<PAGE>
As filed with Securities and Exchange Commission on December 21, 1995
Registration No. 33-_____
----------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-6
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
NEW ENGLAND VARIABLE LIFE SEPARATE ACCOUNT
(Exact Name of Trust)
NEW ENGLAND VARIABLE LIFE INSURANCE COMPANY
(Name of Depositor)
501 Boylston Street
Boston, Massachusetts 02117
(Address of depositor's principal executive offices)
MARIE C. SWIFT, ESQ.
Counsel
New England Variable Life Insurance Company
501 Boylston Street
Boston, Massachusetts 02117
(Name and address of agent for service)
Copies to:
STEPHEN E. ROTH, ESQ.
Sutherland, Asbill & Brennan
1275 Pennsylvania Ave., N.W.
Washington, D.C. 20004-2404
-----------------
Modified Single Premium Variable Life Insurance Policies
(Title, amount, and proposed maximum offering
price of securities being registered)
Registration of an Indefinite Amount of Securities
Pursuant to Rule 24f-2 under the Investment Company Act of 1940
Amount of Filing Fee: $500
Approximate date of proposed public offering: As soon as practicable after the
effective date of this Registration Statement.
The Registrant hereby amends this Registration Statement under the Securities
Act of 1933 on such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the Commission,
acting pursuant to Section 8(a), may determine.
<PAGE>
NEW ENGLAND VARIABLE LIFE SEPARATE ACCOUNT
Registration Statement on Form S-6
Cross-Reference Sheet
<TABLE>
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Form N-8B-2
Item No. Caption in Prospectus
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<S> <C>
1 Cover Page
2 Cover Page
3 Inapplicable
4 NEVLICO's Distribution and Other Agreements
5 NEVLICO and The New England
6 The Variable Account
9 Inapplicable
10(a) Other Policy Features
10(b) Cash Value and Cash Value Benefits
10(c), (d), (e) Cash Value and Cash Value Benefits; Right to Return the
Policy; Lapse and Reinstatement
10(f), (g), (h) Voting Rights; Rights Reserved by NEVLICO
10(i) Limits to NEVLICO's Right to Challenge the Policy; Payment of
Proceeds; Investments of the Variable Account
11 The Variable Account
12 Investments of the Variable Account; NEVLICO's Distribution and
Other Agreements
13 Charges and Expenses; NEVLICO's Distribution and Other
Agreements; Charge for NEVLICO's Income Taxes; Appendix A
14 Premium Payments
15 Premium Payments
16 Investments of the Variable Account
17 Captions referenced under Items 10(c), (d), (e) and (i) above
18 The Variable Account; Appendix B
19 Reports; NEVLICO's Distribution and Other Agreements
20 Captions referenced under Items 6 and 10(g) above
21 Loan Privilege
22 Inapplicable
23 NEVLICO's Distribution and Other Agreements
24 Limits to NEVLICO's Right to Challenge the Policy
25 NEVLICO and The New England
26 NEVLICO's Distribution and Other Agreements
27 NEVLICO and The New England
28 Management
29 NEVLICO and The New England
30 Inapplicable
31 Inapplicable
32 Inapplicable
33 Inapplicable
</TABLE>
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<TABLE>
<CAPTION>
Form N-8B-2
Item No. Caption in Prospectus
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<S> <C>
34 NEVLICO's Distribution and Other Agreements
35 NEVLICO and The New England
36 Inapplicable
37 Inapplicable
38 NEVLICO's Distribution and Other Agreements
39 NEVLICO's Distribution and Other Agreements
40 NEVLICO's Distribution and Other Agreements
41(a) NEVLICO's Distribution and Other Agreements
42 Inapplicable
43 Inapplicable
44(a) Investments of the Variable Account; Premium Payments
44(b) Charges and Expenses
44(c) Premium Payments; Deductions from Initial Premium; Deductions
from Additional Payments
45 Inapplicable
46 Investments of the Variable Account; Captions referenced under
Items 10(c), (d) and (e) above
47 Inapplicable
48 Inapplicable
49 Inapplicable
50 Inapplicable
51 Cover Page; Death Benefit; Lapse and Reinstatement; Charges and
Expenses; Policy Owner and Beneficiary; Premium Payments;
NEVLICO's Distribution and Other Agreements
52 Rights Reserved by NEVLICO
53 Tax Considerations
54 Inapplicable
55 Inapplicable
59 Financial Statements
</TABLE>
<PAGE>
NEW ENGLAND VARIABLE LIFE INSURANCE COMPANY
Modified Single Premium Variable Life Insurance Policies
Issued by New England Variable Life Insurance Company
501 Boylston Street
Boston, Massachusetts 02116
(617) 578-2000
This prospectus describes individual modified single premium variable life
insurance policies (the "Policies") offered by New England Variable Life
Insurance Company ("NEVLICO"), a wholly-owned subsidiary of New England Mutual
Life Insurance Company ("The New England").
The Policies are issued in two forms: Single Insured and Last Survivor. A
Single Insured Policy pays a death benefit on the death of a single named
insured; a Last Survivor Policy pays a death benefit on the last of two named
insureds to die. The death benefit provided by a Policy is the greater of the
variable death benefit and the minimum guaranteed death benefit. The variable
death benefit on any day is the amount determined by dividing the Policy's
cash value by the applicable net single premium. The initial minimum
guaranteed death benefit is based on premium payments made.
You purchase the Policy with a single premium. The minimum premium to
purchase the Policy is $10,000. Additional payments may be made after the
first Policy Year, subject to certain restrictions. You may, within limits,
allocate premiums (net of any charges) to one or more of the 13 investment
Sub-Accounts of NEVLICO's Variable Life Separate Account (the "Variable
Account"). Each Sub-Account of the Variable Account invests in the shares of
one of the following funds of the New England Zenith Fund (the "Zenith Fund"):
Back Bay Advisors Bond Income Series Westpeak Value Growth Series
Back Bay Advisors Money Market Westpeak Stock Index Series
Series Alger Equity Growth Series
Back Bay Advisors Managed Series Venture Value Series
Loomis Sayles Avanti Growth Series Salomon Brothers U.S. Government
Loomis Sayles Small Cap Series Series*
Loomis Sayles Balanced Series Salomon Brothers Strategic Bond
Draycott International Equity Series Opportunities Series*
- --------
* (subject to any necessary state insurance department approvals)
Partial surrenders and Policy loans may be taken from time to time, subject
to certain restrictions. In almost all cases, the Policies will be modified
endowment contracts for federal income tax purposes.
A LOAN, DISTRIBUTION OR OTHER AMOUNT RECEIVED FROM A MODIFIED ENDOWMENT
CONTRACT DURING THE LIFE OF AN INSURED WILL BE TAXED TO THE EXTENT OF ANY
ACCUMULATED INCOME IN THE POLICY. ANY AMOUNTS THAT ARE TAXABLE WITHDRAWALS
WILL BE SUBJECT TO A 10% ADDITIONAL TAX, WITH CERTAIN EXCEPTIONS, INCLUDING AN
EXCEPTION FOR DISTRIBUTIONS MADE ON OR AFTER THE DATE WHEN THE POLICY OWNER
ATTAINS AGE 59 1/2.
The cash value of a Policy will vary daily with the investment experience of
the mutual fund portfolios in which cash value in the Sub-Accounts is
invested. There is no guaranteed minimum for cash value in the Sub-Accounts.
You may cancel the Policy during the "right to return the Policy" period,
which in most states is the 10-day period after you receive your Policy. The
initial premium for the Policy will be invested in the Money Market Sub-
Account until 15 days after NEVLICO mails the confirmation for the initial
premium. Thereafter, the Policy's cash value will be invested in the Sub-
Accounts according to your instructions.
It may not be advantageous to replace existing insurance with the Policy
described in this prospectus.
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 THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE. THIS PROSPECTUS MUST BE ACCOMPANIED OR PRECEDED BY THE CURRENT
PROSPECTUS OF THE NEW ENGLAND ZENITH FUND. THESE PROSPECTUSES SHOULD BE READ
AND RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES ARE OFFERED FOR SALE IN THE COMMONWEALTH OF PUERTO RICO
PURSUANT TO REGISTRATION WITH THE SECURITIES OFFICE OF THE DEPARTMENT OF THE
TREASURY, BUT SUCH REGISTRATION DOES NOT CONSTITUTE A FINDING THAT THIS
PROSPECTUS IS TRUE, COMPLETE, AND NOT MISLEADING, NOR HAS THE SECURITIES
OFFICE OF THE DEPARTMENT OF THE TREASURY PASSED IN ANY WAY UPON THE MERITS OF,
RECOMMENDED, OR GIVEN APPROVAL TO SUCH SECURITIES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF THE ZENITH FUND AND INTERESTS IN THE POLICIES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, A BANK, AND THE SHARES AND
INTERESTS ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
GLOSSARY.................................................................... 4
INTRODUCTION TO THE POLICIES................................................ 6
The Policies.............................................................. 6
Availability of the Policy................................................ 10
Policy Charges............................................................ 10
NEVLICO AND THE NEW ENGLAND................................................. 11
PREMIUMS.................................................................... 12
Applying for a Policy..................................................... 12
Premium Payments.......................................................... 12
Right to Return the Policy................................................ 13
Lapse and Reinstatement................................................... 13
ALLOCATION OF PREMIUM PAYMENTS AND TRANSFER OF CASH VALUE................... 13
Allocation of Premium Payments............................................ 13
Transfer Option........................................................... 14
Dollar Cost Averaging..................................................... 15
Asset Rebalancing......................................................... 15
Transfer and Reallocation Requests........................................ 15
DEATH BENEFIT............................................................... 16
How the Death Benefit is Determined....................................... 16
Minimum Guaranteed Death Benefit.......................................... 16
Adjustments to the Death Proceeds Payable................................. 16
Payment of Death Benefit Proceeds......................................... 16
CASH VALUE AND CASH VALUE BENEFITS.......................................... 17
Cash Value................................................................ 17
Net Investment Experience................................................. 17
Loan Privilege............................................................ 17
Effect of Policy Loan..................................................... 17
Surrender................................................................. 18
Partial Surrenders........................................................ 18
Effect of Partial Surrender on Cash Value and Death Benefit............... 19
Payment of Proceeds....................................................... 19
Payment Options........................................................... 19
CHARGES AND EXPENSES........................................................ 20
Deductions from Initial Premium........................................... 20
Deductions from Additional Payments....................................... 20
Monthly Deduction Deducted from Cash Value................................ 20
Daily Charges Deducted from the Variable Account Assets................... 21
Charges Deducted from Eligible Fund Assets................................ 21
Charges Deducted on Surrender or Partial Surrender........................ 21
Sales Charges............................................................. 21
Surrender Charge.......................................................... 21
State Premium Tax Charge.................................................. 22
Cost of Insurance Charge.................................................. 22
Administrative Charge..................................................... 24
Monthly Maintenance Charge................................................ 24
Mortality and Expense Risk Charge......................................... 24
Eligible Fund Expenses.................................................... 24
Group or Sponsored Arrangements........................................... 24
THE VARIABLE ACCOUNT........................................................ 25
Investments of the Variable Account....................................... 25
Investment Management..................................................... 27
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
OTHER POLICY FEATURES...................................................... 29
Policy Owner and Beneficiary............................................. 29
Exchange of Policy....................................................... 29
NEVLICO'S DISTRIBUTION AND OTHER AGREEMENTS................................ 29
LIMITS TO NEVLICO'S RIGHT TO CHALLENGE THE POLICY.......................... 30
Misstatement of Age or Sex............................................... 30
Suicide.................................................................. 30
TAX CONSIDERATIONS......................................................... 31
Policy Proceeds.......................................................... 31
Definition of Life Insurance............................................. 31
Other Policy Owner Tax Matters........................................... 32
Charge for NEVLICO's Income Taxes........................................ 33
MANAGEMENT................................................................. 33
VOTING RIGHTS.............................................................. 34
RIGHTS RESERVED BY NEVLICO................................................. 35
TOLL-FREE NUMBERS.......................................................... 35
REPORTS.................................................................... 35
ADVERTISING PRACTICES...................................................... 36
LEGAL MATTERS.............................................................. 36
REGISTRATION STATEMENT..................................................... 36
EXPERTS.................................................................... 36
APPENDIX A: ILLUSTRATIONS OF DEATH BENEFITS, CASH VALUES, NET CASH VALUES
AND ACCUMULATED PREMIUMS.................................................. 37
APPENDIX B: INVESTMENT EXPERIENCE INFORMATION.............................. 46
APPENDIX C: EXAMPLE OF ADJUSTMENT TO PREMIUM TAX CHARGE RESULTING FROM
ADDITIONAL PAYMENTS....................................................... 50
APPENDIX D: EXAMPLE OF EFFECT OF SURRENDERS AND PARTIAL SURRENDERS ON
OPERATION OF POLICY....................................................... 51
APPENDIX E: LONG-TERM MARKET TRENDS........................................ 53
APPENDIX F: USES OF LIFE INSURANCE......................................... 55
</TABLE>
3
<PAGE>
GLOSSARY
ADMINISTRATIVE CHARGE. This charge for administering the Policy is deducted
from your cash value on each Monthly Deduction Date after the Policy Date, as
part of the Monthly Deduction. (See "Charges and Expenses.")
ADMINISTRATIVE OFFICE. NEVLICO's office at 501 Boylston Street, Boston,
Massachusetts 02116, (617) 578-2000.
AGE. For purposes of this prospectus, the age of an insured refers to the
insured's age at his or her last birthday. Joint insureds are assigned the
same "joint equal age," which reflects the anticipated mortality of both
insureds.
CASH VALUE. A Policy's cash value is the sum of the amount of its cash value
held in the Variable Account and, if there is an outstanding policy loan, the
amount of its cash value held in NEVLICO's general account as a result of the
loan. (See "Cash Value.")
COST OF INSURANCE CHARGE. This charge for providing insurance protection is
deducted from cash value on each Monthly Deduction Date after the Policy Date,
as part of the Monthly Deduction. No cost of insurance charge is deducted on
or after the Policy Anniversary when the age of the insured(s) is equal to
100. (See "Charges and Expenses.")
ELIGIBLE FUNDS. Each Sub-Account of the Variable Account invests in the
shares of one of the Eligible Funds. The Eligible Funds are: Back Bay Advisors
Bond Income Series, Back Bay Advisors Money Market Series, Back Bay Advisors
Managed Series, Loomis Sayles Avanti Growth Series, Loomis Sayles Small Cap
Series, Loomis Sayles Balanced Series, Draycott International Equity Series,
Alger Equity Growth Series, Westpeak Value Growth Series, Westpeak Stock Index
Series, Venture Value Series, Salomon Brothers U.S. Government Series, and
Salomon Brothers Strategic Bond Opportunities Series, all of which are series
of the Zenith Fund. The availability of the Salomon Brothers U.S. Government
Series and Salomon Brothers Strategic Bond Opportunities Series is subject to
any necessary state insurance department approvals. (See "The Variable
Account.")
FACE AMOUNT. The amount of the initial premium.
INVESTMENT START DATE. This is the latest of the date NEVLICO receives the
single premium for the Policy, the date when the last Part II of the Policy
application or the Supplement to the Part I Application is signed, if any is
required, and the Policy Date. It is the date when an amount is first provided
for investment under the Policy. (See "Amount Provided for Investment Under
the Policy.")
ISSUE AGE. The age of an insured as of the last birthday on or before the
Policy Date. In the case of a Last Survivor Policy, "issue age" refers to the
joint equal age assigned to both insureds.
LAST SURVIVOR POLICY. A Policy providing for the payment of a death benefit
on the death of the last of two named insureds to die.
MINIMUM GUARANTEED DEATH BENEFIT. The minimum guaranteed death benefit on
any day is the greater of total premiums paid or the cash value as of the most
recent five-year anniversary of the Policy Date, as adjusted for any interim
premium payments or withdrawals. See "Death Benefit."
MONTHLY DEDUCTION. The Monthly Deduction is the aggregate amount of charges
deducted from the Policy's cash value on each Monthly Deduction Date and
includes the monthly cost of insurance charge, the monthly administrative
charge, the monthly maintenance charge for certain Policies, the mortality and
expense risk charge, and during the first ten Policy Years, the monthly sales
charge and monthly state premium tax charge. Upon surrender, lapse or partial
surrender, the applicable portion of the Monthly Deduction will also be
deducted from the cash value. (See "Charges and Expenses.")
MONTHLY DEDUCTION DATE. The last day of each Policy Month.
NET ADDITIONAL PAYMENT. Each net additional payment is equal to the
additional payment made less the applicable sales charge and state premium tax
charge.
NET CASH VALUE. On any day, the Policy's net cash value is equal to the cash
value for that day, reduced by any outstanding Policy loan balance and also
reduced by any Surrender Charge that would apply on surrender. (See "Cash
Value.")
NET INVESTMENT EXPERIENCE. For any period, a Sub-Account's net investment
experience equals the investment experience of the underlying Eligible Fund's
shares for the same period. (See "Net Investment Experience.")
4
<PAGE>
POLICY DATE. If you submit the initial premium payment with the application,
the Policy Date is generally the later of the date when the last Part II of
the application or the Supplement to the Part I Application is signed, if any
is required, and receipt of the premium payment. If you do not submit the
initial premium with the application, the Policy Date will be the date NEVLICO
receives the initial premium payment for the Policy. The Policy Date is the
date used to determine all future cyclical periods under the Policy, e.g.,
Policy Months and Policy Years.
POLICY LOAN BALANCE. Policy loans outstanding plus interest accrued to date.
PREFERRED SURRENDER AMOUNT. This amount may be surrendered from the Policy's
cash value during the Surrender Charge Period free of any Surrender Charge.
This amount is calculated during the Surrender Charge Period and is equal to
the greater of (a) cash value in excess of initial premium paid (minus any
previous partial surrenders attributable to the initial premium) and (b) 10%
of the initial premium paid (minus previous partial surrenders in that Policy
Year).
PREMIUMS. Premiums include all payments you make under the Policy other than
loan repayments. (See "Premiums.")
RIGHT TO RETURN THE POLICY PERIOD. Within 10 days (or more where required by
applicable state insurance law) after you receive the Policy, you may cancel
the Policy by returning the Policy to NEVLICO or its agent. If you choose to
cancel the Policy, NEVLICO will refund any premiums paid (or any other amount
that is required by state insurance law) with interest at the rate currently
in use by NEVLICO.
SINGLE INSURED POLICY. A Policy providing for the payment of a death benefit
on the death of the insured named in the Policy.
STATE PREMIUM TAX CHARGE. This charge for state premium taxes is deducted
from your cash value on each Monthly Deduction Date for the first ten Policy
Years, as part of the Monthly Deduction. If you make an additional payment, a
charge for state premium taxes is deducted from the payment before allocation
to the Sub-Accounts. (See "Charges and Expenses.")
SURRENDER CHARGE. If, during the Surrender Charge Period, a Policy is
totally surrendered or lapses or a partial surrender (other than a preferred
partial surrender) is made, a Surrender Charge is taken from the cash value.
The surrender charge is a deferred sales charge attributable to the initial
premium. (See "Surrender Charge.")
SURRENDER CHARGE PERIOD. The Surrender Charge Period is the first nine
Policy Years.
YOU. When used in this prospectus, "you" refers to the Policy Owner.
ZENITH FUND. The New England Zenith Fund.
5
<PAGE>
INTRODUCTION TO THE POLICIES
THE POLICIES
The individual modified single premium variable life insurance policies
offered by this prospectus are designed to provide lifetime insurance coverage
for the insured(s) named in the Policy. They are not offered primarily as an
investment.
The following list provides a brief description of the basic features of the
Policy. These and other features of the Policy are explained in more detail
throughout the prospectus. You should be sure to read the entire prospectus
for more complete information.
-- PREMIUM PAYMENTS. You must pay an initial premium at least equal to our
minimum single premium requirements. After the first Policy Year, you
may make additional payments, subject to certain restrictions and
limitations.
-- INVESTMENT OF PREMIUMS. Your initial premium is invested according to
your instructions in one or more of the Sub-Accounts of the Variable
Account corresponding to mutual fund portfolios after an initial period
in the Money Market Sub-Account. (See "Amount Provided for Investment In
the Policy.") Any net additional payments will be invested according to
your instructions in the Sub-Accounts. (See "Allocation of Premiums" and
"Investment Options.")
-- AVAILABLE PORTFOLIOS. The mutual fund portfolios available to you under
the Policy include several common stock funds, including a fund which
invests primarily in foreign securities, three bond funds, one managed
fund, a balanced fund, and a money market fund, subject to any necessary
state insurance department approvals. (See "Investments of the Variable
Account.")
-- LIMITS ON ALLOCATIONS. You may allocate your Policy's cash value to a
maximum of 10 Sub-Accounts.
-- TRANSFERS. Once fifteen days have passed after we mail the confirmation
for the initial premium payment, you may transfer portions of the
Policy's cash value among the Sub-Accounts up to four times each Policy
Year (twelve times each Policy Year for Policies issued in New York)
without NEVLICO's consent. NEVLICO currently allows twelve transfers
each Policy Year in all states. (See "Transfer Option.")
-- FLUCTUATING CASH VALUE. The cash value of the Policy will vary daily
based on, among other things, the net investment experience of the Sub-
Accounts to which amounts have been allocated. The cash value is not
guaranteed. You bear the investment risk with respect to the cash value.
(See "Cash Value" and "Charges and Expenses.")
-- DEATH BENEFIT. The death benefit is the greater of the variable death
benefit and the minimum guaranteed death benefit. (See "Death Benefit.")
-- POLICY LOANS AND PARTIAL SURRENDERS. A loan privilege is available under
the Policy. Partial surrenders also are allowed. (See "Loan Privilege"
and "Partial Surrenders.")
-- FEDERAL INCOME TAX CONSEQUENCES. Death benefits paid to the beneficiary
under a life insurance contract generally are not subject to Federal
income tax. Under current law, undistributed increases in cash value of
a life insurance contract generally are not taxable. (See "Tax
Considerations.") In almost all situations, the Policies are expected to
be treated as modified endowment contracts. Pre-death distributions
(including partial surrenders and loans) from a modified endowment
contract are included in income on an income first basis, and a 10%
penalty tax may be imposed on income distributed before the Policy Owner
attains age 59 1/2. (See "Tax Considerations.")
COMPARISON TO OTHER POLICIES AND OTHER INVESTMENTS
In many respects the Policies are similar to fixed-benefit life insurance.
Like fixed-benefit life insurance, the Policies offer a death benefit and
provide a cash value, loan privileges and surrender values.
The Policies are different from fixed-benefit life insurance in that the
death benefit will in most cases, and the cash value will always, vary to
reflect the investment experience of the selected Sub-Accounts of the Variable
Account.
6
<PAGE>
The Policies are designed to provide insurance protection. Although the
underlying mutual fund portfolios to which cash value may be allocated invest
in securities similar to those in which mutual funds available directly to the
public invest, in many ways the Policies differ from mutual fund investments.
The main differences are:
-- The Policy provides a death benefit based on NEVLICO's assumption of an
actuarially calculated risk.
-- If the net cash value is not sufficient to pay a Monthly Deduction
because there is an excess Policy loan, the Policy will lapse with no
value unless a payment is made. If the Policy lapses when Policy loans
are outstanding, adverse tax consequences may result.
-- In addition to sales charges, insurance-related charges not associated
with mutual fund investments are deducted from values of the Policy and
from any additional premiums. These charges include various insurance,
risk, administrative and state premium tax charges. (See "Charges and
Expenses.")
-- The Variable Account, not the Policy Owner, owns the mutual fund shares.
-- Federal income tax liability on any earnings on the mutual fund
investment is deferred until you receive a distribution from the Policy.
Transfers from one underlying fund portfolio to another are accomplished
without tax liability under current law.
-- Dividends and capital gains are automatically reinvested. For a
discussion of some of the uses of the Policies, see "Appendix F: Uses of
Life Insurance."
The chart on the following pages shows how the Policy operates.
7
<PAGE>
DIAGRAM OF POLICY
PREMIUM PAYMENTS
--Minimum initial premium required is $10,000.
--Additional payments may be paid after the first Policy
Year, within limits. See page 12.
DEDUCTIONS FROM PREMIUMS BEFORE ALLOCATION
-- From initial premium: NONE
-- From additional payments:
-- 6.5% charge for sales load expense (reduced to 4.85%
for additional payments on Policies with initial
premiums of $1,000,000 or more).
-- 2.5% charge for state premium tax. See page 20.
INVESTMENT OF PREMIUMS
-- You direct the allocation of initial premiums and any net additional
payments among 13 Sub-Accounts of the Variable Account. See page 13 for
rules and limits on allocations.
-- The Sub-Accounts invest in corresponding portfolios of the New England
Zenith Fund. See page 25. Portfolios available are:
Back Bay Advisors Bond Income Series Westpeak Value Growth Series
Back Bay Advisors Money Market Series Westpeak Stock Index Series
Back Bay Advisors Managed Series Alger Equity Growth Series
Loomis Sayles Avanti Growth Series Venture Value Series
Loomis Sayles Small Cap Series Salomon Brothers U.S. Government
Loomis Sayles Balanced Series Series*
Draycott International Equity Series Salomon Brothers Strategic Bond
Opportunities Series*
--------
* (subject to any necessary state insurance department approvals)
DEDUCTIONS FROM ASSETS
--Monthly Deduction from cash value for:
-- cost of insurance (currently calculated as a percentage of cash value
at an annual rate, depending on the issue age and risk class of the
insured, ranging from:
Single Insured Policy: 0.45% to 1.25% for standard risk class
(0.70% to 1.90% for substandard risk class)
Last Survivor Policy: 0.25% to 1.05% for standard risk class (0.40%
to 1.60% for substandard risk class)
-- Administrative charge, calculated as a percentage of cash value at an
annual rate of 0.35% (currently reducing to 0.10% after ten years).*
-- During first ten Policy Years, sales charge and state premium tax
charges, calculated as percentages of cash value at annual rates of
0.40% and 0.25%, respectively.*
-- Mortality and expense risk charge, calculated as a percentage of cash
value at an annual rate of 0.90%.
-- For Policies with cumulative premiums less than $50,000, a Monthly
Maintenance Charge of $2.50 per month also is included in the Monthly
Deduction.
--------
* For Policies with initial premiums of $1,000,000 or more, the 0.40%
sales charge for the initial premium and the 0.25% state premium tax
charge for the initial premium will be waived, and the 0.35%
Administrative Charge currently will be reduced to 0.10% in all Policy
Years.
See page 20.
--Investment advisory fees and fund expenses are deducted from the assets of
each Fund. See page 28.
8
<PAGE>
CASH VALUE
-- Cash value is equal to the initial premium and any net additional
payments, as adjusted each day the New York Stock Exchange is open to
reflect Sub-Account investment experience, charges deducted and other
Policy transactions (such as transfers and partial surrenders). See page
17.
-- Cash value varies from day to day. There is no minimum guaranteed cash
value. The Policy may lapse if there is a Policy loan. See page 17.
-- Cash value can be transferred among the Sub-Accounts. See page 14 for
rules and limits. Policy loans reduce the amount available for
allocations and transfers.
-- Dollar cost averaging and asset rebalancing programs are available. See
page 15.
-- Cash value is the starting point for calculating certain values under a
Policy, such as the net cash value and the death benefit.
CASH VALUE BENEFITS DEATH BENEFITS
-- Loans may be taken for amounts -- Income tax free to Beneficia-
up to 90% of net cash value at ry. (See "Tax Considera-
a net interest rate charge of tions".)
0.75%. Preferred loans are
currently available (with a -- Available as lump sum or under
net interest rate charge of a variety of payment options.
0%). See page 17 for rules and
limits. -- Greater of variable death ben-
efit or minimum guaranteed
-- The Policy may be surrendered death benefit.
in full at any time for its
net cash value, less the -- Variable death benefit is
Monthly Deduction to the date determined by dividing the
of surrender. A declining cash value by the applica-
sales charge of up to 8.0% of ble net single premium.
the initial premium will apply
to a full surrender made dur- -- Minimum guaranteed death
ing the first nine Policy benefit guarantees the
Years. Federal taxes and a tax initial premium plus addi-
penalty also may apply. See tional payments, less ad-
page 18. justments for partial sur-
renders, as long as there
-- Partial surrenders may be is not an excess Policy
made. A pro rata portion of loan. On each five-year
the Surrender Charge may apply anniversary of the Policy
on partial surrenders made Date up to age 75, the
during the first nine Policy minimum guaranteed death
Years. Federal taxes and a tax benefit will be reset as
penalty also may apply. See the greater of the minimum
page 18 for rules and limits. guaranteed death benefit
before the recalculation,
-- Preferred surrender amounts and cash value. See page
(with no surrender charges ap- 16. Proceeds paid would be
plicable) are available. reduced by any Policy loan
balance.
-- Payment options available. See
page 19.
9
<PAGE>
AVAILABILITY OF THE POLICY
Generally, the Policies may be issued on the lives of insureds from the
issue ages of 20 to 80. In the case of a Single Insured Policy, the proposed
insured must meet NEVLICO's underwriting and other criteria for issuance. In
the case of a Last Survivor Policy, both of the insureds must meet those
criteria. (See "Applying for a Policy.")
POLICY CHARGES
-- DEDUCTIONS FROM INITIAL PREMIUM. NEVLICO deducts no charges from the
initial premium before allocation to the Variable Account, although a
monthly sales charge and state premium tax charge are deducted as part
of the Monthly Deduction during the first ten Policy Years, and a
Surrender Charge applies during the Surrender Charge Period (the first
nine Policy Years).
-- DEDUCTIONS FROM ADDITIONAL PAYMENTS. NEVLICO will deduct the following
charges from an additional payment before allocation of the net
additional payment to the Sub-Accounts you select:
-- 6.5% sales charge (reduced to 4.85% for Policies with Initial
Premiums of $1,000,000 or more).
-- 2.5% state premium tax charge.
-- MONTHLY DEDUCTION DEDUCTED FROM CASH VALUE. NEVLICO deducts a charge
from the cash value on each Monthly Deduction Date after the Policy
Date. This charge is the aggregate of the following charges, shown below
at their annual rates:
-- Cost of insurance charge,* currently ranging from:
Single Insured Policy: 0.45% to 1.25% for standard risk class
(0.70% to 1.90% for substandard risk class)
Last Survivor Policy: 0.25% to 1.05% for standard risk class
(0.40% to 1.60% for substandard risk class)
-- 0.35% Administrative Charge (currently reduced to 0.10% after the
first ten Policy Years)**
-- 0.40% sales charge for initial premium (deducted during the first
ten Policy Years only)**
-- 0.25% state premium tax charge for initial premium (deducted during
the first ten Policy Years only)**
-- 0.90% mortality and expense risk charge
-- For Policies with cumulative premiums less than $50,000, a $2.50
Monthly Maintenance Charge also is included in the Monthly Deduction
- --------
* No cost of insurance charge is deducted on or after the Policy Anniversary
when the age of the insured(s) is equal to 100.
** For Policies with initial premiums of $1,000,000 or more, the 0.40% sales
charge and 0.25% premium tax charge for the initial premium will be waived,
and the 0.35% Administrative Charge currently will be reduced to 0.10% in
all Policy Years.
Each charge, except the $2.50 Monthly Maintenance Charge, is calculated as a
percentage of cash value on the Monthly Deduction Date. Each charge is
deducted pro rata from the cash value in the Sub-Accounts.
The charges shown above may be changed to the following extent. The current
cost of insurance charges are guaranteed not to exceed the maximum cost of
insurance charges permitted under the 1980 Commissioners' Standard Ordinary
Smoker/Nonsmoker Tables (or multiples of or additives to, in the case of
substandard classifications). The rate of the state premium tax charge
deducted as part of the Monthly Deduction will be adjusted if cash value
increases as a result of an additional payment. The sales charge also will be
monitored so that the total dollar amount deducted, as part of the Monthly
Deduction and any Surrender Charge, does not exceed 9.0% of the initial
premium. The Administrative Charge is guaranteed not to exceed an annual rate
of 0.35% of cash value. The $2.50 Monthly Maintenance Charge will apply only
if cumulative premiums paid are less than $50,000, and will terminate if
cumulative premiums paid exceed $50,000.
-- CHARGES DEDUCTED FROM ELIGIBLE FUND ASSETS. The value of shares of the
Eligible Funds reflect charges and deductions from assets for investment
advisory services and fund operating expenses.
-- SURRENDER CHARGE. If the Policy is surrendered or lapses or a partial
surrender is taken during the first nine Policy Years (the Surrender
Charge Period), a Surrender Charge may be deducted based on the amount
of the initial premium. The Surrender Charge is a deferred sales charge.
The amount of this charge declines over the course of the Surrender
Charge Period. The table below shows the Surrender Charge as a
percentage of the portion of the amount surrendered subject to the
Surrender Charge:
10
<PAGE>
<TABLE>
<CAPTION>
POLICY YEAR CHARGE
----------- ------
<S> <C>
1............................... 8.0%
2............................... 8.0%
3............................... 7.0%
4............................... 6.0%
5............................... 5.0%
6............................... 4.0%
7............................... 3.0%
8............................... 2.0%
9............................... 1.0%
10............................... 0.0%
</TABLE>
The Surrender Charge is deducted from the amount surrendered.
During the Surrender Charge period, a partial surrender is taken first from
the "preferred surrender amount" free of any Surrender Charge and then from
the cash value subject to the Surrender Charge. The "preferred surrender
amount" is equal to the greater of (a) cash value on the date of surrender in
excess of the initial premium paid (minus any previous partial surrenders
attributable to the initial premium) and (b) 10% of the initial premium paid
(minus previous partial surrenders in that Policy Year). If you make a full
surrender during the Surrender Charge Period, the preferred surrender amount
will be deducted from the amount of the full surrender before the Surrender
Charge is calculated.
For more information concerning the Surrender Charge, see "Surrender
Charge."
For more information concerning the charges and expenses associated with the
Policy, see "Charges and Expenses."
RIGHT TO RETURN THE POLICY
You may cancel the Policy within 10 days (or more where required by
applicable state insurance law) after you receive the Policy. The Policy may
be returned to NEVLICO or its agent. Insurance coverage ends as soon as the
Policy is returned (as determined by its postmark, if the Policy is mailed).
If you choose to cancel the Policy, NEVLICO will refund any premiums paid (or
any other amount that is required by state insurance law) with interest at the
rate currently in use by NEVLICO.
RECEIPT OF COMMUNICATIONS AND PAYMENTS AT NEVLICO'S ADMINISTRATIVE OFFICE
NEVLICO will treat your request for a Policy transaction, or your submission
of a payment, as received at the Administrative Office if it is received there
before the close of regular trading on the New York Stock Exchange on that
day. If it is received after that time, or if the New York Stock Exchange is
not open that day, then it will be treated as received on the next day when
the New York Stock Exchange is open.
NEVLICO AND THE NEW ENGLAND
NEVLICO was organized as a stock life insurance company in Delaware in 1980
and is licensed to sell life insurance in all states, the District of Columbia
and Puerto Rico. NEVLICO's Home Office is in Wilmington, Delaware and its
Administrative Office is at 501 Boylston Street, Boston, Massachusetts 02116.
NEVLICO's mailing address is: P.O. Box 9116, Boston, Massachusetts 02117.
NEVLICO is a wholly-owned subsidiary of The New England, which was organized
in Massachusetts in 1835. The New England is the oldest chartered mutual life
insurance company in the United States. On December 31, 1995, The New England
had over $15 billion of assets and over $ billion of life insurance in force.
As of December 31, 1995, The New England and its affiliates had over $
billion in assets under management. As of December 31, 1995, the value of The
New England's investment in NEVLICO was $96.7 million. It is expected that The
New England may from time to time contribute additional amounts to NEVLICO;
however, The New England is under no obligation to do so, and its assets do
not support the benefits under the Policies. NEVLICO may reinsure a portion of
a Policy's death benefit with The New England.
The New England and Metropolitan Life Insurance Company ("MetLife") have
entered into an agreement to merge, with MetLife to be the survivor of the
merger. The merger is conditioned upon, among other things, approval by the
policyholders of The New England and MetLife and receipt of certain regulatory
approvals. The merger is not expected to occur until after
11
<PAGE>
, 1996. If the merger is consummated, NEVLICO will become a direct or
indirect wholly-owned subsidiary of MetLife. NEVLICO is not expected to be
affected by the merger except to the extent that assets of The New England may
be transferred to NEVLICO in view of the merger.
PREMIUMS
APPLYING FOR A POLICY
Individuals wishing to purchase a Policy must submit an application and
provide evidence of insurability of the proposed insured(s). The initial
premium also must be paid before the Policy is issued. A Single Life Policy
will be issued for an insured only if the insured is between the issue ages of
20 to 80 and satisfies our insurability requirements. A Last Survivor Policy
will be issued on two insureds only if each of them is between the issue ages
of 20 and 80 and each of them satisfies our insurability requirements. The
ages of the two insureds may not be more than nine years apart on the Policy
Date.
Before accepting an application, NEVLICO conducts underwriting to determine
insurability. The amount of the initial premium and the age of the insured(s)
determines whether the insured initially may qualify for "simplified
underwriting" at issue, which entails completion of a written questionnaire
concerning the insured's health but does not entail a medical examination, or
more detailed underwriting.
NEVLICO reserves the right to reject an application or premium for any
reason. If a Policy is not issued, any premium payment submitted will be
returned to you plus interest at the rate currently in use by NEVLICO. If a
Policy is issued, the Policy will be effective on the Policy Date.
PREMIUM PAYMENTS
The minimum initial premium for a Policy is $10,000. You may purchase a
Policy with the proceeds of another life insurance policy, provided that the
following conditions are met. First, the applicable application forms must be
completed. Second, if the value to be applied from the existing policy to a
Policy is subject to a policy loan, then an additional amount of at least
$10,000 (above the amount of the Policy loan) must be submitted as part of the
initial premium, and any loan remaining against the new Policy cannot exceed
40% of the cash value of the Policy at issue. It may not be advantageous to
replace existing insurance with a Policy.
Additional payments may be made until the age of the insured(s) is equal to
100, subject to our underwriting requirements and the following rules. Except
with respect to additional payments required in a grace period (see "Lapse and
Reinstatement"), an additional payment must be at least $1,000, and only one
additional payment may be made each Policy Year beginning with the second
Policy Year. You may pay premiums by check or money order. A payment received
after issuance of the Policy while a loan is outstanding generally is treated
first as repayment of Policy loan interest, second as repayment of a Policy
loan, and last as an additional payment, unless you designate otherwise in
writing when submitting the payment to NEVLICO. (See "Effect of Policy Loan.")
If you have a Policy loan, it may be more advantageous to repay the loan than
to make an additional payment, because an additional payment is subject to
sales and state premium tax charges, whereas the loan repayment is not subject
to any charges. (See "Loan Privilege" and "Deductions from Premiums.")
No additional payments may be made on or after age 100 of the insured(s),
except as may be required in a grace period. (See "Lapse and Reinstatement.")
The tax consequences associated with continuing a Policy beyond age 100 of the
insured(s) are unclear. A tax advisor should be consulted on this issue.
If acceptance of an additional payment would immediately increase the death
benefit by more than it would increase the cash value, we will require
satisfactory evidence of insurability before accepting it. If the payment
would not so affect the death benefit, we will accept it without underwriting.
However, we reserve the right to reject an additional payment for any reason.
