FLEXIBLE PREMIUM
VARIABLE WHOLE LIFE INSURANCE POLICIES
ISSUED BY MML BAY
STATE LIFE INSURANCE COMPANY
Supplement dated
July 6, 2000
Prospectus dated
May 1, 2000
The prospectus for
the policy is changed to add three (3) new investment funds to which to
allocate net premiums and account value. NOTE: Allocations may be made
beginning on September 11, 2000, to the new divisions of the Separate
Account investing in these three investment funds, subject to state
availability.
The revised and new
prospectus pages reflecting this addition are included. The changes to the
prospectus for the policy are as follows:
1.
|
The Facing Page
(the page preceding the Table of Contents) is revised to list the new
funds.
|
2.
|
Page 3 is revised
to list the investment management fees and other expenses of the new
funds.
|
3.
|
Section III,
Investment Options, is revised to reference the new funds. See revised
pages 13 through 15a.
|
4.
|
In Appendix C,
Tables 1 and 2 are revised to include information about the new funds. See
revised page C-2.
|
Prospectuses for the
new funds also are included.
Flexible Premium
Variable Whole Life Insurance Policies*
Issued by MML Bay
State Life Insurance Company
This prospectus
describes a life insurance policy (the policy) offered by MML
Bay State Life Insurance Company (MML Bay State). While the
policy is in force, it provides lifetime insurance protection on the Insured
named in the policy. It pays a death benefit at the death of the
Insured.
In this prospectus,
you and your refer to the Owner of the policy.
We, us, and our refer to MML Bay State.
MassMutual refers to Massachusetts Mutual Life Insurance
Company. MML Bay State is a wholly owned subsidiary of
MassMutual.
The policy provides
premium payment and death benefit flexibility. It permits you to vary the
frequency and amount of premium payments and to increase or decrease the
death benefit. This flexibility allows you to meet changing insurance needs
under a single insurance policy.
You may allocate net
premiums and account value among the investment funds (divisions of the
Separate Account) offered under this policy and a Guaranteed Principal
Account (the GPA). Currently, the funds listed at the right are
available under this policy.
We service the policy
at our Principal Administrative Office located at 1295 State Street,
Springfield, Massachusetts 01111-0001. Our telephone number is (413)
788-8411. Our Home Office is located in Hartford, Connecticut.
This policy
provides insurance protection. It is not a way to invest in mutual funds.
Replacing an existing life insurance policy with this policy may not be to
your advantage.
Please read this
prospectus and keep it for further reference.
*Title may vary in
some jurisdictions.
MML Series Investment
Fund
|
MML Equity Index
Fund (Class II
Shares)
|
Oppenheimer Variable
Account Funds
|
Oppenheimer Global
Securities Fund/VA
|
T. Rowe Price Equity
Series, Inc.
|
T. Rowe Price
Mid-Cap Growth Portfolio
|
You bear the
investment risk of any account value allocated to the investment funds.
The death benefit may vary, and the cash surrender value will vary,
depending on the investment performance of the funds.
Neither the United
States Securities and Exchange Commission nor any state securities
commission has approved this prospectus or determined that it is accurate or
complete. Any representation to the contrary is a criminal offense. This
prospectus is valid only when accompanied by the prospectuses for the
investment funds. The Securities and Exchange Commission maintains a Web
site (http://www.sec.gov) that contains material incorporated by reference
and other information regarding registrants that is filed with the
Commission.
This prospectus is
not an offer to sell the policy in any jurisdiction where it is illegal to
offer the policy or to anyone to whom it is illegal to offer the
policy.
EFFECTIVE JULY 6,
2000
Investment Management
Fees
and Other
Expenses
Total fund operating
expenses expressed as a percentage of average net assets for the year ended
December 31, 1999.
