchaser of Policies for male and female ages 10, 25 or 40
than to prospective purchasers of Policies for a male or female at
other ages.
2. The information with respect to the Policies contained in i) the
illustration of amounts allocated to the Separate Account on page 12 of
the Prospectus for the Champion policy and page 10 for the Basic and
Expanded Policies and ii) the illustration of changes in death benefits
on page 19 of the Prospectus for the Champion policy and page 17 for
the Basic and Expanded policies, based on the assumptions stated in the
illustrations, is consistent with the provisions of the Policies.
3. The tables of illustrative premium rates with respect to the Policies
on page 40 of the Prospectus for the Champion policy and on page 38 for
the Basic and Expanded policies contain the premium rates to be charged
by EVLICO for Policies with initial face amounts, premium frequencies,
issue ages, sex and risk classifications shown in the tables.
4. The examples of insurance coverage provided by the options on lapse
with respect to the Policies on Page 41 of the Prospectus for the
Champion policy and on page 40 for the Basic and Expanded policies
based on the assumptions stated in the examples, are consistent with
the provisions of the Policies.
5. The examples of insurance death benefits, account values and/or cash
surrender values for the Policies on pages 7 and 8 of the Prospectus
for the Champion policy and on page 6 for the Basic and Expanded
policies, based on the Net Returns of the Common Stock Division and the
Money Market Division of the Separate Account and the assumptions
stated with the examples, are consistent with the provisions of the
Policies. The rate structure of the Policies has not been designed so
as to make the relationship between premiums and benefits, as shown in
the examples, appear to be correspondingly more favorable to a
prospective purchaser of Policies for males age 25 than to
prospective purchasers of Policies for a male at other ages or for a
female.
I hereby consent to the use of this opinion as an exhibit to Post-Effective
Amendment No. 26 and to the reference to my name under the heading "Financial
and Actuarial Experts" in the Prospectus.
Very truly yours,
/s/ Joseph O. North, Jr.
------------------------
Joseph O. North, Jr.
Vice President and Actuary
0325D
____________, 1996
The Equitable Life Assurance Society of the United States
787 Seventh Avenue
New York, New York 10019
This consent is furnished in connection with the filing of the
Registration Statement on Form S-6 ("Registration Statement") of Separate
Account I ("Separate Account I") of The Equitable Life Assurance Society of the
United States ("Equitable") covering an indefinite amount of premiums to be
received under Single Premium Variable Whole Life Insurance Policies and
Periodic Premium Variable Whole Life Insurance Policies (collectively, the
"Policies") which were originally offered and issued by Equitable Variable Life
Insurance Company ("Equitable Variable"), a wholly-owned subsidiary of
Equitable, most recently pursuant to the Prospectuses filed in the Registration
Statement. Equitable Variable is to be merged into Equitable on January 1, 1997
and on such date, Equitable will assume Equitable Variable's obligations under
the Policies. The Policies are no longer offered for sale, although Equitable
will continue to collect premiums under the Policies.
I hereby consent to the filing of my opinions dated March 25, 1985 (the
"Opinions") (originally filed as exhibits to Post-Effective Amendment No. 26 to
Equitable Variable's Registration Statement on Form S-6, File No. 2-54015) as
exhibits to Equitable's Registration Statement and to the reference to my name
under the heading "Accounting and Actuarial Experts" in the Prospectuses. The
"references" to Prospectuses in the Opinions and in this consent are the same
Prospectuses being filed in Equitable's Registration Statement, and the Opinions
speak as of their date.
Very truly yours,
---------------------------------
Joseph O. North, Jr.,
F.S.A., M.A.A.A.
Vice President and Senior Actuary
The Equitable Life Assurance
Society of the United States
44946-1
Exhibit 7
---------
SCHEDULE REGARDING
EQUITABLE VARIABLE'S VARIABLE LIFE INSURANCE
POLICIES FUNDED BY SEPARATE ACCOUNT I
AND RELATED POST-EFFECTIVE AMENDMENTS
MAY 1, 1996
--------------------------------------------
Equitable Variable Life Insurance Company ("Equitable Variable")
registers the interests of Separate Account I on Form S-6 in File No. 2-54015.
Separate Account I funds the following policies:
1. "SP-1(TM)." This policy, offered from 1984 to 1990, is a
single-premium policy with a contingent deferred sales load and a level face
amount. (Equitable Variable continues to collect premiums and permit transfers
of accumulated amounts under each of two series of these policies.)
2. The "Champion(TM)." This policy, offered from 1984 to 1990, is a
periodic-premium policy with a contingent deferred sales load and a level face
amount. (Equitable Variable continues to collect premiums and permit transfers
of accumulated amounts under this policy.)
3. Basic & Expanded. These policies, offered from 1976 to 1987, are
periodic-premium policies with a front-end sales load. (Equitable Variable
continues to collect premiums and permit transfers of accumulated amounts under
each of three series of these policies.)
The polices referred to above were the subject of post-effective
amendments filed with the Commission as set out below.
The abbreviation "P.E." refers to a post-effective amendment. The
abbreviation ("I") refers to Equitable Variable Separate Account I (File No.
811-2581), and the abbreviation ("II") refers to Separate Account II (File No.
811-3182).
1. Variable Life Insurance Policy, Level Face Amount ("Basic"), and
----------------------------------------------------------------
Variable Life Insurance Policy, Increasing Face Amount
------------------------------------------------------
("Expanded") (Files No. 2-48988, 2-54015 and 2-72201).