If an additional payment is accepted, NEVLICO will credit your net additional
payment, after deductions for sales and state premium tax charges, to your
Policy's cash value as of the date the payment is received at NEVLICO's
Administrative Office, if underwriting was not required, or the date
underwriting was completed if underwriting was required. (See "Allocation of
Premiums," "Charges and Expenses," and "Receipt of Communications and Payments
at NEVLICO's Administrative Office.")
If an additional payment is accepted, a proportional adjustment will be made
in the rate of the state premium tax charge deducted as part of the Monthly
Deduction. (See "Charges and Expenses" and Appendix C.)
12
<PAGE>
RIGHT TO RETURN THE POLICY
You may cancel the Policy within 10 days (or more where required by
applicable state insurance law) after you receive the Policy. The Policy may
be returned to NEVLICO or its agent. Insurance coverage ends as soon as the
Policy is returned (as determined by its postmark, if the Policy is mailed).
If you choose to cancel the Policy, NEVLICO will refund any premiums paid (or
any other amount that is required by state insurance law) with interest at the
rate currently in use by NEVLICO.
LAPSE AND REINSTATEMENT
As a single premium policy, the Policy is designed to be fully paid-up when
issued. Accordingly, it will not lapse, regardless of adverse investment
experience, unless there are excessive Policy loans. See "Policy Loans." If a
Policy loan is outstanding, and the net cash value on a Monthly Deduction Day
is not enough to cover the entire Monthly Deduction for that Policy Month, the
Policy will be in default. NEVLICO will notify you of the amount due to
continue the Policy. The Policy provides a 62-day grace period for paying an
additional payment in an amount sufficient to cover three months of Monthly
Deductions and loan interest due after the notice is sent. During the grace
period, insurance coverage continues under your Policy, but if the insured
dies (and in the case of a Last Survivor Policy, if the last surviving insured
dies) before the grace period payment is made, NEVLICO will deduct from the
death proceeds the portion of the unpaid Monthly Deduction(s) for the period
prior to the date of death.
If your Policy has lapsed, it may be reinstated within seven years after the
date of lapse. If more than seven years have passed, or if you have
surrendered the Policy, NEVLICO's consent is required to reinstate.
Reinstatement in all cases is subject to payment of certain charges described
in the Policy and generally requires evidence of insurability that is
satisfactory to NEVLICO. If a Policy lapses and is reinstated, the period the
Policy was lapsed will not count for purposes of determining (i) the Surrender
Charge on any date after reinstatement; (ii) whether the ten-year period
during which the Monthly Deduction includes deductions for sales charges and
state premium taxes is in effect; and (iii) whether the ten-year period during
which higher administrative charges are deducted is in effect. For the purpose
of determining the dates on which the minimum guaranteed death benefit will be
recalculated, the period the Policy was lapsed will count. If the minimum
guaranteed death benefit would have been recalculated during the period the
Policy was lapsed, it will be recalculated upon reinstatement.
ALLOCATION OF PREMIUM PAYMENTS AND TRANSFER OF CASH VALUE
ALLOCATION OF PREMIUM PAYMENTS
The initial premium will be allocated to the Money Market Sub-Account as of
the latest of the Policy Date, the date of the last Part II of the application
for the Policy or the Supplement to the Part I Application, if any is
required, and the date the initial premium is received by NEVLICO. Fifteen
days after NEVLICO mails the confirmation for the initial premium (see "Right
to Return the Policy"), the cash value in the Money Market Sub-Account is
allocated to the Sub-Accounts according to your instructions. (See "Investment
Options.") Therefore, your selection of Sub-Accounts in the application does
not take effect until after the end of the initial period described above,
during which the cash value is allocated to the Money Market Sub-Account.
Allocations of premium can be made to a maximum of 10 Sub-Accounts at any
one time. A minimum of 10% of the premium must be allocated to each Sub-
Account selected. Percentages allocated must be whole numbers.
You select the initial premium allocation when you apply for a Policy. This
allocation will be used for any additional payments, unless you specify
otherwise when submitting the payment. You also may change the allocation
instructions for future payments at any time thereafter, provided that your
Policy's cash value is distributed among no more than 10 Sub-Accounts at any
one time. The change will be effective for additional payments accepted on or
after the date when NEVLICO receives your instructions. The portion of an
additional payment to be applied to each Sub-Account chosen must be a whole
percent not less than 10. You may change your instructions by telephone or by
written request in a form satisfactory to NEVLICO. (See "Receipt of
Communications and Payments at NEVLICO's Administrative Office.") See
"Requests" below for information on how to request a transfer or reallocation
by telephone.
AMOUNT PROVIDED FOR INVESTMENT UNDER THE POLICY
The initial premium is first invested under the Policy as of the investment
start date. The investment start date is the latest of: the date when NEVLICO
first receives the premium for the Policy, the date when the last Part II of
the Policy application or
13
<PAGE>
the Supplement to the Part I Application is signed, if any is required, and
the Policy Date. (For this purpose only, receipt of the premium means receipt
by a NEVLICO agent or, if a broker-dealer other than New England Securities is
involved, by NEVLICO.)
If you pay the initial premium with the application, the Policy Date is
generally the later of the date when the last Part II of the application or
the Supplement to the Part I Application is signed, if any is required, and
receipt of the premium payment. In this case the Policy Date and investment
start date are the same.
If you pay the initial premium with the application, the insured will be
covered under a temporary insurance agreement for a limited period that is
described in the temporary insurance agreement form. Generally, coverage under
the temporary insurance agreement begins on the later of the date when NEVLICO
receives the premium payment for the Policy and the date when the last Part II
of the application or the Supplement to the Part I Application is signed, if
any is required. The maximum amount of coverage provided is the lesser of the
amount of insurance applied for and $500,000 for standard and preferred risks
($250,000 for substandard risks and $50,000 for persons who are determined to
be uninsurable). There may be variations to these provisions required by state
law.
If a Policy is issued, Monthly Deductions, including cost of insurance
charges, begin as of the first Monthly Deduction Date, even if the Policy's
issuance was delayed due to underwriting requirements, and will be in amounts
based on the face amount of the Policy issued, even if the temporary insurance
coverage received during the underwriting period was for a lesser amount. If
NEVLICO declines an application, it will refund the premium payment made plus
interest at the rate currently in use by NEVLICO.
TRANSFER OPTION
Beginning fifteen days after NEVLICO mails the confirmation for the initial
premium, you may transfer your Policy's cash value between Sub-Accounts up to
four times each Policy Year (twelve times each Policy Year for Policies issued
in New York) without NEVLICO's consent. Except as described below, NEVLICO
currently allows twelve transfers each Policy Year in all states. Currently,
NEVLICO's rules for transfers require that the amount transferred from any
Sub-Account must be at least $100. (If the full amount of cash value in a Sub-
Account is less than $100, that full amount may be transferred). Currently,
all transfers are subject to a maximum of $500,000 per transfer. In applying
the $500,000 limit, NEVLICO will treat as one transfer all transfers that you
request on the same day for all Policies you own. If the $500,000 limitation
is exceeded for multiple transfers requested on the same day that are treated
as a single transfer, no amount of the transfer will be executed by NEVLICO.
A transfer will be effective as of the date when NEVLICO receives the
transfer request at its Administrative Office. (See "Receipt of Communications
and Payments at NEVLICO's Administrative Office.") However, you should be
aware that because transfer limitations may prevent you from making a transfer
on the date you want to, your Policy's cash value may in the future be lower
than it would have been had the transfer been made on the desired date.
For transfers that NEVLICO determines to be based on "market-timing" (e.g.,
transfers under different Policies that are being requested under Powers of
Attorney with a common attorney-in-fact or that are in NEVLICO's determination
based on the recommendation of a common investment adviser or broker-dealer),
the current transfer limitation is one transfer every 30 days, each transfer
subject to a maximum of $500,000. In applying the limitation of one $500,000
transfer every 30 days, NEVLICO will treat as one transfer all transfers
requested under different Policies that are being requested under Powers of
Attorney with a common attorney-in-fact or that are, in NEVLICO's
determination, based on the recommendation of a common investment adviser or
broker-dealer. If the $500,000 limitation is exceeded for multiple transfers
requested on the same day that are treated as a single transfer, no amount of
the transfer will be executed by NEVLICO. If a transfer is executed under one
Policy and, within the next 30 days, a transfer request for another Policy is
determined by NEVLICO to be related to the executed transfer under this
paragraph's rules, the transfer request will not be executed by NEVLICO. (In
order for it to be executed, it would need to be requested again after the 30-
day period and it, along with any other transfer requests that are
collectively treated as a single transfer, would need to total no more than
$500,000).
NEVLICO's interest in applying these limitations on the maximum number and
size of transfers is to protect the interests of both Policy Owners who are
not engaging in significant transfer activity and Policy Owners who are
engaging in such activity. NEVLICO has determined that the actions of Policy
Owners engaging in significant transfer activity among Sub-Accounts may cause
an adverse effect on the performance of the underlying Eligible Funds. The
movement of significant Sub-Account values from one Sub-Account to another may
prevent the appropriate Eligible Fund from taking advantage of investment
opportunities because it must maintain a significant cash position in order to
handle redemptions. Such movement may also cause a substantial increase in
Eligible Fund transaction costs that must be indirectly borne by Policy
Owners.
14
<PAGE>
Policy Owners will be notified, in advance, of any change in the limitation
on the number or amount of transfers.
See "Transfer and Reallocation Requests" for information regarding transfers
made by written request and by telephone.
Your Policy's cash value may be distributed among no more than ten Sub-
Accounts at any one time.
DOLLAR COST AVERAGING
NEVLICO offers an automated transfer privilege referred to here as dollar
cost averaging. The main objective of dollar cost averaging is to shield
investments from short term price fluctuations. Since the same dollar amount
is transferred to selected Sub-Accounts each month, over time more purchases
of Eligible Fund shares are made when the value of those shares is low, and
fewer shares are purchased when the value is high. As a result, a lower than
average cost of purchases may be achieved over the long term. This plan of
investing allows Owners to take advantage of investment fluctuations, but does
not assure a profit or protect against a loss in declining markets.
Under this feature you may request that a certain amount of your cash value
be transferred on any selected business day of each month (or if not a day
when the New York Stock Exchange is open, the next such day), from any one
Sub-Account to one or more of the other Sub-Accounts, subject to the
limitation that cash value may not be allocated to more than 10 of the Sub-
Accounts at any one time. A minimum of $100 must be transferred to each Sub-
Account that you select under this feature. Currently, transfers made under
the dollar cost averaging program will not be counted against the 12 transfers
that may be made each year. You may select a dollar cost averaging program
when you apply for the Policy or at a later date by contacting NEVLICO's
Administrative Office. You may not participate in the dollar cost averaging
program while you are participating in the asset rebalancing program. (See
"Asset Rebalancing," below). You may cancel your use of the dollar cost
averaging program at any time prior to the monthly transfer date. Transfers
will continue until you notify us to stop making transfers or there no longer
is sufficient cash value in the Sub-Account from which you are transferring
cash value.
ASSET REBALANCING
NEVLICO offers an asset rebalancing program for cash value. Cash value
allocated to the Sub-Accounts can be expected to increase or decrease at
different rates. An asset rebalancing program automatically reallocates your
cash value among the Sub-Accounts each quarter to return the allocation to the
allocation percentages you specify. Asset rebalancing is intended to transfer
cash value from those Sub-Accounts that have increased in value to those that
have declined, or not increased as much, in value. Over time, this method of
investing may help a Policy Owner "buy low and sell high," although there can
be no assurance that this objective will be achieved. Asset rebalancing does
not guarantee profits, nor does it assure that an Owner will not have losses.
You may select an asset rebalancing program when you apply for the Policy or
at a later date by contacting NEVLICO's Administrative Office. You specify the
percentage allocations according to which your cash value will be reallocated
among the Sub-Accounts. You may not participate in the asset rebalancing
program while you are participating in the dollar cost averaging program. (See
"Dollar Cost Averaging," above). On the last day of each Policy quarter (or if
not a day when the New York Stock Exchange is open, the next such day), we
will transfer cash value among the Sub-Accounts to the extent necessary to
return the allocation to your specifications. Asset rebalancing will continue
until a written or telephone request to terminate is received at NEVLICO's
Administrative Office. Currently, transfers made under an asset rebalancing
program are not counted for purposes of the transfer rules described above.
TRANSFER AND REALLOCATION REQUESTS
You may request a Sub-Account transfer or change the allocation of net
additional payments by written request (which may be telecopied) to NEVLICO's
Administrative Office or by telephoning The New England. To request a transfer
or reallocation by telephone, you should contact your registered
representative or contact The New England at 1-800-200-2214. Requests for
transfers (up to NEVLICO's current limit each Policy Year) or reallocations by
telephone will be automatically permitted. NEVLICO and The New England will
use reasonable procedures, such as requiring certain identifying information
from the caller, tape recording the telephone instructions, and providing
written confirmation of the transaction, in order to confirm that instructions
communicated by telephone are genuine. Any telephone instructions reasonably
believed by The New England and NEVLICO to be genuine will be your
responsibility, including losses arising from any errors in the communication
of instructions. As a result of this policy, you will bear the risk of loss.
If NEVLICO and The New England do not employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, they may be liable
for any losses due to unauthorized or fraudulent instructions.
15
<PAGE>
DEATH BENEFIT
If the insured under a Single Insured Policy dies, NEVLICO will pay a death
benefit to the beneficiary. In the case of a Last Survivor Policy, no death
benefit will be paid unless and until both insureds have died.
HOW THE DEATH BENEFIT IS DETERMINED. The death benefit payable on any day is
the greater of the variable death benefit and the minimum guaranteed death
benefit. The variable death benefit is determined by dividing the Policy's
cash value by the applicable net single premium set by the Internal Revenue
Code. Net single premiums are based on the age, sex and smoker/nonsmoker
status of the insured at the time of the calculation and decline over time.
Set forth below are net single premiums for selected ages of male and female,
nonsmoker insureds.
<TABLE>
<CAPTION>
NET SINGLE PREMIUM
-------------------------------
AGE MALE NONSMOKER FEMALE NONSMOKER
--- -------------- ----------------
<S> <C> <C>
30.............. .19992 .17824
40.............. .27992 .24926
50.............. .38723 .34338
60.............. .52085 .46422
70.............. .66655 .61117
</TABLE>
As an example of how the variable death benefit is calculated, assume that
the cash value of a Policy held by a 40-year-old male nonsmoker is $10,000.
The variable death benefit would be $35,724 ($10,000 divided by the applicable
net single premium of .27992).
MINIMUM GUARANTEED DEATH BENEFIT
The minimum guaranteed death benefit guarantees, regardless of investment
performance, that as long as there is not an "excess Policy loan," the death
benefit will never be less than the initial premium paid plus additional
payments, less adjustments for partial surrenders. On the Policy Date, the
minimum guaranteed death benefit is equal to the initial premium paid.
Thereafter, the minimum guaranteed death benefit will be increased by each
additional payment, and decreased proportionately by any partial surrenders.
The reduction at the time of a partial surrender will be based on the ratio of
the cash value after the surrender to the cash value before the surrender.
(See Appendix D for an example illustrating the effect of a partial surrender
on a Policy.) At the end of the fifth Policy Year and every five years
thereafter until the insured is (or insureds are) age 75, the guaranteed death
benefit will be recalculated. On each of these days, the guaranteed death
benefit is equal to the greater of: (i) the guaranteed death benefit before
the recalculation; and (ii) the cash value on the date of recalculation.
If, however, an "excess Policy loan" exists, the Policy may terminate. (See
"Loan Privilege" for the definition of "excess Policy loan.")
ADJUSTMENTS TO THE DEATH PROCEEDS PAYABLE
The death proceeds actually paid to the beneficiary are equal to the amount
of the death benefit determined on the date of the insured's death, reduced by
any Policy loan balance as of that date and by a pro rata portion of the
Monthly Deduction for the portion of the Policy month elapsed since the last
deduction prior to that date.
The death proceeds may also be adjusted if the insured's age (or an
insured's age under a Last Survivor Policy) was misstated in the application,
if death results from the insured's suicide (or an insured's suicide under a
Last Survivor Policy) within two years (or less if provided by state law) from
the Policy's Date of Issue, or if limits on the death benefit are imposed by
rider. (See "Limits to NEVLICO's Right to Challenge the Policy.")
PAYMENT OF DEATH BENEFIT PROCEEDS
Death benefit proceeds will be paid in one sum unless the Policy Owner or
payee chooses to put all or part of the proceeds under a payment option. (See
"Payment of Proceeds" and "Payment Options.") Death benefit proceeds also may
be paid pursuant to NEVLICO's Access Plus program. If the Access Plus program
is elected, an Access Plus account will be established
16
<PAGE>
at State Street Bank & Trust Company at the time that death benefit proceeds
are payable. The Access Plus account provides convenient access to proceeds,
which are maintained in NEVLICO's general account, through checkbook
privileges with State Street. A beneficiary may elect to have death benefit
proceeds paid through the Access Plus program at any time prior to the payment
of death benefit proceeds.
CASH VALUE AND CASH VALUE BENEFITS
CASH VALUE
Your Policy's cash value includes its cash value in the Variable Account
and, if you have an outstanding Policy loan, in NEVLICO's general account as a
result of the loan. (See "Loan Privilege.") The cash value reflects premium
payments, the net investment experience of the Policy's Sub-Accounts, interest
credited on amounts held in the general account as a result of a loan, amounts
deducted for Policy charges (including Monthly Deductions and any Surrender
Charge that applies if you make a partial surrender), partial surrenders and
transfers among the Policy's Sub-Accounts.
Your Policy's net cash value is the cash value on any day, reduced by any
Policy loan balance and also reduced by any applicable Surrender Charge. (See
"Loan Privilege," "Surrender Charge," and "Monthly Deduction Deducted from
Cash Value".) If you surrender your Policy, the net cash value will be reduced
by the applicable portion of the Monthly Deduction for the period from the
last deduction to the date of surrender.
The amount provided for investment in the Policy (i.e., the cash value) is
adjusted as of each day the New York Stock Exchange is open to reflect the net
investment experience of the Sub-Accounts for that day. The Policy's cash
value in the Variable Account may increase or decrease daily depending on the
net investment experience of the Policy's Sub-Accounts. Unfavorable investment
experience can reduce the net cash value to zero. Because there is no
guaranteed minimum cash value in the Variable Account, you bear the entire
investment risk with respect to cash value in the Variable Account.
NET INVESTMENT EXPERIENCE. The net investment experience of the Policy's
Sub-Accounts will affect the Policy's cash value and, in most circumstances,
the death benefit. The net investment experience of the Sub-Accounts is
determined as of the close of regular trading on the New York Stock Exchange
on each day when the Exchange is open for trading. A Sub-Account's net
investment experience for any period reflects the investment experience of the
underlying Eligible Fund shares for the same period. Currently, NEVLICO makes
no charges against the Sub-Accounts, but in the future NEVLICO may impose a
charge against the Sub-Accounts for taxes if appropriate. See "Daily Charges
Deducted from Variable Account Assets" and "Charges Deducted from Eligible
Fund Assets.")
The investment experience of the Eligible Fund shares for any period is the
increase or decrease in their net asset value for the period, increased by the
amount of any dividends or capital gains distributions on the shares during
the period. Dividends and capital gains distributions on Eligible Fund shares
are reinvested in additional shares of the Eligible Fund and affect subsequent
investment experience.
LOAN PRIVILEGE
You may borrow all or part of the Policy's "loan value" once fifteen days
have elapsed after we mail the confirmation for the initial premium. NEVLICO
will make the loan as of the date when a loan request is received at NEVLICO's
Administrative Office. (See "Receipt of Communications and Payments at
NEVLICO's Administrative Office.") You should contact NEVLICO's Administrative
Office or a NEVLICO agent for information regarding the procedures to follow
for requesting a loan.
The Policy's loan value is equal to 90% (or more where required by state
law) of: the Policy's cash value minus the surrender charge. The amount of
loan value available to be borrowed at any time is reduced by the amount of
any Policy loan balance.
A Policy loan may result in adverse tax consequences. (See "Tax
Considerations.")
EFFECT OF POLICY LOAN. When Policy loan proceeds are paid to you, cash value
in the amount of the loan is taken from the Sub-Accounts and transferred to
NEVLICO's general account as collateral for the loan. When you make a loan
repayment, cash value held as collateral is transferred from the general
account back to the Sub-Accounts, and thereby increases the cash value in the
Sub-Accounts by the amount of the repayment. Unless you specify a different
allocation, cash value transferred for a Policy loan is taken from the Sub-
Accounts of the Variable Account in proportion to the cash value in each. All
loan
17
<PAGE>
repayments are allocated, unless you request otherwise, to repay the loans
made against the Sub-Accounts of the Variable Account in proportion to the
cash value in each.
The interest rate charged on Policy loans is 6.0% per year, accrues daily,
and is due on the Policy Anniversary. If not paid at that time, the interest
accrued on the loan is added to the loan, and an amount equal to the unpaid
interest is deducted from the Policy's cash value in the Sub-Accounts in
proportion to the amount in each. Amounts taken as collateral for a loan earn
interest at not less than a 5.25% rate per year. Currently, on preferred
loans, the rate credited is a 6.0% annual rate. "Preferred loans" are loans
that, when taken, represent an amount less than or equal to the excess of cash
value over premiums paid (as adjusted for any partial surrenders). Interest
earned on amounts held in NEVLICO's general account as collateral for a Policy
loan is credited to the Policy's Sub-Accounts on the Policy Anniversary, in
proportion to the cash value in each.
The amount taken from the Policy's Sub-Accounts as a result of a loan does
not participate in the investment experience of the Sub-Accounts. Therefore,
the death benefit and cash value of the Policy can be permanently affected by
a Policy loan, even if it is repaid. In addition, any proceeds payable under a
Policy are reduced by the amount of any outstanding Policy loan balance.
The following procedures will be applied to payments received while a Policy
loan is outstanding. Such a payment is treated first as a repayment of Policy
loan interest, then as repayment of a Policy loan, and last as an additional
payment (if no previous additional payment has been made in that Policy Year),
unless you designate otherwise in writing to NEVLICO. (If a previous
additional payment has been made in that Policy Year, the portion of the
payment in excess of any outstanding Policy loan balance will be returned). If
a Policy loan is outstanding, it may be more advantageous to repay the loan
than to make an additional payment, because an additional payment is subject
to sales and state premium tax charges, and the loan repayment is not subject
to charges.
If a Policy loan is outstanding, and the net cash value on a Monthly
Deduction Day is not enough to cover the entire Monthly Deduction for the
Policy Month, NEVLICO will notify you that the Policy is going to terminate
unless a sufficient payment is made within the 62-day grace period. (This
situation is referred to as an "excess Policy loan.") The Policy will
terminate without value 62 days after the notice is mailed unless a sufficient
amount is paid to NEVLICO within that time. (See "Lapse and Reinstatement.")
If the Policy lapses with a loan outstanding, adverse tax consequences may
result. (See "Tax Considerations" below.)
If you purchase a Policy with the proceeds of another life insurance policy
that has an outstanding policy loan (see "Premium Payments"), the following
conditions must be met. First, the applicable application forms must be
completed. Second, if the value to be applied from the existing policy to a
Policy is subject to a policy loan, then an additional amount of at least
$10,000 (above the amount of the policy loan) must be submitted as part of the
initial premium, and any loan remaining against the new Policy cannot exceed
40% of the cash value of the Policy at issue. It may not be advantageous to
replace existing insurance with a Policy.
SURRENDER
You may surrender a Policy for its net cash value, less the Monthly
Deduction to the date of surrender, at any time while the insured (or at least
one insured under a Last Survivor Policy) is living by submitting a request
conforming to NEVLICO's administrative procedures. The net cash value of the
surrendered Policy is determined as of the date when a surrender request is
received at NEVLICO's Administrative Office. (See "Receipt of Communications
and Payments at NEVLICO's Administrative Office.") The net cash value equals
the cash value, reduced by any Policy loan balance and also reduced by any
applicable Surrender Charge (see "Surrender Charge"). Upon surrender, the
applicable portion of the Monthly Deduction will be deducted from net cash
value. (See "Monthly Deduction Deducted from Cash Value.") You may elect in
writing to have all or part of the surrender amount applied to a payment
option. (See "Payment Options.") A surrender may result in adverse tax
consequences. (See "Tax Considerations," below.)
When you make a full surrender, the requested surrender amount is taken
first from the preferred surrender amount. For more information about the
preferred surrender amount, see "Surrender Charge."
PARTIAL SURRENDERS
You may make a partial surrender of cash value once fifteen days have passed
after we mail the confirmation for the initial premium payment, subject to the
following rules and limits. In each Policy Year, partial surrenders will be
limited, except with
18
<PAGE>
the consent of NEVLICO, to: 20% of the net cash value on the day the first
partial surrender is made for the Policy Year; or, if less, the Policy's loan
value less the amount of any Policy loan balance. The minimum amount for a
partial surrender is $500. Currently, NEVLICO does not limit the maximum
amount of a partial surrender as long as the cash value immediately after the
partial surrender is at least $10,000. A partial surrender made in excess of
the preferred surrender amount may be subject to a Surrender Charge. (See
"Surrender Charge" and "Monthly Deduction.") If any charges apply, they will
be deducted from the amount requested to be surrendered. There are no limits
on the number of partial surrenders that may be made during a Policy Year.
However, there are tax consequences. (See "Tax Considerations.")
When you make a partial surrender, the requested surrender amount is taken
first from the preferred surrender amount. For more information about the
preferred surrender amount, see "Surrender Charge."
EFFECT OF PARTIAL SURRENDER ON CASH VALUE AND DEATH BENEFIT. A partial
surrender reduces the minimum guaranteed death benefit based on the ratio of
the cash value after the partial surrender to the cash value before the
partial surrender. See "Death Benefit" and Appendix D.
You should be aware that the net cash value paid upon a partial surrender
may not be reinvested in the Policy except as additional payments, which are
subject to the charges described under "Charges and Expenses."
The amount paid to you as the result of a partial surrender is equal to the
amount requested to be surrendered less any amount deducted for the Surrender
Charge or Monthly Deduction. (See "Surrender Charge" and "Monthly Deduction
Deducted from Cash Value.") Unless you specify a different allocation, the
partial surrender is effected by reducing the Policy's cash value in the Sub-
Accounts in proportion to the amount of cash value in each. The amount of net
cash value paid upon partial surrender is determined as of the date when a
request conforming to NEVLICO's administrative procedures is received at
NEVLICO's Administrative Office. NEVLICO's administrative procedures can be
determined by contacting a NEVLICO agent or the Administrative Office. (See
"Receipt of Communications and Payments at NEVLICO's Administrative Office,"
"Payment of Proceeds," and "Payment Options.")
PAYMENT OF PROCEEDS
NEVLICO will ordinarily pay any surrender, partial surrender, loan or death
benefit proceeds payable from the Sub-Accounts within seven days after receipt
at the Administrative Office of a request, or proof of death of an insured, in
a form satisfactory to NEVLICO. (See "Receipt of Communications and Payments
at NEVLICO's Administrative Office.") However, NEVLICO may delay payment
(except when a loan is made to pay a premium to NEVLICO) or transfers from the
Sub-Accounts: (i) if the New York Stock Exchange is closed for other than
weekends or holidays, or if trading on the New York Stock Exchange is
restricted, (ii) if the SEC determines that a state of emergency exists that
makes payments or Sub-Account transfers impractical, or (iii) if the SEC
orders the Variable Account or orders the Zenith Fund or its successor or any
other Eligible Fund to postpone payment or transfer of variable benefits.
NEVLICO may withhold payment of surrender, partial surrender or loan
proceeds to the extent that those proceeds are derived from a Policy Owner's
check that has not yet cleared. In those cases, NEVLICO will process the
surrender or loan to the extent of Policy values for which the Policy Owner
has made full payment. The balance of the surrender, partial surrender or loan
proceeds will be paid when the Policy Owner's check has cleared. NEVLICO may
also delay payment if it considers whether to contest the Policy. NEVLICO will
pay interest on the death benefit proceeds from the date they become payable
to the date they are paid in one sum or, if a payment option was selected, to
the effective date of the option. (See "Payment Options.")
PAYMENT OPTIONS
The Policy's death benefit and any partial surrender or surrender of net
cash value will be paid in one sum unless the Policy Owner or payee chooses to
put all or part of the proceeds under a payment option. You can choose a
combination of payment options. The selection of a payment option and the
naming of a payee must be in written form satisfactory to NEVLICO. You can
make, change or revoke the selection before the death of the insured.
The payment options available are fixed benefit options only; therefore,
proceeds applied to an option will no longer be affected by the investment
experience of the Variable Account. The guaranteed mortality assumptions used
in determining payment levels under the options will not vary based on sex.
(For Policies issued in New York and Oregon, however, and which are not issued
for use in connection with certain employee benefit plans and fringe benefit
programs, the mortality assumptions
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<PAGE>
will vary based on sex. (See "Group or Sponsored Arrangements.") Once payments
under an option begin, withdrawal rights may be restricted.
The following payment options are available:
(1) INCOME FOR A SPECIFIED NUMBER OF YEARS. Proceeds are paid in monthly
installments for up to 30 years, with interest at a rate not less than
3.5% a year, compounded yearly. Additional interest paid by NEVLICO for
any year will be added to the monthly payments for that year.
(2) LIFE INCOME. Proceeds are paid in equal monthly installments (i) during
the life of the payee, (ii) for the longer of the life of the payee or
10 years, or (iii) for the longer of the life of the payee or 20 years.
(3) LIFE INCOME WITH REFUND. Proceeds are paid in equal monthly
installments during the life of the payee. At the payee's death, any
unpaid proceeds remaining are paid either in one sum or in equal
monthly installments until the total proceeds have been paid.
(4) INTEREST. Proceeds are held for the life of the payee or another agreed
upon period. Interest of at least 3.5% a year is paid monthly or added
to the principal annually. At the death of the payee, or at the end of
the period agreed to, the balance of principal and any interest will be
paid in one sum.
(5) SPECIFIED AMOUNT OF INCOME. Proceeds plus accrued interest of at least
3.5% a year are paid in an amount and at a frequency elected until
total proceeds have been paid. Any amounts unpaid at the death of the
payee will be paid in one sum.
(6) LIFE INCOME FOR TWO LIVES. Proceeds will be paid in equal monthly
installments (i) while either of two payees is living, (ii) for the
longer of the surviving payee or 10 years, or (iii) while the two
payees are living and, after the death of one payee, two-thirds of the
monthly amount for the life of the surviving payee will be paid.
NEVLICO's consent to use of an option is required if the installment
payments would be less than $20.
CHARGES AND EXPENSES
The following describes the various charges deducted under the Policy.
DEDUCTIONS FROM INITIAL PREMIUM. NEVLICO deducts no charges from the initial
premium before allocation to the Variable Account, although the Monthly
Deduction includes deductions for the first ten Policy Years for sales charges
and state premium taxes attributable to the initial premium, and a Surrender
Charge based on the initial premium may apply to surrenders or partial
surrenders during the Surrender Charge Period.
DEDUCTIONS FROM ADDITIONAL PAYMENTS. NEVLICO will deduct the following
charges from an additional payment before allocation of the net additional
payment to the Sub-Accounts you select:
-- 6.5% sales charge (reduced to 4.85% for Policies with initial premiums
of $1,000,000 or more).
-- 2.5% state premium tax charge.
MONTHLY DEDUCTION DEDUCTED FROM CASH VALUE. NEVLICO deducts a charge from
the cash value on each Monthly Deduction Date after the Policy Date. This
charge is the aggregate of the following charges, shown below at their annual
rates:
--Cost of insurance charge,* currently ranging from:
Single Insured Policy: 0.45% to 1.25% for standard risk class (0.70%
to 1.90% for substandard risk class)
Last Survivor Policy: 0.25% to 1.05% for standard risk class (0.40%
to 1.60% for substandard risk class)
--0.35% Administrative Charge (currently reduced to 0.10% after the first
ten Policy Years)**
--0.40% sales charge for initial premium (deducted during the first ten
Policy Years only)**
--0.25% state premium tax charge for initial premium (deducted during the
first ten Policy Years only)**
--0.90% mortality and expense risk charge
-- For Policies with cumulative premiums less than $50,000, a $2.50 Monthly
Maintenance Charge also is included in the Monthly Deduction.
- --------
* No cost of insurance charge is deducted on or after the Policy Anniversary
when the age of the insured(s) is equal to 100.
** For Policies with initial premiums of $1,000,000 or more, the 0.40% sales
charge and 0.25% premium tax charge for the initial premium will be waived,
and the 0.35% Administrative Charge currently will be reduced to 0.10% in
all Policy Years.
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Each charge, except the $2.50 Monthly Maintenance Charge, is calculated as a
percentage of cash value (including cash value moved to the general account as
collateral for Policy loans) in the following manner: first, all charges,
other than the cost of insurance charge, are calculated, based on the cash
value on the Monthly Deduction Date (before monthly charges are deducted, but
reflecting daily charges deducted from Eligible Fund Assets), and then
deducted. The cost of insurance charge is then calculated based on the cash
value for that date, as reduced by all other charges deducted that day. The
Monthly Deduction is deducted pro rata from the cash value in the Sub-
Accounts.
DAILY CHARGES DEDUCTED FROM THE VARIABLE ACCOUNT ASSETS. Currently, no
charge is made to the Variable Account assets. NEVLICO may, however, in the
future impose a charge for federal income taxes if it determines that such a
charge is appropriate.
CHARGES DEDUCTED FROM ELIGIBLE FUND ASSETS. The value of shares of the
Eligible Funds reflect charges and deductions from assets for investment
advisory services and fund operating expenses. See "Investment Management" and
the prospectus for the Zenith Fund for more information.
CHARGES DEDUCTED ON SURRENDER OR PARTIAL SURRENDER. If the Policy is
surrendered or lapses or a partial surrender is taken during the Surrender
Charge Period (which is the first nine Policy Years), a Surrender Charge may
be deducted. The Surrender Charge is a deferred sales charge. This charge
declines over the course of the Surrender Charge period. (See "Surrender
Charge".) The Surrender Charge is deducted from the Policy's available cash
value, regardless of whether that cash value is derived from premiums or
investment experience.
Upon surrender, lapse or partial surrender, the applicable portion of the
Monthly Deduction (based on the portion of the Policy Month elapsed, and, in
the case of a partial surrender, on the proportion of cash value withdrawn)
will also be deducted from the cash value.
The following section provides more information about the various charges
identified above.
SALES CHARGES. No sales charges are deducted from the initial premium before
allocation to the Sub-Accounts. However, except for certain Policies described
below, the Monthly Deduction includes a deduction taken during the first ten
Policy Years for sales charges attributable to the initial premium. This
charge is calculated as a percentage of cash value on each Monthly Deduction
Date at an annual rate of 0.40%. Also, if, during the first nine Policy years,
you surrender or lapse the Policy, or make a partial surrender, NEVLICO
deducts a Surrender Charge based on the amount of the initial premium. (See
"Surrender Charge.") In no event will the aggregate amount deducted as part of
the Monthly Deduction for sales charges plus the Surrender Charge exceed 9% of
the initial premium.
For Policies with initial premiums of $1,000,000 or more, the 0.40% sales
charge for the initial premium will be waived.
If a Policy lapses and is reinstated, the period the Policy was lapsed will
not count towards the ten-year period during which the Monthly Deduction
includes a deduction for sales charges.
If you make an additional payment, a maximum charge in the amount of 6.5% is
deducted from each additional payment for sales charges before allocation of
the net additional payment to the Sub-Accounts. For Policies with initial
premiums of $1,000,000 or more, this charge is reduced to 4.85%.
The sales charges deducted under a Policy are not necessarily related to
NEVLICO's actual sales expenses for that year. NEVLICO expects that total
revenues from the sales charges will fall short of its total distribution
expenses, and the excess will be recovered from NEVLICO's surplus and other
revenues, including mortality gains and any profit realized from the mortality
and expense risk charge.
Sales charges for Policies sold in certain group or sponsored arrangements
may be reduced. NEVLICO may in the future reduce or eliminate the sales
charge, when you purchase a Policy, on cash value transferred in the first
year, from life insurance policies issued by The New England that meet certain
premium, cash value and/or face amount minimums, as currently published by
NEVLICO. NEVLICO's normal issuance criteria, including reinsurance and other
limitations, would also apply in these situations. NEVLICO may, however, waive
underwriting requirements in these situations. NEVLICO may also reduce the
Surrender Charge on such policies. Your NEVLICO agent can advise you regarding
the availability of this feature.
SURRENDER CHARGE. If, during the first nine Policy Years, a Policy is
totally surrendered or lapses or a partial surrender (other than a preferred
partial surrender) is made, NEVLICO deducts a Surrender Charge from the amount
requested to be surrendered. This charge is based on the portion of the
initial premium deemed to be surrendered in accordance with the
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<PAGE>
following rules. When you make a full or partial surrender, the requested
surrender amount is taken first from the preferred surrender amount. The
"preferred surrender amount" is equal to the greater of (a) cash value
calculated on the date of surrender in excess of initial premium paid (minus
any previous partial surrenders attributable to the initial premium) and (b)
10% of the initial premium paid (minus previous partial surrenders in that
Policy Year). No Surrender Charge applies to the preferred surrender amount.
If your cash value is less than your total purchase payments due to negative
investment performance, the deficiency will be attributed first to additional
payments, and then to the initial premium. The balance of the requested
surrender amount is subject to a Surrender Charge, which is determined by
multiplying the balance by the applicable percentage for the Policy Year. The
Surrender Charge period and the amount of the Surrender Charge are shown in
the following table:
<TABLE>
<CAPTION>
POLICY YEAR CHARGE
----------- ------
<S> <C>
1............................... 8.0%
2............................... 8.0%
3............................... 7.0%
4............................... 6.0%
5............................... 5.0%
6............................... 4.0%
7............................... 3.0%
8............................... 2.0%
9............................... 1.0%
10............................... 0.0%
</TABLE>
Any Surrender Charge deducted upon lapse is credited back to the Policy's
cash value upon reinstatement. The Surrender Charge on the date of
reinstatement will be the same as it was on the date of lapse. For purposes of
determining the Surrender Charge on any date after reinstatement, the period
the Policy was lapsed will not count.
STATE PREMIUM TAX CHARGE. Except for certain Policies described below, this
charge is deducted from your cash value in the Sub-Accounts on each Monthly
Deduction Date after the Policy Date for the first ten Policy Years, as part
of the Monthly Deduction. The annual rate of this charge is 0.25% of cash
value. If you make an additional payment, a charge in the amount of 2.5% is
deducted from the payment before allocation to the Sub-Accounts. Because the
net additional payment will have the immediate effect of increasing the cash
value, the monthly charge for state premium tax is adjusted to take into
account this increase. Appendix C provides an example illustrating the effect
of such an additional payment.
For Policies with initial premiums of $1,000,000 or more, the 0.25% monthly
charge for premium tax will be waived.
If a Policy lapses and is reinstated, the period the Policy was lapsed will
not count towards the ten-year period during which the Monthly Deduction
includes a deduction for state premium taxes.
The state premium tax charge is designed to reimburse NEVLICO for state
premium taxes and administrative expenses. Premium taxes vary from state to
state and the 2.5% charge reflects an average. Administrative expenses covered
by this charge include those related to premium tax and certain other state
filings. This charge is not intended to produce a profit.