Fund
Name |
|
Management
Fees |
|
Other
Expenses |
|
Total Fund
Operating
Expenses |
|
MML Equity
Fund |
|
0.37% |
|
0.00% |
1
|
|
0.37% |
|
MML Money Market
Fund |
|
0.46% |
|
0.04% |
|
|
0.50% |
|
|
MML Managed Bond
Fund |
|
0.47% |
|
0.03% |
1
|
|
0.50% |
|
MML Blend
Fund |
|
0.37% |
|
0.01% |
1
|
|
0.38% |
|
|
MML Equity Index
Fund (Class II
Shares) |
|
0.10% |
|
0.19% |
2
|
|
0.29% |
2
|
Oppenheimer
Global Securities Fund/VA |
|
0.66% |
|
0.01% |
|
|
0.67% |
|
|
T. Rowe Price
Mid-Cap Growth Portfolio |
|
0.85% |
|
0.00% |
|
|
0.85% |
|
1
MassMutual
agreed to bear expenses of the MML Equity Fund, MML Managed Bond Fund,
MML Blend Fund and MML Money Market Fund (other than the management fee,
interest, taxes, brokerage commissions and extraordinary expenses) in
excess of 0.11% of the average daily net asset value of the Funds through
April 30, 2001. MassMutual does not expect that it will be required to
reimburse any expenses of the MML Equity Fund, the MML Managed Bond Fund,
the MML Blend Fund, and the MML Money Market Fund in
2000.
2
Effective May
1, 2000, the MML Equity Index Fund consists of different share classes.
The annual fund expenses shown for the MML Equity Index FundClass
II Shares are based on amounts for the Fund as of December 31,
1999.
MassMutual
agreed to bear expenses of the MML Equity Index Fund-Class II Shares
(other than the management fees, interest, taxes, brokerage commissions
and extraordinary expenses) in excess of 0.19% of the average daily net
asset value of the Fund through April 30, 2001. The expenses shown for
the MML Equity Index Fund-Class II Shares include this reimbursement or
waiver. If not included, the Other Expenses for this Fund in 2000 would
be 0.29%. Without such reductions, the total fund expenses for the MML
Equity Index Fund Class II Shares would be 0.39%.
(See the fund
prospectuses for more information.)
Introduction
III. Investment
Options
The Guaranteed
Principal Account
You may allocate
some or all of the net premiums to the Guaranteed Principal Account
(GPA). You also may transfer some or all of the account value
in the divisions of the Separate Account to the GPA. Neither our general
account nor the GPA is registered under federal or state securities
laws.
Amounts allocated
to the GPA become part of our general account. Our general account
consists of all assets owned by us other than those in the Separate
Account and in our other separate accounts. Subject to applicable law, we
have sole discretion over the investment of the assets of our general
account.
We guarantee
amounts allocated to the GPA in excess of any policy debt (which includes
accrued interest) will accrue interest daily at an effective annual rate
at least equal to 4%. For amounts in the GPA equal to any policy debt,
the guaranteed minimum interest rate is an effective annual rate of 4%
or, if greater, the policy loan rate less the loan interest rate expense
charge. This charge will not be greater than 2% per year. This rate will
be paid regardless of the actual investment experience of the GPA. In
addition to the guaranteed minimum interest rate, we will declare a
calendar year guaranteed minimum rate each December for the upcoming
calendar year. The rate we credit in any calendar year will not be lower
than this calendar year guaranteed minimum rate. Although we are not
obligated to credit interest at a rate higher than the guaranteed
minimum, we may declare a higher rate.
The Separate
Account
Our Board of
Directors established the Separate Account on June 9, 1982, as a separate
investment account of MML Bay State. The Separate Account is maintained
under the laws of the State of Connecticut. The Separate Account is
registered with the Securities and Exchange Commission as a unit
investment trust under the provisions of the Investment Company Act of
1940. We have established a segment within the Separate Account to
receive and invest premium payments for the policies. We have since
divided this segment into seven divisions. Each division invests in
shares of a designated investment fund as follows:
Division |
|
Fund |
|
MML
Equity |
|
MML Equity
Fund |
|
MML Money
Market |
|
MML Money Market
Fund |
|
MML Managed
Bond |
|
MML Managed Bond
Fund |
|
MML
Blend |
|
MML Blend
Fund |
|
MML Equity
Index |
|
MML Equity Index
FundClass II |
|
Oppenheimer
Global
Securities |
|
Oppenheimer
Global
Securities Fund/VA |
|
T. Rowe Price
Mid-
Cap Growth |
|
T. Rowe Price
Mid-
Cap Growth
Portfolio |
We may establish
additional divisions within the segment in the future.
We own the assets
in the Separate Account. We are required to maintain sufficient assets
in the Separate Account to meet anticipated obligations of the policies
funded by the Separate Account. We credit or charge the income, gains,
or losses, realized or unrealized, of the Separate Account against the
assets held in the Separate Account. We do not take any regard of the
other income, gains, or losses of MML Bay State. Assets in
the Separate Account attributable to the reserves and other liabilities
under the policies cannot be charged with liabilities from any other
business conducted by MML Bay State. We may transfer to our general
account any assets that exceed anticipated obligations of the Separate
Account.