------------------------------------------------------
The Basic Policy was originally registered under File No. 2-48988, and
the Expanded Policy was originally registered under File No. 2-54015. The
registration statements were declared effective on December 17 and December 23,
1975, respectively. The registration statements were amended separately until
1981. Beginning in 1981, the registration statements for both policies funded
through Separate Account I were amended under File No. 2-54015 and, by reference
pursuant to Rule 429 under the Securities Act of 1933, to File No. 2-48988. Both
policies funded through Separate Account II were originally registered under
File No. 2-72201, and the registration statement was amended under the same file
number. On March 22, 1985 Separate Account I was combined with Separate Account
II. All subsequent amendments have been filed only under File
<PAGE>
No. 2-54015. Equitable Variable discontinued its offer to sell Basic and
Expanded policies in January, 1987.
First Series (Basic and Expanded)
- ---------------------------------
<TABLE>
<S> <C> <C>
P.E. No. 1(I) 6-17-76 Update (Basic; later filing for Expanded)
P.E. No. 1(I) 6-22-76 Update (Expanded; earlier filing for Basic)
P.E. No. 2(I) 9-3-76 Update (Each policy)
P.E. No. 3(I) 3-31-77 Update (Each policy)
P.E. No. 4(I) 2-16-78 Update (Each policy)
P.E. No. 5(I) 4-26-78 Update (Each policy)
P.E. No. 12(I) 7-29-81 Policy rider to permit funding through Separate
Account II (Each policy)
</TABLE>
Second Series (Basic and Expanded)
- ----------------------------------
<TABLE>
<S> <C> <C>
P.E. No. 6(I) 11-21-78 New series of policy (Specimen filed) (Each policy)
P.E. No. 7(I) 12-5-78 Respond to comments on P.E. No. 6(I) (Each policy)
P.E. No. 8(I) 4-27-79 Update (and first of annual supplements for
preceding series) (Each policy)
P.E. No. 9(I) 3-31-80 Update (Each policy)
P.E. No. 10(I) 1-14-81 Supplement: additional illustrations of death
benefits (Each policy)
P.E. No. 11(I) 4-15-81 Update (Each policy)
P.E. No. 12(I) 7-29-81 Policy rider to permit funding through Separate
Account II (Each policy)
</TABLE>
Third Series (Basic and Expanded)
- ---------------------------------
<TABLE>
<S> <C> <C>
P.E. No. 12(I) 7-29-81 New series of policy to permit funding through
Separate Account II, a registered money market
account (specimens filed, on May 8, 1981, as
exhibits to Form N-1 registration statement of
Separate Account II)
P.E. No. 13(I)&
P.E. No. 1(II) 3-18-82 Update and revise prospectus disclosure format
P.E. No. 14(I)&
P.E. No. 2(II) 12-7-82 Supplement: revised loan provisions and reduced
premiums for non-smokers and possible sale through
independent broker-dealers
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
P.E. No. 15(I) &
P.E. No. 3 (II) 4-26-83 Update
P.E. No. 21(I) &
P.E. No. 9(II) 3-9-84 Update
P.E. No. 24 12-19-84 Revision to reflect proposed reorganization
P.E. No. 25 3-13-85 Respond to comments on P.E. No. 24
P.E. No. 26 3-26-85 Reflect completion of reorganization and update
P.E. No. 27 4-30-86 Update
P.E. No. 28 9-29-86 Supplement: Update and add new investment
divisions
P.E. No. 29 12-18-86 Change effective date of P.E. No. 28 to 12-18-86
P.E. No. 30 2-27-87 Supplement: Update
P.E. No. 31 4-29-88 Supplement: Update
P.E. No. 32 5-1-89 Supplement: Update
P.E. No. 33 5-1-90 Supplement: Update
P.E. No. 34 2-26-91 Supplement: New Separate Account Divisions
P.E. No. 35 2-26-91 Supplement: Update
P.E. No. 36 4-27-92 Supplement: Update
P.E. No. 37 7-23-92 Supplement: Conversion from a Mutual Life
Insurance Company to a Stock Life Insurance Company
P.E. No. 38 4-28-93 Supplement: Update
P.E. No. 39 2-11-94 Supplement: Update
P.E. No. 40 4-28-94 Supplement: Update
P.E. No. 41 4-25-95 Supplement: Update
</TABLE>
2. Single Premium Variable Life Insurance Policy ("SP-1").
-------------------------------------------------------
The original SP-1(TM) Policy, with an increasing face amount, was
originally registered on Post-Effective Amendment No. 16(I) under File No.
2-54015 and on Post-Effective Amendment No. 4(II) under File No. 2-72201.
Equitable Variable discontinued its offer to sell such Policy in December, 1983.
The second series SP-1 Policy, with a level face amount, was registered
on Post-Effective Amendment No. 23(I) under File No. 2-54015 and on
Post-Effective Amendment No. 11(II) under File No. 2-72201. On March 22, 1985
Separate Account I was combined with Separate Account II. All subsequent
amendments have been filed only under File No. 2-54015. Equitable Variable
discontinued its offer to sell the SP-1 Policy in April, 1990.