The state premium tax rates in the jurisdictions where NEVLICO transacts
business range from .75% to 4.00%. However, because of the effect of
retaliatory tax law provisions, the actual premium tax rates imposed on
NEVLICO range from slightly less than 2.00% to 4.00%.
COST OF INSURANCE CHARGE. This charge is deducted from the Policy's cash
value in the Sub-Accounts on each Monthly Deduction Date after the Policy
Date, as part of the Monthly Deduction. This charge is not deducted on or
after the Policy Anniversary when the age of the insured(s) is equal to 100.
The cost of insurance charge covers the cost of providing insurance
protection under your Policy. Currently, the amount of this charge is based on
the risk class and issue age of the insured(s). (It does not currently vary by
sex of the insured(s), although it may in the future.) NEVLICO assigns
insureds to risk classes based on underwriting conducted when NEVLICO receives
an application for a Policy. Currently, NEVLICO assigns insureds to the
following risk classes: standard nonsmoker, standard smoker, substandard
nonsmoker and substandard smoker. Once a Policy is issued, an insured's risk
class does not change except in the following circumstances. If an additional
payment is submitted that, if accepted, will have the effect of increasing the
death benefit, acceptance of the payment is subject to underwriting review to
determine whether the insured(s) qualify for the same or a better risk class.
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<PAGE>
If the new risk class is better and has lower cost of insurance rates than
the original risk class, the risk class for the additional payment will be
used for cost of insurance charges under the entire Policy. If, however, the
new risk class has higher cost of insurance rates than the original risk
class, NEVLICO will decline the additional payment.
Currently, the cost of insurance charge for a Policy is calculated as a
percentage of the cash value on the Monthly Deduction Date. For a Single Life
Policy, the charge is based on whether the insured is over or under the age of
70, is a smoker or non-smoker, and has been assigned to a standard or
substandard risk class. The current monthly rates for these classes are
equivalent to the annual percentage rates shown in the following table:
<TABLE>
<CAPTION>
RATING CLASS AND ISSUE AGE NONSMOKER SMOKER
-------------------------- --------- ------
<S> <C> <C>
Standard issue age 70 or less............................... 0.45% 0.75%
Standard over issue age 70.................................. 0.85% 1.25%
Substandard issue age 70 or less............................ 0.70% 1.15%
Substandard over issue age 70............................... 1.30% 1.90%
</TABLE>
In the case of a Last Survivor Policy, the current charge is calculated
based on whether the joint equal issue age is over or under 70, the
smoker/nonsmoker status of each insured, and whether at least one insured is
substandard.
<TABLE>
<CAPTION>
NONSMOKER NONSMOKER SMOKER
RATING CLASS AND ISSUE AGE NONSMOKER SMOKER SMOKER
-------------------------- --------- --------- ------
<S> <C> <C> <C>
Standard issue age 70 or less..................... 0.25% 0.40% 0.55%
Standard over issue age 70........................ 0.65% 0.85% 1.05%
Substandard issue age 70 or less.................. 0.40% 0.60% 0.85%
Substandard over issue age 70..................... 1.00% 1.30% 1.60%
</TABLE>
For purposes of determining the current cost of insurance charge on a
Monthly Deduction Date, all other charges included in the Monthly Deduction
are calculated and deducted from the Policy's cash value, and then the
applicable cost of insurance percentage is applied to the cash value, as
reduced by the other charges.
The cost of insurance charge deducted on a Monthly Deduction Date is
guaranteed not to exceed the amount calculated using the guaranteed cost of
insurance rates set forth in the Policy for that date. The cost of insurance
charge for a Monthly Deduction Date determined using the guaranteed cost of
insurance rates is equal to the "net amount at risk" under the Policy,
multiplied by the cost of insurance rate for that date. The net amount at risk
is determined on the last day of the Policy Month. The net amount at risk
equals the death benefit on the first day of the month, minus the cash value
on the last day of the month, assuming interest at the monthly equivalent of a
4.0% rate was used for the month, and no deductions have been made except the
guaranteed cost of insurance charge.
The guaranteed cost of insurance rate for a Monthly Deduction Date under a
Policy depends on the insured's sex, risk class, and age on the first day of a
Policy Year. Guaranteed cost of insurance rates applicable to joint insureds
under a Last Survivor policy depend on the sex of each insured, their joint
equal age on the first day of the Policy Year, and their risk classes. The
guaranteed cost of insurance rate for a Policy changes from month to month.
The risk classes used for determining guaranteed cost of insurance rates for
insureds are smoker standard, smoker substandard, nonsmoker standard,
nonsmoker substandard. Substandard ratings result in higher cost of insurance
charges. The guaranteed cost of insurance rates for substandard ratings are
based on multiples of or additives to the guaranteed standard rates provided
by the 1980 Commissioners Standard Ordinary Mortality Tables.
Cost of insurance rates -- whether current or guaranteed -- are generally
more favorable for nonsmoker than for smoker insureds. Within a given rating
class, guaranteed cost of insurance rates are generally more favorable for
insureds of lower ages than for insureds of higher ages.
If a Policy loan is outstanding, and the net cash value on a Monthly
Deduction Date is not enough to cover the entire Monthly Deduction for the
Policy Month, NEVLICO will notify you that the Policy is going to terminate
unless a sufficient payment is made within the 62-day grace period. (See
"Effect of a Policy Loan.")
Eligible group or sponsored arrangements may also elect to purchase Policies
on a simplified underwriting basis above the limits applicable to other
purchasers. Policies issued on a simplified underwriting basis will have the
same cost of insurance rates as fully underwritten Policies.
23
<PAGE>
ADMINISTRATIVE CHARGE. This charge is deducted from your Policy's cash value
in the Sub-Accounts on each Monthly Deduction Date after the Policy Date, as
part of the Monthly Deduction. Except for certain Policies described below,
this charge is currently set at an annual rate of 0.35% of cash value on each
Monthly Deduction Date, and is intended to be decreased to 0.10% after the
first 10 Policy Years. It is guaranteed never to exceed an amount equivalent
to an annual rate of 0.35% of cash value. This charge is for the cost of
administering the Policies (such as the cost of processing Policy
transactions, issuing Policy Owner statements and reports, and record
keeping), as well as legal, actuarial, systems, mailing and other overhead
costs connected with NEVLICO's variable life insurance operations. These
charges have been designed to cover actual costs and are not intended to
produce a profit.
For Policies with initial premiums of $1,000,000 or more, the Administrative
Charge currently is 0.10% in all Policy years.
For purposes of calculating the 10-year period after which the
Administrative Charge is intended to be reduced to 0.10%, the period that a
Policy was lapsed will not count.
MONTHLY MAINTENANCE CHARGE. If the initial premium paid for the Policy is
less than $50,000, a $2.50 fee is deducted from cash value on each Monthly
Deduction Date to cover administrative expenses. This fee is in addition to
the administrative charge. This monthly fee will continue to be deducted until
cumulative premium payments made are at least $50,000. After cumulative
premium payments of at least $50,000 have been made, the Monthly Maintenance
Charge will not be charged even if the Policy's cash value is reduced to less
than $50,000 as a result of investment performance or partial surrenders. This
charge is designed to cover actual costs and is not intended to produce a
profit.
MORTALITY AND EXPENSE RISK CHARGE. NEVLICO deducts a charge from your cash
value in the Sub-Accounts on each Monthly Deduction Date after the Policy Date
for the mortality and expense risks that NEVLICO assumes. This charge is
currently set at an annual rate of 0.90% of cash value on each Monthly
Deduction Date. The mortality risk NEVLICO assumes is that insureds may live
for shorter periods of time than NEVLICO estimated. The expense risk is that
NEVLICO's costs of issuing and administering the Policies may be more than
NEVLICO estimated.
If all the money NEVLICO collects from this charge is not needed to cover
death benefits and expenses, the money is contributed to NEVLICO's general
account. Conversely, even if the money NEVLICO collects is insufficient,
NEVLICO will provide for all death benefits and expenses.
ELIGIBLE FUND EXPENSES. Charges for investment advisory fees and other
expenses are deducted from the assets of the Eligible Funds. (See "Investment
Management.")
CHARGES FOR ADDITIONAL SERVICES. NEVLICO reserves the right to charge Policy
Owners a nominal fee, which will be billed directly to the Policy Owner in the
event that a Policy re-issue or re-dating is requested.
CHARGES FOR INCOME TAXES. NEVLICO currently makes no charge for income taxes
against the Variable Account, but in the future NEVLICO may impose such a
charge, if appropriate. NEVLICO reserves the right to make a charge for any
taxes imposed on the Policies by any governmental body in the future. (See
"Charge for NEVLICO's Income Taxes.")
GROUP OR SPONSORED ARRANGEMENTS
The Policies may be issued to group or sponsored arrangements, as well as on
an individual basis. A "group arrangement" includes a program under which a
trustee, employer or similar entity purchases individual Policies covering a
group of individuals. An example of such an arrangement is a non-tax qualified
deferred compensation plan. A "sponsored arrangement" includes a program under
which an employer permits group solicitation of its employees or an
association permits group solicitation of its members for the purchase of the
Policies on an individual basis.
For Policies issued in connection with group or sponsored arrangements,
NEVLICO may waive or reduce one or more of the following charges: the sales
charge, Surrender Charge, monthly cost of insurance charge, mortality and
expense risk charge, administrative charges, Monthly Maintenance Charge,
and/or state premium tax charge described in "Charges and Expenses." (In
addition, the interest rate credited on amounts taken from the sub-accounts as
a result of a Policy loan may be increased for these Policies.) NEVLICO will
waive or reduce these charges according to its rules in effect when the Policy
application is approved. To qualify for a waiver or reduction, a group or
sponsored arrangement must satisfy certain criteria as to, for example, size
and number of years in existence. Generally, the sales contacts and effort,
administrative costs and mortality cost per Policy vary based on such factors
as the size of the group or sponsored arrangement, its stability, the purposes
for which the Policies are purchased and certain characteristics of its
members. The amount of reduction and the criteria for qualification will
reflect
24
<PAGE>
the reduced sales and administrative effort resulting from sales to qualifying
group or sponsored arrangements. NEVLICO may modify from time to time both the
amounts of reductions and the criteria for qualification. Reductions in or
waiver of these charges will not be unfairly discriminatory against any
person, including the affected Policy Owners and all other Policy Owners of
Policies funded by the Variable Account.
The United States Supreme Court has held that certain insurance policies
providing values and benefits that vary with the sex of the insured may not be
used to fund certain employee benefit programs.
Therefore, NEVLICO offers Policies that do not vary based on the sex of the
insured for use in connection with certain employee benefit programs. NEVLICO
recommends that any employer proposing to offer the Policies to employees
under a group or sponsored arrangement consult its attorney before doing so.
THE VARIABLE ACCOUNT
The Variable Account was established as a separate investment account of
NEVLICO on January 31, 1983 under Delaware Insurance Law. The Variable Account
is the funding vehicle for other NEVLICO variable life insurance policies in
addition to the Policies. The Variable Account meets the definition of a
"separate account" under Federal securities laws. The Variable Account is a
type of investment company called a unit investment trust and is registered
with the Securities and Exchange Commission (the "SEC") under the Investment
Company Act of 1940. Registration with the SEC does not involve supervision by
the SEC of the management or investment practices or policies of the Variable
Account. However, both NEVLICO and the Variable Account are subject to
regulation by the Delaware Insurance Commissioner and to the insurance laws
and regulations in every jurisdiction where the Policies are sold.
Although the assets of the Variable Account are owned by NEVLICO, applicable
law provides that the portion of the Variable Account assets equal to the
reserves and other liabilities of the Variable Account may not be charged with
liabilities that arise out of any other business NEVLICO may conduct. NEVLICO
believes this means that the assets of the Variable Account equal to the
reserves and other liabilities of the Variable Account are not available to
meet the claims of NEVLICO's general creditors, and may only be used to
support the cash values under its variable life insurance policies issued by
the Variable Account. But NEVLICO may transfer to its general account assets
which exceed the reserves and other liabilities of the Variable Account.
Before making any such transfer, NEVLICO will consider any possible adverse
impact the transfer might have on the Variable Account.
Income and realized and unrealized capital gains and losses of the Variable
Account are credited to the Variable Account without regard to any of
NEVLICO's other income or capital gains and losses.
INVESTMENTS OF THE VARIABLE ACCOUNT
The Variable Account currently has 13 Sub-Accounts available under the
Policy, each of which invests in a series of an Eligible Fund. The Sub-
Accounts of the Variable Account are:
-- The Bond Income Sub-Account, which invests in the Back Bay Advisors Bond
Income Series of the Zenith Fund
-- The Money Market Sub-Account, which invests in the Back Bay Advisors
Money Market Series of the Zenith Fund
-- The Managed Sub-Account, which invests in the Back Bay Advisors Managed
Series of the Zenith Fund
-- The Avanti Growth Sub-Account, which invests in the Loomis Sayles Avanti
Growth Series of the Zenith Fund
-- The Small Cap Sub-Account, which invests in the Loomis Sayles Small Cap
Series of the Zenith Fund
-- The Balanced Sub-Account, which invests in the Loomis Sayles Balanced
Series of the Zenith Fund
-- The International Equity Sub-Account, which invests in the Draycott
International Equity Series of the Zenith Fund
-- The Value Growth Sub-Account, which invests in the Westpeak Value Growth
Series of the Zenith Fund
-- The Stock Index Sub-Account, which invests in the Westpeak Stock Index
Series of the Zenith Fund
-- The Equity Growth Sub-Account, which invests in the Alger Equity Growth
Series of the Zenith Fund
-- The Value Sub-Account, which invests in the Venture Value Series of the
Zenith Fund
-- The U.S. Government Sub-Account, which invests in the Salomon Brothers
U.S. Government Series of the Zenith Fund*
-- The Strategic Bond Opportunities Sub-Account, which invests in the
Salomon Brothers Strategic Bond Opportunities Series of the Zenith Fund*
- --------
* (subject to any necessary state insurance department approvals)
25
<PAGE>
The Zenith Fund is an open-end diversified management investment company,
more commonly known as a mutual fund. The Zenith Fund was established by The
New England as an investment vehicle for separate investment accounts of
NEVLICO and of other life insurance companies. Currently the Zenith Fund is
the funding vehicle for the Variable Account and for separate accounts of The
New England and NEVLICO that issue variable annuity contracts.
Shares of the Eligible Funds are purchased and sold by the Variable Account
at their net asset value (without a deduction for sales load) determined as of
the close of regular trading on the New York Stock Exchange on each day when
the exchange is open for trading.
The investment objectives of the Eligible Funds' portfolios are described
briefly below. There is, of course, no assurance that these objectives will be
met. A full description of the Eligible Funds, including their investment
objectives and policies, expenses, and risks of investing in the Eligible
Funds, is contained in the attached Zenith Fund prospectus, as well as in the
Zenith Fund's Statement of Additional Information, which is referenced in the
Zenith Fund prospectus.
The ZENITH BACK BAY ADVISORS BOND INCOME SERIES' investment objective is to
provide a high level of current income consistent with preservation of capital
and moderate investment risk. The Series seeks to achieve its objective
through investment primarily in an investment quality bond portfolio.
The ZENITH BACK BAY ADVISORS MONEY MARKET SERIES' investment objective is to
provide the highest possible level of current income consistent with
preservation of capital. The Series seeks to achieve its objective through
investment in a managed portfolio of high quality money market instruments.
Money market funds are neither insured nor guaranteed by the U.S. Government
and there can be no assurance that the Series will maintain a stable net asset
value of $100 per share.
The ZENITH BACK BAY ADVISORS MANAGED SERIES' investment objective is to
provide a favorable total investment return through investment in a
diversified portfolio. The Series' portfolio is expected to include (i) common
stocks, (ii) notes and bonds, and (iii) money market instruments.
The ZENITH LOOMIS SAYLES AVANTI GROWTH SERIES' investment objective is long-
term growth of capital. The Series normally will invest primarily in equity
securities of companies with medium and large capitalization (capitalization
of $1 billion to $5 billion and over $5 billion, respectively) but will also
invest a portion of its assets in equity securities of companies with a
relatively small market capitalization (under $1 billion).
The ZENITH LOOMIS SAYLES SMALL CAP SERIES' investment objective is long-term
capital growth from investments in common stock or their equivalent. The
Series will normally invest at least 65% of its total assets in companies with
market capitalization of less than $500 million.
The ZENITH LOOMIS SAYLES BALANCED SERIES' investment objective is reasonable
long-term investment return from a combination of long-term capital
appreciation and moderate current income. The Series is "flexibly managed" in
that sometimes it invests more heavily in equity securities and at other times
it invests more heavily in fixed-income securities. Under normal conditions,
the Series will invest at least 25% of its assets in bonds and at least 50% of
its assets in common stocks.
The ZENITH DRAYCOTT INTERNATIONAL EQUITY SERIES' investment objective is to
seek total return from long-term growth of capital and dividend income. The
Series will invest primarily in common stocks of issuers either headquartered
outside the U.S. or deriving a substantial part of their revenues from
countries outside of the U.S.
The ZENITH WESTPEAK VALUE GROWTH SERIES' investment objective is long-term
total return (capital appreciation and dividend income) through investment in
equity securities. Emphasis will be given to both undervalued securities
("value" style) and securities of companies with growth potential ("growth"
style).
The ZENITH WESTPEAK STOCK INDEX SERIES' investment objective is to provide
investment results that correspond to the composite price and yield
performance of United States publicly traded common stocks. The Series
currently seeks to achieve its objective by attempting to duplicate the
composite price and yield performance of the Standard & Poor's 500 Composite
Stock Price Index.
The ZENITH ALGER EQUITY GROWTH SERIES' investment objective is to seek long-
term capital appreciation. The Series' assets will be invested primarily in a
diversified, actively managed portfolio of equity securities, with a majority
of issuers having a total market capitalization of $1 billion or greater.
The ZENITH VENTURE VALUE SERIES' investment objective is growth of capital.
The Series will primarily invest in domestic common stocks (and securities
convertible into common stock) that the Series' subadviser believes have
capital growth potential
26
<PAGE>
due to factors such as undervalued assets or earnings potential, product
development and demand, favorable operating ratios, resources for expansion,
management abilities, reasonableness of market price, and favorable overall
business prospects. The Series will generally invest predominantly in equity
securities of companies with market capitalizations of at least $250 million.
The ZENITH SALOMON BROTHERS U.S. GOVERNMENT SERIES' investment objective is
to provide a high level of current income consistent with preservation of
capital and maintenance of liquidity.
The ZENITH SALOMON BROTHERS STRATEGIC BOND OPPORTUNITIES SERIES' investment
objective is to seek a high level of total return consistent with preservation
of capital.
The basic objective of the Policy is to provide benefits which increase in
value when the investment experience of the Policy's sub-accounts is
favorable. 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 Avanti Growth, Equity Growth, Value,
Value Growth, Stock Index, International Equity or Small Cap Sub-Accounts, or
some combination of these sub-accounts, may, therefore, be a more desirable
selection for Policy Owners who are willing to accept such risks of short term
fluctuations in value. For a demonstration of certain of these market trends,
see Appendix E: Long Term Market Trends.
Historically, the investment performance of "small cap" stocks over the long
term has generally been superior to stocks of large capitalization companies,
although "small cap" stocks have been substantially more volatile.
Historically, having a small percentage of a portfolio invested in overseas
stocks and the rest in domestic stocks has produced a portfolio that has less,
although still substantial, volatility than a completely domestic portfolio.
Equity investors should recognize that overseas and "small cap" funds
traditionally involve more risk than most domestic stock funds.
The performance of the various financial markets over shorter periods of
time has sometimes differed from their long term historical results. Short
term interest rates were very high in the late 1970's and early 1980's, but
are now lower. Long term bond values continue to fluctuate, and common stock
prices, which have risen substantially at times, have also had periods of
volatility.
Policy Owners who seek somewhat greater protection against loss of principal
in the short term than that afforded by a stock fund may prefer the Bond
Income Sub-Account, the Strategic Bond Opportunities Sub-Account or the U.S.
Government Sub-Account. However, because the Zenith Salomon Brothers Strategic
Bond Opportunities Series may invest in below-investment-grade securities,
which are considered high-yield, high-risk securities, commonly known as "junk
bonds," this series has a higher degree of risk associated with it relative to
more conservative fixed income funds.
Those who seek even greater safety of principal may select the Money Market
Sub-Account, although it is subject to possible rapid changes in short term
interest rates.
Those who primarily seek safety of principal should consider fixed life
insurance as an alternative to variable life insurance.
You may wish to consider diversifying your investments by allocating the
Policy's cash value among two or more sub-accounts. Policy Owners may also
diversify by selecting the Managed Sub-Account, or the Balanced Sub-Account
since each generally invests its assets at most times in a combination of
bonds, stocks and short term instruments, in varying proportions depending
upon the investment adviser's evaluation of the economy and financial markets.
You may also wish to diversify your cash value by country. The International
Equity Sub-Account allows you to participate primarily in companies and
economies outside the United States.
The selection of a Policy's sub-accounts is a matter of your own choice and
should depend on your willingness to accept investment risks, the other types
of investments you have and your own assessment of future economic and
financial market conditions.
INVESTMENT MANAGEMENT
TNE Advisers, which is a subsidiary of The New England, is the investment
adviser of each of the Series. The chart below lists the sub-adviser of each
Series. TNE Advisers and each of the sub-advisers are registered with the SEC
as investment advisers under the Investment Advisers Act of 1940.
27
<PAGE>
<TABLE>
<CAPTION>
SERIES SUBADVISER
- ------ ----------
<S> <C>
Zenith Back Bay Advisors Bond Income
Series Back Bay Advisors, L.P.
Zenith Back Bay Advisors Money Market
Series Back Bay Advisors, L.P.
Zenith Back Bay Advisors Managed Se-
ries Back Bay Advisors, L.P.
Zenith Loomis Sayles Avanti Growth Se-
ries Loomis, Sayles & Company, L.P.
Zenith Loomis Sayles Small Cap Series Loomis, Sayles & Company, L.P.
Zenith Loomis Sayles Balanced Series Loomis, Sayles & Company, L.P.
Zenith Draycott International Equity
Series Draycott Partners, Ltd.
Zenith Westpeak Value Growth Series Westpeak Investment Advisors, L.P.
Zenith Westpeak Stock Index Series Westpeak Investment Advisors, L.P.
Zenith Alger Equity Growth Series Fred Alger Management, Inc.
Zenith Venture Value Series Selected/Venture Advisers, L.P.
Zenith Salomon Brothers U.S. Govern-
ment Series Salomon Brothers Asset Management, Inc.
Zenith Salomon Brothers Strategic Bond
Opportunities Series Salomon Brothers Asset Management, Inc.
</TABLE>
In the case of the Back Bay Advisors Money Market Series, Back Bay Advisors
Bond Income Series, Back Bay Advisors Managed Series, Westpeak Stock Index
Series, Westpeak Value Growth Series, Loomis Sayles Avanti Growth Series and
Loomis Sayles Small Cap Series, TNE Advisers became the adviser on May 1,
1995. Prior to that date those series were advised by their current sub-
advisers, except as follows. The New England itself served as investment
adviser to the Back Bay Advisors Money Market and Back Bay Advisors Bond
Income Series until September 10, 1986 when Back Bay Advisors assumed The New
England's responsibilities under the investment advisory agreements with those
Series. Back Bay Advisors served as investment adviser to the Westpeak Stock
Index Series until August 2, 1993, when Westpeak became the investment
adviser.
The Zenith Fund Series incur charges for advisory fees and certain other
expenses. Under a voluntary expense cap by TNE Advisers for each of the Back
Bay Advisors Bond Income, Back Bay Advisors Money Market, Back Bay Advisors
Managed, Westpeak Stock Index, Westpeak Value Growth and Loomis Sayles Avanti
Growth Series, TNE Advisers will bear those expenses (other than the
management fee) that exceed 0.15% of average daily net assets; for the Loomis
Sayles Small Cap Series, TNE Advisers will bear all expenses that exceed 1.00%
of average daily net assets. For the remaining Zenith Fund Series, TNE
Advisers, under a voluntary expense deferral arrangement, will bear those
expenses (other than the management fee) which exceed a certain limit in the
year in which they are incurred and will charge those expenses to the series
in a future year when actual expenses of the series are below the limit. The
expense cap and expense deferral arrangement may be terminated at any time.
The following table shows the annual operating expenses for each Series,
based on actual expenses incurred for 1994 (or, in some cases, based on
estimated annual operating expenses), after giving effect to the applicable
expense cap or expense deferral arrangement:
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS AFTER EXPENSE CAP)
<TABLE>
<CAPTION>
BACK BAY BACK BAY LOOMIS LOOMIS
ADVISORS ADVISORS BACK BAY SAYLES SAYLES WESTPEAK WESTPEAK
BOND MONEY ADVISORS AVANTI SMALL VALUE STOCK
INCOME MARKET MANAGED GROWTH CAP GROWTH INDEX
SERIES SERIES SERIES SERIES SERIES SERIES SERIES
-------- -------- -------- ------ ------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fee.......... .40% .35% .50% .63% .77% .59% .25%
Other Expenses.......... .14% .15% .14% .22% .23% .26% .15%
---- ---- ---- ---- ----- ---- ----
Total Operating Ex-
penses............. .54% .50% .64% .85% 1.00% .85% .40%
==== ==== ==== ==== ===== ==== ====
</TABLE>
28
<PAGE>
ESTIMATED ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS AFTER EXPENSE DEFERRAL)
<TABLE>
<CAPTION>
SALOMON
SALOMON BROTHERS
LOOMIS ALGER BROTHERS STRATEGIC
SAYLES DRAYCOTT EQUITY VENTURE U.S. BOND
BALANCED INTERNATIONAL GROWTH VALUE GOVERNMENT OPPORTUNITIES
SERIES EQUITY SERIES SERIES SERIES SERIES SERIES
-------- ------------- ------ ------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Management Fee.......... .70% .90% .70% .75% .55% .65%
Other Estimated Ex-
penses................. .15% .40% .15% .15% .15% .20%
---- ----- ---- ---- ---- ----
Total Estimated Op-
erating Expenses... .85% 1.30% .85% .90% .70% .85%
==== ===== ==== ==== ==== ====
</TABLE>
For more information about the Series' advisory agreements, see the Zenith
--------------------------------------------------------------------------
Fund prospectus attached at the end of this prospectus and the Zenith Fund's
- ----------------------------------------------------------------------------
Statement of Additional Information.
- ------------------------------------
OTHER POLICY FEATURES
POLICY OWNER AND BENEFICIARY
The Policy Owner is named in the application but may be changed from time to
time. At the death of the Policy Owner, his or her estate will become the
Policy Owner unless a successor Policy Owner has been named. The Policy
Owner's rights (except for rights to payment of benefits) terminate at the
death of the insured (or the second death under a Last Survivor Policy).
The beneficiary is also named in the application. The beneficiary of the
Policy may be changed at any time before the death of the insured, or before
the second death under a Last Survivor Policy. The beneficiary has no rights
under the Policy until the death of the insured (or until the second death in
the case of a Last Survivor Policy) and must survive the insured(s) in order
to receive the death proceeds. If no named beneficiary survives the
insured(s), the proceeds will be paid to the Policy Owner.
A change of Policy Owner or beneficiary must be in written form satisfactory
to NEVLICO and must be dated and signed by the Policy Owner making the change.
The change will be subject to all payments made and actions taken by NEVLICO
under the Policy before the signed change form is received by NEVLICO at its
Administrative Office.
You may assign (transfer) your rights in the Policy to someone else. An
absolute assignment of the Policy is a change of Policy Owner and beneficiary
to the assignee. A collateral assignment of the Policy does not change the
Policy Owner or beneficiary, but their rights will be subject to the terms of
the assignment. Assignments will be subject to all payments made and actions
taken by NEVLICO under the Policy before a signed copy of the assignment form
is received at NEVLICO's Administrative Office. NEVLICO will not be
responsible for determining whether or not an assignment is valid. Changing
the Policy Owner or assigning the Policy may have tax consequences. (See "Tax
Considerations" below.)
EXCHANGE OF POLICY
Within 24 months after the Date of Issue, the Policy Owner can exchange the
Policy, if the Policy is in force, for a policy that provides fixed benefit
insurance. The new policy will be issued by NEVLICO or by The New England on
any plan of whole life or endowment insurance (or, if the Policy exchanged is
a Last Survivor Policy, on any plan of survivorship insurance) with a level
face amount issued by NEVLICO or The New England on the Policy Date.
The new policy will be issued with the same insured(s), Face Amount, Policy
Date, and risk class(es) as this Policy, with the age of the insured(s) on the
Policy Date, and with a rider that purchases paid-up additions issued by
NEVLICO or The New England on the Policy Date, if the cash value of the Policy
is more than is required to purchase the new policy. The new policy will be
issued subject to any cost or credit and the repayment of any Policy loan
balance, and subject to any assignments of this Policy.
NEVLICO'S DISTRIBUTION AND OTHER AGREEMENTS
NEVLICO sells the Policies through agents who are licensed by state
insurance officials to sell NEVLICO's variable life insurance policies. These
agents are also registered representatives of New England Securities. New
England Securities, a Massachusetts corporation organized in 1968, 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.
29
<PAGE>
New England Securities, whose principal business address is 399 Boylston
Street, Boston, Massachusetts 02116, serves as the principal underwriter for
the Policies under a Distribution Agreement between NEVLICO and New England
Securities.
Under the Distribution Agreement, NEVLICO pays the following sales expenses:
general agent and agency manager's compensation, agents' training allowances,
deferred compensation and insurance benefits of agents, general agents and
agency managers and advertising expenses and all other expenses of
distributing the Policies.
NEVLICO pays to the selling agent commissions and service and other fees of
a maximum of 4.5% of the initial premium and 2.7% of additional payments.
For Policies sold to certain group or sponsored arrangements the maximum
first year commission may be paid in installments over a period of years
rather than all in the first Policy year.
Agents who meet certain productivity and persistency standards in selling
policies issued by NEVLICO and The New England may be eligible for additional
compensation. Non-cash forms of compensation may also be paid in compliance
with applicable state law. Sales expenses in any year are not equal to the
deduction for sales load in that year.
New England Securities distributes mutual funds, variable annuity contracts
and variable life insurance policies. It is the principal underwriter for the
Zenith Fund; The New England Variable Account; New England Retirement
Investment Account; New England Variable Annuity Separate Account; and New
England Variable Annuity Fund I. New England Securities also sells interests
in various investment partnerships.
New England Securities intends to enter into selling agreements with other
broker-dealers registered under the Securities Exchange Act of 1934 whose
representatives are authorized by applicable law to sell variable life
insurance policies. Under the agreements with those broker-dealers, the
commission paid to the broker-dealer will not exceed 7.0% of the initial
premium and 4.4% of additional payments.
Commissions will be paid through the registered broker-dealer, which may
also be reimbursed for portions of expenses incurred in connection with the
sale of the Policies.
Under a Services Agreement between NEVLICO, The New England and New England
Securities, The New England performs underwriting, issuance and other
administrative services for NEVLICO'S variable life insurance policies.
NEVLICO paid The New England approximately $ million in 1995 for services
provided under this agreement.
LIMITS TO NEVLICO'S RIGHT TO CHALLENGE THE POLICY
NEVLICO can challenge that amount of the death benefit that results from the
initial premium for two years during an insured's lifetime from the Date of
Issue, based on misrepresentations made in the application. NEVLICO can
challenge any amount of the death benefit that results from an additional
payment for which proof of insurability is required for two years during an
insured's lifetime from the date that payment is received. However, if an
insured dies within two years of the Date of Issue, NEVLICO can challenge all
or part of the Policy at any time with respect to misrepresentations in the
application. If an insured dies within two years of the receipt of an
additional payment for which proof of insurability is required, NEVLICO can
challenge any amount of the death benefit resulting from that additional
payment at any time with respect to misrepresentation.
MISSTATEMENT OF AGE OR SEX
If the insured's age (or either insured's age under a Last Survivor Policy)
is misstated in the application, the Policy's death benefit will be the amount
that the most recent Monthly Deduction which was made would have provided,
based on the insured's correct age(s) and sex(es).
SUICIDE
Single Insured Policies. If the Insured dies by suicide while sane or insane
------------------------
within two years (or less, if required by state law) from the Date of Issue
(or the Policy Date, if earlier, if required by state law) set forth in the
Policy, the Death Benefit will be limited to: the amount of the initial
premium; plus any additional payments made; less any outstanding Policy Loan
Balance; and less any partial surrenders (or such greater amount, if required
by state law).
30
<PAGE>
Last Survivor Policies. If either of the Insureds dies by suicide while sane
-----------------------
or insane within two years (or less, if required by state law) from the Date
of Issue (or the Policy Date, if earlier, if required by state law) set forth
in the Policy, the Death Benefit will be limited to: the amount of the initial
premium; plus any additional payments made; less any outstanding Policy Loan
Balance; and less any partial surrenders (or such greater amount, if required
by law). The Policy will terminate as of the first death by suicide.
Within 60 days after the first death by suicide under a Last Survivor
Policy, the Owner can purchase new life insurance on an Eligible Insured
without evidence of insurability. For purposes of this provision, an Eligible
Insured is a surviving Insured on whom NEVLICO would have issued a single life
policy on the Policy Date of this Policy. The new policy will be issued on a
plan of single life variable life insurance agreed to and issued by NEVLICO on
the Policy Date of the new policy, if the issue age on the new policy is age
75 or younger; and on a single life Ordinary Life plan with a level face
amount issued by New England Mutual Life Insurance Company on the Policy Date
of the new policy, if the issue age on the new policy is greater than 75. The
new policy will be issued: with a Face Amount equal to the Face Amount of this
Policy plus the amount of any single life term rider for the Eligible Insured
under this Policy: based on the underwriting class to which the Eligible
Insured was assigned by NEVLICO on the Policy Date of this Policy; with a
Policy Date equal to the date of the suicidal death; and premiums must be paid
from the policy date. The single life variable life insurance policy can be
exchanged for an ordinary life policy, if desired, using any exchange
provision of the new policy.
If an Eligible Insured dies within the 60 day period and before submitting
an application, the death benefit will be paid as if the new policy had been
issued and if the new policy is a variable life policy, assuming all premiums
for the new policy were allocated to the Money Market Sub-Account and the
death benefit option in effect would result in the smallest amount of death
proceeds.
TAX CONSIDERATIONS
POLICY PROCEEDS
The following discussion of Federal income tax issues relating to the
Policies is general in nature and is not intended as tax advice. It describes
what NEVLICO believes is the Federal income tax treatment of the Policies in
the most commonly occurring circumstances and does not reflect the effect of
Federal income taxes in all situations. In addition, there is no guarantee
that the Federal income tax laws and regulations or interpretation of them
will not change. Therefore, NEVLICO recommends that you consult your own tax
advisor for more complete information and advice.
DEFINITION OF LIFE INSURANCE. Section 7702 of the Internal Revenue Code of
1986, as amended ("Code") defines a life insurance contract for Federal income
tax purposes.
The Section 7702 definition can be met if a life insurance contract
satisfies either one of two tests set forth in that section. The manner in
which these tests should be applied to certain features of the Policy is not
directly addressed by Section 7702 or proposed regulations issued under that
section. The presence of these Policy features, the absence of final
regulations, and the lack of other pertinent interpretations of Section 7702,
thus create some uncertainty about the application of Section 7702 to the
Policy.
Nevertheless, NEVLICO believes that it is reasonable to conclude that the
Policy qualifies as a life insurance contract for federal tax purposes, so
that:
-- the death benefit should be fully excludible from the gross income of
the beneficiary under Section 101(a)(1) of the Code; and
-- the Policy Owner should not be considered in constructive receipt of the
cash surrender value, including any increases, unless and until they are
distributed from the Policy.
If a Policy were determined not to be a life insurance contract for purposes
of Section 7702, such Policy would not provide most of the tax advantages
normally provided by a life insurance contract. NEVLICO thus reserves the
right to make changes in the Policy if such changes are deemed necessary to
attempt to assure its qualification as a life insurance contract for tax
purposes.
TAX TREATMENT OF LOANS AND OTHER DISTRIBUTIONS. Federal tax law establishes
a class of life insurance policies referred to as modified endowment
contracts. In almost all cases, this Policy will be a modified endowment
contract. (See, however, the
31
<PAGE>
discussion below on a Policy issued in exchange for another life insurance
policy.) Except as specifically noted, the remainder of this discussion
assumes that this Policy will be a modified endowment contract. Loans and
partial withdrawals from, as well as collateral assignments of, modified
endowment contracts will be treated as distributions to the Policy Owner. All
pre-death distributions (including loans, partial surrenders and collateral
assignments) from these Policies will be included in gross income on an
income-first basis to the extent of any income in the Policy immediately
before the distribution.
The law also imposes a 10% penalty tax on pre-death distributions (including
loans, collateral assignments, partial withdrawals and complete surrenders)
from modified endowment contracts to the extent they are included in income,
unless such amounts are distributed on or after the taxpayer attains age 59
1/2, because the taxpayer is disabled, or as substantially equal periodic
payments over the taxpayer's life (or life expectancy) or over the joint lives
(or joint life expectancies) of the taxpayer and his or her beneficiary.
Furthermore, if the loan interest is capitalized by adding the amount due to
the balance of the loan, the amount of the capitalized interest will be
treated as an additional distribution subject to income tax as well as the 10%
penalty tax, if applicable, to the extent of income in the Policy.
Any Policy issued in exchange for a modified endowment contract will be
subject to the tax treatment accorded to modified endowment contracts.
However, NEVLICO believes that any Policy issued in exchange for a life
insurance policy that is not a modified endowment contract will generally not
be treated as a modified endowment contract if the death benefit of the Policy
is greater than or equal to the death benefit of the policy being exchanged.
The payment of any premiums at the time of or after the exchange may, however,
cause the Policy to become a modified endowment contract. A Policy Owner may,
of course, choose not to exercise the right to make additional payments in
order to prevent a Policy from being treated as a modified endowment contract.
If a Policy that was not a modified endowment contract at issue subsequently
becomes a modified endowment contract, distributions made during the Policy
year in which it becomes a modified endowment contract, distributions in any
subsequent Policy year and distributions within two years before the Policy
becomes a modified endowment contract will be subject to the tax treatment
described above. This means that a distribution from a Policy that is not a
modified endowment contract could later become taxable as a distribution from
a modified endowment contract. In addition, regulations or other
interpretations may be issued which will apply similar tax treatment to other
distributions made in anticipation of a Policy becoming a modified endowment
contract.
SPECIAL TREATMENT OF LOANS ON THE POLICY. If there is any borrowing against
the Policy, the interest paid on loans may not be tax deductible.
AGGREGATION OF MODIFIED ENDOWMENT CONTRACTS. In the case of a pre-death
distribution (including a loan, partial surrender, collateral assignment or
full surrender) from a Policy that is treated as a modified endowment
contract, a special aggregation requirement may apply for purposes of
determining the amount of the income on the Policy. Specifically, if NEVLICO
or any of its affiliates issues to the same Policy Owner more than one
modified endowment contract within a calendar year, then for purposes of
measuring the income on the Policy with respect to a distribution from any of
those policies, the income on the policy for all those policies will be
aggregated and attributed to that distribution.
OTHER POLICY OWNER TAX MATTERS. Federal and state estate, inheritance and
other tax consequences of ownership or receipt of proceeds under the Policy
depend upon the individual circumstances of each Policy Owner or beneficiary.