The
Funds
The investment
funds available through the policy are offered by three investment
companies. They each provide an investment vehicle for the separate
investment accounts of variable life policies and variable annuity
contracts offered by companies such as MML Bay State. Shares of these
organizations are not offered to the general public.
The assets of
certain variable annuity separate accounts offered by MML Bay State and
by other affiliated and non-affiliated life insurers are invested in
shares of these funds. Because these separate accounts are invested in
the same underlying funds, it is possible that conflicts could arise
between policy owners and owners of the variable annuity
contracts.
The boards of
trustees or boards of directors of the funds will follow procedures
developed to determine whether conflicts have arisen. If a conflict
exists, the boards will notify the insurers and they will take
appropriate action to eliminate the conflicts.
We purchase the
shares of each fund for the division at net asset value. All dividends
and capital gain distributions received from a fund are automatically
reinvested in that fund at net asset value, unless MML Bay State, on
behalf of the Separate Account, elects otherwise. We redeem shares of
the funds at their net asset values as needed to make payments under the
policies.
Some of the funds
offered are similar to, or are clones of, mutual funds
offered in the retail marketplace. These clone funds have
the same investment objectives, policies, and portfolio managers as the
retail funds and usually were formed after the retail funds. While the
clone funds generally have identical investment objectives, policies and
portfolio managers, they are separate and distinct from the retail
funds. In fact, the performance of the clone funds may be dramatically
different from the performance of the retail funds due to differences in
the funds sizes, dates shares of stock are purchased and sold,
cash flows and expenses. Thus, while the performance of the retail funds
may be informative, you should remember that such performance is not the
performance of the funds that support the policy. It is not an
indication of future performance of the policy funds.
Fund
Profiles
Following is a
summary of the investment objectives of each fund. Please note there can
be no assurance any fund will achieve its objectives. More detailed
information concerning the funds and their investment objectives is
contained in the accompanying prospectuses; they include information on
the risks associated with the investments, the investment techniques,
and the deduction of expenses for each of the funds.
MML Series
Investment Fund
(MML Trust)
The MML Trust,
managed by MassMutual, was organized as a Massachusetts business trust
on December 19, 1984. Five of the diversified investment portfolios of
the Trust are available under this policy.
MML Equity
Fund
Sub-adviser: David L. Babson & Company,
Inc.
The MML Equity
Fund seeks to achieve a superior total rate of return over an extended
period of time from both capital appreciation and current income by
investing in equity securities.
14
Investment
Options
MML Money Market
Fund
Sub-adviser: David L. Babson & Company,
Inc.
The MML Money
Market Fund seeks to achieve high current income, the preservation of
capital, and liquidity by investing in short-term
securities.
MML Managed Bond
Fund
Sub-adviser: David L. Babson & Company,
Inc.
The MML Managed
Bond Fund seeks to achieve as high a total rate of return on an annual
basis as is considered consistent with the preservation of capital by
investing primarily in investment grade debt securities.
MML Blend
Fund
Sub-adviser: David L. Babson & Company,
Inc.
The MML Blend
Fund seeks to achieve as high a level of total rate of return over an
extended period of time as is considered consistent with prudent
investment risk and the preservation of capital by investing in equity,
fixed income and money market securities.
MML Equity Index Fund
(Class II Shares)
Sub-adviser: Bankers Trust Company
The MML Equity
Index Fund seeks to provide investment results that correspond to the
price and yield performance of publicly traded common stocks in the
aggregate, as represented by the Standard & Poors 500
Composite Stock Price Index®.
(Standard
& Poors 500 and S&P 500® are
trademarks of The McGraw-Hill Companies, Inc. and have been licensed for
use by the Fund. The Fund is not sponsored, endorsed, sold or promoted
by Standard & Poors (S&P), a division of The
McGraw-Hill Companies, or The McGraw Hill Companies, Inc. Standard &
Poors makes no representation regarding the advisability of
investing in the fund.)
Oppenheimer
Variable Account Funds (Oppenheimer Trust)
The Oppenheimer
Trust is managed by OppenheimerFunds, Inc. The Trust consists of 10
separate funds, one of which is offered under this policy.
Oppenheimer Global
Securities Fund/VA
The Oppenheimer
Global Securities Fund/VA seeks long-term capital appreciation by
investing mainly in common stocks, and can also buy other equity
securities, including preferred stocks and securities convertible into
common stock.