First Series (SP-1)
- -------------------
<TABLE>
<S> <C> <C>
P.E. No. 16(I) &
P.E. No. 4(II) 7-14-83 New policy (specimen filed)
P.E. No. 17(I) &
P.E. No. 5(II) 8-17-83 New policy
P.E. No. 18(I) &
P.E. No. 6(II) 10-18-83 Supplement: sale through independent brokers
</TABLE>
3
<PAGE>
Second Series (SP-1)
- --------------------
<TABLE>
<S> <C> <C>
P.E. No. 23(I) &
P.E. No. 11(II) 5-14-84 New series of policy (specimen filed)
P.E. No. 24 12-19-84 Revision to reflect proposed reorganization
P.E. No. 25 3-13-85 Respond to comments on P.E. No. 24
P.E. No. 26 3-26-85 Reflect completion of reorganization and update
P.E. No. 27 4-30-86 Update
P.E. No. 28 9-29-86 Supplement: Update and add new investment divisions
P.E. No. 29 12-18-86 Change effective date of P.E. No. 28 to 12-18-86
P.E. No. 30 2-27-87 Supplement: Update
P.E. No. 31 4-29-88 Supplement: Update
P.E. No. 32 5-1-89 Supplement: Update
P.E. No. 33 5-1-90 Supplement: Update
P.E. No. 34 2-26-91 Supplement: New Separate Account Divisions
P.E. No. 35 2-26-91 Supplement: Update
P.E. No. 36 4-27-92 Supplement: Update
P.E. No. 37 7-23-92 Supplement: Conversion from a Mutual Life
Insurance Company to a Stock Life Insurance Company
P.E. No. 38 4-28-93 Supplement: Update
P.E. No. 39 2-11-94 Supplement: Update
P.E. No. 40 4-28-94 Supplement: Update
P.E. No. 41 4-25-95 Supplement: Update
P.E. No. 42 4-26-96 Supplement: Update
</TABLE>
3. Periodic Premium Variable Life Insurance Policy with Contingent
---------------------------------------------------------------
Deferred Sales Load (The "Champion").
- -------------------------------------
The Champion(TM) Policy was originally registered on Post-Effective
Amendment No. 19 (I) under File No. 2-54015 and on Post-Effective Amendment No.
7(II) under File No. 2-72201. On March 22, 1985 Separate Account I was combined
with Separate Account II. All subsequent amendments have been filed only under
File No. 2-54015. Equitable Variable discontinued its offer to sell The Champion
Policy in April, 1990.
<TABLE>
<S> <C> <C>
P.E. No. 19(I) &
P.E. No. 7(II) 12-27-83 New policy (specimen filed)
P.E. No. 20(I) &
P.E. No. 8(II) 2-27-84 Cancel automatic effectiveness of P.E. No. 19(I) &
P.E. No. 7(II)
P.E. No. 22(I) &
P.E. No. 10 (II) 5-7-84 Respond to comments on P.E. No. 19(I) & P.E. No.
7(II)
P.E. No. 24 12-19-84 Revision to reflect proposed reorganization
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C>
P.E. No. 25 3-13-85 Respond to comments on P.E. No. 24
P.E. No. 26 3-26-85 Reflect completion of reorganization and update
P.E. No. 27 4-30-86 Update
P.E. No. 28 9-29-86 Reorganize prospectus presentation, update, and
add new investment divisions
P.E. No. 29 12-18-86 Change effective date of P.E. No. 28 to 12-18-86
P.E. No. 30 2-27-87 Supplement: Update
P.E. No. 31 4-29-88 Supplement: Update
P.E. No. 32 5-1-89 Supplement: Update
P.E. No. 33 5-1-90 Supplement: Update
P.E. No. 34 2-26-91 Supplement: New Separate Account Divisions
P.E. No. 35 2-26-91 Supplement: Update
P.E. No. 36 4-27-92 Supplement: Update
P.E. No. 37 7-23-92 Supplement: Conversion from a Mutual Life
Insurance Company to a Stock Life Insurance Company
P.E. No. 38 4-28-93 Supplement: Update
P.E. No. 39 2-11-94 Supplement: Update
P.E. No. 40 4-28-94 Supplement: Update
P.E. No. 41 4-25-95 Supplement: Update
P.E. No. 42 4-26-96 Supplement: Update
</TABLE>
1813
5
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
1285 Avenue of the Americas
New York, New York 10019
EQUITABLE
VARIABLE LIFE INSURANCE COMPANY
NEW YORK, N.Y.
(EVLICO LOGO)
SEPARATE ACCOUNT I
OF
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
March 22, 1985
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Amended and Restated Notice of Election pursuant to Section 27(g)
and Rule 27g-1 thereunder to be Governed by Section 27(h) of the
Investment Company Act of 1940
----------------------------------------------------------------
Commissioners:
Pursuant to Rule 27g-1 under the Investment Company Act of 1940, as
amended (the "1940 Act"), Separate Account I of Equitable Variable Life
Insurance Company ("EVLICO") hereby amends and restates its election to be
governed by the provisions of Section 27(h) of the 1940 Act rather than the
provisions of Sections 27(a) and 27(d) thereof to read in its entirety as set
forth below.
Separate Account I hereby elects, pursuant to Rule 27g-1(a) under the
1940 Act, to be governed by the provisions of Section 27(h) with regard (i) to
its variable life insurance policy form nos. 83-09 and 85-09 and (ii) to all
other forms of variable life insurance policies under which interests have been
registered under the Securities Act of 1933 (File Nos. 2-54015 and, pursuant to
Rule 429(b), 2-48988) prior to the date of this amended and restated election,
except its policy form nos. 84-11 and 85-11.