The Policy may continue after the insured(s) attain age 100. The tax
consequences associated with continuing a Policy beyond age 100 are unclear. A
tax advisor should be consulted on this issue.
Section 817(h) of the Code requires the investments of the Variable Account
to be "adequately diversified" in accordance with Treasury Regulations for the
Policy to qualify as a life insurance contract under Section 7702 of the Code.
Failure to comply with the diversification requirements may result in not
treating the Policy as life insurance. If the Policy does not qualify as life
insurance, you may be subjected to immediate taxation on the incremental
increases in cash value of the Policy plus the cost of insurance protection
for the year. Regulations specifying the diversification requirements have
been issued by the Department of Treasury, and NEVLICO believes it complies
fully with such requirements.
In connection with the issuance of the diversification regulations, the
Treasury Department stated that it anticipates the issuance of regulations or
rulings prescribing the circumstances in which an owner's control of the
investments of a separate account may cause a Policy Owner, rather than the
insurance company, to be treated as the owner of the assets in the separate
account. To date, no such regulations or guidance has been issued. If a Policy
Owner is considered the owner of the assets of the Separate Account, income
and gains from the Account would be included in the Owner's gross income.
32
<PAGE>
The ownership rights under the Policy are similar to, but different in
certain respects from, those described by the Internal Revenue Service in
rulings in which it determined that the owners were not owners of separate
account assets. For example, a Policy Owner has additional flexibility in
allocating payments and cash values. These differences could result in the
owner being treated as the owner of a pro rata share of the assets of the
Separate Account. In addition, NEVLICO does not know what standards will be
set forth in the regulations or rulings which the Treasury has reserved the
right to issue. NEVLICO therefore reserves the right to modify the Policy as
necessary to attempt to prevent the Policy Owner from being considered the
owner of the assets of the Separate Account.
The Policies may be used in various arrangements, including non-qualified
deferred compensation or salary continuance plans, split dollar insurance
plans, executive bonus plans, tax exempt and nonexempt welfare benefit plans,
retiree medical benefit plans and others. The tax consequences of such plans
may vary depending on the particular facts and circumstances of each
individual arrangement. Therefore, if you are contemplating the use of the
Policies in any arrangement the value of which depends in part on its tax
consequences, you should be sure to consult a qualified tax advisor regarding
the tax attributes of the particular arrangement and the suitability of this
product for the arrangement.
NEVLICO believes that Policies subject to the provisions of the Puerto Rican
tax law will generally receive the same tax treatment as that described above
for Policies subject to the Internal Revenue Code. You should note that
Policies governed by the Puerto Rican tax law are not currently subject to the
above described rules regarding modified endowment contracts. If such a Policy
becomes subject to the Internal Revenue Code, however, the rules regarding
modified endowment contracts will apply, and they may apply retroactively. You
should consult your tax advisor if a Policy governed by the Puerto Rican tax
law subsequently becomes subject to the Internal Revenue Code.
CHARGE FOR NEVLICO'S INCOME TAXES
Under current Federal income tax law no tax is imposed on NEVLICO as a
result of the operations of the Variable Account. Thus, no charge is being
made currently to the Variable Account for NEVLICO's Federal income taxes.
NEVLICO reserves its rights to charge the Variable Account for company Federal
income taxes in the future.
Under current laws NEVLICO may incur state and local taxes (in addition to
premium taxes) in several states. At present these taxes are not significant
and, accordingly, NEVLICO is not currently making a charge for them. If they
increase, however, charges for such taxes attributable to the Variable Account
may be made.
MANAGEMENT
The directors and executive officers of NEVLICO and their principal business
experience during the past five years are:
DIRECTORS OF NEVLICO
<TABLE>
<CAPTION>
PRINCIPAL BUSINESS EXPERIENCE
NAME DURING THE PAST FIVE YEARS
---- -----------------------------
<C> <S>
Edward C. Hall President -- New England Services (a business unit of The New
England) since 1994; formerly, Executive Vice President --
Client Services, 1988 to 1994, of The New England; Vice
President-- Administration of NEVLICO
Kernan F. King Director of The New England and President -- New England Life
(a business unit of The New England) since 1994; formerly,
Director, Executive Vice President and Chief Marketing
Officer, 1992 to 1994, Director, Executive Vice President --
Administration and General Counsel, 1990 to 1992, of The New
England
Robert E. Schneider Director, Executive Vice President and Chief Financial Officer
of The New England since 1993; formerly, Executive Vice
President and Chief Financial Officer, 1990 to 1993, of The
New England
Robert A. Shafto Chairman, President and Chief Executive Officer since 1993;
formerly, President and Chief Executive Officer, 1992 to 1993,
President and Chief Operating Officer, 1990 to 1992, of The
New England; Chairman, President and Chief Executive Officer
of NEVLICO
Daniel J. Toran Executive Vice President of The New England since 1991;
formerly, Senior Vice President --Agencies, 1986 to 1991, of
The New England
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL BUSINESS EXPERIENCE
NAME DURING THE PAST FIVE YEARS
---- -----------------------------
<C> <S>
H. James Wilson Executive Vice President and General Counsel of The New
England since 1993; formerly, Senior Vice President and
General Counsel, 1992 to 1993, Senior Vice President and
Associate General Counsel, 1990 to 1992, of The New
England; General Counsel and Secretary of NEVLICO
Frederick K. Zimmerman Executive Vice President and Chief Investment Officer of The
New England since 1993; formerly, Senior Vice President --
Investments, 1989 to 1993, of The New England; Vice
President --Investments of NEVLICO
</TABLE>
EXECUTIVE OFFICERS OF NEVLICO
OTHER THAN DIRECTORS
<TABLE>
<CAPTION>
PRINCIPAL BUSINESS EXPERIENCE
NAME DURING THE PAST FIVE YEARS
---- -----------------------------
<C> <S>
William A. Campagna Vice President -- Broker/Dealer Distribution of The New
England since 1995; formerly Senior Vice President of
Insurance Products of Putnam Investments, 1993 to 1995;
Vice President --Product Manager of Putnam Investments,
1992 to 1993; Vice President -- Insurance Products of
Merrill Lynch & Co., 1987 to 1992; Vice President --
Broker/Dealer Distribution of NEVLICO.
Rodney J. Chandler Second Vice President and Actuary of The New England since
1990; Chief Actuary of NEVLICO
Chester R. Frost Senior Vice President of The New England since 1984; Vice
President -- Controller of NEVLICO
John F. Guthrie Vice President of The New England since 1983; Vice
President -- Portfolio Strategy of NEVLICO
Kenneth J. Schweiger Vice President -- Bank Distribution of The New England since
1995; formerly Regional Vice President of Annuity Sales &
New Business Development of Keyport Life Insurance Company,
1990 to 1995; Vice President -- Bank Distribution of
NEVLICO.
John G. Small Senior Vice President of The New England since 1990; Vice
President and Chief Underwriter of NEVLICO
Phillip G. Sullivan Second Vice President and Medical Director of The New
England since 1974; Vice President and Medical Director of
NEVLICO
Newton H. Thompson Vice President and Treasurer since 1995; formerly, Second
Vice President and Assistant Treasurer, 1991 to 1992, and
Assistant Vice President and Assistant Treasurer, 1989 to
1991, of The New England; Vice President and Treasurer of
NEVLICO
H. James Wilson See Directors above.
Frederick K. Zimmerman See Directors above.
</TABLE>
The principal business address for each of the directors and executive
officers is the same as NEVLICO's.
VOTING RIGHTS
NEVLICO is the legal owner of the Eligible Fund shares held in the Variable
Account and has the right to vote those shares at meetings of the Eligible
Fund shareholders. However, to the extent required by applicable Federal
securities law, NEVLICO will give you, as Policy Owner, the right to instruct
NEVLICO how to vote the shares that are attributable to your Policy.
The Policy Owners who are entitled to give voting instructions and the
number of shares attributable to their Policies will be determined as of the
record date for the meeting. All Eligible Fund shares held in any Sub-Account
of the Variable Account, or in any other separate account of NEVLICO or an
affiliate, the policyholders of which have rights of instruction with respect
to the Eligible Fund shares, and for which timely instructions are not
received, will be voted in the same proportion as (i) the aggregate cash value
of policies giving instructions, respectively, to vote, for, against, or
withhold votes on a proposition, bears to (ii) the total cash value in that
Sub-Account for all policies for which voting instructions are received. No
voting privileges apply
34
<PAGE>
with respect to cash value removed from the Variable Account as a result of a
Policy loan. All Zenith Fund shares held by the general account (or any
unregistered separate account for which voting privileges were not extended)
of NEVLICO or its affiliates will be voted in the same proportion as the total
of (i) shares for which voting instructions were received and (ii) shares that
are voted in proportion to such voting instructions.
The SEC requires the Eligible Funds' Board of Trustees to monitor events to
identify conflicts that may arise from the sale of Eligible Fund shares to
variable life and variable annuity separate accounts of affiliated and, if
applicable, unaffiliated insurance companies. Conflicts could arise as a
result of changes in state insurance law or Federal income tax law, changes in
investment management of any of the Eligible Funds, or differences in voting
instructions given by variable life and variable annuity contract owners, for
example. If there is a material conflict, the Board of Trustees will have an
obligation to determine what action should be taken, including the removal of
the affected Sub-Accounts from the Eligible Fund(s), if necessary. If NEVLICO
believes any Eligible Fund action is insufficient, NEVLICO will consider
taking other action to protect Policy Owners. There could, however, be
unavoidable delays or interruptions of operations of the Variable Account that
NEVLICO may be unable to remedy.
If required by state insurance authorities, NEVLICO may disregard voting
instructions if they would require that shares be voted to cause a change in
the investment objectives of the portfolios of the Eligible Funds or to
approve or disapprove an investment advisory or underwriting contract for a
portfolio. In addition, NEVLICO may disregard voting instructions in favor of
changes, initiated by a Policy Owner or an Eligible Fund's Board of Trustees,
in the investment policy, investment adviser or principal underwriter of the
Eligible Fund portfolio if NEVLICO (i) reasonably disapproves of the changes
and (ii) in the case of a change in investment policy or investment adviser,
makes a good faith determination that the proposed change is contrary to state
law or is prohibited by state regulatory authorities or that the change would
be inconsistent with a Sub-Account's investment objectives or would result in
the purchase of securities which vary from the general quality and nature of
investments and investment techniques utilized by other separate accounts of
NEVLICO or of an affiliated life insurance company, which separate accounts
have investment objectives similar to those of the Sub-Account. If NEVLICO
does disregard voting instructions, a summary of that action and the reasons
for it will be included in the next semiannual report to Policy Owners.
RIGHTS RESERVED BY NEVLICO
NEVLICO and The New England may change the voting procedures described
above, and may vote Eligible Fund shares in their own right without
instructions from Policy Owners, if the applicable Federal securities laws or
regulations or interpretations of them change. NEVLICO also reserves the
right: (1) to create new investment accounts; (2) to combine any two or more
separate investment accounts, including the Variable Account; (3) to invest
some or all of the assets of the Variable Account other than in the Zenith
Fund; (4) to invest some or all of the assets of the Variable Account in any
other investment company chosen by NEVLICO; (5) to remove a portfolio in which
the Sub-Account is invested or to substitute a different portfolio; (6) to
operate the Variable Account as a management investment company under the
Investment Company Act of 1940 or in any other form permitted by law; and (7)
to deregister the Variable Account under the Investment Company Act of 1940 if
registration is no longer required. NEVLICO will exercise these rights in
accordance with applicable law, including approval of Policy Owners if
required. NEVLICO will notify you if exercise of any of these rights would
result in a material change in the Variable Account or its investments.
TOLL-FREE NUMBERS
For information about historical values of the Variable Account Sub-
Accounts, call the toll-free number 1-800-333-2501.
For Sub-Account transfers or premium reallocations, call the toll-free
number 1-800-200-2214.
REPORTS
NEVLICO will send you a statement at least annually showing your Policy's
death benefit, cash value and any outstanding Policy loan balance. NEVLICO
will also confirm Policy loans, sub-account transfers, lapses, surrenders and
other Policy transactions when they occur.
You will be sent semiannual reports containing the financial statements of
the Variable Account and the Eligible Funds.
35
<PAGE>
ADVERTISING PRACTICES
NEVLICO may from time to time receive endorsements of the Policies from
professional organizations. NEVLICO may refer to or use such endorsements in
advertisements or sales material for the Policies. NEVLICO may also pay the
professional organization making the endorsement for the use of its customer
or mailing lists in order to distribute promotional materials regarding the
Policies. An endorsement of the Policies by a third party is not necessarily
indicative of the future performance or results which may be obtained by
persons who purchase the Policies. From time to time, articles discussing the
Variable Account's investment experience, performance rankings and other
characteristics may appear in national publications. Some or all of these
publishers or ranking services (including, but not limited to Lipper
Analytical Services, Inc. and Morningstar, Inc.) may publish their own
rankings or performance reviews of variable contract separate accounts,
including the Variable Account. References to, reprints or portions of
reprints of such articles or rankings may be used by NEVLICO as sales
literature or advertising material and may include rankings that indicate the
names of other variable contract separate accounts and their investment
experience.
Articles and releases, developed by NEVLICO, the Eligible Funds and other
parties, about the Variable Account or the Eligible Funds regarding individual
Eligible Funds' and fund groups' asset levels and sales volumes, statistics
and analyses of industry sales volume and asset levels, and other
characteristics may appear in various publications. References to or reprints
of such articles may be used in promotional literature for the Policies or the
Variable Account. Such literature may refer to personnel of the advisers, who
have portfolio management responsibility, and their investment style. The
reference may allude to or include excerpts from articles appearing in the
media.
The advertising and sales literature for the Policies and the Variable
Account may refer to historical, current and prospective economic trends.
In addition, sales literature may be published concerning topics of general
investor interest for the benefit of registered representatives and
prospective Policy Owners. These materials may include, but are not limited
to, discussions of college planning, retirement planning, reasons for
investing and historical examples of the investment performance of various
classes of securities, securities markets and indices.
LEGAL MATTERS
Legal matters in connection with the Policies described in this prospectus
have been passed on by H. James Wilson, General Counsel and Secretary of
NEVLICO. Sutherland, Asbill & Brennan, of Washington, D.C., has provided
advice on certain matters relating to the federal securities laws.
REGISTRATION STATEMENT
This prospectus omits certain information contained in the Registration
Statement which has been filed with the SEC. Copies of such additional
information may be obtained from the SEC upon payment of the prescribed fee.
EXPERTS
The financial statements of New England Variable Life Insurance Company as
of December 31, 1994 and 1993 and for the years then ended, and the financial
statements of the Variable Account as of December 31, 1994 and for each of the
three years in the period ended December 31, 1994 have been audited by Coopers
& Lybrand L.L.P., independent auditors, as stated in their opinions appearing
herein and have been so included in reliance upon their authority as experts
in accounting and auditing. The interim financial statements of New England
Variable Life Insurance Company as of September 30, 1995 and for each of the
six month periods ended September 30, 1995 and 1994 and the interim financial
statements of the Variable Account as of September 30, 1995 and for each of
the six month periods ended September 30, 1995 and 1994 have not been audited.
Actuarial matters included in this prospectus have been examined by Rodney
J. Chandler, F.S.A., M.A.A.A., Chief Actuary of NEVLICO, as stated in his
opinion filed as an exhibit to the Registration Statement.
36
<PAGE>
APPENDIX A:
ILLUSTRATIONS OF DEATH BENEFITS,
CASH VALUES, NET CASH VALUES AND ACCUMULATED PREMIUMS
The tables in Appendix A illustrate the way the Policies operate. They show
how the death benefit, net cash value and cash value could vary over an
extended period of time assuming hypothetical gross rates of return (i.e.,
investment income and capital gains and losses, realized or unrealized) for
the Variable Account equal to constant after tax annual rates of 0%, 6% and
12%. The tables are based on an initial premium of $50,000 and also show the
initial death benefit based on that premium. The insureds are assumed to be in
the standard nonsmoker underwriting class. Values are first given based on
current Policy charges and then based on guaranteed Policy charges. (See
"Charges and Expenses.") These tables may assist in the comparison of death
benefits, net cash values and cash values for the Policies with those under
other variable life insurance policies that may be issued by NEVLICO or other
companies.
Death benefits, net cash values and cash values for a Policy would be
different from the amounts shown if the actual gross rates of return averaged
0%, 6% or 12%, but varied above and below that average for the period, if the
initial premium was paid in another amount, or additional payments were made.
They would also be different depending on the allocation of cash value among
the Variable Account's Sub-Accounts, if the actual gross rate of return for
all Sub-Accounts averaged 0%, 6% or 12%, but varied above or below that
average for individual Sub-Accounts. They would also differ if any Policy loan
or partial surrender were made during the period of time illustrated, or if
the insured were in another risk class.
The death benefits, net cash values and cash values shown in the tables
reflect the fact that: a Monthly Deduction (consisting of an administrative
charge, a charge for the cost of insurance, a mortality and expense risk
charge, and, during the first ten Policy Years, a sales charge and state
premium tax charge) are deducted from cash value on each Monthly Deduction
Date. (Because an initial premium of $50,000 has been assumed for purposes of
these illustrations, no Monthly Maintenance Charge is reflected in the
illustrations.) The net cash values shown in the tables reflect the fact that
a Surrender Charge (consisting of a deferred sales charge) is deducted from
cash value upon surrender or lapse during the first nine Policy Years. (See
"Charges and Expenses.") The amounts shown in the table are based on an
average of the investment advisory fees and operating expenses incurred by the
Eligible Funds, at an annual rate of .79% of the average daily net assets of
the Eligible Funds. This average reflects voluntary expense cap and expense
deferral arrangements between TNE Advisers and the Zenith Fund, under which
TNE Advisers bears operating expenses of the Zenith Fund that exceed certain
amounts. TNE Advisers could terminate the expense cap and expense deferral
arrangements at any time. If TNE Advisers terminates these arrangements, the
values illustrated on the following pages could be less. (See "Charges and
Expenses".)
Taking account of the average investment advisory fee and operating expenses
of the Eligible Funds, the gross annual rates of return of 0%, 6% and 12%
correspond to net investment experience at constant annual rates of -.78%,
5.17%, and 11.12%, respectively. (See "Net Investment Experience.")
The hypothetical rates of return shown in the tables do not reflect any tax
charges attributable to the Variable Account since no such charges are
currently made. If any such charges are imposed in the future, the gross
annual rate of return would have to exceed the rates shown by an amount
sufficient to cover the tax charges, in order to produce the death benefits,
net cash values and cash values illustrated. (See "Charge for NEVLICO's Income
Taxes.")
The second column of each table shows the amount which would accumulate if
the initial premium of $50,000 were invested to earn interest, after taxes, of
5% per year, compounded annually.
The internal rate of return on net cash value is equivalent to an interest
rate (after taxes) at which an amount equal to the initial premium could have
been invested outside the Policy to arrive at the net cash value of the
Policy. The internal rate of return on the death benefit is equivalent to an
interest rate (after taxes) at which an amount equal to the initial premium
could have been invested outside the Policy to arrive at the death benefit of
the Policy. The internal rate of return is compounded annually.
NEVLICO will furnish upon request a personalized illustration reflecting the
proposed insured's age, sex, and underwriting classification. Where
applicable, NEVLICO will also furnish upon request an illustration for a
Policy which is not affected by the sex of the insured.
37
<PAGE>
SINGLE INSURED POLICY
MALE ISSUE AGE 50
$50,000 INITIAL PREMIUM FOR STANDARD NONSMOKER
$ INITIAL DEATH BENEFIT
THIS ILLUSTRATION IS BASED ON CURRENT POLICY CHARGES.
<TABLE>
<CAPTION>
INTERNAL RATE OF RETURN
INITIAL DEATH BENEFIT NET CASH VALUE CASH VALUE ON NET CASH VALUE
PREMIUM ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
ACCUMULATED GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL
END OF AT 5% RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF
POLICY INTEREST ----------------------- ----------------------- ----------------------- ------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- ------ ----------- -- -- --- -- -- --- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
<CAPTION>
INTERNAL RATE OF RETURN
ON DEATH BENEFIT
ASSUMING HYPOTHETICAL
GROSS ANNUAL
END OF RATE OF RETURN OF
POLICY -----------------------
YEAR 0% 6% 12%
- ------ -- -- ---
<S> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL GROSS ANNUAL RATES OF RETURN SHOWN
ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE GROSS ANNUAL RATES OF RETURN. ACTUAL
GROSS RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A POLICY
OWNER, WHETHER ADDITIONAL PAYMENTS ARE MADE, AND THE INVESTMENT EXPERIENCE OF
THE POLICY'S SUB-ACCOUNTS. THE DEATH BENEFIT, CASH VALUE AND NET CASH VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL
RATES OF RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT VARIED
ABOVE OR BELOW THAT AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF
ANY POLICY LOAN OR PARTIAL SURRENDER WERE MADE DURING THE PERIOD. NO
REPRESENTATIONS CAN BE MADE BY NEVLICO OR THE ELIGIBLE FUNDS THAT THOSE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
38
<PAGE>
SINGLE INSURED POLICY
MALE ISSUE AGE 50
$50,000 INITIAL PREMIUM FOR STANDARD NONSMOKER
$ INITIAL DEATH BENEFIT
THIS ILLUSTRATION IS BASED ON GUARANTEED POLICY CHARGES.
<TABLE>
<CAPTION>
INTERNAL RATE OF RETURN
DEATH BENEFIT NET CASH VALUE CASH VALUE ON NET CASH VALUE
INITIAL ASSUMING ASSUMING ASSUMING ASSUMING HYPOTHETICAL INTERNAL RATE OF RETURN
PREMIUM HYPOTHETICAL HYPOTHETICAL HYPOTHETICAL GROSS ON DEATH BENEFIT
ACCUMULATED GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL ANNUAL ASSUMING HYPOTHETICAL GROSS
END OF AT 5% RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF ANNUAL RATE OF RETURN OF
POLICY INTEREST -----------------------------------------------------------------------------------------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% O% 6% 12% 0% 6% 12% 0% 6% 12%
- ------ ----------- ----- ----- ----------- ----- ----------- ----- ------------- ------- ----------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL GROSS ANNUAL RATES OF RETURN SHOWN
ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE GROSS ANNUAL RATES OF RETURN. ACTUAL
GROSS RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A POLICY
OWNER, WHETHER ADDITIONAL PAYMENTS ARE MADE, AND THE INVESTMENT EXPERIENCE OF
THE POLICY'S SUB-ACCOUNTS. THE DEATH BENEFIT, CASH VALUE AND NET CASH VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL
RATES OF RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT VARIED
ABOVE OR BELOW THAT AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF
ANY POLICY LOAN OR PARTIAL SURRENDER WERE MADE DURING THE PERIOD. NO
REPRESENTATIONS CAN BE MADE BY NEVLICO OR THE ELIGIBLE FUNDS THAT THOSE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
39
<PAGE>
SINGLE INSURED POLICY
FEMALE ISSUE AGE 50
$50,000 INITIAL PREMIUM FOR STANDARD NONSMOKER
$ INITIAL DEATH BENEFIT
THIS ILLUSTRATION IS BASED ON CURRENT POLICY CHARGES.
<TABLE>
<CAPTION>
INITIAL DEATH BENEFIT NET CASH VALUE CASH VALUE INTERNAL RATE OF RETURN
PREMIUM ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ON NET CASH VALUE
ACCUMULATED GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL ASSUMING HYPOTHETICAL GROSS
END OF AT 5% RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF ANNUAL RATE OF RETURN OF
POLICY INTEREST ----------------------- ----------------------- ----------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- ------ ----------- -- -- --- -- -- --- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
<CAPTION>
INTERNAL RATE OF RETURN
ON DEATH BENEFIT
ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL RATE OF RETURN OF
POLICY -----------------------------
YEAR 0% 6% 12%
- ------ -- -- ---
<S> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL GROSS ANNUAL RATES OF RETURN SHOWN
ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE GROSS ANNUAL RATES OF RETURN. ACTUAL
GROSS RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A POLICY
OWNER, WHETHER ADDITIONAL PAYMENTS ARE MADE, AND THE INVESTMENT EXPERIENCE OF
THE POLICY'S SUB-ACCOUNTS. THE DEATH BENEFIT, CASH VALUE AND NET CASH VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL
RATES OF RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT VARIED
ABOVE OR BELOW THAT AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF
ANY POLICY LOAN OR PARTIAL SURRENDER WERE MADE DURING THE PERIOD. NO
REPRESENTATIONS CAN BE MADE BY NEVLICO OR THE ELIGIBLE FUNDS THAT THOSE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
40
<PAGE>
SINGLE INSURED POLICY
FEMALE ISSUE AGE 50
$50,000 INITIAL PREMIUM FOR STANDARD NONSMOKER
$ INITIAL DEATH BENEFIT
THIS ILLUSTRATION IS BASED ON GUARANTEED POLICY CHARGES.
<TABLE>
<CAPTION>
INITIAL DEATH BENEFIT NET CASH VALUE CASH VALUE INTERNAL RATE OF RETURN
PREMIUM ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ON NET CASH VALUE
ACCUMULATED GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL ASSUMING HYPOTHETICAL GROSS
END OF AT 5% RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF ANNUAL RATE OF RETURN OF
POLICY INTEREST ----------------------- ----------------------- ----------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- ------ ----------- -- -- --- -- -- --- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
<CAPTION>
INTERNAL RATE OF RETURN
ON DEATH BENEFIT
ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL RATE OF RETURN OF
POLICY -----------------------------
YEAR 0% 6% 12%
- ------ -- -- ---
<S> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL GROSS ANNUAL RATES OF RETURN SHOWN
ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE GROSS ANNUAL RATES OF RETURN. ACTUAL
GROSS RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A POLICY
OWNER, WHETHER ADDITIONAL PAYMENTS ARE MADE, AND THE INVESTMENT EXPERIENCE OF
THE POLICY'S SUB-ACCOUNTS. THE DEATH BENEFIT, CASH VALUE AND NET CASH VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL
RATES OF RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT VARIED
ABOVE OR BELOW THAT AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF
ANY POLICY LOAN OR PARTIAL SURRENDER WERE MADE DURING THE PERIOD. NO
REPRESENTATIONS CAN BE MADE BY NEVLICO OR THE ELIGIBLE FUNDS THAT THOSE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
41
<PAGE>
SINGLE INSURED POLICY
MALE ISSUE AGE 70
$50,000 INITIAL PREMIUM FOR STANDARD NONSMOKER
$ INITIAL DEATH BENEFIT
THIS ILLUSTRATION IS BASED ON CURRENT POLICY CHARGES.
<TABLE>
<CAPTION>
INITIAL DEATH BENEFIT NET CASH VALUE CASH VALUE INTERNAL RATE OF RETURN
PREMIUM ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ON NET CASH VALUE
ACCUMULATED GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL ASSUMING HYPOTHETICAL GROSS
END OF AT 5% RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF ANNUAL RATE OF RETURN OF
POLICY INTEREST ----------------------- ----------------------- ----------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- ------ ----------- -- -- --- -- -- --- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
<CAPTION>
INTERNAL RATE OF RETURN
ON DEATH BENEFIT
ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL RATE OF RETURN OF
POLICY -----------------------------
YEAR 0% 6% 12%
- ------ -- -- ---
<S> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL GROSS ANNUAL RATES OF RETURN SHOWN
ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE GROSS ANNUAL RATES OF RETURN. ACTUAL
GROSS RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A POLICY
OWNER, WHETHER ADDITIONAL PAYMENTS ARE MADE, AND THE INVESTMENT EXPERIENCE OF
THE POLICY'S SUB-ACCOUNTS. THE DEATH BENEFIT, CASH VALUE AND NET CASH VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL
RATES OF RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT VARIED
ABOVE OR BELOW THAT AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF
ANY POLICY LOAN OR PARTIAL SURRENDER WERE MADE DURING THE PERIOD. NO
REPRESENTATIONS CAN BE MADE BY NEVLICO OR THE ELIGIBLE FUNDS THAT THOSE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
42
<PAGE>
SINGLE INSURED POLICY
MALE ISSUE AGE 70
$50,000 INITIAL PREMIUM FOR STANDARD NONSMOKER
$ INITIAL DEATH BENEFIT
THIS ILLUSTRATION IS BASED ON GUARANTEED POLICY CHARGES.
<TABLE>
<CAPTION>
INITIAL DEATH BENEFIT NET CASH VALUE CASH VALUE INTERNAL RATE OF RETURN
PREMIUM ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ON NET CASH VALUE
ACCUMULATED GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL ASSUMING HYPOTHETICAL GROSS
END OF AT 5% RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF ANNUAL RATE OF RETURN OF
POLICY INTEREST ----------------------- ----------------------- ----------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- ------ ----------- -- -- --- -- -- --- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
<CAPTION>
INTERNAL RATE OF RETURN
ON DEATH BENEFIT
ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL RATE OF RETURN OF
POLICY -----------------------------
YEAR 0% 6% 12%
- ------- -- -- ---
<S> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL GROSS ANNUAL RATES OF RETURN SHOWN
ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE GROSS ANNUAL RATES OF RETURN. ACTUAL
GROSS RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A POLICY
OWNER, WHETHER ADDITIONAL PAYMENTS ARE MADE, AND THE INVESTMENT EXPERIENCE OF
THE POLICY'S SUB-ACCOUNTS. THE DEATH BENEFIT, CASH VALUE AND NET CASH VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL
RATES OF RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT VARIED
ABOVE OR BELOW THAT AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF
ANY POLICY LOAN OR PARTIAL SURRENDER WERE MADE DURING THE PERIOD. NO
REPRESENTATIONS CAN BE MADE BY NEVLICO OR THE ELIGIBLE FUNDS THAT THOSE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
43
<PAGE>
SINGLE INSURED POLICY
FEMALE ISSUE AGE 70
$50,000 INITIAL PREMIUM FOR STANDARD NONSMOKER
$ INITIAL DEATH BENEFIT
THIS ILLUSTRATION IS BASED ON CURRENT POLICY CHARGES.
<TABLE>
<CAPTION>
INTERNAL RATE INTERNAL RATE
OF RETURN OF RETURN
ON NET CASH ON DEATH
DEATH BENEFIT NET CASH VALUE CASH VALUE VALUE BENEFIT
ASSUMING ASSUMING ASSUMING ASSUMING ASSUMING
INITIAL HYPOTHETICAL HYPOTHETICAL HYPOTHETICAL HYPOTHETICAL HYPOTHETICAL
PREMIUM GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL GROSS GROSS
ACCUMULATED RATE OF RETURN RATE OF RETURN RATE OF RETURN ANNUAL RATE OF ANNUAL RATE OF
END OF AT 5% OF OF OF RETURN OF RETURN OF
POLICY INTEREST -------------- -------------- -------------- -------------- --------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- ------ ----------- -- -- --- -- -- --- -- -- --- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL GROSS ANNUAL RATES OF RETURN SHOWN
ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE GROSS ANNUAL RATES OF RETURN. ACTUAL
GROSS RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A POLICY
OWNER, WHETHER ADDITIONAL PAYMENTS ARE MADE, AND THE INVESTMENT EXPERIENCE OF
THE POLICY'S SUB-ACCOUNTS. THE DEATH BENEFIT, CASH VALUE AND NET CASH VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL
RATES OF RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT VARIED
ABOVE OR BELOW THAT AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF
ANY POLICY LOAN OR PARTIAL SURRENDER WERE MADE DURING THE PERIOD. NO
REPRESENTATIONS CAN BE MADE BY NEVLICO OR THE ELIGIBLE FUNDS THAT THOSE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
44
<PAGE>
SINGLE INSURED POLICY
FEMALE ISSUE AGE 70
$50,000 INITIAL PREMIUM FOR STANDARD NONSMOKER
$ INITIAL DEATH BENEFIT
THIS ILLUSTRATION IS BASED ON GUARANTEED POLICY CHARGES.
<TABLE>
<CAPTION>
INTERNAL RATE INTERNAL RATE
OF RETURN OF RETURN
ON NET CASH ON DEATH
DEATH BENEFIT NET CASH VALUE CASH VALUE VALUE BENEFIT
ASSUMING ASSUMING ASSUMING ASSUMING ASSUMING
INITIAL HYPOTHETICAL HYPOTHETICAL HYPOTHETICAL HYPOTHETICAL HYPOTHETICAL
PREMIUM GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL GROSS GROSS
ACCUMULATED RATE OF RETURN RATE OF RETURN RATE OF RETURN ANNUAL RATE OF ANNUAL RATE OF
END OF AT 5% OF OF OF RETURN OF RETURN OF
POLICY INTEREST -------------- -------------- -------------- -------------- --------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- ------ ----------- -- -- --- -- -- --- -- -- --- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL GROSS ANNUAL RATES OF RETURN SHOWN
ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE GROSS ANNUAL RATES OF RETURN. ACTUAL
GROSS RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A POLICY
OWNER, WHETHER ADDITIONAL PAYMENTS ARE MADE, AND THE INVESTMENT EXPERIENCE OF
THE POLICY'S SUB-ACCOUNTS. THE DEATH BENEFIT, CASH VALUE AND NET CASH VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL
RATES OF RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT VARIED
ABOVE OR BELOW THAT AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF
ANY POLICY LOAN OR PARTIAL SURRENDER WERE MADE DURING THE PERIOD. NO
REPRESENTATIONS CAN BE MADE BY NEVLICO OR THE ELIGIBLE FUNDS THAT THOSE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
45
<PAGE>
LAST SURVIVOR POLICY
MALE ISSUE AGE 65
FEMALE ISSUE AGE 60
(JOINT EQUAL AGE )
$50,000 INITIAL PREMIUM FOR STANDARD NONSMOKER
$ INITIAL DEATH BENEFIT
THIS ILLUSTRATION IS BASED ON CURRENT POLICY CHARGES.
<TABLE>
<CAPTION>
INITIAL DEATH BENEFIT NET CASH VALUE CASH VALUE INTERNAL RATE OF RETURN
PREMIUM ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ON NET CASH VALUE
ACCUMULATED GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL ASSUMING HYPOTHETICAL GROSS
END OF AT 5% RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF ANNUAL RATE OF RETURN OF
POLICY INTEREST ----------------------- ----------------------- ----------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- ------ ----------- -- -- --- -- -- --- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
<CAPTION>
INTERNAL RATE OF RETURN
ON DEATH BENEFIT
ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL RATE OF RETURN OF
POLICY -----------------------------
YEAR 0% 6% 12%
- ------ -- -- ---
<S> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL GROSS ANNUAL RATES OF RETURN SHOWN
ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE GROSS ANNUAL RATES OF RETURN. ACTUAL
GROSS RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A POLICY
OWNER, WHETHER ADDITIONAL PAYMENTS ARE MADE, AND THE INVESTMENT EXPERIENCE OF
THE POLICY'S SUB-ACCOUNTS. THE DEATH BENEFIT, CASH VALUE AND NET CASH VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL
RATES OF RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT VARIED
ABOVE OR BELOW THAT AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF
ANY POLICY LOAN OR PARTIAL SURRENDER WERE MADE DURING THE PERIOD. NO
REPRESENTATIONS CAN BE MADE BY NEVLICO OR THE ELIGIBLE FUNDS THAT THOSE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
46
<PAGE>
LAST SURVIVOR POLICY
MALE ISSUE AGE 65
FEMALE ISSUE AGE 60
(JOINT EQUAL AGE )
$50,000 INITIAL PREMIUM FOR STANDARD NONSMOKER
$ INITIAL DEATH BENEFIT
THIS ILLUSTRATION IS BASED ON GUARANTEED POLICY CHARGES.
<TABLE>
<CAPTION>
INITIAL DEATH BENEFIT NET CASH VALUE CASH VALUE INTERNAL RATE OF RETURN
PREMIUM ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ON NET CASH VALUE
ACCUMULATED GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL ASSUMING HYPOTHETICAL GROSS
END OF AT 5% RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF ANNUAL RATE OF RETURN OF
POLICY INTEREST ----------------------- ----------------------- ----------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- ------ ----------- -- -- --- -- -- --- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
<CAPTION>
INTERNAL RATE OF RETURN
ON DEATH BENEFIT
ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL RATE OF RETURN OF
POLICY -----------------------------
YEAR 0% 6% 12%
- ------ -- -- ---
<S> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL GROSS ANNUAL RATES OF RETURN SHOWN
ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE GROSS ANNUAL RATES OF RETURN. ACTUAL
GROSS RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A POLICY
OWNER, WHETHER ADDITIONAL PAYMENTS ARE MADE, AND THE INVESTMENT EXPERIENCE OF
THE POLICY'S SUB-ACCOUNTS. THE DEATH BENEFIT, CASH VALUE AND NET CASH VALUE
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL
RATES OF RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT VARIED
ABOVE OR BELOW THAT AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF
ANY POLICY LOAN OR PARTIAL SURRENDER WERE MADE DURING THE PERIOD. NO
REPRESENTATIONS CAN BE MADE BY NEVLICO OR THE ELIGIBLE FUNDS THAT THOSE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
47
<PAGE>
APPENDIX B
INVESTMENT EXPERIENCE INFORMATION
The information contained in Appendix B gives hypothetical illustrations of
the Variable Account's and the Policy's investment experience based on the
historical investment experience of the Eligible Funds. It does not represent
what may happen in the future.
The Policies were not available until , 1996. The Zenith Fund and the
Variable Account commenced operations on August 26, 1983. The Westpeak Stock
Index and Back Bay Advisors Managed Series of the Zenith Fund commenced
operations on May 1, 1987. The Westpeak Value Growth Series and Loomis Sayles
Avanti Growth Series of the Zenith Fund commenced operations on April 30,
1993. The Loomis Sayles Small Cap Series of the Zenith Fund commenced
operations on May 2, 1994. The remaining Zenith Fund Series commenced
operations on October 31, 1994.
The illustrations are based on the actual investment experience of the
relevant Eligible Funds for the periods shown (net of actual charges and
expenses incurred by the Eligible Funds). The illustrations assume that an
initial premium of $50,000 was paid and that no loans, transfers or other
Policy Owner transactions were made during the periods shown.
SUB-ACCOUNT INVESTMENT EXPERIENCE
The Policies are supported by the Variable Account, which invests in the
Eligible Funds. The investment experience of the Sub-Account or Sub-Accounts
you choose will affect the values and benefits of your Policy.
Many factors in addition to investment experience will affect the actual
values and benefits of your Policy. For instance, these investment experience
figures do not reflect the charges deducted from additional Premiums and the
Monthly Deductions from the cash value. (See "Charges and Expenses".)
NET RATES OF RETURN
A Sub-Account's investment experience is expressed below as a net rate of
return. The annual net rate is the effective earnings rate at which the Sub-
Accounts increased or decreased over a one-year period, based on the
investment experience of the relevant Eligible Funds. The rate is calculated
by taking the difference between the Sub-Accounts' ending values and beginning
values of the period and dividing it by the beginning values of the period.
The effective annual net rate of return since inception is the annualized
effective interest rate at which the Sub-Accounts increased or decreased since
the inception dates of the Sub-Accounts. For each Sub-Account, the rate is
calculated by taking the difference between the Sub-Account's ending value and
the value on the date of its inception and dividing it by the value on the
date of inception. This result is the total net rate of return since inception
("Total Return"). The effective annual net rate of return is the rate which,
if compounded annually, would equal the total net rate of return since
inception.