T. Rowe Price
Equity Series, Inc.
The T. Rowe Price
Equity Series, Inc., was incorporated in Maryland in 1994. Currently, it
consists of four series, each representing a separate class of shares
having different objectives and investment policies. One of the series,
the Mid-Cap Growth Portfolio, is available under this
policy.
T. Rowe Price Mid-Cap
Growth Portfolio
The T. Rowe Price
Mid-Cap Growth Portfolio seeks to provide long-term capital appreciation
by investing in mid-cap stocks with potential for above-average earnings
growth. T. Rowe Price defines mid-cap companies as those with market
capitalizations within the range of companies in the S&P 400 Mid-Cap
Index.
The Investment
Advisers
MassMutual serves
as investment manager of each of the MML Funds under investment
management agreements. David L. Babson & Company, Inc.
(Babson), which is a controlled subsidiary of MassMutual, is
the investment sub-adviser to MML Equity Fund, MML Money Market Fund,
MML Managed Bond Fund, and MML Blend Fund. Both MassMutual and Babson are
registered investment advisers under the Investment Advisers Act of
1940.
MassMutual
entered into a sub-advisory agreement with Bankers Trust Company.
Bankers Trust Company manages the investment and reinvestment of the
assets of the MML Equity Index Fund.
OppenheimerFunds,
Inc. (OFI) is an investment adviser organized under the laws
of Colorado as a corporation; it was originally organized in 1959. It
(including a subsidiary) currently manages investment companies,
including other Oppenheimer funds, with assets of more than $120 billion
as of December 31, 1999, and with more than five million shareholder
accounts. OFI is located at Two World Trade Center, 34th Floor, New
York, New York 10048-0203. OFI is owned by Oppenheimer Acquisition
Corporation, a holding company owned in part by senior management of OFI
and ultimately controlled by MassMutual. OFI serves as investment
adviser to the Oppenheimer Trust. OFI is registered as an investment
adviser under the Investment Advisers Act of 1940. OFI serves as
Investment Adviser to the Oppenheimer Funds.
T. Rowe Price
Associates, Inc., (T. Rowe Price), is the investment adviser
to the T. Rowe Price Mid-Cap Growth Portfolio. T. Rowe Price was founded
in 1937. T. Rowe Price has its principal business address at 100 East
Pratt Street, Baltimore, Maryland 21202. The T. Rowe Price Equity
Series, Inc., (the Corporation), was incorporated in
Maryland in 1994. The Corporation is governed by a Board of Directors
that meets regularly to review the funds investments, performance,
expenses, and other business affairs. The policy of the Corporation is
that a majority of Board members will be independent of T. Rowe
Price.
15a
Investment
Options
TABLE
1
EFFECTIVE ANNUAL RATES
OF RETURN
AS OF DECEMBER 31, 1999
Fund |
|
Since
Inception |
|
15
Years |
|
10
Years |
|
5
Years |
|
1
Year |
MML Money
Market Fund |
|
6.54% |
|
5.82% |
|
4.98% |
|
5.14% |
|
4.78% |
|
|
MML Managed
Bond Fund |
|
9.53% |
|
8.85% |
|
7.68% |
|
7.50% |
|
(1.83% |
) |
MML Blend
Fund |
|
12.66% |
|
12.89% |
|
11.51% |
|
13.75% |
|
(1.24% |
) |
|
MML Equity
Fund |
|
14.06% |
|
15.05% |
|
13.56% |
|
17.78% |
|
(3.82% |
) |
MML Equity
Index Fund
1, 2
|
|
26.93% |
|
|
|
|
|
|
|
20.32% |
|
|
Oppenheimer
Global Securities Fund/VA
2
|
|
16.79% |
|
|
|
|
|
21.67% |
|
58.48% |
|
T. Rowe Price
Mid-Cap Growth Portfolio
2
|
|
21.52% |
|
|
|
|
|
|
|
23.73% |
|
The figures in
this Table do not reflect any charges at the Separate Account or policy
level.
1
These returns
do not reflect the lower annual fund expenses of the Class II Shares
since the initial offering of the Class II Shares occurred on May 1,
2000. These returns would have been higher if the Class II fee structure
were in place and reflected in the performance.
2
These funds
will become available through the policy beginning on September 11,
2000.