Very truly yours,
SEPARATE ACCOUNT I OF
EQUITABLE VARIABLE LIFE
INSURANCE COMPANY
By /s/ SIGNATURE UNREADABLE
-------------------------------
Vice President, Equitable
Variable Life Insurance
Company, on behalf of
Separate Account I
MR:ij
6084I
Exhibit 9
Amended and Restated
Description of Equitable's Issuance, Transfer
and Redemption Procedures for Policies
Pursuant to Rule 6e-2(b)(12)(ii)
January 1, 1997
Set forth below is the information called for under Rule
6e-2(b)(12)(ii) under the Investment Company Act of 1940 ("1940 Act"). That rule
provides an exemption for separate accounts, their investment advisers,
principal underwriters and sponsoring insurance company from Sections 22(d),
22(e), and 27(c)(1) of the 1940 Act, and Rule 22(c)-1 promulgated thereunder,
for issuance, transfer and redemption procedures under variable life insurance
policies to the extent necessary to comply with Rule 6e-2, state administrative
law or established administrative procedures of the life insurance company. In
order to qualify for the exemption, procedures must be reasonable, fair and not
discriminatory and they must be disclosed in the registration statement filed by
the separate account.
Equitable's Separate Account I is registered under the 1940 Act. Within
the Separate Account are the following investment funds: The High Yield Fund,
the Aggressive Stock Fund, the Common Stock Fund, the Balanced Fund, the Money
Market Fund and the Intermediate Government Securities Fund. Procedures apply
equally to each of the Funds and for purposes of this description are defined in
terms of the Account, except where a discussion of each is necessary. Each Fund
invests in shares of a corresponding investment portfolio of The Hudson River
Trust ("the Trust"), a "series" type of mutual fund registered under the 1940
Act. The investment experience of the Separate Account Funds depends on the
performance of the corresponding Trust portfolios.
Equitable believes its procedures meet the requirements of Rule
6e-2(b)(12)(ii) and states the following:
1. Because of the insurance nature of Equitable's variable life
insurance policies ("policies") and due to the requirements of state insurance
laws, the procedures necessarily differ in significant respects from procedures
for mutual funds and contractual plans for which the 1940 Act was designed.
2. Many of the procedures used by Equitable have been adopted from
its established procedures for its fixed benefit life insurance policies.
<PAGE>
- 2 -
3. In structuring its procedures to comply with Rule 6e-2, state
insurance laws and its administrative procedures, Equitable has attempted to
comply with the intendment of the 1940 Act, to the extent deemed feasible.
4. In general, state insurance laws require that Equitable's
procedures be reasonable, fair and not discriminatory.
5. Because of the nature of the insurance product, it is often
difficult to determine precisely when Equitable's procedures deviate from those
required under Sections 22(d), 22(e) or 27(c)(1) of the 1940 Act or rule 22c-1
thereunder. Accordingly, set out below is a summary of the principal policy
provisions and procedures which may be deemed to constitute, either directly or
indirectly, such a deviation. The summary, while comprehensive, does not attempt
to treat each and every procedure or variation which might occur and does
include certain procedural steps which do not constitute deviations from the
above-cited sections or rule.
I. "Redemption Procedures":
Surrender and Related Transactions
---------------------------------
This section will outline those procedures which differ in certain
significant respects from redemption procedures for mutual funds and contractual
plans. Equitable's policies provide for the payment of monies to a policyowner
or beneficiary upon presentation of a policy. The principal difference between
Equitable's "redemption" procedures and those in a mutual fund or contractual
plan context is that the payee will not receive a pro rata or proportionate
share of the Account's assets within the meaning of the 1940 Act. The amount
received by the payee will depend upon the particular benefit for which the
policy is presented, including, for example, the cash surrender value or death
benefit. There are also certain policy provisions -- such as options on lapse
and the loan privilege -- under which the policy will not be presented to
Equitable but which will affect the policyowner's benefits and may involve a
transfer of the assets supporting the policy reserve out of the Account.
Finally, state insurance law may require that certain requirements be met before
Equitable is permitted to make payments to the payee.
<PAGE>
- 3 -
a. Surrender for Cash Values
-------------------------
Unless premiums are in default for more than three months, (1)
Equitable will pay the cash surrender value within seven days after receipt, at
its Administrative Office, of the policy or proof of loss and a signed request
for surrender and any other requirements dictated by state law. Computations
with respect to the investment experience of the Account will be made at the end
of each business day. Generally, a business day is any day we are open and the
New York Stock Exchange is open for trading. However, we are closed on Martin
Luther King Day and the Friday after Thanksgiving Day. This will enable
Equitable to pay a cash value on surrender based on the next computed value
after a request is received. The surrender is effective on the date the request
is received at Equitable's Administrative Office.
The cash value at the end of a policy year is equal to the reserve for
a standard mortality risk policy. (For "SP-1"(TM) and "The Champion"(TM), this
is the Account Value.) The cash value between policy anniversaries may increase
or decrease from day to day depending on the investment experience of the
Account, based on the relationship of the assumed rate of investment return to
the actual rate of return in accordance with the policy. No minimum amount of
cash value is guaranteed.
Except for single premium policies, calculation of cash value (for
purposes of policy surrenders) for any day during a given policy year (i.e.,
fractional durations) will take into account the extent to which premiums are
paid beyond that day. Accordingly, all other things being equal, a cash value
will be higher at fractional durations where premiums are paid on an annual,
rather than a more frequent, basis (although the cash values will be identical
on the anniversary date). The formula for determining the cash value during the
first policy year is designed to cover, as far as possible, a deduction for
administrative expenses incurred before the policy is issued. The formula for
calculating the cash value will have the effect of charging for the cost of
insurance on a pro rata basis over the policy year and for administrative
charges and state premium taxes. For the "Basic" and "Expanded" policies, this
formula will have the effect of charging certain maximum percentage deductions
from premiums for "sales load" (20% of the basic annual premium for the first
policy year; 14.5% for the second through fourth policy years; and 7.25% after
the fourth policy year).