TO BE FILED BY PRE-EFFECTIVE AMENDMENT
POLICY PERFORMANCE
The material below assumes a Policy was issued with an initial premium of
$50,000 paid on August 26, 1983, in the case of the Bond Income and Money
Market Sub-Accounts (May 1, 1987, in the case of the Westpeak Stock Index and
Back Bay Advisors Managed Sub-Accounts; April 30, 1993, in the case of the
Westpeak Value Growth and Avanti Growth Sub-Accounts; May 2, 1994, in the case
of the Small Cap Sub-Account; October 31, 1994, in the case of the Balanced,
International Equity, Equity Growth, Value, U.S. Government and Strategic Bond
Opportunities Sub-Accounts), to a male age 50 in the standard nonsmoker risk
category. The death benefits, cash values and internal rates of return assume
in each instance that the entire Policy value was invested in the particular
Sub-Account for the period shown. These illustrations of policy investment
experience reflect all Policy charges (except for the $2.50 Monthly
Maintenance Charge) based on NEVLICO's current rates. (See Appendix A for the
definition of the internal rate of return.)
TO BE COMPLETED BY PRE-EFFECTIVE AMENDMENT
48
<PAGE>
BOND INCOME SUB-ACCOUNT
<TABLE>
<CAPTION>
MINIMUM INTERNAL RATE
TOTAL GUARANTEED VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
August 26, 1983.........
December 31, 1983.......
December 31, 1984.......
December 31, 1985.......
December 31, 1986.......
December 31, 1987.......
December 31, 1988.......
December 31, 1989.......
December 31, 1990.......
December 31, 1991.......
December 31, 1992.......
December 31, 1993.......
December 31, 1994.......
MONEY MARKET SUB-ACCOUNT
<CAPTION>
INTERNAL RATE
TOTAL MINIMUM VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
August 26, 1983.........
December 31, 1983.......
December 31, 1984.......
December 31, 1985.......
December 31, 1986.......
December 31, 1987.......
December 31, 1988.......
December 31, 1989.......
December 31, 1990.......
December 31, 1991.......
December 31, 1992.......
December 31, 1993.......
December 31, 1994.......
MANAGED SUB-ACCOUNT
<CAPTION>
MINIMUM INTERNAL RATE
TOTAL GUARANTEED VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
May 1, 1987.............
December 31, 1987.......
December 31, 1988.......
December 31, 1989.......
December 31, 1990.......
December 31, 1991.......
December 31, 1992.......
December 31, 1993.......
December 31, 1994.......
</TABLE>
49
<PAGE>
AVANTI GROWTH SUB-ACCOUNT
<TABLE>
<CAPTION>
MINIMUM INTERNAL RATE
TOTAL GUARANTEED VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
April 30, 1993..........
December 31, 1993.......
December 31, 1994.......
SMALL-CAP SUB-ACCOUNT
<CAPTION>
MINIMUM INTERNAL RATE
TOTAL GUARANTEED VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
May 1, 1994.............
December 31, 1994.......
BALANCED SUB-ACCOUNT
<CAPTION>
MINIMUM INTERNAL RATE
TOTAL GUARANTEED VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
October 31, 1994........
December 31, 1994.......
INTERNATIONAL EQUITY SUB-ACCOUNT
<CAPTION>
MINIMUM INTERNAL RATE
TOTAL GUARANTEED VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
October 31, 1994........
December 31, 1994.......
EQUITY GROWTH SUB-ACCOUNT
<CAPTION>
MINIMUM INTERNAL RATE
TOTAL GUARANTEED VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
October 31, 1994........
December 31, 1994.......
VALUE GROWTH SUB-ACCOUNT
<CAPTION>
MINIMUM INTERNAL RATE
TOTAL GUARANTEED VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
April 30, 1993..........
December 31, 1993.......
December 31, 1994.......
</TABLE>
50
<PAGE>
STOCK INDEX SUB-ACCOUNT
<TABLE>
<CAPTION>
MINIMUM INTERNAL RATE
TOTAL GUARANTEED VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
May 1, 1987.............
December 31, 1987.......
December 31, 1988.......
December 31, 1989.......
December 31, 1990.......
December 31, 1991.......
December 31, 1992.......
December 31, 1993.......
December 31, 1994.......
VALUE SUB-ACCOUNT
<CAPTION>
MINIMUM INTERNAL RATE
TOTAL GUARANTEED VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
October 31, 1994........
December 31, 1994.......
U.S. GOVERNMENT SUB-ACCOUNT
<CAPTION>
MINIMUM INTERNAL RATE
TOTAL GUARANTEED VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
October 31, 1994........
December 31, 1994.......
STRATEGIC BOND OPPORTUNITIES SUB-ACCOUNT
<CAPTION>
MINIMUM INTERNAL RATE
TOTAL GUARANTEED VARIABLE OF RETURN ON INTERNAL RATE
PREMIUMS DEATH DEATH CASH NET CASH NET CASH OF RETURN ON
DATE PAID BENEFIT BENEFIT VALUE VALUE VALUE DEATH BENEFIT
- ---- -------- ---------- -------- ----- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
October 31, 1994........
December 31, 1994.......
</TABLE>
51
<PAGE>
APPENDIX C
EXAMPLE OF ADJUSTMENT TO PREMIUM TAX CHARGE RESULTING FROM ADDITIONAL PAYMENTS
As described under "Charges and Expenses," if an additional payment is
accepted, a proportional adjustment will be made in the rate of the state
premium tax charge deducted as part of the Monthly Deduction.
For example, assume that the cash value immediately before acceptance of the
additional payment is $30,000, and the net additional payment would increase
the cash value to $50,000. As a result, the state premium tax charge deducted
monthly as part of the Monthly Deduction would be 60% of what it was
originally, resulting in deductions thereafter at an annual rate of 0.15% for
the state premium tax charge.
52
<PAGE>
APPENDIX D
EXAMPLES OF EFFECT OF SURRENDERS AND PARTIALSURRENDERS ON OPERATION OF POLICY
The following examples assume that an initial premium of $40,000 was paid.
The examples further assume that no additional payments have been made and
that there have been no partial surrenders.
Based on these hypothetical assumptions, the examples demonstrate the effect
of surrenders and partial surrenders on a hypothetical Policy at the beginning
of Policy Year 5, assuming that current cash value is either $60,000 or
$30,000.
THE HYPOTHETICAL CURRENT CASH VALUES OF $60,000 AND $30,000 ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
PERFORMANCE.
SURRENDER CHARGE ON FULL SURRENDER
$60,000 current cash value:
- --------------------------
Preferred Surrender Amount: $20,000
[The maximum of (1) $20,000 (cash value
calculated on the date of surrender, or $60,000,
in excess of the initial premium paid, or
$40,000); and (2) $4,000 (10% of the initial
premium paid, or $40,000)]
Surrender Charge Imposed: $2,000
[5% of $40,000 ($60,000, the amount being
surrendered, less $20,000, the preferred
surrender amount)]
Surrender Proceeds:
$58,000
[$60,000, the cash value of the Policy, less
$2,000, the Surrender Charge]
$30,000 current cash value:
- --------------------------
Preferred Surrender Amount: $4,000
[The maximum of (1) - $10,000 (cash value
calculated on the date of surrender, or $30,000,
in excess of the initial premium paid, or
$40,000); and (2) $4,000 (10% of the initial
premium paid, or $40,000)]
Surrender Charge Imposed: $1,300
[5% of $26,000 ($30,000, or the amount being
surrendered, less $4,000, the preferred surrender
amount)]
Surrender Proceeds:
$28,700
[$30,000, the cash value of the Policy, less
$1,300, the Surrender Charge]
SURRENDER CHARGE ON PARTIAL SURRENDER AND EFFECT ON CASH VALUE
$60,000 current cash value:
- --------------------------
Partial Surrender: $30,000
Preferred Surrender Amount: $20,000
[The maximum of (1) $20,000 (cash value
calculated on the date of surrender, or $60,000,
in excess of the initial premium paid, or
$40,000); and (2) $4,000 (10% of the initial
premium paid, or $40,000)]
Surrender Charge Imposed: $500
[5% of $10,000 ($30,000, the amount being
surrendered, less $20,000, the preferred
surrender amount)]
Surrender Proceeds:
$29,500 ($30,000, the amount being surrendered,
less $500, the Surrender Charge being imposed)
53
<PAGE>
Remaining Cash Value: $30,000
Remaining Initial Premium: $30,000
Remaining Surrender Charge: $1,500 [5% of $30,000]
Remaining Cash Surrender Value:
$28,500
$30,000 current cash value:
- --------------------------
Partial Surrender: $20,000
Preferred Surrender Amount: $4,000
[The maximum of (1) - $10,000 (cash value
calculated on the date of surrender, or $30,000,
in excess of the initial premium paid, or
$40,000); and (2) $4,000 (10% of the initial
premium paid, or $40,000)]
Surrender Charge Imposed:
$800
[5% of $16,000 ($20,000, or the amount being
surrendered, less $4,000, the preferred surrender
amount)]
Surrender Proceeds: $19,200
[$20,000, the amount being surrendered, less
$800, the surrender charge being imposed]
Remaining Cash Value: $10,000
Remaining Initial Premium: $20,000
Remaining Surrender Charge:
$1,000 [5% of $20,000]
Remaining Cash Surrender Value:
$9,000
EFFECT OF PARTIAL SURRENDER ON GUARANTEED DEATH BENEFIT
Making a partial surrender will reduce the amount of the minimum guaranteed
death benefit on a proportionate basis, based on the amount of the reduction
in cash value (including any Surrender Charge) resulting from the partial
surrender, as compared to the cash value before the reduction (but not more
than the partial surrender amount).
Cash Value: $60,000
Partial Surrender: $15,000
Cash Value after Surrender: $45,000
Minimum Guaranteed Death Benefit before partial surrender:
$40,000
[Initial premium paid]
Minimum Guaranteed Death Benefit after partial surrender:
$30,000
[$40,000, or the minimum guaranteed death benefit
before partial surrender, multiplied by $45,000,
the cash value after the partial surrender,
divided by $60,000, the cash value before the
partial surrender]
54
<PAGE>
APPENDIX E
LONG-TERM MARKET TRENDS
The information below is a comparison of the average annual returns of
common stock, high grade corporate bonds and 30-day U.S. Treasury bills over
20-year and 30-year holding periods.* The average annual returns assume the
reinvestment of dividends, capital gains and interest. This is an historical
record and is not intended as a projection of future performance. Charges
associated with a variable life policy are not reflected.
The data indicates that, historically, the investment performance of common
stocks over long periods of time has been positive and has generally been
superior to that of long-term, high grade debt securities. Common stocks have,
however, been subject to more dramatic market adjustments over short periods
of time. These trends indicate the potential advantages of holding a variable
life insurance policy for a long period of time.
Over the 50 20-year time periods beginning in 1926 and ending in 1994 (i.e.,
1926-1945, 1927-1946, and so on through 1975-1994):
-- The average annual return of common stocks was superior to that of high
grade, long-term corporate bonds in 47 of the 50 periods.
-- The average annual return of common stocks surpassed that of U.S.
Treasury bills in each of the 50 periods.
-- Common stock average annual returns exceeded the average annual rate of
inflation in each of the 50 periods.
Over the 40 30-year periods beginning in 1926 and ending in 1994, the
average annual return of common stocks was superior to that of high grade,
long-term corporate bonds, U.S. Treasury bills and inflation in all 40
periods.
From 1926 through 1994 the average annual return for common stocks was
10.2%, compared to 5.4% for high grade, long-term corporate bonds, 3.7% for
U.S. Treasury bills and 3.1% for the Consumer Price Index.
- --------
* Source: Stocks, Bonds, Bills and Inflation 1995 Yearbook(TM), Ibbotson
------------------------------------------------
Associates, Chicago (annually updates work by Roger G. Ibbotson and Rex A.
Sinquefield). Used with permission. All rights reserved.
----------------
SUMMARY: HISTORIC S&P STOCK INDEX RESULTS FOR SPECIFIC HOLDING PERIODS
The following chart categorizes the historical results of the Standard &
Poor's 500 Stock Index with dividends reinvested, over one-year, five-year and
twenty-year periods beginning in 1926 and ending in 1994.
The chart shows that, historically, the longer that a portfolio matching the
S&P 500 Stock Index was held, the less likely was the chance of a loss.
Conversely, the shorter the holding period of such a portfolio, the more
likely was the chance of a loss. The chart also shows that shorter term
results tend to be more extreme than longer term results.
The chart is not a projection or representation of future stock market
results. It cannot be taken as representative of the performance of any one
fund. Rather it shows the historic performance of a broad index of stocks.
----------------
PERCENT OF HOLDING PERIODS WITH THE FOLLOWING RETURNS:
<TABLE>
<CAPTION>
GREATER
THAN
HOLDING NEGATIVE 0-5.00% 5.01-10.00% 10.01-15.00% 15.01-20.00% 20.00%
PERIOD RETURN RETURN RETURN RETURN RETURN RETURN
------- -------- ------- ----------- ------------ ------------ -------
<S> <C> <C> <C> <C> <C> <C>
1 year 29% 4% 12% 7% 12% 36%
5 years 11% 15% 16% 33% 17% 9%
10 years 3% 12% 36% 22% 25% 2%
20 years 0% 6% 34% 54% 6% 0%
</TABLE>
- --------
Source: Stocks, Bonds, Bills and Inflation 1995 Yearbook(TM), Ibbotson
------------------------------------------------
Associates, Chicago (annually updates work by Roger G. Ibbotson and Rex A.
Sinquefield). Used with permission. All rights reserved.
55
<PAGE>
DOLLAR COST AVERAGING
Dollar cost averaging allows a person to take advantage of the historical
long-term stock market results, assuming that they continue, although it does
not guarantee a profit or protect against a loss. If an investor follows a
program of dollar cost averaging on a long-term basis, and the stock fund
selected performs at least as well as the S&P 500 has historically, it is
likely although not guaranteed that the price at which shares are surrendered,
for whatever reason, will be higher than the average cost per share.
An investor using dollar cost averaging invests the same amount of money in
the same professionally managed fund at regular intervals over a long period
of time. Dollar cost averaging keeps an investor from investing too much when
the price of shares is high and too little when the price is low. When the
price of shares is low, the money invested buys more shares. When it is high,
the money invested buys fewer shares. If the investor has the ability and
desire to maintain this program over a long period of time (for example, 20
years), and the stock fund chosen follows the historical upward market trends,
the price at which the shares are sold should be higher than their average
cost. This price could be lower, however, if the fund chosen does not follow
these historical trends.
Investors contemplating the use of dollar cost averaging should consider
their ability to continue the on-going purchases so that they can take
advantage of periods of low price levels.
56
<PAGE>
APPENDIX F
USES OF LIFE INSURANCE
The following are examples of ways in which the Policy can be used to
address certain financial objectives:
FAMILY INCOME PROTECTION
Life insurance may be purchased on the lives of the family income earners to
provide a death benefit to cover final expenses, and continue the current
income to the family. The amount of insurance purchased should be an amount
which will provide a death benefit that when invested outside the policy at a
reasonable interest rate, will generate enough money to replace the
individual's income.
ESTATE PROTECTION
Life insurance may be purchased by a trust on the life of the person whose
estate will incur federal estate taxes upon the person's death. The amount of
insurance purchased would equal the amount of the estimated estate tax
liability. Upon the insured's death, the trustee could make the death proceeds
available to the estate for the payment of estate tax costs.
EDUCATION FUNDING
Life insurance may be purchased on the life of the parent(s) or primary
person funding an education. The amount of insurance purchased should equal
the total education cost projected at a reasonable inflation rate.
In the event of death, the guaranteed death benefit is available to help pay
the education costs. If the insured lives through the education years, the
cash value accumulations may be accessed to help offset the remaining
education costs. Any cash value loans or surrenders will reduce the policy
death benefit.
MORTGAGE PROTECTION
Life insurance may be purchased on the life of the person responsible for
making mortgage payments. The amount of insurance purchased should equal the
mortgage amount. In the event of the insured's death, the guaranteed death
benefit can be used to offset the remaining mortgage balance.
During the insured's lifetime, the cash value accumulations may be accessed
late in the mortgage term to help make the remaining mortgage payments. Any
cash value loans or surrenders will reduce the policy death benefit.
KEY PERSON PROTECTION
Life insurance may be purchased by the business on the life of the key
person in an amount equal to the key person's value, considering salary,
benefits, and contribution to business profits. Upon the key person's death,
the business uses the death benefit to ease the interruption of business
operations and/or to provide a replacement fund for hiring a new executive.
BUSINESS CONTINUATION PROTECTION
Life insurance may be purchased on the life of each business owner in an
amount equal to the value of each owner's business interest. In the event of
death, the guaranteed death benefit may provide the funds needed to carry out
the purchase of the deceased's business interest by the business, or surviving
owners, from the deceased owner's heirs.
RETIREMENT INCOME
Life insurance may be purchased on the life of a family income earner during
his or her working life. If the insured lives to retirement, the cash value
accumulations may be accessed to provide retirement payments. In the event of
the insured's death, the proceeds may be used to provide retirement income to
his or her spouse. Any cash value loans or surrenders will reduce the policy
death benefit.
If you wish to access your Policy's cash value, through loans, surrenders or
partial surrenders, you should consult your tax advisor about possible tax
consequences.
57
<PAGE>
[FINANCIAL STATEMENTS FOR THE VARIABLE ACCOUNT
AND NEVLICO TO BE INCLUDED IN PRE-EFFECTIVE AMENDMENT.]
58
<PAGE>
PART II - OTHER INFORMATION
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
RULE 484 UNDERTAKING
Section 6.4 of NEVLICO's By-Laws provides for indemnification of a
director, officer or employee to the full extent of the law. Generally, Section
145 of the General Corporation Law of the State of Delaware permits
indemnification against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred if the indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation. However, no indemnification shall be made in any
type of action by or in the right of NEVLICO if the proposed indemnitee is
adjudged to be liable for negligence or misconduct in the performance of his
duty to NEVLICO, unless a court determines otherwise.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
NEVLICO pursuant to the foregoing provisions, or otherwise, NEVLICO has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification may be against public policy as expressed in the Act and may be,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by NEVLICO of expenses incurred or paid by
a director, officer, or controlling person of NEVLICO in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, NEVLICO
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
REPRESENTATIONS PURSUANT TO RULE 6e-3(T)
This filing is made pursuant to Rule 6e-3(T) under the Investment Company
Act of 1940.
Registrant elects to be governed by Rule 6e-3(T)(b)(13)(i)(A) under the
Investment Company Act of 1940 with respect to the Policies described in the
Prospectus.
Registrant makes the following representations:
II-1
<PAGE>
(1) Section 6e-3(T)(b)(13)(iii)(F) has been relied upon.
(2) The level of the mortality and expense risk charge is within the range
of industry practice for comparable flexible or scheduled contracts.
(3) Registrant has concluded that there is a reasonable likelihood that
the distribution financing arrangement of the Variable Account will
benefit the Variable Account and Policy owners and will keep and make
available to the Commission on request a memorandum setting forth the
basis for this representation.
(4) The Variable Account will invest only in management investment
companies which have undertaken to have a board of directors, a
majority of whom are not interested persons of the company, formulate
and approve any plan under Rule 12b-1 to finance distribution
expenses.
The methodology used to support the representation made in paragraph (2)
above is based on an analysis of the mortality and expense risk and guaranteed
benefits risk charge contained in other variable life insurance contracts.
Registrant undertakes to keep and make available to the Commission on request
the documents used to support the representation in paragraph (2) above.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement consists of the following papers and documents:
The facing sheet.
A reconciliation and tie of the information shown in the prospectus with
the items of Form N-8B-2.
The prospectus consisting of ___ pages.
The undertaking to file reports.
The Rule 484 Undertaking.
The signatures.
Written consents of the following persons:
Independent Auditors (to be filed by amendment)
H. James Wilson, Esquire (to be filed by amendment)
Rodney J. Chandler, F.S.A., M.A.A.A. (to be filed by amendment)
II-2
<PAGE>
Sutherland, Asbill & Brennan (to be filed by amendment)
The following exhibits:
1.A. (1) January 31, 1983 resolution of the Board of Directors of
NEVLICO**
(2) None
(3)(a) Distribution Agreement between NEVLICO and NELESCO*
(b)(i) Form of Contract between NEVLICO and its General Agents+++
(ii) Form of Contract between NEVLICO and its Agents+++
(c) Commission Schedule for Policies (to be filed by
amendment)
(d) Form of Contract among NES, TNE, NEVLICO and other
broker-dealers++
(4) None
(5)(a) Specimens of Policy
(6)(a) Certificate of Incorporation and By-Laws of NEVLICO**
(b) Amended Certificates of Incorporation dated April 10,
1984, July 25, 1984 and October 9, 1986++
(c) Amended By-laws dated October 12, 1983++
(7) None
(8) Services Agreement among TNE, NEVLICO and NELESCO***
(9) None
(10) Specimens of Applications for Policy
II-3
<PAGE>
2. See Exhibit 3.(i)
3.(i) Opinion and Consent of H. James Wilson, Esquire (to be
filed by amendment)
(ii) Opinion and Consent of Rodney J. Chandler, F.S.A.,
M.A.A.A. (to be filed by amendment)
4. None
5. Inapplicable
6. Consent of Sutherland, Asbill & Brennan (to be filed by
amendment)
7. Powers of Attorney##
8. Inapplicable
9. Form of reinsurance agreement between NEVLICO and New
England Life+
10. Inapplicable
11. Consent of Independent Auditors (to be filed by
amendment)
12. Schedule for computation of performance quotations#
13. Memorandum describing certain procedures, filed
pursuant to Rule 6e-3(T)(b)(12)(iii) (to be filed by
amendment)
27. Financial Data Schedule (to be filed by amendment)
- ------------------
* Filed with Pre-Effective Amendment No. 1 to the Variable Account's Form
S-6 Registration Statement, File No. 2-82838, filed July 28, 1983.
** Filed with the Variable Account's Form S-6 Registration Statement, File
No. 2-82838, filed April 4, 1983.
II-4
<PAGE>
*** Filed with the Variable Account's Form S-6 Registration Statement, File
No. 33-19540, filed January 8, 1988.
+ Filed with Pre-Effective Amendment No. 1 to the Variable Account's Form
S-6 Registration Statement, File No. 33-19540, filed May 13, 1988.
# Filed with Post-Effective Amendment No. 2 to the Variable Account's Form
S-6 Registration Statement, File No. 33-19540, filed April 28, 1989.
## Filed with Post-Effective Amendment No. 4 to the Variable Account's Form
S-6 Registration Statement, File No. 33-66864, filed March 2, 1995.
++ Filed with the Variable Account's Form S-6 Registration Statement, File
No. 33-52050, filed September 16, 1992.
+++ Filed with Pre-Effective Amendment No. 1 to the Variable Account's Form
S-6 Registration Statement, File No. 33-52050, filed January 12, 1993.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
New England Variable Life Separate Account, has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Boston and the Commonwealth of Massachusetts on the
21st day of December, 1995.
New England Variable Life Separate Account
(Registrant)
By: New England Variable Life Insurance Company
(Depositor)
Attest: /s/ Marie C. Swift By: /s/ Rodney J. Chandler
--------------------------- ---------------------------
MARIE C. SWIFT RODNEY J. CHANDLER
CHIEF ACTUARY
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, New England
Variable Life Insurance Company has duly caused this Registration Statement to
be signed on its behalf by the undersigned thereunto duly authorized, and its
seal to be hereunto affixed and attested, all in the City of Boston and the
Commonwealth of Massachusetts, on the 21st day of December, 1995.
[SEAL] New England Variable Life Insurance Company
Attest: /s/ Marie C. Swift By: /s/ Rodney J. Chandler
--------------------------- ---------------------------
MARIE C. SWIFT RODNEY J. CHANDLER
CHIEF ACTUARY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the date(s) set forth below.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
* Chairman, President; Chief Executive December 21,1995
- ------------------------ Officer
Robert A. Shafto
* Vice President - Controller; December 21,1995
- ------------------------ Principal
Chester R. Frost Accounting Officer; Principal
Financial Officer
* Director December 21,1995
- ------------------------
Edward C. Hall
* Director December 21,1995
- ------------------------
Kernan F. King
* Director December 21,1995
- ------------------------
Robert E. Schneider
* Director December 21,1995
- ------------------------
Daniel J. Toran
* Director; General Counsel; Secretary December 21,1995
- ------------------------
H. James Wilson
* Director December 21,1995
- ------------------------
Frederick K. Zimmerman
</TABLE>
II-7
<PAGE>
By: /s/ Rodney J. Chandler Date: December 21, 1995
----------------------------------
RODNEY J. CHANDLER
* Executed by Rodney J. Chandler on behalf of those indicated pursuant to
powers of attorney filed as exhibits incorporated by reference in this
registration statement.
II-8
<PAGE>
NEW ENGLAND VARIABLE
LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Variable Life Policy
- --------------------------------------------------------------------------------
INSURED 1 INSURED 2
JOHN ALDEN PRISCILLA ALDEN
POLICY NUMBER
Specimen
PLAN
Modified Single Premium Variable Survivorship Life
- --------------------------------------------------------------------------------
NEW ENGLAND VARIABLE LIFE INSURANCE COMPANY Agrees to pay THE DEATH BENEFIT OF
THIS POLICY TO THE BENEFICIARY ON RECEIPT OF PROOF THAT THE LAST DEATH OCCURRED;
AND to provide THE OTHER RIGHTS AND BENEFITS OF THE POLICY.
These agreements are subject to all of the provisions of the Policy.
Signed on the Date of Issue
for the Company at its
Administrative Office,
501 Boylston Street
Boston, MA 02117
Robert A. Shafto
President
H. James Wilson
Secretary
MODIFIED SINGLE PREMIUM VARIABLE SURVIVORSHIP LIFE POLICY
. The death proceeds are payable when the Last Death occurs, if the Policy is
in force.
. Additional Payments can be made. (See Section 8.)
. The Policy does not share in dividends.
THE DEATH BENEFIT ON THE POLICY DATE WILL BE EQUAL TO THE AMOUNT SHOWN IN
SECTION 1. THEREAFTER, THE DEATH BENEFIT CAN VARY FROM DAY TO DAY. IT CAN
INCREASE OR DECREASE, DEPENDING ON SEPARATE INVESTMENT ACCOUNT PERFORMANCE; BUT
IT WILL NOT BE LESS THAN THE MINIMUM GUARANTEED DEATH BENEFIT FOR THE POLICY.
SEE SECTION 7.
THE CASH VALUE OF THIS POLICY CAN VARY FROM DAY TO DAY. IT CAN INCREASE OR
DECREASE, DEPENDING ON SEPARATE INVESTMENT ACCOUNT PERFORMANCE. SEE SECTION 11.
PLEASE READ YOUR POLICY CAREFULLY
This Policy is a legal Contract between you and the Company.
RIGHT TO RETURN THE POLICY WHEN THIS POLICY IS ISSUED YOU SHOULD EXAMINE IT. YOU
CAN RETURN THE POLICY TO THE COMPANY OR ITS AGENT FOR ANY REASON WITHIN 10 DAYS
AFTER YOU RECEIVE IT FROM THE COMPANY. IF YOU RETURN THE POLICY: AN AMOUNT EQUAL
TO ANY PREMIUM PAID WILL BE REFUNDED TO YOU; AND THE POLICY WILL BE CANCELLED
FROM THE START.
- --------------------------------------------------------------------------------
NEV-11
<PAGE>
- --------------------------------------------------------------------------------
Policy Provisions
Section
1 Policy Schedule
2 Table of Guaranteed Maximum
Cost of Insurance Rates Per $1,000
3 Table of Net Single Premiums
4 Accounts Available
5 Contract
6 The Variable Account
7 Death Benefit
8 Premiums
9 Monthly Deduction
10 Reinstatement After Lapse
11 Cash Value of the Policy
12 Surrender of the Policy
13 Policy Loans
14 Exchange of Policy
15 Owner and Beneficiary
16 Payment of Benefits
17 Payment Options
18 Life Income Tables
. Riders, if any
. Amendments and Endorsements
. Copy of the Application
Alphabetical Guide
Section
4 Accounts
8 Additional Payments
1,5 Age of Insured
15 Assignments
15 Beneficiary
16 Benefits, Payment of
11 Cash Value
5 Claims of Creditors
5 Contestable
5 Contract
1,5 Date of Issue
1,5 Date, Policy
7 Death Benefit
14 Exchange of Policy
1 Face Amount
12 Full Surrender
9 Grace Period
2 Insurance Rates
11 Investment Return
5 Last Death
17,18 Life Income Options
18 Life Income Tables
1 Loan Interest Rate
13 Loans, Policy
7 Minimum Guaranteed Death Benefit
9 Monthly Deduction
8 Net Additional Payments
11 Net Cash Value
3 Net Single Premiums
15 Owner
12 Partial Surrender
17 Payment Options
5 Periodic Reports
13 Policy Loan Balance
5 Postponement of Payments
8 Premiums
10 Reinstatement
1 Schedule, Policy
6 Sub-Accounts
5 Suicide
1,12 Surrender Charge
12 Surrender of the Policy
6 Variable Account
- --------------------------------------------------------------------------------
NEV-11
<PAGE>
NEW ENGLAND VARIABLE
LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
1. Policy Schedule OWNER AND BENEFICIARY
As named in the Application
or as later changed.
See the Owner and
Beneficiary Section
of the Policy.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POLICY NUMBER INSURED 1 AGE INSURED 1 SEX INSURED 2 AGE INSURED 2 SEX
<S> <C> <C> <C> <C>
Specimen 35 Male 35 Female
POLICY DATE DATE OF ISSUE Joint Equal AGE
January 1, 1996 January 1, 1996 35
POLICY LOAN INTEREST RATE
6%
- --------------------------------------------------------------------------------------
SCHEDULE OF BENEFITS
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Modified Single Premium Variable Survivorship Life
<S> <C>
Face Amount (Minimum Guaranteed Death Benefit) $10,000
Initial Death Benefit $54,959
- --------------------------------------------------------------------------------------
SCHEDULE OF PREMIUMS
- --------------------------------------------------------------------------------------
Initial Premium $10,000
- --------------------------------------------------------------------------------------
SCHEDULE OF CHARGES
- --------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
. Maximum Monthly Charges Based on Cash Value
<S> <C>
. Maximum Sales Charge 1/12 of .40% for 10 years
. Maximum Administrative Charge 1/12 of .35% in all years
. Maximum Premium Tax Charge 1/12 of .25% for 10 years
. Maximum Mortality and Expense Risk 1/12 of .90% in all years
Charge
. Maximum Monthly Cost of Insurance Charge See Section 2.
. Maximum Monthly Maintenance Charge $2.50 until the total of the initial
premium plus all Additional Payments
is at least equal to $50,000
. Maximum Premium Expense Charge for 9% of Payment
Additional Payments
- --------------------------------------------------------------------------------------
</TABLE>
H. James Wilson
Secretary
<PAGE>
NEW ENGLAND VARIABLE
LIFE INSURANCE COMPANY
- -------------------------------------------------------------------------------
1. Policy Schedule (Second Page) OWNER AND BENEFICIARY
As named in the Application
or as later changed.
See the Owner and
Beneficiary Section
of the Policy.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POLICY NUMBER INSURED 1 AGE INSURED 1 SEX INSURED 2 AGE INSURED 2 SEX
<S> <C> <C> <C> <C>
Specimen 35 Male 35 Female
POLICY DATE Date of Issue JOINT EQUAL AGE
January 1, 1996 January 1, 1996 35
POLICY LOAN INTEREST RATE
6%
- --------------------------------------------------------------------------------
SCHEDULE OF CHARGES (Continued)
- --------------------------------------------------------------------------------
</TABLE>
. Surrender Charge: The initial premium is subject to a Surrender Charge
for 9 years (see Section 12).
<TABLE>
<CAPTION>
During Year Charge
<S> <C>
1 8.0%
2 8.0
3 7.0
4 6.0
5 5.0
6 4.0
7 3.0
8 2.0
9 1.0
10 0
</TABLE>
- --------------------------------------------------------------------------------
H. James Wilson
Secretary
<PAGE>
NEW ENGLAND VARIABLE
LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
2. Table of Guaranteed Maximum Cost of Insurance Rates per $1,000
Based on the 1980 CSO Smoker Table
- --------------------------------------------------------------------------------
POLICY NUMBER
Specimen
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POLICY YEAR MONTHLY RATE POLICY YEAR MONTHLY RATE
<S> <C> <C> <C>
1 0.0005 34 1.4354
2 0.0015 35 1.6251
3 0.0028 36 1.8429
4 0.0045 37 2.1019
5 0.0066 38 2.4097
6 0.0093 39 2.7705
7 0.0126 40 3.1850
8 0.0166 41 3.6474
9 0.0215 42 4.1481
10 0.0272 43 4.6795
11 0.0341 44 5.2445
12 0.0421 45 5.8568
13 0.0514 46 6.5343
14 0.0624 47 7.2932
15 0.0752 48 8.1462
16 0.0903 49 9.1093
17 0.1081 50 10.1455
18 0.1293 51 11.2350
19 0.1545 52 12.3639
20 0.1836 53 13.5319
21 0.2170 54 14.7443
22 0.2545 55 15.9880
23 0.2959 56 17.3320
24 0.3416 57 18.7629
25 0.3930 58 20.3521
26 0.4527 59 22.2335
27 0.5233 60 24.7419
28 0.6085 61 28.5011
29 0.7102 62 34.5389
30 0.8283 63 44.7909
31 0.9611 64 62.0017
32 1.1076 65 83.3333
33 1.2649 Thereafter 0
</TABLE>
- --------------------------------------------------------------------------------
H. James Wilson
Secretary
<PAGE>
NEW ENGLAND VARIABLE
LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
3. Table of Net Single Premiums
- --------------------------------------------------------------------------------
POLICY NUMBER
Specimen
- -------------------------------------------------------------------------------
The Table below shows the rate for the policy month which starts on the Policy
Date or a policy anniversary. The rates during each policy month reflect elapsed
time. See Section 7.
<TABLE>
<CAPTION>
NET SINGLE PREMIUMS PER $1.00
POLICY MONTH MONTHLY RATE POLICY MONTH MONTHLY RATE
<S> <C> <C> <C>
1 $0.18195 34 $0.59047
2 0.18923 35 0.60701
3 0.19678 36 0.62359
4 0.20462 37 0.64018
5 0.21277 38 0.65666
6 0.22121 39 0.67295
7 0.22997 40 0.68892
8 0.23905 41 0.70449
9 0.24846 42 0.71959
10 0.25821 43 0.73424
11 0.26829 44 0.74847
12 0.27872 45 0.76230
13 0.28950 46 0.77575
14 0.30064 47 0.78879
15 0.31213 48 0.80137
16 0.32399 49 0.81340
17 0.33621 50 0.82480
18 0.34879 51 0.83555
19 0.36173 52 0.84572
20 0.37500 53 0.85539
21 0.38862 54 0.86468
22 0.40256 55 0.87370
23 0.41682 56 0.88264
24 0.43141 57 0.89162
25 0.44632 58 0.90086
26 0.46155 59 0.91063
27 0.47708 60 0.92116
28 0.49286 61 0.93258
29 0.50885 62 0.94477
30 0.52501 63 0.95734
31 0.54127 64 0.96940
32 0.55760 65 0.97904
33 0.57400 Thereafter 1.00000
</TABLE>
- --------------------------------------------------------------------------------
H. James Wilson
Secretary
<PAGE>
NEW ENGLAND VARIABLE
LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
4. Sub-accounts Available on 1/1/96
- --------------------------------------------------------------------------------
POLICY NUMBER
Specimen
- --------------------------------------------------------------------------------
Back Bay Advisors Money Market
Back Bay Advisors Bond Income
Back Bay Advisors Managed
Westpeak Stock Index
Westpeak Value Growth
Loomis Sayles Avanti Growth
Loomis Sayles Balanced
Loomis Sayles Small Cap
Draycott International Equity
Salomon Brothers U.S. Government Bond
Salomon Brothers Strategic Bond Opportunities
Venture Value
Alger Equity Growth
- -------------------------------------------------------------------------------
H. John Wilson
Secretary
<PAGE>
- --------------------------------------------------------------------------------
5. Contract
THE CONTRACT
This Policy is a legal contract between the Owner of the Policy (called "you")
and New England Variable Life Insurance Company, a Delaware corporation, (called
"the Company"). The Policy, which includes the attached Application, is the
entire contract between you and the Company. All riders are listed in Section
1. A change in or waiver of the provisions of the Policy must be signed by the
President or the Secretary of the Company to be valid.
PAYMENTS UNDER THE CONTRACT
All contract amounts are in dollars of the United States of America. Payments by
the Company under the contract will be made at the Administrative Office of the
Company. The obligations of the Company are subject to all payments made and
actions taken by the Company under the Policy before receipt by the Company at
its Administrative Office of proof of death of both Insureds.
DATES
Policy years, months and anniversaries are all measured from the Policy Date.
Contestable and suicide periods start on the Date of Issue. The Policy Date and
the Date of Issue are shown in Section 1.
LAST DEATH
The Last Death is the later of: the death of Insured 1; and the death of Insured
2.
NOT CONTESTABLE AFTER TWO YEARS
Insurance is issued by the Company in reliance on the statements made in the
Application for the insurance. Those statements are representations; they are
not warranties. No statement can be used to contest or rescind insurance or to
defend against a claim unless contained in the Application for the insurance.
The insurance issued under this Policy will not be contestable after it has been
in force during the life of the Insured:
. With respect to the amount of Death Benefit which results from the initial
premium for two years from the Date of Issue; and
. With respect to any amount of Death Benefit which results from an Additional
Payment for which proof of insurability is required, for two years from the
date that Payment is received.
SUICIDE WITHIN TWO YEARS
If either of the Insureds die by suicide while sane or insane within two years
from the Date of Issue, the Death Benefit will be limited to: the amount of the
initial premium; plus any Additional Payments made; less any Policy Loan Balance
; and less any partial surrenders. The Policy will terminate as of the first
death by suicide.
Within 60 days after the first death by suicide, the Owner can purchase new life
insurance on an Eligible Insured without evidence of insurability. For purposes
of this provision, an Eligible Insured is a surviving Insured on whom the
Company would have issued a single life policy on the Policy Date of this
Policy. The new policy will be issued:
. On a plan of single life variable insurance agreed to and issued by the
Company on the Policy Date of the new policy, if the issue age on the new
policy is age 75 or younger;
. On a single life Ordinary Life plan with a level face amount issued by
England Mutual Life Insurance Company on the Policy Date of the new policy,
if the issue age on the new policy is greater than 75;
. On a policy form and at rates in use on the Policy Date by the company
issuing the new policy;
. Subject to any assignments and limitations to which this Policy is subject;
. With a Policy Date and Date of Issue the same as the date of the first death
by suicide under this Policy;
. Based on the underwriting class to which the Eligible Insured was assigned
by the Company on the Policy Date of this Policy;
. At the age of the Eligible Insured; and
. With a Face Amount equal to the Face Amount of this Policy plus the amount
of any single life term rider for the Eligible Insured under this Policy.
<PAGE>
Riders can be added to the new policy only with the consent of the company
issuing the new policy. Application for the new policy must be: in writing;
signed by the Owner and by the Eligible Insured; and received by the company
issuing the new policy within 60 days after the date of the first death by
suicide. However, a death benefit for the Eligible Insured's death will be paid
as if the new policy had been issued: if that Insured dies within this 60 day
period; and before the application for a new policy is received by the company
issuing the new policy; and if the new policy is a variable life policy,
assuming all premiums for the new policy were allocated to the Money Market sub-
account and the death benefit option in effect would result in the smallest
amount of death proceeds.