TABLE
2
ONE YEAR TOTAL
RETURNS
Year
Ended |
|
MML
Money
Market |
|
MML
Managed
Bond |
|
MML
Blend |
|
MML
Equity
1
|
|
MML
Equity
Index
3
|
|
Oppenheimer
Global
Securities
3
|
|
T. Rowe
Price
Mid-Cap
Growth
3
|
1999 |
|
4.78% |
|
(1.83% |
) |
|
(1.24% |
) |
|
(3.82% |
) |
|
20.32 |
%
2
|
|
58.48% |
|
|
23.73 |
% |
|
1998 |
|
5.16% |
|
8.14% |
|
|
13.56% |
|
|
16.20% |
|
|
28.22
|
%2
|
|
14.11% |
|
|
22.08 |
% |
1997 |
|
5.18% |
|
9.91% |
|
|
20.89% |
|
|
28.59% |
|
|
21.93
|
%*
2
|
|
22.42% |
|
|
18.80 |
%* |
|
1996 |
|
5.01% |
|
3.25% |
|
|
13.95% |
|
|
20.25% |
|
|
|
|
|
17.80% |
|
|
|
|
1995 |
|
5.58% |
|
19.14% |
|
|
23.28% |
|
|
31.13% |
|
|
|
|
|
2.24% |
|
|
|
|
|
1994 |
|
3.84% |
|
(3.76% |
) |
|
2.48% |
|
|
4.10% |
|
|
|
|
|
(5.72% |
) |
|
|
|
1993 |
|
2.75% |
|
11.81% |
|
|
9.70% |
|
|
9.52% |
|
|
|
|
|
70.32% |
|
|
|
|
|
1992 |
|
3.48% |
|
7.31% |
|
|
9.36% |
|
|
10.48% |
|
|
|
|
|
(7.11% |
) |
|
|
|
1991 |
|
6.01% |
|
16.66% |
|
|
24.00% |
|
|
25.56% |
|
|
|
|
|
3.39% |
|
|
|
|
|
1990 |
|
8.12% |
|
8.38% |
|
|
2.37% |
|
|
(0.51% |
) |
|
|
|
|
0.40% |
* |
|
|
|
1989 |
|
9.16% |
|
12.83% |
|
|
19.96% |
|
|
23.04% |
|
|
|
|
|
|
|
|
|
|
|
1988 |
|
7.39% |
|
7.13% |
|
|
13.40% |
|
|
16.68% |
|
|
|
|
|
|
|
|
|
|
1987 |
|
6.49% |
|
2.60% |
|
|
3.12% |
|
|
2.10% |
|
|
|
|
|
|
|
|
|
|
|
1986 |
|
6.60% |
|
14.46% |
|
|
18.30% |
|
|
20.15% |
|
|
|
|
|
|
|
|
|
|
1985 |
|
8.03% |
|
19.94% |
|
|
24.88% |
|
|
30.54% |
|
|
|
|
|
|
|
|
|
|
|
1984 |
|
10.39% |
|
11.69% |
|
|
8.24% |
* |
|
5.40% |
|
|
|
|
|
|
|
|
|
|
1983 |
|
8.97% |
|
7.26% |
|
|
|
|
|
22.85% |
|
|
|
|
|
|
|
|
|
|
|
1982 |
|
11.12%
|
*
|
22.79% |
* |
|
|
|
|
25.67% |
|
|
|
|
|
|
|
|
|
|
|
The figures in
this Table do not reflect any charges at the Separate Account or
policy level. |
1
Performance
for the MML Equity Fund for years 1981 through 1974: 6.67%, 27.62%,
19.54%, 3.71%, (0.52%), 24.77%, 32.85%, (17.61%). Performance for the
MML Equity Fund prior to 1974 is not available. |
2
These
returns do not reflect the lower annual fund expenses of the Class
II Shares since the initial offering of the Class II Shares occurred
on May 1, 2000. These returns would have been higher if the Class II
fee structure were in place and reflected in the
performance. |
3
These
funds will become available through the policy beginning on
September 11, 2000. |
*Since
inception. |
Dates of
inception: |
MML Equity
Fund - 9/15/71 |
MML
Equity Index Fund - 5/1/97 |
MML Managed Bond
Fund - 12/16/81 |
Oppenheimer Global Securities
Fund/VA - 11/12/90 |
MML Money Market
Fund - 12/16/81 |
T. Rowe
Price Mid-Cap Growth Portfolio - 12/31/96 |
MML Blend
Fund - 2/3/84 |
|
Appendix
C