- ----------
(1) Under such circumstances, the assets supporting the cash value would be held
in Equitable's general account rather than in the Account.
<PAGE>
- 4 -
For the "SP-1" (single premium) policies, a "contingent deferred sales
load" at a maximum of 9% of the single premium, reducing to zero after 10 years,
will be deducted from the Account Value to produce the cash surrender value. And
for The Champion(TM) policies, a "contingent deferred sales load" will also be
deducted (22.5% of the basic annual premium for the first policy year, 15% for
the second year and decreasing until it reaches zero after 10 years).
Equitable will make the payment of cash surrender value out of its
general account and, at the same time, transfer assets from the Account to the
general account in an amount equal to the policy reserves in the Account.
In lieu of payment of the cash value in a single sum upon surrender of
a policy, an election may be made to apply all or a portion of the proceeds
under one of the fixed benefit payment options described in the policies or,
with the approval of Equitable, a combination of options. The election may be
made by the policyowner during his lifetime, or, if no election is in effect at
his death, by the beneficiary. An option in effect at death may not be changed
to another form of benefit after death. An option is available only if the
proceeds to be applied are $2,500 or more and would result in periodic payments
of at least $25.(2) The settlement options are subject to the restrictions and
limitations set forth in the policies.
Equitable's policies do not contain a partial surrender feature.
Instead, as an administrative accommodation, Equitable permits a policy to be
"split" and one of the post-split policies to be surrendered. The continuing
policy must meet minimum face amount or premium requirements. For post-split
surrenders of "SP-1 or "Champion" policies, any applicable contingent deferred
sales load will be charged.
b. Death Claims
------------
Equitable will pay a death benefit to the beneficiary within seven days
after receipt, at its regional Life Insurance Center, of the policy, due proof
of death of insured, and all other requirements necessary(3) to make payment.
- ----------
(2)Older series of policies require that the proceeds be $2,000 or more and
result in periodic payments of at least $20.
(3)State insurance laws impose various requirements, such as receipt of a tax
waiver, before payment of the death benefit may be made. In addition, payment of
the death benefit is subject to the provisions of the policies regarding suicide
and incontestability.
<PAGE>
- 5 -
On each policy anniversary to which premiums have been duly paid,
Equitable will determine the "variable adjustment amount" to take account of
investment experience of the Account for the previous year. Provided premiums
are duly paid, the death benefit during a policy year will equal the sum of (i)
the face amount and (ii) the "variable adjustment amount" (established at the
beginning of the policy year) if positive. The amount of the death benefit
determined at the beginning of the policy year is guaranteed not to go below
that amount for the entire policy year; conversely it will not be adjusted
upward during that period.(4)
The proceeds payable to the beneficiary will be adjusted to reflect any
premiums paid past the end of the policy month in which death occurs, any
outstanding indebtedness and any premium due if death occurs during the grace
period. The proceeds payable on death also reflect interest from the date of
death to the date of payment.
Equitable will make payment of the death benefit out of its general
account, and will transfer assets from the Account to the general account in an
amount equal to the reserve in that Account determined without regard to the
guaranteed minimum death benefit. The excess, if any, of the face amount over
the amount transferred will be paid out of the general account reserve
maintained for that purpose.
In lieu of payment of the death benefit in a single sum, a settlement
option may be selected as described immediately above with respect to cash
surrender values.
c. Exchange of Policy
------------------
Equitable's policies provide that the policyowner, within 18 months of
issuance, may exchange the policy, without submission of new evidence of
insurability, for a permanent fixed benefit insurance policy if any outstanding
loan plus accrued interest is repaid.(5) The new policy will have a fixed amount
of coverage equal to the initial face amount of the policy. This exchange
privilege is designed to permit the policyowner to change his mind ab initio and
obtain a
- ----------
(4)Older series of policies provide that the death benefit in no event will be
less than the amount of insurance under the reduced paid-up fixed benefit option
on lapse, assuming that premiums had been paid to the date of death and such
option had become effective on such date. The purpose of this provision is to
cover a remote contingency, under a policy in force for many years, where there
has been an abnormally sharp rise in the value of the Account's assets during
the policy year of death. "SP-1". and "The Champion" have a similar provision.
(5) For one Series of "SP-1" and for "The Champion," the period is 24 months.
<PAGE>
- 6 -
fixed benefit policy based on the original issue age for the policy -- just as
if the policyowner had originally decided to buy fixed benefit insurance.
Certain adjustments will be made to achieve this result. If the
exchange is made from the "Basic," "SP-1" (as issued starting in 1984) and "The
Champion" Policies, the policyowner will be required to pay the difference in
premiums between the variable and fixed policies. If the exchange is made from
the "Expanded" and "SP-1" (as issued in 1983) Policies, the policyowner will
receive a refund of the difference in premiums, not to exceed the difference in
tabular cash values.(6) Furthermore, any difference between the total cash value
and tabular cash value of the policy (arising from investment experience in the
Account different from the assumed rate of investment return) will be paid to
the policyowner if positive, or by the policyowner if negative. For "The
Champion" Policy, this adjustment also reflects the declared rate of return on
the fixed Policy. Therefore, favorable investment experience in the Account may
be used to reduce the payment by the policyowner on exchange; unfavorable
investment experience could require a payment by the policyowner. The cash value
used for this purpose will be that next computed after receipt, at Equitable's
Regional Life Insurance Center, of the policy and a signed request for exchange.