NOTIFICATION OF FIRST DEATH
The Company should be notified immediately when the first death occurs. Even if
the Company continues to accept payments made after the first death, the Company
retains the right: to contest the Policy under the Not Contestable After Two
Years provision; or to limit benefits and terminate the Policy under the Suicide
Within Two Years provision.
AGE OF INSURED
The age of an Insured on the Policy Date and on each policy anniversary means
the age at the last birthday of that Insured.
If the age or sex of either of the Insureds has not been correctly stated in the
Application, the Death Benefit will be the amount that the most recent Monthly
Deduction which was made would have provided for the correct age and sex.
JOINT EQUAL AGE
The Joint Equal Age on the Policy Date and on policy anniversaries reflects the
age of each Insured. If an Insured has died, the age of that Insured will be
the age he or she would have been if he or she was still alive. Therefore, the
death of one Insured will not impact the Joint Equal Age. Between
anniversaries, joint equal age means joint equal age on the last anniversary
plus elapsed time.
CLAIMS OF CREDITORS
The Policy and payments under it are exempt from the claims of creditors to the
extent allowed by law.
BASIS OF VALUES
"1980 CSO" means Commissioners 1980 Standard Ordinary; it is used to describe
mortality tables. Minimum Cash Values, Reserves and Guaranteed Insurance Factors
are based on the mortality table shown in Section 2. Interest is compounded
daily at the effective rate of 4% per year. A detailed statement of the method
of computing values has been filed, where required, with the Insurance
Department of the state in which the Policy is delivered. All values are equal
to or in excess of the minimum values required by the law of that state.
PERIODIC REPORTS
The Company will send you all reports required by law and regulation. Such
reports will be sent at least once each year or more often if required by law or
regulation. The annual report will include, as of the date for which the report
is made: the Death Benefit; the Cash Value; any Policy Loan Balance; and any
other information required by law or regulation.
POLICY ILLUSTRATION OF BENEFITS AND VALUES
Upon written request the Company will send you a policy illustration which will
illustrate benefits and values under the Policy.
POSTPONEMENT OF VARIABLE BENEFITS
Except for a Policy Loan that will be used to pay premiums on policies issued by
the Company, the Company can postpone the determination of and the payment or
transfer of amounts based on separate investment account performance if:
. The New York Stock Exchange is closed for trading (except for normal weekend
and holiday closing) or when trading is restricted; or
. The Securities and Exchange Commission determines that a state of emergency
exists which may make payment or transfer impractical; or
. The Securities and Exchange Commission orders the Variable Account or orders
the New England Zenith Fund or its successor or any other investment company
in which the Variable Account is invested to postpone payment or transfer of
variable benefits.
<PAGE>
- --------------------------------------------------------------------------------
6. The Variable Account
THE VARIABLE ACCOUNT
The Variable Account (called "the Account") is a separate investment account
established by the Company in accordance with Delaware law. The assets of the
Account are owned by the Company. The assets of the Account will be used to
provide values and benefits under this Policy and similar policies. The portion
of the Account assets equal to the reserves plus other policy liabilities of the
Account is not chargeable with liabilities arising out of any other business the
Company may conduct. The Company reserves the right to transfer to its general
account Variable Account assets which exceed the total of reserves and other
liabilities of the Account. Income and realized and unrealized capital gains
and losses of the Account are credited to the Account without regard to any of
the Company's other income or capital gains and losses.
SUB-ACCOUNTS
The Account consists of sub-accounts, each of which is invested in shares of one
portfolio of the New England Zenith Fund or its successor or any other
investment company in which the Account is invested. Shares of a portfolio are
purchased for a sub-account at their net asset value.
The Policy's first investment is made in the Money Market sub-account as of the
latest of:
. The Policy Date;
. The date of the last Part II of the Application, if any is required; and
. The date the initial premium is received by the Company.
The Policy's Cash Value will be transferred, based on your choice, to the sub-
accounts 15 days after the Company mails the Confirmation for the initial
premium. Before this transfer, the values and benefits of the Policy will depend
on the net investment performance of the Money Market sub-account. After this
transfer each Net Additional Payment allocated to the Account will be invested
as of the date it is received by the Company at its Administrative Office in the
sub-accounts you chose.
Each distribution of income, dividends and capital gains from a portfolio to a
sub-account will be reinvested for the benefit of the owners of the policies in
that sub-account at net asset value in shares of the portfolio which made the
distribution.
The Cash Value of the Policy at any time cannot be allocated among more than 10
sub-accounts, except with the consent of the Company.
The values and benefits of a policy depend on the investment performance of the
portfolios in which the sub-accounts are invested. The Company does not
guarantee the investment performance of the portfolios of the sub-accounts. You
bear the investment risk for amounts invested in the sub-accounts for your
Policy.
CHOICE OF SUB-ACCOUNTS
You choose the sub-accounts in which the initial premium and Net Additional
Payments are to be invested. You can change the choice for future Net Additional
Payments at any time by notice to the Company. The change will be effective as
of the date the request is received by the Company at its Administrative Office.
The portion of the initial premium and the Net Additional Payments to be applied
to each sub-account chosen must be a whole percent not less than 10.
See Section 4. Also, the portfolios are listed in the then current prospectus
for the Account.
<PAGE>
CHANGE IN PORTFOLIOS
The Company can add or remove portfolios as sub-account investments as permitted
by law. When a change is made, the Company will send you: a revised prospectus
for the Account which will describe all of the portfolios then available in the
New England Zenith Fund or its successor or any other investment company in
which the Account is invested; and any notice required by law.
When a portfolio is removed, the Company has the right to substitute a different
portfolio in which the sub-account will then invest:
. The value of the removed portfolio; and
. Future Net Additional Payments applied to that sub-account.
TRANSFER OPTION
You can transfer all or a portion of the Policy's existing share of a sub-
account to another sub-account, subject to the Company's published maximum for
transfers after 15 days from the date the Company mails the Confirmation for the
initial premium. Requests for transfers can be made in writing or by telephone.
The Company is not responsible for determining the authenticity of transfer
instructions received by telephone. The Company will send you a confirmation of
any transfers made. Except with the consent of the Company, transfers will be
subject to a limit of 4 in each policy year and must be at least $100.
CHANGE OF INVESTMENT POLICY
The investment policy of the Account will not be changed unless: (a) the change
has been approved by the Insurance Commissioner of the state of Delaware; and
(b) a statement of the approval process has been filed with the Insurance
Department of the state in which this Policy is delivered, if required. If the
investment policy of the Account is changed, the Company will give you written
notice of the change. You can then choose to convert this Policy to fixed
benefit coverage. The conversion will be on the same basis as that described in
the Exchange of Policy section. (See Section 14.) Your request to convert this
Policy must be made within 60 days of the later of: (a) the effective date of
the investment policy change; or (b) the date you receive the notice of the
change.
RIGHTS RESERVED BY THE COMPANY
The Company reserves the right to take certain actions subject to compliance
with law including, if required, the approval of the owners of the policies.
These actions are: (a) to create new investment accounts; (b) to combine any two
or more separate investment accounts, including the Account; (c) to invest some
or all of the assets of the Account other than in the New England Zenith Fund;
(d) to invest some or all of the assets of the Account in any other investment
company chosen by New England Variable Life Insurance Company; (e) to remove a
portfolio in which the sub-account is invested or to substitute a different
portfolio; (f) to operate the Account as a management investment company and to
charge investment advisory fees under the Investment Company Act of 1940 or to
operate the Account in any other form permitted by law; and (g) to deregister
the Account under the Investment Company Act of 1940 if registration is no
longer required.
<PAGE>
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7. Death Benefit
DEATH BENEFIT
The Company will pay a Death Benefit to the Beneficiary upon receipt of proof
that the Last Death occurred. The amount of the Death Benefit will be calculated
as of the date of the Last Death. The amount payable will be reduced by: any
Policy Loan Balance; and by an amount to cover Monthly Deductions to the date of
the Last Death. The policy proceeds will be paid in one sum unless all or part
of the proceeds is applied to a Payment Option. (See Payment of Benefits,
Section 16.)
The Death Benefit is equal to the greater of:
. The Minimum Guaranteed Death Benefit (see below); and
. The Cash Value of the Policy divided by the Net Single Premium. (See Section
3.)
MINIMUM GUARANTEED DEATH BENEFIT
On the Policy Date, the Minimum Guaranteed Death Benefit is equal to the initial
premium shown in Section 1. Thereafter, the Minimum Guaranteed Death Benefit
will be: increased by each Additional Payment made; and decreased when any Cash
Value is surrendered. The reduction at the time of a partial surrender will be
based on the ratio of the Cash Value after the surrender to the Cash Value
before the surrender.
Also, at the end of the last day of the fifth policy year and every five years
thereafter, until the Joint Equal Age is 75, the Minimum Guaranteed Death
Benefit will be recalculated. On each of these days the Minimum Guaranteed
Death Benefit is equal to the greater of: the Minimum Guaranteed Death Benefit
before the recalculation; and the Cash Value on the date of recalculation.
8. Premiums
PAYMENT
The initial premium is payment made to the Company to pay for the Policy. The
Policy will not be in force until the initial premium is paid. After the first
policy year, Additional Payments can be made. Payments can be made at the
Administrative Office of the Company or at any Agency of the Company. A receipt
for payment signed by the Secretary of the Company will be given on request.
The Company will send you a Confirmation of the initial premium and of any
Additional Payments.
Unless you request otherwise in writing to the Company, any payment received by
the Company when a Policy Loan exists on the Policy will be used: first, as
payment of the loan interest due; second, as a repayment of the Policy Loan; and
third, as an Additional Payment, subject to the limits stated below.
Cash Values and Death Benefits will be permanently affected by the amount of the
initial premium and the amount of any Additional Payments.
ADDITIONAL PAYMENTS
Additional Payments can be made after the first policy year. Except as stated
in the Grace Period provision (see Section 9), no Additional Payments can be
made at and after age 100. Unless the Company consents otherwise, Additional
Payments are subject to the following limits:
. No Additional Payment can be less than $1,000;
. Only one Additional Payment can be made in any policy year; and
. No Additional Payment can be made if it increases the Death Benefit by
more than it increases the Cash Value, except with evidence of insurability
and the consent of the Company.
The Maximum Premium Tax Charge rate will be reduced to reflect the increase in
Cash Value as a result of any Additional Payment.
This Policy is intended to qualify as a flexible premium life insurance contract
under the Internal Revenue Code and any interpretive regulation or rulings by
the Internal Revenue Service.
NET ADDITIONAL PAYMENTS
Each Net Additional Payment is equal to: the Additional Payment; less no more
than the Maximum Premium Expense Charge for
Additional Payments shown in Section 1.
<PAGE>
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9. Monthly Deduction
MONTHLY DEDUCTION
The Company will make a Monthly Deduction from the Cash Value of this Policy on
the last day of each policy month. (See Monthly Deduction Adjustment below.) The
amount of the Monthly Deduction for a policy month is equal to:
. The cost of insurance for the policy month;
PLUS
. An amount not greater than: the Cash Value of the Policy at the end of the
last day of the policy month; times the Maximum Monthly Charges Based on
Cash Value shown in Section 1;
PLUS
. An amount not greater than the Maximum Monthly Maintenance Charge shown in
Section 1;
PLUS
. The cost of any riders for the policy month.
The Monthly Deduction will be made as long as the Net Cash Value is enough to
cover the entire Monthly Deduction. If a Policy Loan Balance exists and the Net
Cash Value is not enough to cover the entire Monthly Deduction, the grace period
will begin. (See the Grace Period provision below and Section 13.) This
provision will not continue any rider beyond the termination date as provided in
the rider.
The Monthly Deduction will be deducted in the same proportion as the Cash Value
of the Policy is in the sub-accounts.
COST OF INSURANCE
The maximum monthly cost of insurance for the Policy is equal to: the Amount at
Risk; times the cost of insurance rate per $1,000 for that month divided by
1,000. The Amount at Risk is equal to:
. The Death Benefit on the first day of the policy month;
LESS
. The Cash Value on the first day of the policy month, accumulated with
interest to the end of the month at the monthly equivalent of 4% per year;
LESS
The maximum monthly cost of insurance.
COST OF INSURANCE RATES
The cost of insurance rates will be based on the expectations of the Company as
to future experience with regard to investment earnings, mortality, expenses and
lapse rates.
The Table of Guaranteed Maximum Cost of Insurance Rates per $1,000 (see Section
2) shows the maximum guaranteed rate for each policy month which starts on the
Policy Date or a policy anniversary. The rates between anniversaries vary
monthly based on the assumption of uniform distribution of deaths throughout the
policy year. The Maximum Guaranteed Cost of Insurance Rates for each policy year
are based on the sexes, the underwriting classes and the ages of the Insureds on
the first day of the policy year.
MONTHLY DEDUCTION ADJUSTMENT
If the Policy is partially or fully surrendered, a Monthly Deduction to the date
of surrender will be deducted from the surrender proceeds (See Section 12.) If
policy proceeds become payable, a Monthly Deduction to the date of the Last
Death will be deducted from the policy proceeds. (See Section 7.)
GRACE PERIOD
If a Policy Loan Balance exists and the Net Cash Value is not enough to cover
the entire Monthly Deduction for that month, the Company will mail a notice to
you and any assignee at the addresses on record with the Company. There is a
grace period of 62 days from the date when the Monthly Deduction was due in
which to make an Additional Payment large enough to permit the Monthly Deduction
to be made. The insurance remains in force during the grace period. If the
Additional Payment remains unpaid at the end of its 62-day grace period, the
Policy will lapse without value. Any riders will also lapse without value unless
otherwise stated in the rider.
<PAGE>
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10. Reinstatement After Lapse
REINSTATEMENT
If the Policy lapses, the Policy and riders can be reinstated. (See Limitations
on Reinstatement below.) Reinstatement is subject to:
. Written application to reinstate;
. Proof that both Insureds are insurable in the same underwriting class
as this Policy, except with the consent of the Company;
. Payment of an Additional Payment (see Section 8) large enough to keep
the Policy and any riders in force for at least three months; and
. Payment or reinstatement of any Policy Loan Balance which existed on
the date when the Policy lapsed.
LIMITATIONS ON REINSTATEMENT
The Policy and riders cannot be reinstated, except with the consent of the
Company, if more than seven years have passed since the date of lapse.
Any rider which provides life or disability insurance on a person other than the
Insureds can be reinstated only as stated in the rider.
EFFECTIVE DATE OF REINSTATEMENT
Reinstatement will take effect: only if the application for reinstatement is
approved by the Company; and only when the Additional Payment for reinstatement
has been paid, provided that at the time of payment there has been no change in
insurability as represented in the application for reinstatement.
SURRENDER CHARGE AT AND AFTER REINSTATEMENT
If a Surrender Charge was applied when the Policy lapsed, and if the Policy is
later reinstated, the Surrender Charge will be credited to the Cash Value of the
Policy. The Surrender Charge on the date of reinstatement will be the same as it
was on the date of lapse. For the purpose of determining the Surrender Charge
on any date after reinstatement, the period the Policy was lapsed will not
count.
MAXIMUM MONTHLY CHARGES AFTER REINSTATEMENT
For the purpose of determining the Maximum Sales Charge and the Maximum Premium
Tax Charge on any date after reinstatement, the period the Policy was lapsed
will not count.
MINIMUM GUARANTEED DEATH BENEFIT AFTER REINSTATEMENT
For the purpose of determining the dates on which the Minimum Guaranteed Death
Benefit will be recalculated, the period the Policy was lapsed will count. If
the Minimum Guaranteed Death Benefit would have been recalculated during the
period which the Policy was lapsed, it will be recalculated upon reinstatement.
<PAGE>
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11. Cash Value of the Policy
CASH VALUE
The initial premium will be credited to the Policy as of the latest of:
. The Policy Date;
. The date of the last Part II of the Application for the Policy, if any
is required; and
. The date the initial premium is received by the Company.
Each future Net Additional Payment will be credited to the Cash Value as of the
date it is received by the Company.
The Cash Value of the Policy will depend on the net investment performance of
the Money Market sub-account until 15 days after the Company mails the
Confirmation for the initial premium. Thereafter, the Cash Value of the Policy
is equal to:
. The Policy's share of the chosen sub-accounts;
PLUS
. The amount of any assets transferred to the general account of the
Company because of Policy Loans; plus any interest earned on those assets
which has not been transferred to the sub-accounts. (See Section 13.)
The amount of the Cash Value depends on: the amount of the initial premium; the
amount of Net Additional Payments ; investment performance of the chosen sub-
accounts; Monthly Deductions; partial surrenders; transfers among sub-accounts;
and Policy Loans. The Cash Value can increase or decrease on a daily basis,
depending on the actual investment performance of the chosen sub-accounts. (See
Actual Investment Return below.)
The Cash Value of the Policy is not increased by the cash value of any rider,
unless stated in the rider.
NET CASH VALUE
The Net Cash Value is equal to:
. The Cash Value of the Policy
LESS
. Any Policy Loan Balance;
LESS
The Surrender Charge that would apply upon surrender, whether or not there is a
surrender. (See Sections 1 and 12.)
ACTUAL INVESTMENT RETURN
The Policy has an Actual Investment Return for each Valuation Period for its
share of each chosen sub-account. The Policy's Actual Investment Return for
each sub-account for each Valuation Period is equal to (a) minus (b); where:
. (a) is equal to the Policy's share of the sub-account as of the end of
Valuation Period;
PLUS
any Monthly Deduction deducted in the Valuation Period;
LESS
any Net Additional Payment credited during the Valuation Period;
PLUS
the total amount deducted for partial surrenders made during the Valuation
Period;
LESS
the amount of money transferred into the sub-account during the Valuation
Period;
PLUS
the amount of money transferred out of the sub-account during the Valuation
Period;
LESS
the portion of each loan repayment made during the Valuation Period
allocated to the sub-account;
PLUS
the portion of each Policy Loan which was transferred from the sub-account
to the general account during the Valuation Period;
PLUS
the interest credited during the Valuation Period to any borrowed portion of
the Policy's Cash Value;
PLUS or LESS
a charge or credit for the Policy's share of any reserve for taxes which the
Company determines to apply to the sub-account; and
. (b) is equal to the Policy's share of the sub-account as of the end of
the most recent Valuation Period;
PLUS or LESS
a charge or credit for the Policy's share of any reserve for taxes which the
Company determines to apply to the sub-account.
<PAGE>
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VALUATION PERIODS AND VALUATION DATES
A Valuation Period for each sub-account is a period:
. Which starts on a Valuation Date; and
. Which ends on the next succeeding Valuation Date.
Each day the New York Stock Exchange is open for trading is a Valuation Date.
<PAGE>
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12. Surrender of the Policy
SURRENDER OF THE POLICY
You can make a partial or full surrender subject to the provisions below.
Surrender proceeds will be paid to you in one sum, unless you choose in writing
to apply all or part to a Payment Option. (See Payment of Benefits, Section 16.)
FULL SURRENDER
You can fully surrender the Policy at any time by notice to the Company in
writing. The surrender proceeds will be equal to: the Net Cash Value; less a
Monthly Deduction to the date of surrender. Upon full surrender, the Policy will
be cancelled.
PARTIAL SURRENDER
You can make a partial surrender by written request to the Company any time
after 15 days from the date the Company mails the Confirmation for the initial
premium. In each policy year, partial surrenders will be limited, except with
the consent of the Company, to: 20% of the Net Cash Value on the day the first
partial surrender is made for the policy year; or, if less, the Loan Value less
any Policy Loan Balance. Except with the consent of the Company: each partial
surrender must be at least $500; and the Cash Value which will remain after the
partial surrender must be at least $10,000.
The following amount will be equal to the surrender proceeds when a partial
surrender is made:
. The amount of the partial Cash Value surrendered;
LESS
. Any applicable Surrender Charge (See below.);
LESS
. A Monthly Deduction to the date of the partial surrender.
A partial surrender will reduce the Policy's portion of the sub-accounts
proportionately.
The Death Benefit of the Policy will be permanently affected by a partial
surrender. The Minimum Guaranteed Death Benefit for the Policy will be reduced
based on the ratio of the Cash Value after the surrender to the Cash Value
before the surrender.
SURRENDER CHARGE
A Surrender Charge may apply to certain partial or full surrenders. A Surrender
Charge is based on the initial premium only. The Charge will be calculated as
if: the excess of the Cash Value over the sum of the initial premium paid plus
any Additional Payments made is surrendered first; any Additional Payments are
surrendered second; and the initial premium is surrendered last.
A portion of the Cash Value will be exempt from any Surrender Charge. The
exempt amount will be the greater of:
. 10% of the initial premium; less any partial surrenders in that policy
year; and
. The Cash Value less: the initial premium; less any prior partial
surrenders attributable to the initial premium.
The amount of the Surrender Charge depends on the policy year in which the
surrender occurs and is applied at the rate shown in Section 1. In no event
will the Surrender Charge plus the Sales Charge exceed 9% of the initial
premium.
<PAGE>
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13. Policy Loans
POLICY LOANS
You can borrow all or part of the Loan Value of the Policy by request, in a
manner satisfactory to the Company. Unless the Company consents otherwise, no
request can be made until after 15 days from the date the Company mails the
Confirmation for the initial premium. Policy Loans are made on the sole security
of the Policy. The amount you can borrow at any time is equal to the Loan Value
less any Policy Loan Balance at that time.
Unless you request otherwise, Policy Loans will reduce the Policy's share of the
sub-accounts proportionately. Assets equal to the amount of the Loan:
. Will be transferred to the general account of the Company; and
. Will earn interest at the effective rate per year of not less than:
the Policy Loan Interest Rate; less .75%
Interest earned on the assets will stay in the general account until the policy
anniversary. On the policy anniversary, the interest earned during the prior
year will be transferred to the Policy's share of the chosen sub-accounts
proportionately.
Policy Loans, whether or not repaid, can have a permanent effect on Cash Values
and Death Benefits.
LOAN VALUE
The Loan Value of the Policy is equal to 90% of the sum of the Net Cash Value of
the Policy plus any Policy Loan Balance.
INTEREST ON LOANS; POLICY LOAN BALANCE
Interest will be charged on Policy Loans at the Policy Loan Interest Rate shown
in Section 1. Interest accrues daily. The Policy Loan Balance at any time means
Policy Loans outstanding plus interest accrued to date. Loan interest is due on
the policy anniversary each year. Loan interest not paid when due will be added
to the Loan and interest will be charged on it; when loan interest is added to
the Loan, the Policy's share of the sub-accounts will be reduced
proportionately.
REPAYMENT OF LOANS
Policy Loans can be repaid to the Company at any time in whole or in part.
Unless you request otherwise, Loan repayments will be allocated to repay the
Loans made against the sub-accounts in the same proportion as the Policy is
invested in the sub-accounts.
A Policy Loan is a charge against the Policy. The proceeds of the Policy will be
reduced by any Policy Loan Balance. If the Policy Loan Balance at any time
exceeds the Cash Value of the Policy less the Surrender Charge on the current
Valuation Date (called "excess Policy Loan"), the Company will mail a notice to
you and to any assignee at the addresses on record with the Company. If a
payment large enough to pay the excess amount is not paid to the Company within
62 days after the mailing of the notice, the Policy will lapse without value.
Unless you request otherwise, any payment received by the Company when a Policy
Loan exists on the Policy will be used: first, as payment of the loan interest
due; second, as a repayment of the Policy Loan; and third, as an Additional
Payment, subject to the limits described in the Additional Payments provision.
(See Section 8.).
<PAGE>
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14. Exchange of Policy
EXCHANGE OF POLICY
Within 24 months after its Date of Issue, you can exchange this Policy, if the
Policy is in force, for a policy which provides fixed benefit insurance. The
new policy will be issued:
. By the Company or by New England Mutual Life Insurance Company;
. On any plan of survivorship insurance with a level face amount issued
by the Company or by New England Mutual Life Insurance Company on the Policy
Date;
. With the same Insureds, Face Amount and Policy Date as this Policy;
. With the age of each Insured on the Policy Date;
. Based on the actual underwriting class to which each Insured was assigned by
the Company on the Date of Issue of this Policy;
. With a rider which purchases paid-up additions issued by the Company or by
New England Mutual Life Insurance Company on the Policy Date, if the Cash
Value of this Policy is more than is required to purchase the new policy;
. Subject to any cost or credit and the repayment of any Policy Loan Balance;
and
. Subject to any assignments of this Policy, and limitations on this Policy
stated in riders.
Riders which provide benefits that are the same as those provided by riders on
this Policy will be attached to the new policy, if they are available.
CHANGE COST OR CREDIT
Any change cost or credit will be quoted by the Company on request.
A detailed statement of the method of computing the change cost or credit has
been filed, where required, with the Insurance Department of the state in which
the Policy is delivered.
<PAGE>
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15. Owner and Beneficiary
OWNER
The Owner of the Policy is named in the Application (see copy attached); but the
Owner can be changed. The new Owner will succeed to all rights of the Owner,
including the right to make a further change of Owner. At the death of the
Owner, his or her estate will be the Owner, unless a successor Owner has been
named. In this Policy "you" means the Owner, whether the Owner is a person, a
partnership, a corporation, a fiduciary or any other legal entity. The rights of
the Owner will end at the Last Death, except for Payment of Benefits. (See
Section 16.)
BENEFICIARY
The Beneficiary is named in the Application (see copy attached); but the
Beneficiary can be changed before the Last Death. The Beneficiary can be a
person, a corporation, a partnership, a fiduciary or any other legal entity. A
person must survive the last Insured to die to qualify as Beneficiary. If none
survives, the proceeds will be paid to the Owner.
CHANGE OF OWNER OR BENEFICIARY
A change of Owner or Beneficiary must be in written form satisfactory to the
Company, and must be dated and signed by the Owner who is making the change. The
change will be subject to all payments made and actions taken by the Company
under the Policy before the signed change form is received by the Company at its
Administrative Office.
ASSIGNMENTS
An absolute assignment of the Policy by the Owner is a change of Owner and
Beneficiary to the assignee. A collateral assignment of the Policy by the Owner
is not a change of Owner or Beneficiary; but their rights will be subject to the
terms of the assignment, except that the rights of an irrevocable beneficiary
named before the assignment are not subordinate to those of the assignee.
Assignments will be subject to all payments made and actions taken by the
Company before a signed copy of the assignment form is received by the Company
at its Administrative Office. The Company will not be responsible for
determining whether or not an assignment is valid.
DESIGNATION OF OWNER AND BENEFICIARY
A numbered sequence can be used to name successive Owners or Beneficiaries. Co-
Beneficiaries will receive equal shares unless otherwise stated.
In naming Owners or Beneficiaries, unless otherwise stated:
. "Child" includes an adopted or posthumous child;
. "Provision for issue" means that if a Beneficiary does not survive both
Insureds, the share of that Beneficiary will be taken by his or her living
issue by right of representation; and
. A family relation such as "wife" , "husband" or "child" means the relation
to the Insureds.
At the time for payment of benefits the Company can rely on an affidavit of any
Owner or other responsible person to determine family relations or members of a
class.
<PAGE>
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16. Payment of Benefits
PAYMENT
The policy proceeds will be paid in one sum, unless all or part of the proceeds
is applied to a Payment Option. (See Section 17.) The Company will pay interest
on the death proceeds from the date the proceeds become payable to the date of
payment in one sum, or to the Option Date. The rate of interest will be set each
year by the Company. The rate will not be less than: that required by law; or 3
1/2% per year.
SELECTION OF PAYMENT OPTIONS; OPTION DATE
The selection of a Payment Option and the naming of the Payee must be in written
form satisfactory to the Company. You can make or change or revoke the selection
before the Last Death.. The Option Date is the effective date of the Payment
Option, as stated in the selection form.
PAYEE
The Payee is a person, a corporation, a partnership, a fiduciary or any other
legal entity entitled to receive payment in one sum or under a Payment Option.
SELECTION BY PAYEES
Any proceeds payable in one sum at the Last Death, or upon surrender of the
Policy, can be applied to any Payment Option chosen by the Payee. Further, with
the consent of the Company, any Payee who is entitled to receive proceeds in one
sum when a Payment Option ends, or at the death of a prior Payee, or when
proceeds are withdrawn, can choose to apply the proceeds to a Payment Option.
RIGHTS OF PAYEES
In the selection of a Payment Option the right can be given to the Payee:
. To withdraw principal and interest under the Fourth or Fifth Option; or
. To withdraw the commuted value of payments certain under the First, Second,
or Sixth Option.
Under the Life Income Options only payments certain can be commuted. No Payee
can assign, commute or withdraw the payments under any Payment Option, unless
the right is reserved in the selection of the Option.
LIMITATIONS
If instalments under an Option would be less than $20, proceeds can be applied
to a Payment Option only with the consent of the Company.
LIFE INCOME OPTIONS
Guaranteed Life Income Options are based on the age of the Payee on the Payee's
birthday nearest the Option Date. The Company will require proof of age. The
Life Income payments will be based: on the rates shown in the Life Income Tables
(Section 18); or, if they are greater, on the Payment Option rates of the
Company on the Option Date. If the rates at a given age are the same for
different periods certain, the longest period certain will be used.
PURCHASE OF INCREASED PAYMENT OPTION BENEFITS
On the Option Date, a one sum purchase payment can be made to the Company to be
added to the proceeds being applied to any Payment Option. The portion of Life
Income payments purchased in this way will be based on the Payment Option rates
of the Company on the Option Date, which may not be the rates shown in the Life
Income Tables (Section 18). The purchase payment will be limited to the
Company's published maximum for single premium immediate annuities on the Option
Date. A portion of the purchase payment may be used by the Company to pay
premium taxes on the purchase payment.
DEATH OF PAYEE
If a Payee under a Life Income Option dies within 30 days after the Option Date,
the amount applied to the Option, less any payments made, will be paid in one
sum, unless a Payment Option is chosen by the successor Payee. Otherwise,
amounts to be paid after the death of a Payee under a Payment Option will be
paid as due to the successor Payee. If there is no successor Payee, amounts to
be paid in one sum, or the commuted value of any unpaid payments certain, will
be paid in one sum to the estate of the last Payee to die.
COMMUTATION RATE
The interest rate used to compute the commuted value of any unpaid payments
certain:
. Under the First Option will be 3 1/2% per year; and
. Under the Life Income Options will be the rate used by the Company in
computing the amount of the monthly payments.
<PAGE>
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17. Payment Options
PAYMENT OPTIONS
All or part of the policy proceeds can be applied to any one of the following
Options, subject to Section 16, Payment of Benefits:
FIRST OPTION: INCOME FOR A SPECIFIED NUMBER OF YEARS
The Company will make monthly payments which will include both principal and
interest. Payments will start on the Option Date and will continue for the
number of years chosen. The number of years chosen cannot be more than 30.
Interest is at the rate of 3 1/2% per year compounded yearly. Additional
interest paid by the Company for any year will be added to the monthly payments
for that year.
Guaranteed monthly payments per $1,000 of proceeds applied to the First Option
are shown below:
<TABLE>
<CAPTION>
- ------------------------------------------------------
Number Number Number
of of of
Years Years Years
- ------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 $84.65 11 $9.09 21 $5.56
2 43.05 12 8.46 22 5.39
3 29.19 13 7.94 23 5.24
4 22.27 14 7.49 24 5.09
5 18.12 15 7.10 25 4.96
6 15.35 16 6.76 26 4.84
7 13.38 17 6.47 27 4.73
8 11.90 18 6.20 28 4.63
9 10.75 19 5.97 29 4.53
10 9.83 20 5.75 30 4.45
- ------------------------------------------------------
</TABLE>
SECOND OPTION: LIFE INCOME
The Company will make equal monthly payments. Payments will start on the Option
Date and will continue:
. During the life of the Payee, with no further payment after the death
of the Payee, called "Life Income, No Refund" ; or
. During the life of the Payee, but for at least 10 years, called "Life
Income, 10 Years Certain" ; or
. During the life of the Payee, but for at least 20 years, called "Life
Income, 20 Years Certain"
THIRD OPTION: LIFE INCOME WITH REFUND
The Company will make equal monthly payments. Payments will start on the Option
Date and will continue during the life of the Payee. At the death of the Payee,
if the total payments made are less than the total proceeds applied to the
Option, then:
. The difference will be paid in one sum, called "Life Income, Cash Refund" ;
or
. The equal monthly payments will continue until the total payments are
equal to the total proceeds applied to the Option, called "Life Income,
Instalment Refund" .
FOURTH OPTION: INTEREST
The Company will hold the proceeds at interest during the life of the Payee or
for any other period agreed to by the Company. Interest on the proceeds:
. Will be paid each month to the Payee starting one month after the Option
Date; or
. Will be added to the principal amount each year and will earn interest.
At the death of the Payee, or at the end of the period agreed to, the balance of
principal and any accrued interest will be paid in one sum. The rate of interest
will be set each year by the Company; but the rate will not be less than 3 1/2%
per year.
FIFTH OPTION: SPECIFIED AMOUNT OF INCOME
The Company will make monthly payments which will include both principal and
interest. Payments will be in the amount chosen. Payments can be quarterly or at
any other frequency chosen, and payments can be for different amounts, all
subject to the consent of the Company. Payments will start on the Option Date
and will continue until the balance is fully paid out. At the death of the Payee
any unpaid balance and accrued interest will be paid in one sum. The rate of
interest will be set each year by the Company; but the rate will not be less
than 3 1/2% per year. Interest will be added each year to the principal and will
earn interest.
SIXTH OPTION: LIFE INCOME FOR TWO LIVES
The Company will make monthly payments. Payments will start on the Option Date
and will continue:
. While either of two Payees is living, called "Joint and Survivor Life
Income" ; or
. While either of two Payees is living, but for at least 10 years, called
"Joint and Survivor Life Income, 10 Years Certain" ; or
. While two Payees are living, and after the death of one Payee, two-
thirds of the monthly amount while the other Payee is living, called "Joint
and 2/3 to Survivor Life Income" .
<PAGE>
- --------------------------------------------------------------------------------
18. Life Income Tables
LIFE INCOME TABLES
Guaranteed monthly payments per $1,000 of amounts applied to the Life Income
Options are shown below:
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SECOND AND THIRD OPTIONS: LIFE INCOME
- ---------------------------------------------------------
Age 10 20
of No Years Years Cash Instalment
Payee Refund Certain Certain Refund Refund
- ---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
*15 $3.19 $3.19 $3.19 $3.18 $3.19
16 3.21 3.20 3.20 3.19 3.20
17 3.22 3.22 3.21 3.21 3.21
18 3.23 3.23 3.23 3.22 3.22
19 3.25 3.24 3.24 3.23 3.24
20 3.26 3.26 3.25 3.25 3.25
21 3.27 3.27 3.27 3.26 3.26
22 3.29 3.29 3.28 3.28 3.28
23 3.31 3.30 3.30 3.29 3.29
24 3.32 3.32 3.31 3.31 3.31
25 3.34 3.34 3.33 3.32 3.33
26 3.36 3.36 3.35 3.34 3.35
27 3.38 3.37 3.37 3.36 3.36
28 3.40 3.39 3.39 3.38 3.38
29 3.42 3.41 3.41 3.40 3.40
30 3.44 3.44 3.43 3.42 3.42
31 3.46 3.46 3.45 3.44 3.44
32 3.49 3.48 3.47 3.46 3.47
33 3.51 3.51 3.50 3.49 3.49
34 3.54 3.53 3.52 3.51 3.52
35 3.56 3.56 3.55 3.54 3.54
36 3.59 3.59 3.58 3.56 3.57
37 3.62 3.62 3.60 3.59 3.60
38 3.66 3.65 3.63 3.62 3.63
39 3.69 3.69 3.67 3.65 3.66
40 3.73 3.72 3.70 3.68 3.69
41 3.76 3.76 3.73 3.71 3.72
42 3.80 3.79 3.77 3.75 3.76
43 3.84 3.84 3.80 3.78 3.79
44 3.89 3.88 3.84 3.82 3.83
45 3.93 3.92 3.88 3.86 3.87
46 3.98 3.97 3.92 3.90 3.91
47 4.03 4.02 3.97 3.94 3.96
48 4.08 4.07 4.01 3.99 4.00
49 4.14 4.12 4.06 4.03 4.05
50 4.20 4.18 4.11 4.08 4.10
51 4.26 4.23 4.16 4.13 4.15
52 4.32 4.30 4.21 4.19 4.21
53 4.39 4.36 4.26 4.24 4.27
54 4.46 4.43 4.32 4.30 4.33
55 4.54 4.50 4.37 4.36 4.39
56 4.62 4.58 4.43 4.43 4.46
57 4.70 4.65 4.49 4.49 4.53
58 4.79 4.74 4.56 4.57 4.60
59 4.89 4.83 4.62 4.64 4.68
60 4.99 4.92 4.68 4.72 4.76
61 5.10 5.02 4.75 4.80 4.85
62 5.22 5.12 4.82 4.89 4.94
63 5.34 5.23 4.88 4.98 5.03
64 5.47 5.35 4.95 5.07 5.13
65 5.61 5.47 5.02 5.17 5.24
66 5.76 5.60 5.08 5.28 5.35
67 5.92 5.73 5.15 5.39 5.47
68 6.10 5.87 5.21 5.51 5.59
69 6.28 6.02 5.27 5.63 5.72
- ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SECOND AND THIRD OPTIONS: LIFE INCOME
- ---------------------------------------------------------
Age 10 20
of No Years Years Cash Instalment
Payee Refund Certain Certain Refund Refund
- ---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
70 $6.48 $6.17 $5.33 $5.76 $5.86
71 6.70 6.33 5.38 5.89 6.00
72 6.92 6.49 5.43 6.04 6.16
73 7.17 6.66 5.48 6.19 6.32
74 7.43 6.84 5.52 6.34 6.49
75 7.71 7.02 5.56 6.52 6.67
76 8.02 7.20 5.60 6.69 6.86
77 8.34 7.38 5.63 6.87 7.06
78 8.69 7.56 5.66 7.07 7.27
79 9.07 7.75 5.68 7.27 7.50
80 9.47 7.93 5.70 7.49 7.74
81 9.90 8.11 5.71 7.73 7.99
82 10.36 8.28 5.73 7.96 8.25
83 10.86 8.45 5.73 8.21 8.53
84 11.39 8.62 5.74 8.50 8.83
**85 11.96 8.77 5.75 8.78 9.14
</TABLE>
* AND UNDER **AND OVER
<TABLE>
<CAPTION>
- -----------------------------------------------------
SIXTH OPTION: LIFE INCOME FOR TWO LIVES
- -----------------------------------------------------
Age of One Age of Other Payee
Payee 55 60 65 70 75
- -----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Joint and Survivor
55 $4.04 $4.17 $4.28 $4.37 $4.43
60 4.17 4.36 4.53 4.68 4.79
65 4.28 4.53 4.79 5.02 5.22
70 4.37 4.68 5.02 5.38 5.71
75 4.43 4.79 5.22 5.71 6.22
80 4.47 4.87 5.37 5.98 6.68
- ------------------------------------------------------
Joint and Survivor, 10 Years Certain
55 $3.96 $4.09 $4.20 $4.36 $4.42
60 4.09 4.27 4.44 4.59 4.77
65 4.20 4.44 4.69 4.91 5.09
70 4.36 4.59 4.91 5.22 5.50
75 4.42 4.77 5.09 5.50 5.88
80 4.46 4.85 5.33 5.72 6.21
- -------------------------------------------------------
Joint and 2/3 to Survivor
55 $4.37 $4.56 $4.76 $4.99 $5.23
60 4.56 4.78 5.02 5.30 5.59
65 4.76 5.02 5.33 5.67 6.03
70 4.99 5.30 5.67 6.10 6.57
75 5.23 5.59 6.03 6.57 7.18
80 5.48 5.89 6.41 7.06 7.84
- --------------------------------------------------------
</TABLE>
Payments for other ages will be quoted by the Company on request.