Once the exchange takes effect, Equitable will transfer assets from the
Account to the general account in an amount equal to the policy reserve in the
Account.
d. Default and Options on Lapse
----------------------------
A premium not paid on or before its due date is in default. Equitable
Variable's policies provide, however, for a grace period of 31 days for the
payment of each premium after the first. The insurance continues in force during
the grace period, but, if the policyowner dies during the grace period, the
portion of the premium which is applicable to the period from the premium due
date to the end of the policy month in which death occurs is deducted from the
death benefit.
Within three months after the date of default, if a policy is not
surrendered, the cash surrender value, less any indebtedness, may be applied
under one of the options on lapse for continued insurance not requiring payment
of premiums. These options provide for (i) reduced paid-up whole life insurance
or (ii) fixed
- ----------
(6)This procedure is designed to avoid discrimination by preventing a
policyowner from utilizing the exchange privilege in order to obtain lower
premiums for fixed benefit insurance, or higher cash surrender values under the
policies, than otherwise would be available.
<PAGE>
- 7 -
benefit extended term insurance. The cash value applied under an option will be
that at the next computed value on the date on which the option takes effect (on
the date of lapse for the variable reduced paid-up option). Equitable
simultaneously will transfer assets from the Account to the general account in
an amount equal to the policy reserve held in that Account (except for the
variable reduced paid-up option). Except as stated below, under a policy issued
at other than standard rates, the policyowner may not elect the extended term
insurance option, and the fixed reduced paid-up whole life insurance option will
become effective at the end of the three-month period.
The reduced paid-up whole life insurance option provides for a fixed
amount of paid-up whole life insurance which the cash surrender value of the
policy, less any indebtedness on the date the option becomes effective, will
provide. "The Champion" has the additional option of variable reduced paid-up
insurance. Once determined, it will vary with the investment experience of the
Account, without any guaranteed minimum.
The extended term insurance option provides for a fixed amount of
insurance equal to the death benefit, less any indebtedness, as of the date of
lapse (determined as if default had not occurred). The insurance continues for
as long a period as the cash value of the policy, less any indebtedness on such
date, will purchase.
If the policyowner has not elected reduced paid-up whole life insurance
within three months after the date of default, the extended term insurance
option will automatically apply thereafter. Fixed reduced paid-up insurance will
apply instead if the extended term insurance option is not available. However,
if the policyowner dies after the grace period but within three months after the
date of default, the greater of the benefit under the fixed reduced paid-up or
extended term insurance will apply even though such extended term insurance
option is not otherwise available and notwithstanding any election for a reduced
paid-up whole life insurance option.(7)
e. Policy Loan
-----------
Equitable policies provide that a policyowner, if no premium is in
default beyond the grace period,(8) may take a loan of up to 90% of the cash
value upon
- ----------
(7)Older policies differ slightly.
(8)The policy also provides for a loan value while premiums are in default and
the policy is in effect under the option on lapse for reduced paid-up whole life
insurance, but not the option on lapse for extended term insurance.
<PAGE>
- 8 -
assignment to Equitable of the policy as sole security.(9) The cash value for
this purpose will be that next computed after receipt, at Equitable's
Administrative Office, of a signed loan request or, under certain circumstances
and up to a specified maximum amount, a verbal request. Payment of the loan out
of Equitable's general account will be made to the policyowner within seven
days after such receipt.
Interest on a loan accrues daily at an effective annual rate of 5% and
is compounded on each policy anniversary.(10) Policyowners (except for "SP-1")
may elect (in writing) an interest rate which is adjustable on a periodic basis.
A rate will be determined as of the beginning of each policy year and will apply
to a new or outstanding loan during that policy year. The annual loan interest
rate for a policy year will be the greater of 5% (5-1/2% for "The Champion") or
the monthly Average Composite Yield on a seasoned Corporate Bonds published by
Moody's Investors Service, Inc., for the month ending two months before the
beginning of the policy year. The loan interest rate for a policy year after the
first will be the same as it was for the immediately preceding policy year if
the formula above would produce a change of less than 1/2 of 1% from the rate
for the preceding year. Election or re-election, where permitted by state law,
of the adjustable loan rate will not take effect until a policyowner's next
policy anniversary.
The amount of any outstanding loan plus accrued interest is called an
"indebtedness". Except when used to pay premiums, a loan will not be permitted
unless it is at least $100 more than the existing indebtedness, if any. A loan
does not affect the amount of the premiums due. When a loan is made, the portion
of the assets in the Account (which is a portion of the cash value and which
also constitutes a portion of the reserves for the death benefit) equal to the
indebtedness created thereby is transferred by Equitable from the Account to the
general account. Allocation of the loan between the Accounts will be
proportionate to the net cash value in each Account on the date the loan is
made. Where the fixed interest rate applies, Equitable credits the policy with a
4% rate of return (4-1/2% for "The Champion"). Where the Adjustable Loan
Interest Rate applies, Equitable credits the policy with a rate of return which
is.75% below the interest rate charged, minus any charges for taxes or reserves
for taxes. Because of the transfer, a portion of the policy is not variable
during the loan period (except in accordance with the Adjustable Loan Interest
Rate) and,
- ----------
(9)For "The Champion", the loan value is somewhat higher.
(10)Interest rates on older policies differ and the interest rate for "The
Champion" is 5-1/2% year.
<PAGE>
therefore, the death benefit above the guaranteed minimum amount and the cash
value are permanently affected by any indebtedness, whether or not repaid in
whole or in part.
The guaranteed minimum death benefit is not affected by an indebtedness
if premiums are duly paid. However, on settlement, the amount of any outstanding
indebtedness is subtracted from the death benefit.
Whenever the then outstanding indebtedness under a policy attributed to
a Fund equals or exceeds the cash value allocated to that Fund, that Fund will
become inactive for a policy and the benefit base and loan balance will be
transferred to the other Funds based on the proportions that the unloaned
amounts in each of the other Funds bears to the unloaned amount of the total
cash value. In addition, the premium allocation for that Fund is reduced to
zero. If the total outstanding indebtedness exceeds the total cash value, the
policy terminates 31 days after a notice has been mailed by Equitable to the
policyowner and any assignee of record at their last known addresses, unless a
repayment is made within that period.
f. Transfers among Funds
---------------------
An owner may transfer the benefit base among the Funds up to four times
in a policy year. Transfers go into effect upon receipt of the written request
at their next computed cash value and there is no charge. (Benefit base equals
cash value for "Basic" and "Expanded" policies or account value for "SP-1" and
"Champion" policies, in each case plus any unearned net annual premium.)
g. Right of Withdrawal Procedures
------------------------------
Equitable's policies provide that the policyowner, within 45 days after
signing Part 1 of the policy application or within 10 days after receipt of the
policy, whichever is later, may return the policy and receive a full refund of
any premium paid.(11) Such a provision is required under the insurance laws of a
number of states. Additionally, policyowners have a right to cancel their
policies for a full refund of premiums paid, within 10 days after Equitable
mails a written Notice of Withdrawal Right.
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(11)In accordance with Rule 27f-1(c) the postmark date on the envelope
containing the policy will determine whether a certificate has been surrendered
within Equitable's withdrawal period.
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II. "Public Offering Price": Purchase and Related
Transactions -- Section 22(d) and Rule 22c-1
--------------------------------------------
This section outlines those principal policy provisions and
administrative procedures which might be deemed to constitute, either directly
or indirectly, a "purchase" transaction. Because of the insurance nature of the
policies, the procedures involved necessarily differ in certain significant
respects from the purchase procedures for mutual funds and contractual plans.
The chief differences revolve around the premium rate structure, the insurance
underwriting (i.e., evaluation of risk) process and Equitable's advancement of
the "net annual premium" whether or not a premium has been paid. There are also
certain policy provisions -- such as reinstatement and loan repayment -- which
do not result in the issuance of a policy but which require certain payments by
the policyowner and involve a transfer of assets supporting the policy reserve
into the Account.
a. Premium Schedules and Underwriting Standards
--------------------------------------------
Premiums for Equitable's policies will not be the same for all
policyowners. The chief reason is that the principle of pooling and distribution
of mortality risks is based upon the assumption that each policyowner pays a
premium commensurate with the Insured's mortality risk which is actuarially
determined based upon factors such as age, sex, health and occupation. In the
context of life insurance, a uniform premium (or "public offering price") for
all Insureds would discriminate unfairly in favor of those Insureds representing
greater mortality risks to the disadvantage of those representing lesser risks.
Accordingly, although there will be no uniform "public offering price" for all
policyowners, there will be a single "price" for all policyowners in a given
actuarial category.
The policies will be offered and sold pursuant to established premium
schedules(12) and underwriting standards and in accordance with state insurance
laws. Such laws prohibit unfair discrimination among Insureds, but recognize
that premiums must be based upon factors such as age, sex, health and
occupation. Premiums and the manner in which they are determined will be
described in the Account's and Equitable's 1993 Act prospectuses. The
prospectuses also will specify premiums for illustrative ages and offer to
furnish premium information applicable to any proposed Insured upon request. In
addition, an illustration showing the premiums to be paid by a policyowner will
be delivered along with the policy.
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(12)In accordance with industry practice, Equitable will establish procedures to
handle errors in initial and subsequent premium payments, to refund overpayments
and to collect underpayments, except for the minimis amounts.
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Upon receipt of a completed application from a proposed policyowner,
Equitable will follow certain insurance underwriting (i.e., evaluation of risks)
procedures designed to determine whether the proposed Insured is insurable. This
process may involve such verification procedures as medical examinations and may
require that further information be provided by the proposed policyowner before
a determination can be made. A policy cannot be issued, i.e., physically issued
through Equitable's computerized issue system, until this underwriting procedure
has been completed.
The date on which a policy is issued is referred to as the "issue
date". It represents the commencement of the suicide and contestable periods for
purposes of the policies. The date as of which the insurance age of the proposed
Insured is determined is referred to as the "register date". It represents the
first day of the policy year and therefore determines the policy anniversary. It
marks the commencement of the variability of benefits, except as noted below.
These processing procedures are designed to provide immediate benefits
to the proposed policyowner in connection with payment of the initial premium
and will not dilute any benefit payable to any existing policyowner. Although a
policy cannot be issued until after the underwriting process has been completed,
the proposed policyowner will receive immediate insurance coverage, if he has
paid his first premium and proves to be insurable. If the full first premium is
paid with the application, and no medical evidence is required, the register
date will be the application date, so that variability of benefits will commence
as of that date. If the full first premium is not paid with the application, the
register date will be the date we receive the latest of the application, the
full first premium and any required medical evidence.
Except for "SP-1", there are two principal variations in the foregoing
procedure. First, if the policyowner wishes that his permanent insurance
protection and variability of benefits commence at a future date, he can select
a period of preliminary term insurance of up to 120 days. The register date then
will be at the end of the preliminary term period. Second, subject to state
insurance laws, the proposed policyowner may backdate the policy up to six
months, so that the premiums are based on a lower issue age. In this situation,
Equitable will attach a rider to the policy so that the variability of benefits
will not
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(13)For "SP-1" policies, if the premium is not received at the Administrative
Office within 10 days of the application date, variability will commence as of
the date of receipt.