The rates shown above are based on an interest rate of 3 1/2% per year; and on
mortality: using a 60/40 male/Female weighting; based on the individual
Annuitant Mortality Table for 1983; and with projection on Scale G to the Year
2000 and then on Scale B Modified to year 2010.
<PAGE>
- --------------------------------------------------------------------------------
Amendments and Endorsements (To be made only by the Company)
<PAGE>
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please notify the Company of any change in your name or address. The Company
will communicate with you at your address on record with the Company.
NEW ENGLAND VARIABLE LIFE
INSURANCE COMPANY
Administrative Office:
501 Boylston Street
Boston, Massachusetts 02117
MODIFIED SINGLE PREMIUM VARIABLE SURVIVORSHIP LIFE POLICY
. The death proceeds are payable when the last Death occurs, if the Policy is
in force.
. Additional Payments can be made. (See Section 8.)
. The Policy does not share in dividends.
- --------------------------------------------------------------------------------
<PAGE>
NEW ENGLAND VARIABLE
LIFE INSURANCE COMPANY
================================================================================
Variable Life Policy
================================================================================
INSURED 1
JOHN ALDEN
POLICY NUMBER
Specimen
PLAN
Modified Single Premium Variable Life
NEW ENGLAND VARIABLE LIFE INSURANCE COMPANY AGREES TO PAY THE DEATH BENEFIT OF
THIS POLICY TO THE BENEFICIARY ON RECEIPT OF PROOF OF THE DEATH OF THE INSURED;
AND TO PROVIDE THE OTHER RIGHTS AND BENEFITS OF THE POLICY.
These agreements are subject to all of the provisions of the Policy.
Signed on the Date of Issue
for the Company at its
Administrative Office,
501 Boylston Street
Boston, MA 02117
/s/ Robert A Shafto
President
/s/ James Wilson
Secretary
MODIFIED SINGLE PREMIUM VARIABLE LIFE POLICY
. The death proceeds are payable at the death of the Insured if the
Policy is in force.
. Additional Payments can be made. (See Section 8.)
. The Policy does not share in dividends.
THE DEATH BENEFIT ON THE POLICY DATE WILL BE EQUAL TO THE AMOUNT SHOWN IN
SECTION 1. THEREAFTER, THE DEATH BENEFIT CAN VARY FROM DAY TO DAY. IT CAN
INCREASE OR DECREASE, DEPENDING ON SEPARATE INVESTMENT ACCOUNT PERFORMANCE; BUT
IT WILL NOT BE LESS THAN THE MINIMUM GUARANTEED DEATH BENEFIT FOR THE POLICY.
SEE SECTION 7.
THE CASH VALUE OF THIS POLICY CAN VARY FROM DAY TO DAY. IT CAN INCREASE OR
DECREASE, DEPENDING ON SEPARATE INVESTMENT ACCOUNT PERFORMANCE. SEE SECTION 11.
PLEASE READ YOUR POLICY CAREFULLY
This Policy is a legal Contract between you and the Company.
RIGHT TO RETURN THE POLICY
WHEN THIS POLICY IS ISSUED YOU SHOULD EXAMINE IT. YOU CAN RETURN THE POLICY TO
THE COMPANY OR ITS AGENT FOR ANY REASON WITHIN 10 DAYS AFTER YOU RECEIVE IT FROM
THE COMPANY. IF YOU RETURN THE POLICY: AN AMOUNT EQUAL TO ANY PREMIUM PAID WILL
BE REFUNDED TO YOU; AND THE POLICY WILL BE CANCELLED FROM THE START.
================================================================================
<PAGE>
================================================================================
Policy Provisions
Section
1 Policy Schedule
2 Table of Guaranteed Maximum
Cost of Insurance Rates Per $1,000
3 Table of Net Single Premiums
4 Accounts Available
5 Contract
6 The Variable Account
7 Death Benefit
8 Premiums
9 Monthly Deduction
10 Reinstatement After Lapse
11 Cash Value of the Policy
12 Surrender of the Policy
13 Policy Loans
14 Exchange of Policy
15 Owner and Beneficiary
16 Payment of Benefits
17 Payment Options
18 Life Income Tables
. Riders, if any
. Amendments and Endorsements
. Copy of the Application
Alphabetical Guide
Section
4 Accounts
8 Additional Payments
1,5 Age of Insured
15 Assignments
15 Beneficiary
16 Benefits, Payment of
11 Cash Value
5 Claims of Creditors
5 Contestable
5 Contract
1,5 Date of Issue
1,5 Date, Policy
7 Death Benefit
14 Exchange of Policy
1 Face Amount
12 Full Surrender
9 Grace Period
2 Insurance Rates
11 Investment Return
17,18 Life Income Options
18 Life Income Tables
1 Loan Interest Rate
13 Loans, Policy
7 Minimum Guaranteed Death Benefit
9 Monthly Deduction
8 Net Additional Payments
11 Net Cash Value
3 Net Single Premiums
15 Owner
12 Partial Surrender
17 Payment Options
5 Periodic Reports
13 Policy Loan Balance
5 Postponement of Payments
8 Premiums
10 Reinstatement
1 Schedule, Policy
6 Sub-Accounts
5 Suicide
1,12 Surrender Charge
12 Surrender of the Policy
6 Variable Account
================================================================================
<PAGE>
NEW ENGLAND VARIABLE
LIFE INSURANCE COMPANY
================================================================================
1. Policy Schedule OWNER AND BENEFICIARY
As named in the Application
or as later changed. See the
Owner and Beneficiary Section
of the Policy.
================================================================================
POLICY NUMBER AGE SEX
Specimen 35 Male
POLICY DATE DATE OF ISSUE
January 1, 1996 January 1, 1996
POLICY LOAN INTEREST RATE
6%
================================================================================
SCHEDULE OF BENEFITS
- --------------------------------------------------------------------------------
Modified Single Premium Variable Life
Face Amount (Minimum Guaranteed Death Benefit) $10,000
Initial Death Benefit $34,681
================================================================================
SCHEDULE OF PREMIUMS
- --------------------------------------------------------------------------------
Initial Premium $10,000
================================================================================
SCHEDULE OF CHARGES
- --------------------------------------------------------------------------------
. Maximum Monthly Charges Based on Cash Value
. Maximum Sales Charge 1/12 of .40% for 10 years
. Maximum Administrative Charge 1/12 of .35% in all years
. Maximum Premium Tax Charge 1/12 of .25% for 10 years
. Maximum Mortality and Expense Risk 1/12 of .90% in all years
Charge
. Maximum Monthly Cost of Insurance See Section 2.
Charge
. Maximum Monthly Maintenance Charge $2.50 until the total of the initial
premium plus all Additional Payments
is at least equal to $50,000
. Maximum Premium Expense Charge for 9% of Payment
Additional Payments
================================================================================
/s/ James Wilson
Secretary
<PAGE>
NEW ENGLAND VARIABLE
LIFE INSURANCE COMPANY
================================================================================
1. Policy Schedule (Second Page) OWNER AND BENEFICIARY
As named in the Application
or as later changed. See
the Owner and Beneficiary
Section of the Policy.
================================================================================
POLICY NUMBER AGE SEX
Specimen 35 Male
POLICY DATE DATE OF ISSUE
January 1, 1996 January 1, 1996
POLICY LOAN INTEREST RATE
6%
================================================================================
SCHEDULE OF CHARGES (Continued)
- --------------------------------------------------------------------------------
. Surrender Charge: The initial premium is subject to a Surrender Charge
for 9 years (see Section 12).
<TABLE>
<CAPTION>
During Year Charge
<S> <C>
1 8.0%
2 8.0
3 7.0
4 6.0
5 5.0
6 4.0
7 3.0
8 2.0
9 1.0
10 0
</TABLE>
================================================================================
/s/ H. James Wilson
Secretary
<PAGE>
NEW ENGLAND VARIABLE
LIFE INSURANCE COMPANY
================================================================================
2. Table of Guaranteed Maximum Cost of Insurance Rates per $1,000
Based on the 1980 CSO Smoker Table
================================================================================
POLICY NUMBER
Specimen
<TABLE>
<CAPTION>
================================================================================
POLICY YEAR MONTHLY RATE POLICY YEAR MONTHLY RATE
<S> <C> <C> <C>
1 $0.2267 34 $4.0325
2 0.2433 35 4.3625
3 0.2642 36 4.7267
4 0.2875 37 5.1358
5 0.3142 38 5.5983
6 0.3450 39 6.1108
7 0.3783 40 6.6725
8 0.4150 41 7.2725
9 0.4550 42 7.8858
10 0.4992 43 8.5017
11 0.5458 44 9.1242
12 0.5942 45 9.7750
13 0.6467 46 10.4758
14 0.7033 47 11.2467
15 0.7650 48 12.1008
16 0.8333 49 13.0242
17 0.9108 50 13.9858
18 0.9983 51 14.9533
19 1.0975 52 15.9033
20 1.2058 53 16.8783
21 1.3217 54 17.8942
22 1.4442 55 18.9042
23 1.5733 56 19.9233
24 1.7092 57 20.9833
25 1.8550 58 22.2125
26 2.0175 59 23.7892
27 2.2008 60 25.9392
28 2.4075 61 29.3217
29 2.6383 62 35.0825
30 2.8908 63 45.0833
31 3.1583 64 62.0958
32 3.4383 65 83.3333
33 3.7283 Thereafter 0
</TABLE>
================================================================================
/s/ H. James Wilson
Secretary
<PAGE>
NEW ENGLAND VARIABLE
LIFE INSURANCE COMPANY
================================================================================
3. Table of Net Single Premiums
================================================================================
POLICY NUMBER
Specimen
================================================================================
The Table below shows the rate for the policy month which starts on the Policy
Date or a policy anniversary. The rates during each policy month reflect elapsed
time. See Section 7.
<TABLE>
<CAPTION>
NET SINGLE PREMIUMS PER $1.00
POLICY YEAR MONTHLY RATE POLICY YEAR MONTHLY RATE
<S> <C> <C> <C>
1 $.28834 34 $.68963
2 .29792 35 .70191
3 .30776 36 .71406
4 .31785 37 .72605
5 .32818 38 .73782
6 .33875 39 .74926
7 .34953 40 .76032
8 .36053 41 .77094
9 .37173 42 .78108
10 .38313 43 .79080
11 .39472 44 .80019
12 .40650 45 .80933
13 .41849 46 .81825
14 .43067 47 .82694
15 .44304 48 .83534
16 .45560 49 .84336
17 .46832 50 .85096
18 .48119 51 .85813
19 .49415 52 .86496
20 .50719 53 .87157
21 .52027 54 .87805
22 .53340 55 .88445
23 .54656 56 .89096
24 .55976 57 .89781
25 .57302 58 .90529
26 .58633 59 .91363
27 .59965 60 .92300
28 .61294 61 .93358
29 .62613 62 .94526
30 .63917 63 .95752
31 .65203 64 .96945
32 .66472 65 .97904
33 .67724 Thereafter 1.00000
</TABLE>
================================================================================
/s/ H. James Wilson
Secretary
<PAGE>
NEW ENGLAND VARIABLE
LIFE INSURANCE COMPANY
================================================================================
4. Sub-accounts Available on 1/1/96
================================================================================
POLICY NUMBER
Specimen
================================================================================
Back Bay Advisors Money Market
Back Bay Advisors Bond Income
Back Bay Advisors Managed
Westpeak Stock Index
Westpeak Value Growth
Loomis Sayles Avanti Growth
Loomis Sayles Balanced
Loomis Sayles Small Cap
Draycott International Equity
Salomon Brothers U.S. Government Bond
Salomon Brothers Strategic Bond Opportunities
Venture Value
Alger Equity Growth
================================================================================
/s/ H. James Wilson
Secretary
<PAGE>
================================================================================
5. Contract
THE CONTRACT
This Policy is a legal contract between the Owner of the Policy (called "you")
and New England Variable Life Insurance Company, a Delaware corporation, (called
"the Company"). The Policy, which includes the attached Application, is the
entire contract between you and the Company. All riders are listed in Section
1. A change in or waiver of the provisions of the Policy must be signed by the
President or the Secretary of the Company to be valid.
PAYMENTS UNDER THE CONTRACT
All contract amounts are in dollars of the United States of America. Payments by
the Company under the contract will be made at the Administrative Office of the
Company. The obligations of the Company are subject to all payments made and
actions taken by the Company under the Policy before receipt by the Company at
its Administrative Office of proof of death of the Insured.
DATES
Policy years, months and anniversaries are all measured from the Policy Date.
Contestable and suicide periods start on the Date of Issue. The Policy Date and
the Date of Issue are shown in Section 1.
NOT CONTESTABLE AFTER TWO YEARS
Insurance is issued by the Company in reliance on the statements made in the
Application for the insurance. Those statements are representations; they are
not warranties. No statement can be used to contest or rescind insurance or to
defend against a claim unless contained in the Application for the insurance.
The insurance issued under this Policy will not be contestable after it has been
in force during the life of the Insured:
. With respect to the amount of Death Benefit which results from the initial
premium for two years from the Date of Issue; and
. With respect to any amount of Death Benefit which results from an
Additional Payment for which proof of insurability is required, for two
years from the date that Payment is received.
SUICIDE WITHIN TWO YEARS
If the Insured dies by suicide while sane or insane within two years from the
Date of Issue, the Death Benefit will be limited to: the amount of the initial
premium; plus any Additional Payments made; less any Policy Loan Balance; and
less any partial surrenders.
AGE OF INSURED
The age of the Insured on the Policy Date and on each policy anniversary means
the age at the last birthday of the Insured.
If the age or sex of the Insured has not been correctly stated in the
Application, the Death Benefit will be the amount that the most recent Monthly
Deduction which was made would have provided for the correct age and sex.
CLAIMS OF CREDITORS
The Policy and payments under it are exempt from the claims of creditors to the
extent allowed by law.
BASIS OF VALUES
"1980 CSO" means Commissioners 1980 Standard Ordinary; it is used to describe
mortality tables. Minimum Cash Values, Reserves and Guaranteed Insurance Factors
are based on the mortality table shown in Section 2. Interest is compounded
daily at the effective rate of 4% per year. A detailed statement of the method
of computing values has been filed, where required, with the Insurance
Department of the state in which the Policy is delivered. All values are equal
to or in excess of the minimum values required by the law of that state.
<PAGE>
================================================================================
PERIODIC REPORTS
The Company will send you all reports required by law and regulation. Such
reports will be sent at least once each year or more often if required by law or
regulation. The annual report will include, as of the date for which the report
is made: the Death Benefit; the Cash Value; any Policy Loan Balance; and any
other information required by law or regulation.
POLICY ILLUSTRATION OF BENEFITS AND VALUES
Upon written request the Company will send you a policy illustration which will
illustrate benefits and values under the Policy.
POSTPONEMENT OF VARIABLE BENEFITS
Except for a Policy Loan that will be used to pay premiums on policies issued by
the Company, the Company can postpone the determination of and the payment or
transfer of amounts based on separate investment account performance if:
. The New York Stock Exchange is closed for trading (except for normal weekend
and holiday closing) or when trading is restricted; or
. The Securities and Exchange Commission determines that a state of emergency
exists which may make payment or transfer impractical; or
. The Securities and Exchange Commission orders the Variable Account or
orders the New England Zenith Fund or its successor or any other investment
company in which the Variable Account is invested to postpone payment or
transfer of variable benefits.
<PAGE>
================================================================================
6. The Variable Account
THE VARIABLE ACCOUNT
The Variable Account (called "the Account") is a separate investment account
established by the Company in accordance with Delaware law. The assets of the
Account are owned by the Company. The assets of the Account will be used to
provide values and benefits under this Policy and similar policies. The portion
of the Account assets equal to the reserves plus other policy liabilities of the
Account is not chargeable with liabilities arising out of any other business the
Company may conduct. The Company reserves the right to transfer to its general
account Variable Account assets which exceed the total of reserves and other
liabilities of the Account. Income and realized and unrealized capital gains and
losses of the Account are credited to the Account without regard to any of the
Company's other income or capital gains and losses.
SUB-ACCOUNTS
The Account consists of sub-accounts, each of which is invested in shares of one
portfolio of the New England Zenith fund or its successor or any other
investment company in which the Account is invested. Shares of a portfolio are
purchased for a sub-account at their net asset value.
The Policy's first investment is made in the Money Market sub-account as of the
latest of:
. The Policy Date;
. The date of the last Part II of the Application, if any is required; and
. The date the initial premium is received by the Company.
The Policy's Cash Value will be transferred, based on your choice, to the sub-
accounts 15 days after the Company mails the Confirmation for the initial
premium. Before this transfer, the values and benefits of the Policy will depend
on the net investment performance of the Money Market sub-account. After this
transfer each Net Additional Payment allocated to the Account will be invested
as of the date it is received by the Company at its Administrative Office in the
sub-accounts you chose.
Each distribution of income, dividends and capital gains from a portfolio to a
sub-account will be reinvested for the benefit of the owners of the policies in
that sub-account at net asset value in shares of the portfolio which made the
distribution.
The Cash Value of the Policy at any time cannot be allocated among more than 10
sub-accounts, except with the consent of the Company.
The values and benefits of a policy depend on the investment performance of the
portfolios in which the sub-accounts are invested. The Company does not
guarantee the investment performance of the portfolios of the sub-accounts. You
bear the investment risk for amounts invested in the sub-accounts for your
Policy.
CHOICE OF SUB-ACCOUNTS
You choose the sub-accounts in which the initial premium and Net Additional
Payments are to be invested. You can change the choice for future Net Additional
Payments at any time by notice to the Company. The change will be effective as
of the date the request is received by the Company at its Administrative Office.
The portion of the initial premium and the Net Additional Payments to be applied
to each sub-account chosen must be a whole percent not less than 10.
See Section 4. Also, the portfolios are listed in the then current prospectus
for the Account.
<PAGE>
CHANGE IN PORTFOLIOS
The Company can add or remove portfolios as sub-account investments as permitted
by law. When a change is made, the Company will send you: a revised prospectus
for the Account which will describe all of the portfolios then available in the
New England Zenith Fund or its successor or any other investment company in
which the Account is invested; and any notice required by law.
When a portfolio is removed, the Company has the right to substitute a different
portfolio in which the sub-account will then invest:
. The value of the removed portfolio; and
. Future Net Additional Payments applied to that sub-account.
TRANSFER OPTION
You can transfer all or a portion of the Policy's existing share of a sub-
account to another sub-account, subject to the Company's published maximum for
transfers, after 15 days from the date the Company mails the Confirmation for
the initial premium. Requests for transfers can be made in writing or by
telephone. The Company is not responsible for determining the authenticity of
transfer instructions received by telephone. The Company will send you a
confirmation of any transfers made. Except with the consent of the Company,
transfers will be subject to a limit of 4 in each policy year and must be at
least $100.
CHANGE OF INVESTMENT POLICY
The investment policy of the Account will not be changed unless: (a) the change
has been approved by the Insurance Commissioner of the state of Delaware; and
(b) a statement of the approval process has been filed with the Insurance
Department of the state in which this Policy is delivered, if required. If the
investment policy of the Account is changed, the Company will give you written
notice of the change. You can then choose to convert this Policy to fixed
benefit coverage. The conversion will be on the same basis as that described in
the Exchange of Policy section. (See Section 14.) Your request to convert this
Policy must be made within 60 days of the later of: (a) the effective date of
the investment policy change; or (b) the date you receive the notice of the
change.
RIGHTS RESERVED BY THE COMPANY
The Company reserves the right to take certain actions subject to compliance
with law including, if required, the approval of the owners of the policies.
These actions are: (a) to create new investment accounts; (b) to combine any two
or more separate investment accounts, including the Account; (c) to invest some
or all of the assets of the Account other than in the New England Zenith Fund;
(d) to invest some or all of the assets of the Account in any other investment
company chosen by New England Variable Life Insurance Company; (e) to remove a
portfolio in which the sub-account is invested or to substitute a different
portfolio; (f) to operate the Account as a management investment company and to
charge investment advisory fees under the Investment Company Act of 1940 or to
operate the Account in any other form permitted by law; and (g) to deregister
the Account under the Investment Company Act of 1940 if registration is no
longer required.
<PAGE>
================================================================================
7. Death Benefit
DEATH BENEFIT
The Company will pay a Death Benefit to the Beneficiary upon receipt of proof of
the death of the Insured. The amount of the Death Benefit will be calculated as
of the date of death. The amount payable will be reduced by: any Policy Loan
Balance; and by an amount to cover Monthly Deductions to the date of death. The
policy proceeds will be paid in one sum unless all or part of the proceeds is
applied to a Payment Option. (See Payment of Benefits, Section 16.)
The Death Benefit is equal to the greater of:
. The Minimum Guaranteed Death Benefit (see below); and
. The Cash Value of the Policy divided by the Net Single Premium. (See
Section 3.)
MINIMUM GUARANTEED DEATH BENEFIT
On the Policy Date, the Minimum Guaranteed Death Benefit is equal to the initial
premium shown in Section 1. Thereafter, the Minimum Guaranteed Death Benefit
will be: increased by each Additional Payment made; and decreased when any Cash
Value is surrendered. The reduction at the time of a partial surrender will be
based on the ratio of the Cash Value after the surrender to the Cash Value
before the surrender.
Also, at the end of the last day of the fifth policy year and every five years
thereafter, until the Insured is age 75, the Minimum Guaranteed Death Benefit
will be recalculated. On each of these days the Minimum Guaranteed Death Benefit
is equal to the greater of: the Minimum Guaranteed Death Benefit before the
recalculation; and the Cash Value on the date of recalculation.
8. Premiums
PAYMENT
The initial premium is payment made to the Company to pay for the Policy. The
Policy will not be in force until the initial premium is paid. After the first
policy year, Additional Payments can be made. Payments can be made at the
Administrative Office of the Company or at any Agency of the Company. A receipt
for payment signed by the Secretary of the Company will be given on request. The
Company will send you a Confirmation of the initial premium and of any
Additional Payments.
Unless you request otherwise in writing to the Company, any payment received by
the Company when a Policy Loan exists on the Policy will be used: first, as
payment of the loan interest due; second, as a repayment of the Policy Loan; and
third, as an Additional Payment, subject to the limits stated below.
Cash Values and Death Benefits will be permanently affected by the amount of the
initial premium and the amount of any Additional Payments.
ADDITIONAL PAYMENTS
Additional Payments can be made after the first policy year. Except as stated in
the Grace Period provision (see Section 9), no Additional Payments can be made
at and after age 100. Unless the Company consents otherwise, Additional Payments
are subject to the following limits:
. No Additional Payment can be less than $1,000;
. Only one Additional Payment can be made in any policy year; and
. No Additional Payment can be made if it increases the Death Benefit by more
than it increases the Cash Value, except with evidence of insurability and
the consent of the Company.
The Maximum Premium Tax Charge rate will be reduced to reflect the increase in
Cash Value as a result of any Additional Payment.
This Policy is intended to qualify as a flexible premium life insurance contract
under the Internal Revenue Code and any interpretive regulation or rulings by
the Internal Revenue Service.
NET ADDITIONAL PAYMENTS
Each Net Additional Payment is equal to: the Additional Payment; less no more
than the Maximum Premium Expense Charge for Additional Payments shown in Section
1.
<PAGE>
9. Monthly Deduction
MONTHLY DEDUCTION
The Company will make a Monthly Deduction from the Cash Value of this Policy on
the last day of each policy month. (See Monthly Deduction Adjustment below.)
The amount of the Monthly Deduction for a policy month is equal to:
. The cost of insurance for the policy month;
PLUS
. An amount not greater than: the Cash Value of the Policy at the end of the
last day of the policy month; times the Maximum Monthly Charges Based on
Cash Value shown in Section 1;
PLUS
. An amount not greater than the Maximum Monthly Maintenance Charge shown in
Section 1;
PLUS
. The cost of any riders for the policy month.
The Monthly Deduction will be made as long as the Net Cash Value is enough to
cover the entire Monthly Deduction. If a Policy Loan Balance exists and the Net
Cash Value is not enough to cover the entire Monthly Deduction, the grace period
will begin. (See the Grace Period provision below and Section 13.) This
provision will not continue any rider beyond the termination date as provided in
the rider.
The Monthly Deduction will be deducted in the same proportion as the Cash Value
of the Policy is in the sub-accounts.
COST OF INSURANCE
The maximum monthly cost of insurance for the Policy is equal to: the Amount at
Risk; times the cost of insurance rate per $1,000 for that month divided by
1,000. The Amount at Risk is equal to:
. The Death Benefit on the first day of the policy month;
LESS
. The Cash Value on the first day of the policy month, accumulated with
interest to the end of the month at the monthly equivalent of 4% per year;
LESS
The maximum monthly cost of insurance.
COST OF INSURANCE RATES
The cost of insurance rates will be based on the expectations of the Company as
to future experience with regard to investment earnings, mortality, expenses and
lapse rates.
The Table of Guaranteed Maximum Cost of Insurance Rates per $1,000 (see Section
2) shows the maximum guaranteed rate for each policy month which starts on the
Policy Date or a policy anniversary. The rates between anniversaries vary
monthly based on the assumption of uniform distribution of deaths throughout the
policy year. The Maximum Guaranteed Cost of Insurance Rates for each policy year
are based on the sex, the underwriting class and the age of the Insured on the
first day of the policy year.
MONTHLY DEDUCTION ADJUSTMENT
If the Policy is partially or fully surrendered, a Monthly Deduction to the date
of surrender will be deducted from the surrender proceeds (See Section 12.) If
policy proceeds become payable, a Monthly Deduction to the date of death will be
deducted from the policy proceeds. (See Section 7.)
GRACE PERIOD
If a Policy Loan Balance exists and the Net Cash Value is not enough to cover
the entire Monthly Deduction for that month, the Company will mail a notice to
you and any assignee at the addresses on record with the Company. There is a
grace period of 62 days from the date when the Monthly Deduction was due in
which to make an Additional Payment large enough to permit the Monthly Deduction
to be made. The insurance remains in force during the grace period. If the
Additional Payment remains unpaid at the end of its 62-day grace period, the
Policy will lapse without value. Any riders will also lapse without value unless
otherwise stated in the rider.
<PAGE>
================================================================================
10. Reinstatement After Lapse
REINSTATEMENT
If the Policy lapses, the Policy and riders can be reinstated. (See Limitations
on Reinstatement below.) Reinstatement is subject to:
. Written application to reinstate;
. Proof that the Insured is insurable in the same underwriting class as this
Policy, except with the consent of the Company;
. Payment of an Additional Payment (see Section 8) large enough to keep
the Policy and any riders in force for at least three months; and
. Payment or reinstatement of any Policy Loan Balance which existed on the
date when the Policy lapsed.
LIMITATIONS ON REINSTATEMENT
The Policy and riders cannot be reinstated, except with the consent of the
Company, if more than seven years have passed since the date of lapse.
Any rider which provides life or disability insurance on a person other than the
Insured can be reinstated only as stated in the rider.
EFFECTIVE DATE OF REINSTATEMENT
Reinstatement will take effect: only if the application for reinstatement is
approved by the Company; and only when the Additional Payment for reinstatement
has been paid, provided that at the time of payment there has been no change in
insurability as represented in the application for reinstatement.
SURRENDER CHARGE AT AND AFTER REINSTATEMENT
If a Surrender Charge was applied when the Policy lapsed, and if the Policy is
later reinstated, the Surrender Charge will be credited to the Cash Value of the
Policy. The Surrender Charge on the date of reinstatement will be the same as it
was on the date of lapse. For the purpose of determining the Surrender Charge
on any date after reinstatement, the period the Policy was lapsed will not
count.
MAXIMUM MONTHLY CHARGES AFTER REINSTATEMENT
For the purpose of determining the Maximum Sales Charge and the Maximum Premium
Tax Charge on any date after reinstatement, the period the Policy was lapsed
will not count.
MINIMUM GUARANTEED DEATH BENEFIT AFTER REINSTATEMENT
For the purpose of determining the dates on which the Minimum Guaranteed Death
Benefit will be recalculated, the period the Policy was lapsed will count. If
the Minimum Guaranteed Death Benefit would have been recalculated during the
period which the Policy was lapsed, it will be recalculated upon reinstatement.
<PAGE>
===============================================================================
11. Cash Value of the Policy
CASH VALUE
The initial premium will be credited to the Policy as of the latest of:
. The Policy Date;
. The date of the last Part II of the Application for the Policy, if any is
required; and
. The date the initial premium is received by the Company.
Each future Net Additional Payment will be credited to the Cash Value as of the
date it is received by the Company.
The Cash Value of the Policy will depend on the net investment performance of
the Money Market sub-account until 15 days after the Company mails the
Confirmation for the initial premium. Thereafter, the Cash Value of the Policy
is equal to:
. The Policy's share of the chosen sub-accounts;
PLUS
. The amount of any assets transferred to the general account of the Company
because of Policy Loans; plus any interest earned on those assets which has
not been transferred to the sub-accounts. (See Section 13.)
The amount of the Cash Value depends on: the amount of the initial premium; the
amount of Net Additional Payments ; investment performance of the chosen sub-
accounts; Monthly Deductions; partial surrenders; transfers among sub-accounts;
and Policy Loans. The Cash Value can increase or decrease on a daily basis,
depending on the actual investment performance of the chosen sub-accounts. (See
Actual Investment Return below.)
The Cash Value of the Policy is not increased by the cash value of any rider,
unless stated in the rider.
NET CASH VALUE
The Net Cash Value is equal to:
. The Cash Value of the Policy
LESS
. Any Policy Loan Balance;
LESS
. The Surrender Charge that would apply upon surrender, whether or not there
is a surrender. (See Sections 1 and 12.)
ACTUAL INVESTMENT RETURN
The Policy has an Actual Investment Return for each Valuation Period for its
share of each chosen sub-account. The Policy's Actual Investment Return for each
sub-account for each Valuation Period is equal to (a) minus (b); where:
. (a) is equal to the Policy's share of the sub-account as of the end of
the Valuation Period;
PLUS
any Monthly Deduction deducted in the Valuation Period;
LESS
any Net Additional Payment credited during the Valuation Period;
PLUS
the total amount deducted for partial surrenders made during the Valuation
Period;
LESS
the amount of money transferred into the sub-account during the Valuation
Period;
PLUS
the amount of money transferred out of the sub-account during the Valuation
Period;
LESS
the portion of each loan repayment made during the Valuation Period
allocated to the sub-account;
PLUS
the portion of each Policy Loan which was transferred from the sub-account
to the general account during the Valuation Period;
PLUS
the interest credited during the Valuation Period to any borrowed portion
of the Policy's Cash Value;
PLUS or LESS
a charge or credit for the Policy's share of any reserve for taxes which
the Company determines to apply to the sub-account
. (b) is equal to the Policy's share of the sub-account as of the end of
the most recent Valuation Period;
PLUS or LESS
a charge or credit for the Policy's share of any reserve for taxes which
the Company determines to apply to the sub-account.
<PAGE>
================================================================================
VALUATION PERIODS AND VALUATION DATES
A Valuation Period for each sub-account is a period:
. Which starts on a Valuation Date; and
. Which ends on the next succeeding Valuation Date.
Each day the New York Stock Exchange is open for trading is a Valuation Date.
<PAGE>
================================================================================
12. Surrender of the Policy
SURRENDER OF THE POLICY
You can make a partial or full surrender subject to the provisions below.
Surrender proceeds will be paid to you in one sum, unless you choose in writing
to apply all or part to a Payment Option. (See Payment of Benefits, Section 16.)
FULL SURRENDER
You can fully surrender the Policy at any time by notice to the Company in
writing. The surrender proceeds will be equal to: the Net Cash Value; less a
Monthly Deduction to the date of surrender. Upon full surrender, the Policy will
be cancelled.
PARTIAL SURRENDER
You can make a partial surrender by written request to the Company any time
after 15 days from the date the Company mails the Confirmation for the initial
premium. In each policy year, partial surrenders will be limited, except with
the consent of the Company, to: 20% of the Net Cash Value on the day the first
partial surrender is made for the policy year; or, if less, the Loan Value less
any Policy Loan Balance. Except with the consent of the Company: each partial
surrender must be at least $500; and the Cash Value which will remain after the
partial surrender must be at least $10,000.
The following amount will be equal to the surrender proceeds when a partial
surrender is made:
. The amount of the partial Cash Value surrendered;
LESS
. Any applicable Surrender Charge (See below.);
LESS
. A Monthly Deduction to the date of the partial surrender.
A partial surrender will reduce the Policy's portion of the sub-accounts
proportionately.
The Death Benefit of the Policy will be permanently affected by a partial
surrender. The Minimum Guaranteed Death Benefit for the Policy will be reduced
based on the ratio of the Cash Value after the surrender to the Cash Value
before the surrender.
SURRENDER CHARGE
A Surrender Charge may apply to certain partial or full surrenders. A Surrender
Charge is based on the initial premium only. The Charge will be calculated as
if: the excess of the Cash Value over the sum of the initial premium paid plus
any Additional Payments made is surrendered first; any Additional Payments are
surrendered second; and the initial premium is surrendered last.
A portion of the Cash Value will be exempt from any Surrender Charge. The
exempt amount will be the greater of:
. 10% of the initial premium; less any partial surrenders in that policy
year; and
. The Cash Value less: the initial premium; less any prior partial
surrenders attributable to the initial premium.
The amount of the Surrender Charge depends on the policy year in which the
surrender occurs and is applied at the rate shown in Section 1. In no event
will the Surrender Charge plus the Sales Charge exceed 9% of the initial
premium.
<PAGE>
================================================================================
13. Policy Loans
POLICY LOANS
You can borrow all or part of the Loan Value of the Policy by request, in a
manner satisfactory to the Company. Unless the Company consents otherwise, no
request can be made until after 15 days from the date the Company mails the
Confirmation for the initial premium. Policy Loans are made on the sole security
of the Policy. The amount you can borrow at any time is equal to the Loan Value
less any Policy Loan Balance at that time.
Unless you request otherwise, Policy Loans will reduce the Policy's share of the
sub-accounts proportionately. Assets equal to the amount of the Loan:
. Will be transferred to the general account of the Company; and
. Will earn interest at the effective rate per year of not less than:
the Policy Loan Interest Rate; less .75%
Interest earned on the assets will stay in the general account until the policy
anniversary. On the policy anniversary, the interest earned during the prior
year will be transferred to the Policy's share of the chosen sub-accounts
proportionately.
Policy Loans, whether or not repaid, can have a permanent effect on Cash Values
and Death Benefits.
LOAN VALUE
The Loan Value of the Policy is equal to 90% of the sum of the Net Cash Value of
the Policy plus any Policy Loan Balance.
INTEREST ON LOANS; POLICY LOAN BALANCE
Interest will be charged on Policy Loans at the Policy Loan Interest Rate shown
in Section 1. Interest accrues daily. The Policy Loan Balance at any time means
Policy Loans outstanding plus interest accrued to date. Loan interest is due on
the policy anniversary each year. Loan interest not paid when due will be added
to the Loan and interest will be charged on it; when loan interest is added to
the Loan, the Policy's share of the sub-accounts will be reduced
proportionately.
REPAYMENT OF LOANS
Policy Loans can be repaid to the Company at any time in whole or in part.
Unless you request otherwise, Loan repayments will be allocated to repay the
Loans made against the sub-accounts in the same proportion as the Policy is
invested in the sub-accounts.
A Policy Loan is a charge against the Policy. The proceeds of the Policy will be
reduced by any Policy Loan Balance. If the Policy Loan Balance at any time
exceeds the Cash Value of the Policy less the Surrender Charge on the current
Valuation Date (called "excess Policy Loan"), the Company will mail a notice to
you and to any assignee at the addresses on record with the Company. If a
payment large enough to pay the excess amount is not paid to the Company within
62 days after the mailing of the notice, the Policy will lapse without value.
Unless you request otherwise, any payment received by the Company when a Policy
Loan exists on the Policy will be used: first, as payment of the loan interest
due; second, as a repayment of the Policy Loan; and third, as an Additional
Payment, subject to the limits described in the Additional Payments provision.
(See Section 8.).
<PAGE>
================================================================================
14. Exchange of Policy
EXCHANGE OF POLICY
Within 24 months after its Date of Issue, you can exchange this Policy, if the
Policy is in force, for a policy which provides fixed benefit insurance. The
new policy will be issued:
. By the Company or by New England Mutual Life Insurance Company;
. On any plan of Whole Life or Endowment insurance with a level face amount
issued by the Company or by New England Mutual Life Insurance Company on
the Policy Date;
. With the same Insured, Face Amount, Policy Date, and underwriting class as
this Policy;
. With the age of the Insured on the Policy Date;
. With a rider which purchases paid-up additions issued by the Company or by
New England Mutual Life Insurance Company on the Policy Date, if the Cash
Value of this Policy is more than is required to purchase the new policy;
. Subject to any cost or credit and the repayment of any Policy Loan Balance;
and
. Subject to any assignments of this Policy, and limitations on this
Policy stated in riders.
Riders which provide benefits that are the same as those provided by riders on
this Policy will be attached to the new policy, if they are available.
CHANGE COST OR CREDIT
Any change cost or credit will be quoted by the Company on request.
A detailed statement of the method of computing the change cost or credit has
been filed, where required, with the Insurance Department of the state in which
the Policy is delivered.
<PAGE>
================================================================================
15. Owner and Beneficiary
OWNER
The Owner of the Policy is named in the Application (see copy attached); but the
Owner can be changed. The new Owner will succeed to all rights of the Owner,
including the right to make a further change of Owner. At the death of the
Owner, his or her estate will be the Owner, unless a successor Owner has been
named. In this Policy "you" means the Owner, whether the Owner is a person, a
partnership, a corporation, a fiduciary or any other legal entity. The rights of
the Owner will end at the death of the Insured, except for Payment of Benefits.
(See Section 16.)
BENEFICIARY
The Beneficiary is named in the Application (see copy attached); but the
Beneficiary can be changed before the death of the Insured. The Beneficiary can
be a person, a corporation, a partnership, a fiduciary or any other legal
entity. A person must survive the Insured to qualify as Beneficiary. If none
survives, the proceeds will be paid to the Owner.
CHANGE OF OWNER OR BENEFICIARY
A change of Owner or Beneficiary must be in written form satisfactory to the
Company, and must be dated and signed by the Owner who is making the change. The
change will be subject to all payments made and actions taken by the Company
under the Policy before the signed change form is received by the Company at its
Administrative Office.
ASSIGNMENTS
An absolute assignment of the Policy by the Owner is a change of Owner and
Beneficiary to the assignee. A collateral assignment of the Policy by the Owner
is not a change of Owner or Beneficiary; but their rights will be subject to the
terms of the assignment, except that the rights of an irrevocable beneficiary
named before the assignment are not subordinate to those of the assignee.