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commence on the earlier register date, but on the date of completion of the
application if the initial premium is paid with the application or, if the first
premium is not paid with the application, the issue date.
Equitable will require that the policy be delivered with a specific
delivery period to protect itself against anti-selection by the proposed
policyowner resulting from a deterioration of his health. Generally, the period
will not exceed the shorter of 30 days from the date the policy is issued and 75
days from the date of Part 2 of the Application.
Equitable will transfer the policy's first year "net annual premium"
from its general account to the Account on the date the initial premium is
reported paid, unless, as noted above, the policyowner selects a period of
preliminary term insurance in which case the first year "net annual premium"
will be transferred to the Account on the register date. This differs slightly
for single premium policies.
c. Anniversary and Premium Processing
----------------------------------
Except for "SP-1", at each policy anniversary (so long as premiums have
been paid to that date), Equitable will transfer from the general account to the
Funds the portion of the "net annual premium" allocated to each Fund by the
policyowner, irrespective of whether premiums are due annually, semi-annually,
quarterly or monthly. This procedure will sometimes result in Equitable's
advancing monies prior to receipt of premiums.
The amount of the "net annual premium" will depend upon such factors as
the plan of insurance, the policyowner's age, sex and risk classification, the
policy's face amount, and the period for which the policy has been in force. The
amount of the "net annual premium" for the second, third and fourth policy years
will be at least equal to the "net annual premium" for the first policy year,
and the "net annual premium" for subsequent policy years will be at least equal
to that for prior years.
Premiums payable on an annual basis, which correspond to Equitable's
transfer of the "net annual premium" to the Account, are based upon the
assumption that, on the average, they will be paid on the anniversary, although
some may be paid before and some later in the grace period.
Premiums payable other than annually are based on the assumption that
they will be paid on their due dates. Until such premiums are paid, Equitable
will suffer a loss of interest from having advanced the "net annual premium" for
the policy on the anniversary date. In order to reimburse Equitable for this
loss of
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interest, premiums include a charge based on an assumed annual interest rate.
All premiums include a charge to reimburse Equitable for the increased costs
incurred in billing and collecting. This charge is part of the administrative
annual policy fee which is reflected in the premiums.
d. Reinstatement
-------------
If premiums are in default and if the policy has not been terminated by
payment of its cash surrender value, the policy may be reinstated within five
years from the date of default, upon production of evidence of insurability
satisfactory to Equitable and payment of the greater of (a) all overdue premiums
with interest at 6% compounded annually or (b) 110% of the difference between
(i) the excess of the cash surrender value immediately following reinstatement
over the cash value immediately preceding reinstatement and (ii) any
indebtedness in effect at the date any option on lapse became effective, with
interest at 5% (5-1/2% for The Champion), compounded annually to the date of
reinstatement and any other requirements dictated by state law. Upon
reinstatement the policy will have the same death benefit, cash value and
indebtedness, if any, as if default had not occurred. This reinstatement
provision is designed to comply with the insurance law of a number of states.
e. Repayment of Loan
-----------------
A loan made under Equitable's Policies may be repaid with an amount
equal to the monies borrowed with interest at the 5% fixed rate (5-1/2% for The
Champion) or applicable Adjustable Loan Interest Rate.(14)
When a loan is made, Equitable will transfer from the Account to the
general account a proportionate amount of each Division's cash surrender value
totaling the loan amount. Since Equitable will credit these assets with interest
at the rate of 4% (4-1/2% for The Champion), where the fixed loan rate is 5% (or
5-1/2%), or a rate of return which is .75% below the Adjustable Loan Interest
Rate (minus any charges for taxes or reserves for taxes), Equitable will realize
the difference between these rates and the loan rates in order to cover certain
expenses and contingencies. Upon repayment of indebtedness, Equitable will
reduce its general account policy loan asset and transfer assets supporting
corresponding reserves to the Funds in proportion to the loan balance in each
Fund.
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(14)Interest rates on older policies differ.
<PAGE>
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f. Correction of Misstatement
of Age or Sex
-------------
If Equitable discovers that the age or sex of the Insured has been
misstated, Equitable will reconstruct the policy by determining what benefits
the premium paid would have purchased at the correct age or sex. Special
adjustments may have to be made if the resultant face amount is below
Equitable's minimum size policy. Once benefits are redetermined, Equitable will
make any necessary transfers of assets into or out of the Account to reflect the
reserve for the redetermined benefits and the correct age and sex of the
Insured. Any amounts transferred to the general account will be treated as
surplus available generally for policy benefits, expenses and other liabilities
of Equitable.
g. Reduction in Premium Rate
Classification
--------------
By administrative practice, Equitable will reduce the premium rate
classification for an outstanding policy if new evidence of insurability
demonstrates that the policyowner qualifies for a lower premium classification.
After the reduced rating is determined, the policyowner will pay a lower premium
thereafter, and Equitable will make any necessary transfers of assets into or
out of the Account to reflect the reserve for benefits at the proper rating. Any
amount transferred to the general account will be treated as surplus available
generally for policy benefits, expenses and other liabilities of Equitable.
Where applicable a similar change may be made for insureds who stop smoking.
h. Annual Calculation of Death
Benefit -- Rule 22c-1
---------------------
The method of calculating the death benefit under Equitable's policies
is described under I.b. above. The calculation will be made on each policy's
anniversary date (so long as premiums have been paid to that date), and the
death benefit will remain constant during the policy year provided premiums are
paid for such year.
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