Assignments will be subject to all payments made and actions taken by the
Company before a signed copy of the assignment form is received by the Company
at its Administrative Office. The Company will not be responsible for
determining whether or not an assignment is valid.
DESIGNATION OF OWNER AND BENEFICIARY
A numbered sequence can be used to name successive Owners or Beneficiaries. Co-
Beneficiaries will receive equal shares unless otherwise stated.
In naming Owners or Beneficiaries, unless otherwise stated:
. "Child" includes an adopted or posthumous child;
. "Provision for issue" means that if a Beneficiary does not survive the
Insured, the share of that Beneficiary will be taken by his or her living
issue by right of representation; and
. A family relation such as "wife" , "husband" or "child" means the relation
to the Insured.
At the time for payment of benefits the Company can rely on an affidavit of any
Owner or other responsible person to determine family relations or members of a
class.
<PAGE>
================================================================================
16. Payment of Benefits
PAYMENT
The policy proceeds will be paid in one sum, unless all or part of the proceeds
is applied to a Payment Option. (See Section 17.) The Company will pay interest
on the death proceeds from the date the proceeds become payable to the date of
payment in one sum, or to the Option Date. The rate of interest will be set each
year by the Company. The rate will not be less than: that required by law; or 3
1/2% per year.
SELECTION OF PAYMENT OPTIONS; OPTION DATE
The selection of a Payment Option and the naming of the Payee must be in written
form satisfactory to the Company. You can make or change or revoke the selection
before death of the Insured. The Option Date is the effective date of the
Payment Option, as stated in the selection form.
PAYEE
The Payee is a person, a corporation, a partnership, a fiduciary or any other
legal entity entitled to receive payment in one sum or under a Payment Option.
SELECTION BY PAYEES
Any proceeds payable in one sum at the death of the Insured, or upon surrender
of the Policy, can be applied to any Payment Option chosen by the Payee.
Further, with the consent of the Company, any Payee who is entitled to receive
proceeds in one sum when a Payment Option ends, or at the death of a prior
Payee, or when proceeds are withdrawn, can choose to apply the proceeds to a
Payment Option.
RIGHTS OF PAYEES
In the selection of a Payment Option the right can be given to the Payee:
. To withdraw principal and interest under the Fourth or Fifth Option;
or
. To withdraw the commuted value of payments certain under the First, Second,
or Sixth Option.
Under the Life Income Options only payments certain can be commuted. No Payee
can assign, commute or withdraw the payments under any Payment Option, unless
the right is reserved in the selection of the Option.
LIMITATIONS
If instalments under an Option would be less than $20, proceeds can be applied
to a Payment Option only with the consent of the Company.
LIFE INCOME OPTIONS
Guaranteed Life Income Options are based on the age of the Payee on the Payee's
birthday nearest the Option Date. The Company will require proof of age. The
Life Income payments will be based: on the rates shown in the Life Income Tables
(Section 18); or, if they are greater, on the Payment Option rates of the
Company on the Option Date. If the rates at a given age are the same for
different periods certain, the longest period certain will be used.
PURCHASE OF INCREASED PAYMENT OPTION BENEFITS
On the Option Date, a one sum purchase payment can be made to the Company to be
added to the proceeds being applied to any Payment Option. The portion of Life
Income payments purchased in this way will be based on the Payment Option rates
of the Company on the Option Date, which may not be the rates shown in the Life
Income Tables (Section 18). The purchase payment will be limited to the
Company's published maximum for single premium immediate annuities on the Option
Date. A portion of the purchase payment may be used by the Company to pay
premium taxes on the purchase payment.
DEATH OF PAYEE
If a Payee under a Life Income Option dies within 30 days after the Option Date,
the amount applied to the Option, less any payments made, will be paid in one
sum, unless a Payment Option is chosen by the successor Payee. Otherwise,
amounts to be paid after the death of a Payee under a Payment Option will be
paid as due to the successor Payee. If there is no successor Payee, amounts to
be paid in one sum, or the commuted value of any unpaid payments certain, will
be paid in one sum to the estate of the last Payee to die.
COMMUTATION RATE
The interest rate used to compute the commuted value of any unpaid payments
certain:
. Under the First Option will be 3 1/2% per year; and
. Under the Life Income Options will be the rate used by the Company in
computing the amount of the monthly payments.
<PAGE>
================================================================================
17. Payment Options
PAYMENT OPTIONS
All or part of the policy proceeds can be applied to any one of the following
Options, subject to Section 16, Payment of Benefits:
FIRST OPTION: INCOME FOR A SPECIFIED NUMBER OF YEARS
The Company will make monthly payments which will include both principal and
interest. Payments will start on the Option Date and will continue for the
number of years chosen. The number of years chosen cannot be more than 30.
Interest is at the rate of 3 1/2% per year compounded yearly. Additional
interest paid by the Company for any year will be added to the monthly payments
for that year.
Guaranteed monthly payments per $1,000 of proceeds applied to the First Option
are shown below:
<TABLE>
<CAPTION>
=================================================================
Number Number Number
of of of
Years Years Years
=================================================================
<S> <C> <C> <C> <C> <C>
1 $84.65 11 $9.09 21 $5.56
2 43.05 12 8.46 22 5.39
3 29.19 13 7.94 23 5.24
4 22.27 14 7.49 24 5.09
5 18.12 15 7.10 25 4.96
6 15.35 16 6.76 26 4.84
7 13.38 17 6.47 27 4.73
8 11.90 18 6.20 28 4.63
9 10.75 19 5.97 29 4.53
10 9.83 20 5.75 30 4.45
==================================================================
</TABLE>
SECOND OPTION: LIFE INCOME
The Company will make equal monthly payments. Payments will start on the Option
Date and will continue:
. During the life of the Payee, with no further payment after the death of
the Payee, called "Life Income, No Refund" ; or
. During the life of the Payee, but for at least 10 years, called "Life
Income, 10 Years Certain" ; or
. During the life of the Payee, but for at least 20 years, called "Life
Income, 20 Years Certain"
THIRD OPTION: LIFE INCOME WITH REFUND
The Company will make equal monthly payments. Payments will start on the Option
Date and will continue during the life of the Payee. At the death of the Payee,
if the total payments made are less than the total proceeds applied to the
Option, then:
. The difference will be paid in one sum, called "Life Income, Cash Refund" ;
or
. The equal monthly payments will continue until the total payments are equal
to the total proceeds applied to the Option, called "Life Income,
Instalment Refund" .
FOURTH OPTION: INTEREST
The Company will hold the proceeds at interest during the life of the Payee or
for any other period agreed to by the Company. Interest on the proceeds:
. Will be paid each month to the Payee starting one month after the
Option Date; or
. Will be added to the principal amount each year and will earn interest.
At the death of the Payee, or at the end of the period agreed to, the balance of
principal and any accrued interest will be paid in one sum. The rate of interest
will be set each year by the Company; but the rate will not be less than 3 1/2%
per year.
FIFTH OPTION: SPECIFIED AMOUNT OF INCOME
The Company will make monthly payments which will include both principal and
interest. Payments will be in the amount chosen. Payments can be quarterly or at
any other frequency chosen, and payments can be for different amounts, all
subject to the consent of the Company. Payments will start on the Option Date
and will continue until the balance is fully paid out. At the death of the Payee
any unpaid balance and accrued interest will be paid in one sum. The rate of
interest will be set each year by the Company; but the rate will not be less
than 3 1/2% per year. Interest will be added each year to the principal and will
earn interest.
SIXTH OPTION: LIFE INCOME FOR TWO LIVES
The Company will make monthly payments. Payments will start on the Option Date
and will continue:
. While either of two Payees is living, called "Joint and Survivor Life
Income" ; or
. While either of two Payees is living, but for at least 10 years, called
"Joint and Survivor Life Income, 10 Years Certain" ; or
. While two Payees are living, and after the death of one Payee, two-thirds
of the monthly amount while the other Payee is living, called "Joint and
2/3 to Survivor Life Income".
<PAGE>
================================================================================
18. Life Income Tables
LIFE INCOME TABLES
Guaranteed monthly payments per $1,000 of amounts applied to the Life Income
Options are shown below:
<TABLE>
<CAPTION>
===============================================================
SECOND AND THIRD OPTIONS: LIFE INCOME
===============================================================
Age 10 20
of No Years Years Cash Instalment
Payee Refund Certain Certain Refund Refund
===============================================================
<S> <C> <C> <C> <C> <C>
*15 $3.19 $3.19 $3.19 $3.18 $3.19
16 3.21 3.20 3.20 3.19 3.20
17 3.22 3.22 3.21 3.21 3.21
18 3.23 3.23 3.23 3.22 3.22
19 3.25 3.24 3.24 3.23 3.24
20 3.26 3.26 3.25 3.25 3.25
21 3.27 3.27 3.27 3.26 3.26
22 3.29 3.29 3.28 3.28 3.28
23 3.31 3.30 3.30 3.29 3.29
24 3.32 3.32 3.31 3.31 3.31
25 3.34 3.34 3.33 3.32 3.33
26 3.36 3.36 3.35 3.34 3.35
27 3.38 3.37 3.37 3.36 3.36
28 3.40 3.39 3.39 3.38 3.38
29 3.42 3.41 3.41 3.40 3.40
30 3.44 3.44 3.43 3.42 3.42
31 3.46 3.46 3.45 3.44 3.44
32 3.49 3.48 3.47 3.46 3.47
33 3.51 3.51 3.50 3.49 3.49
34 3.54 3.53 3.52 3.51 3.52
35 3.56 3.56 3.55 3.54 3.54
36 3.59 3.59 3.58 3.56 3.57
37 3.62 3.62 3.60 3.59 3.60
38 3.66 3.65 3.63 3.62 3.63
39 3.69 3.69 3.67 3.65 3.66
40 3.73 3.72 3.70 3.68 3.69
41 3.76 3.76 3.73 3.71 3.72
42 3.80 3.79 3.77 3.75 3.76
43 3.84 3.84 3.80 3.78 3.79
44 3.89 3.88 3.84 3.82 3.83
45 3.93 3.92 3.88 3.86 3.87
46 3.98 3.97 3.92 3.90 3.91
47 4.03 4.02 3.97 3.94 3.96
48 4.08 4.07 4.01 3.99 4.00
49 4.14 4.12 4.06 4.03 4.05
50 4.20 4.18 4.11 4.08 4.10
51 4.26 4.23 4.16 4.13 4.15
52 4.32 4.30 4.21 4.19 4.21
53 4.39 4.36 4.26 4.24 4.27
54 4.46 4.43 4.32 4.30 4.33
55 4.54 4.50 4.37 4.36 4.39
56 4.62 4.58 4.43 4.43 4.46
57 4.70 4.65 4.49 4.49 4.53
58 4.79 4.74 4.56 4.57 4.60
59 4.89 4.83 4.62 4.64 4.68
60 4.99 4.92 4.68 4.72 4.76
61 5.10 5.02 4.75 4.80 4.85
62 5.22 5.12 4.82 4.89 4.94
63 5.34 5.23 4.88 4.98 5.03
64 5.47 5.35 4.95 5.07 5.13
65 5.61 5.47 5.02 5.17 5.24
66 5.76 5.60 5.08 5.28 5.35
67 5.92 5.73 5.15 5.39 5.47
68 6.10 5.87 5.21 5.51 5.59
69 6.28 6.02 5.27 5.63 5.72
70 $6.48 $6.17 $5.33 $5.76 $5.86
71 6.70 6.33 5.38 5.89 6.00
72 6.92 6.49 5.43 6.04 6.16
73 7.17 6.66 5.48 6.19 6.32
74 7.43 6.84 5.52 6.34 6.49
75 7.71 7.02 5.56 6.52 6.67
76 8.02 7.20 5.60 6.69 6.86
77 8.34 7.38 5.63 6.87 7.06
78 8.69 7.56 5.66 7.07 7.27
79 9.07 7.75 5.68 7.27 7.50
80 9.47 7.93 5.70 7.49 7.74
81 9.90 8.11 5.71 7.73 7.99
82 10.36 8.28 5.73 7.96 8.25
83 10.86 8.45 5.73 8.21 8.53
84 11.39 8.62 5.74 8.50 8.83
**85 11.96 8.77 5.75 8.78 9.14
</TABLE>
* AND UNDER **AND OVER
<TABLE>
<CAPTION>
===============================================================
SIXTH OPTION: LIFE INCOME FOR TWO LIVES
===============================================================
Age Of One Age Of Other Payee
Payee 55 60 65 70 70
===============================================================
<S> <C> <C> <C> <C> <C>
JOINT AND SURVIVOR
55 $4.04 $4.17 $4.28 $4.37 $4.43
60 4.17 4.36 4.53 4.68 4.79
65 4.28 4.53 4.79 5.02 5.22
70 4.37 4.68 5.02 5.38 5.71
75 4.43 4.79 5.22 5.71 6.22
80 4.47 4.87 5.37 5.98 6.68
===============================================================
JOINT AND SURVIVOR, 10 YEARS CERTAIN
55 $3.96 $4.09 $4.20 $4.36 $4.43
60 4.09 4.27 4.44 4.59 4.77
65 4.20 4.44 4.69 4.91 5.09
70 4.36 4.59 4.91 5.22 5.50
75 4.42 4.77 5.09 5.50 5.88
80 4.46 4.85 5.33 5.72 6.21
JOINT AND 2/3 T0 SURVIVOR
55 $4.37 $4.56 $4.76 $4.99 $5.23
60 4.56 4.78 5.02 5.30 5.59
65 4.76 5.02 5.33 5.67 6.03
70 4.99 5.30 5.67 6.10 6.57
75 5.23 5.59 6.03 6.57 7.18
80 5.48 5.89 6.41 7.06 7.84
==============================================================
</TABLE>
PAYMENTS FOR OTHER AGES WILL BE QUOTED BY THE COMPANY ON REQUEST.
The rates shown above are based on an interest rate of 3 1/2% per year; and on
mortality: using a 60/40 male/female weighting; based on the individual
Annuitant Mortality Table for 1983; and with projection on Scale G to the year
2000 and then on Scale B modified to year 2010.
<PAGE>
================================================================================
AMENDMENTS AND ENDORSEMENTS (TO BE MADE ONLY BY THE COMPANY)
<PAGE>
================================================================================
================================================================================
Please notify the Company of any change in your name or address. The Company
will communicate with you at your address on record with the Company.
NEW ENGLAND VARIABLE LIFE
INSURANCE COMPANY
Administrative Office:
501 Boylston Street
Boston, Massachusetts 02117
MODIFIED SINGLE PREMIUM VARIABLE LIFE POLICY
. The death proceeds are payable at the death of the Insured if the
Policy is in force.
. Additional Payments can be made. (See Section 8.)
. The Policy does not share in dividends.
================================================================================
<PAGE>
Administrative Office:
501 Boylston Street
Boston, Massachusetts 02117
- --
NE THE NEW ENGLAND (R) ---------------------------------
Insurance and Investment Policy Number __________________
- -- ---------------------------------
- --------------------------------------------------------------------------------
APPLICATION TO NEW ENGLAND VARIABLE LIFE INSURANCE COMPANY FOR
[_] SINGLE PREMIUM VARIABLE LIFE INSURANCE (Complete information for Proposed
Insured 1.)
[_] SINGLE PREMIUM VARIABLE SURVIVORSHIP LIFE INSURANCE (Complete information
for Proposed Insureds 1 and 2.)
QUESTIONS BELOW PERTAIN TO THE PROPOSED INSURED(S) UNLESS OTHERWISE INDICATED.
PART I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------- ----------------------------------------------------------
<S> <C>
1. PROPOSED INSURED 1 2. PROPOSED INSURED 2 (If applying for survivorship life
insurance.)
a. Print Name as it is to appear on the policy. a. Print Name as it is to appear on the policy.
__________________________________________________ __________________________________________________
__________________________________________________ __________________________________________________
(First/Middle Initial/Last) (First/Middle Initial/Last)
b. Address - Residence b. Address - Residence
-------------------------------------------------- --------------------------------------------------
(Street) (Street)
-------------------------------------------------- --------------------------------------------------
(City/State/Zip) (City/State/Zip)
-------------------------------------------------- --------------------------------------------------
c. Business c. Business
-------------------------------------------------- --------------------------------------------------
(Company/Street) (Company/Street)
-------------------------------------------------- --------------------------------------------------
(City/State/Zip) (City/State/Zip)
-------------------------------------------------- --------------------------------------------------
_________________________ _________________________
d. Social Security Number d. Social Security Number
_________________________ _________________________
--------------------------------- --------------------------------
e. Birthplace (State/Country) e. Birthplace (State/Country)
--------------------------------- --------------------------------
--------------------------------- --------------------------------
f. Birth Date (Month/Day/Year) f. Birth Date (Month/Day/Year)
--------------------------------- --------------------------------
g. Sex [_] Female [_] Male g. Sex [_] Female [_] Male
--------------------------------- --------------------------------
h. Occupation (Give Job Title and Duties) h. Occupation (Give Job Title And Duties)
--------------------------------- --------------------------------
_________________________________ ________________________________
i. Employed by i. Employed by
- ---------------------------------------------------------- ----------------------------------------------------------
</TABLE>
................................................................................
BENEFICIARY AND OWNER
3. Primary Beneficiary (Names and Relation to Proposed Insured(s).)
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Secondary Beneficiary (Names and Relation to Proposed Insured(s).)
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
4. Owner [_] Proposed Insured 1 [_] Proposed Insured 2 [_] Other
Complete if Owner is either Proposed Insured: Send communications to address
in [_] 1.b. [_] 1.c. [_] 2.b. [_] 2.c.
Otherwise complete information below:
________________________________
Name and Relation to Proposed Insured(s)
________________________________
-------------------------------------------------------
Address: (Street)
-------------------------------------------------------
(City/State/Zip)
-------------------------------------------------------
________________
Owner's Social Security Or Taxpayer ID Number
________________
................................................................................
<PAGE>
PART I APPLICATION (continued)
- --------------------------------------------------------------------------------
Replacement
5. Any life insurance or annuity in this or any other company which has
been or will be replaced as a result of this Application for
insurance? (If YES, complete the following and submit replacement
forms, if required.) [_] YES [_] NO
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
PROPOSED INSURED COMPANY 1035 EXCH. POLICY DATE POLICY NUMBER AMOUNT
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
[_] 1 [_] 2 $
-----------------------------------------------------------------------------------------------------
[_] 1 [_] 2 $
-----------------------------------------------------------------------------------------------------
[_] 1 [_] 2 $
-----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
..........................................................................................................................
<S> <C>
PREMIUM PAYMENT/ALLOCATIONS
--------------------
6. Initial Premium* $ Initial Premium Collected (Prepayment)** [_] YES [_] NO
--------------------
(If any part of question 9 or question 10 is answered YES, no prepayment is permitted.)
7. Account allocations (Whole % -- Minimum 10% in each selected account)*
---------- ----------
% Back Bay Advisors Money Market % Draycott International Equity
---------- ----------
% Back Bay Advisors Bond Income % Salomon Brothers U.S. Government Bond
---------- ----------
% Back Bay Advisors Managed % Salomon Brothers Strategic Bond Opportunities
---------- ----------
% Westpeak Stock Index % Venture Value
---------- ----------
% Westpeak Value Growth % Alger Equity Growth
---------- ----------
% Loomis Sayles Avanti Growth %
---------- ------------------------------------------------------------
% Loomis Sayles Balanced %
---------- ------------------------------------------------------------
% Loomis Sayles Small Cap 100% Total
---------- ------------------------------------------------------------
</TABLE>
* The initial premium will be allocated to the Money Market account for
an initial period described on page 1 of the prospectus.
** If YES, attach Prepayment Receipt and Temporary Life Insurance
Agreement.
<TABLE>
<CAPTION>
....................................................................................................................................
--------------------------------------------
SIMPLIFIED UNDERWRITING INFORMATION (Complete in all situations.) PROPOSED INSURED 1 PROPOSED INSURED 2
--------------------------------------------
<S> <C> <C> <C>
8. Has Proposed Insured smoked tobacco within the past 12 months? [_] YES [_] NO [_] YES [_] NO
9. Have you been treated for or been diagnosed by a member of the medical profession as having: (If YES, circle all conditions
that apply and give details in REMARKS.)
a. Cancer; tumor; diabetes; high blood pressure; stroke; or disease or
disorder of heart, blood or circulatory system? [_] YES [_] NO [_] YES [_] NO
b. Any mental or nervous disorder; epilepsy; drug addiction; alcoholism;
muscular or skeletal disorder; paralysis or deformity; any disease or [_] YES [_] NO [_] YES [_] NO
disorder of: kidneys; lungs; stomach; liver; digestive system; or urinary
system?
c. Acquired Immune Deficiency Syndrome (AIDS) or AIDS-Related
Complex (ARC)? [_] YES [_] NO [_] YES [_] NO
10. Has life or disability insurance on your life ever been declined, postponed
or modified as to plan, amount or rate? (If YES, give details in REMARKS.) [_] YES [_] NO [_] YES [_] NO
....................................................................................................................................
</TABLE>
<PAGE>
PART I APPLICATION (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------
FULL UNDERWRITING INFORMATION (complete questions 11-18 if any part of Qquestion 9 or PROPOSED INSURED 1 PROPOSED INSURED 2
Qquestion 10 is answered YES.)
---------------------------------------
<S> <C> <C> <C>
11. Has Proposed Insured used any tobacco in the past year? (If YES, complete [_] YES [_] NO [_] YES [_] NO
the following.)
_______________________________________
How many cigarettes per day?
_______________________________________
_______________________________________
If other than cigarettes, please explain.
_______________________________________
12. Have you been convicted in the past 2 years of: driving under the
influence of alcohol or drugs; or 2 or more moving violations? [_] YES [_] NO [_] YES [_] NO
(If YES, give details in REMARKS.)
13. a. Driver's License No. _______________________________________
_______________________________________
_______________________________________
b. State _______________________________________
14. Have you in the past 2 years participated in, or do you intend to
participate in: any flights as a trainee, pilot or crew member; underwater
sports (SCUBA diving, skin diving, snorkeling, hardhat); sky sports (sky
diving, hang gliding, parachuting, ballooning); or motor racing (auto,
motorcycle, motorboat)? (If YES, circle all that apply and give details in REMARKS.) [_] YES [_] NO [_] YES [_] NO
15. Do you intend to travel or reside outside of the United States? [_] YES [_] NO [_] YES [_] NO
(If YES, give details in REMARKS.)
---------------------------------------
16. a. Give present: Height/Weight __ft. __in. ___lbs. __ft. __in. __lbs.
---------------------------------------
b. Have you had any change in weight in the past year? [_] YES [_] NO [_] YES [_] NO
---------------------------------------
c. If yes, how much? ____ lbs.gain/loss ____ lbs.gain/loss
---------------------------------------
---------------------------------------------------------------------------------------------
PROPOSED INSURED 1 PROPOSED INSURED 2
------------------------------------------------------------------------------------------
17. Family History Age if State of Health Age at Age if State of Health Age at
Living or Cause of Death Death Living or Cause of Death Death
--------------------------------------------- ------------------------------------------
Father
------------------------------------------ ---------------------------------------------
Mother
------------------------------------------ ---------------------------------------------
Brothers and sisters:
- -
number living
- -
number dead
------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
18. Life Insurance in Force (If NONE, so state. Type P = Personal; B = Business; G = Group)
----------------------------------------------------------------------------------------------------------------------------
PROPOSED INSURED COMPANY TYPE YEAR OF ISSUE LIFE AMOUNT ADB AMOUNT
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
[_] 1 [_] 2 $ $
----------------------------------------------------------------------------------------------------------------------------
[_] 1 [_] 2 $ $
----------------------------------------------------------------------------------------------------------------------------
[_] 1 [_] 2 $ $
----------------------------------------------------------------------------------------------------------------------------
....................................................................................................................................
</TABLE>
<PAGE>
PART I APPLICATION (continued)
- --------------------------------------------------------------------------------
SUITABILITY/DISCLOSURE SECTION
--------------------
19. Suitability Statement by Applicant APPLICANT
--------------------
a. Did you receive the prospectus? [_] YES [_] NO
----------------------------
If YES, give date of prospectus. (Month/Day/Year)
----------------------------
b. Do you understand that:
-the death benefit may increase or decrease
depending on the policy's investment return,
but will never be less than the guaranteed
minimum? [_] YES [_] NO
-the cash value may increase or decrease
depending on the policy's investment return? [_] YES [_] NO
c. Do you believe that this policy will meet
your insurance needs and financial
objectives? [_] YES [_] NO
................................................................................
COST OF INSURANCE RATES MAY CHANGE. The cost of insurance rates for the policy
may change. The rates currently being charged are not guaranteed; and the
Company may charge the full maximum guaranteed rates.
THE DEATH BENEFIT MAY BE VARIABLE OR FIXED UNDER SPECIFIED CONDITIONS.
THE CASH VALUE MAY INCREASE OR DECREASE IN ACCORDANCE WITH SEPARATE INVESTMENT
ACCOUNT EXPERIENCE.
................................................................................
REMARKS (Attach additional sheet, if necessary.)
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
SPECIAL REQUESTS FOR ADDITIONAL COVERAGE (Attach additional sheet, if
necessary.)
___________________________________________________________________________
___________________________________________________________________________
<PAGE>
PART I APPLICATION (continued)
- --------------------------------------------------------------------------------
Company use (Additions and Amendments)
- --------------------------------------------------------------------------------
DECLARATIONS
GENERAL. To the best of my knowledge and belief the answers recorded are true
and complete. In those states where written consent is required by law, my
agreement in writing is required to any entry made by the Company in the
"Company Use" section as to: (a) age; or (b) plan of insurance; or (c) riders;
or (d) amounts; or (e) rate class.
WHEN INSURANCE TAKES EFFECT. If the initial premium is prepaid in connection
with this application, the insurance will take effect as stated in the
Prepayment Receipt and Temporary Life Insurance Agreement. Otherwise, the
insurance will take effect only when the initial premium is paid; provided
that at the time of such payment: (a) this Application has been approved at
the Company's Administrative Office; and (b) there has been no change in
insurability as represented in this Application since the date of the
Application.
LIMITATION ON AUTHORITY OF AGENTS AND EXAMINERS. Agents and Examiners do not
have authority: (a) to determine insurability; (b) to change any terms of this
Application; or (c) to make a contract for the Company.
................................................................................
AUTHORIZATION
In order that insurance can be issued, I authorize each of the following
having records or knowledge of me or my health to give this information to the
Company: a medical practitioner; a medical facility; an insurance company; the
Medical Information Bureau; a consumer reporting bureau; and any other
company, concern or person. Information received by the Company may be
disclosed to third parties in the conduct of the Company's business.
I understand that: I have a right of access to and correction of all
information obtained by the Company; I can ask to be interviewed with respect
to any investigative consumer report; and I can ask for a copy of any such
report. A photocopy of this authorization is as valid as the original. This
authorization is valid for 30 months from the date it is signed. I have
received a Notice of Insurance Practices; this Notice gives a more detailed
description of the information practices of the Company.
................................................................................
SIGNATURES
--------------------------------------------
Signed at (City/State)
--------------------------------------------
--------------------------------------------
Date (Month/Day/Year)
--------------------------------------------
____________________________________________
Applicant (If other than
Proposed Insured(s))
____________________________________________
____________________________________________
Proposed Insured 1
____________________________________________
____________________________________________
Proposed Insured 2
____________________________________________
____________________________________________
Agent
____________________________________________
END OF APPLICATION
================================================================================
OWNER'S CERTIFICATION (IN LIEU OF W9)
Owner's Social Security or Taxpayer Identification Number
[_] I am [_] I am not subject to backup withholding under Section
3406(a)(l)(C) of the Internal Revenue Code. Under penalties of perjury, I
certify that the information in this section is true, correct and complete.
__________________________________________________________
Signature of Owner
__________________________________________________________
----------------------------------------------------------
Date (Month/Day/Year)
----------------------------------------------------------
<PAGE>
- --
NE THE NEW ENGLAND (R)
Insurance and Investment
- --
================================================================================
AGENT'S CERTIFICATE (Completion required in every case.)
================================================================================
<TABLE>
<CAPTION>
-------------------------------------------------------
Questions Proposed Insured 1 Proposed Insured 2
-------------------------------------------------------
<S> <C> <C> <C>
1. Did you see the Proposed Insured on
the date the application was signed? [_] YES [_] NO [_] YES [_] NO
2. Is the Proposed Insured a citizens of the US? [_] YES [_] NO [_] YES [_] NO
_______________________________________________________
If NO, specify: Date of entry:
_______________________________________________________
Type of visa:
_______________________________________________________
_______________________________________________________
3. If the name of the Proposed Insured(s) has been changed
in the past 10 years, give former name(s).
_______________________________________________________
4. Marital Status [_] SINGLE [_] MARRIED [_] SINGLE [_]MARRIED
[_] SEPARATED [_] WIDOWED [_] SEPARATED [_] WIDOWED
[_] DIVORCED [_] DIVORCED
_______________________________________________________
5. Annual Income
_______________________________________________________
_______________________________________________________
6. Net Worth
_______________________________________________________
-------------------------------------------------------
7. Provide phone numbers where Proposed Insured(s) can ( ) ( )
be contacted.
-------------------------------------------------------
Preferred Calling Times: ______[_] a.m.[_] p.m. ______[_]A.M. [_] P.M.
-------------------------------------------------------
8. Do you have knowledge or reason to believe
that any insurance or annuity in this
or any other company has been or will
be replaced as a result of this Application
for insurance? [_] YES [_] NO [_] YES [_] NO
_________________________________________________________________
9. State Source of Funds if $10,000 or greater.
_________________________________________________________________
..........................................................................................................................
OWNER SUITABILITY
______________________________________________________________________________________
10. Occupation
______________________________________________________________________________________
______________________________________________________________________________________
11. EMPLOYER _______________________________________________________
(Give name and address.) _______________________________________________________
______________________________________________________________________________________
-------- ----------
12. Financial Status: a. Annual Income $ b. Net worth, exclusive of home, furnishings and autos $
-------- ----------
--------------- ---------- ------------------------
13. Tax Bracket % 14. Age 15. State of Residence
--------------- ---------- ------------------------
16. Is Owner associated with a member firm of the NASD? (If YES, give name and address of firm.) [_] YES [_] NO
__________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________
..........................................................................................................................
SIGNATURE
To the best of my knowledge, I have presented the Company all pertinent facts regarding the Proposed Insured(s) and
regarding this Application.
_________________________________________________ -----------------------------------
Signature of Agent Date (MONTH/DAY/YEAR)
_________________________________________________ -----------------------------------
..........................................................................................................................
GENERAL AGENT'S CERTIFICATE
__________________________________________________________________
If Agent of another company, give name of company.
__________________________________________________________________
Is Agent licensed where application is written? [_] YES [_] NO
__________________________________________ -----------------------------------
Signature of General Agent Date (MONTH/DAY/YEAR)
__________________________________________ -----------------------------------
..........................................................................................................................
AGENT'S IDENTIFICATION
AGENT'S AGENCY COMMISSION SPLIT
----------------------
AGENT'S NAME NUMBER NUMBER FIRST RENEWAL
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
COMPLETE ABOVE DATA IN ALL CASES FOR PROPER CREDITING OF COMMISSIONS.
..........................................................................................................................
ACCEPTED FOR THE COMPANY
___________________________________________________________________________ -----------------------------------
DATE (MONTH/DAY/YEAR)
___________________________________________________________________________ -----------------------------------
</TABLE>
<PAGE>
Administrative Office:
501 Boylston Street
Boston, Massachusetts 02117
- -- --------------------------------
NE THE NEW ENGLAND (R) Policy Number __________________
Insurance and Investment --------------------------------
- --
================================================================================
SUPPLEMENT TO PART I APPLICATION TO NEW ENGLAND VARIABLE LIFE INSURANCE
COMPANY FOR
[_] SINGLE PREMIUM VARIABLE LIFE INSURANCE (Complete information for
Proposed Insured 1.)
[_] SINGLE PREMIUM VARIABLE SURVIVORSHIP LIFE INSURANCE (Complete
information for Proposed Insureds 1 and 2.)
<TABLE>
<CAPTION>
PROPOSED INSURED 1 PROPOSED INSURED 2
------------------------------------------------------------------------------------------
<S> <C> <C>
Name (First/Middle Initial/Last Name)
------------------------------------------------------------------------------------------
Birth Date (Month/Day/Year)
------------------------------------------------------------------------------------------
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------
PROPOSED INSURED 1 PROPOSED INSURED 2
----------------------------------------------------
<C> <C>
1. Has Proposed Insured used any tobacco in the past year? [_] YES [_] NO [_] YES [_] NO
(If YES, complete the following.)
----------------------------------------------------
How many cigarettes per day?
----------------------------------------------------
----------------------------------------------------
If other than cigarettes, please explain
----------------------------------------------------
2. Have you been convicted in the past 2 years of: driving
under the influence of alcohol or drugs; or 2 or more moving [_] YES [_] NO [_] YES [_] NO
violations? (If YES, give details in REMARKS.)
----------------------------------------------------
3. a. Driver's License No.
----------------------------------------------------
----------------------------------------------------
b. State
----------------------------------------------------
4. Have you in the past 2 years participated in, or do you
intend to participate in: any flights as a trainee, pilot
or crew member; underwater sports (SCUBA diving, skin
diving, snorkeling, hardhat); sky sports (sky diving,
hang gliding, parachuting, ballooning); or motor racing
(auto, motorcycle, motorboat)? (If YES, circle all that [_] YES [_] NO [_] YES [_] NO
apply and give details in REMARKS.)
5. Do you intend to travel or reside outside of the United
States? (If YES, give details in REMARKS.) [_] YES [_] NO [_] YES [_] NO
----------------------------------------------------
6. a. Give present: Height/Weight __ft. __in. ____lbs. __ft. __in. ____lbs.
----------------------------------------------------
b. Have you had a change in weight in the past year? [_] YES [_] NO [_] YES [_] NO
----------------------------------------------------
c. If YES, how much? ______ lbs gain/loss ______ lbs gain/loss
----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
PROPOSED INSURED 1 PROPOSED INSURED 2
------------------------------------------------------------------------------------------------
7. Family History Age if State of Health Age Age if State of Health Age
Living or Cause of Death at Death Living or Cause of Death at Death
------------------------------------------- -------------------------------------------
<S> <C> <C>
Father
------------------------------------------- -------------------------------------------
Mother
------------------------------------------- -------------------------------------------
Brothers and sisters:
---- ----
number living
---- ----
number dead
------------------------------------------------------------------------------------------------
</TABLE>
8. Life Insurance in Force (If NONE, so state. Type P = Personal;
B = Business; G = Group)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
PROPOSED INSURED COMPANY TYPE YEAR OF ISSUE LIFE AMOUNT ADB AMOUNT
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
[_] 1 [_] 2 $ $
---------------------------------------------------------------------------------------------------------------------------
[_] 1 [_] 2 $ $
---------------------------------------------------------------------------------------------------------------------------
[_] 1 [_] 2 $ $
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
...............................................................................
<PAGE>
PART I APPLICATION (continued)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
------------------------------------------------------------------------------------------------
PROPOSED INSURED 1 PROPOSED INSURED 2
------------------------------------------------------------------------------------------------
9. MARITAL STATUS [_] SINGLE [_] MARRIED [_] SEPARATED [_] SINGLE [_] MARRIED [_] SEPARATED
[_] WIDOWED [_] DIVORCED [_] WIDOWED [_] DIVORCED
------------------------------------------------------------------------------------------------
10. OCCUPATION (Give
job title and duties.)
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
11. EMPLOYED BY (Give
name and address.)
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
12. ANNUAL INCOME $ $
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
13. NET WORTH $ $
------------------------------------------------------------------------------------------------
</TABLE>
......................................................................
REMARKS (Attach additional sheet, if necessary.)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
- -------------------------------------------------------------------------------
COMPANY USE (Additions and Amendments)
- -------------------------------------------------------------------------------
DECLARATIONS
GENERAL. To the best of my knowledge and belief the answers recorded are
true and complete. In those states where written consent is required by
law, my agreement in writing is required to any entry made by the Company
in the "Company Use" section as to: (a) age; or (b) plan of insurance; or
(c) riders; or (d) amounts; or (e) rate class.
LIMITATION ON AUTHORITY OF AGENTS, REGISTERED REPRESENTATIVES AND
EXAMINERS. Agents, Registered Representatives and Examiners do not have
authority: (a) to determine insurability; (b) to change any terms of this
Application ; or (c) to make a contract for the Company.
...............................................................................
<TABLE>
<S> <C>
SIGNATURES
---------------------------------------------------------------------------------------------
Signed at (City/State)
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Date (Month/day/year)
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Proposed Insured 1
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Proposed Insured 2
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Applicant (If Other than
Proposed Insured(s).)
------------------------------------------------- -----------------------------------
Teleunderwriter Date (Month/day/year)
------------------------------------------------- -----------------------------------
</TABLE>
<PAGE>
Administrative Office:
501 Boylston Street
Boston, Massachusetts 02117
(800)-600-3898
- --
NE THE NEW ENGLAND (R)
Insurance and Investment
- --
================================================================================
PART I APPLICATION TO NEW ENGLAND VARIABLE LIFE INSURANCE COMPANY FOR
[_] SINGLE PREMIUM VARIABLE LIFE INSURANCE (Complete information for Proposed
Insured 1.)
[_] SINGLE PREMIUM VARIABLE SURVIVORSHIP LIFE INSURANCE (Complete information
for Proposed Insureds 1 and 2.)
================================================================================
<TABLE>
<S> <C>
OWNER
_____________________________________________________________________________________
1. Name and Relation to Proposed Insured(s):
_____________________________________________________________________________________
---------------------------------------------------------------------
Address to which communications(street) should be sent: (Street)
---------------------------------------------------------------------
(City/State/Zip)
---------------------------------------------------------------------
_____________________________________________________________________
Owner's Social Security Or Taxpayer ID Number:
_____________________________________________________________________
....................................................................................................................................
PROPOSED INSURED 1
----------------------------------------------------------------------------------
2. Print Name as it is to appear on the policy. (First/Middle Initial/Last)
----------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Address a. Residence (Street)
------------------------------------------------------------------------------------------------
(City/State/zip)
------------------------------------------------------------------------------------------------
b. Business (Company/Street)
------------------------------------------------------------------------------------------------
(City/State/Zip)
------------------------------------------------------------------------------------------------
__________________________
c. Social Security Number d. Sex [_] Female [_] Male
__________________________
------------------------------------ -------------------------------------------------------
e. Birth Date (Month/Day/Year) f. Birthplace (State/Country)
------------------------------------ -------------------------------------------------------
g. Have you smoked tobacco within the past 12 months? [_] YES [_] NO
....................................................................................................................................
PROPOSED INSURED 2 (If applying for survivorship life insurance.)
----------------------------------------------------------------------------------
3. Print Name as it is to appear on the policy. (First/Middle initial/Last)
----------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Address a. Residence (Street)
------------------------------------------------------------------------------------------------
(City/State/Zip)
------------------------------------------------------------------------------------------------
b. Business (Company/Street)
------------------------------------------------------------------------------------------------
(City/State/Zip)
------------------------------------------------------------------------------------------------
__________________________
c. Social Security Number d. Sex [_] Female [_] Male
__________________________
------------------------------------ -------------------------------------------------------
e. Birth Date (Month/Day/Year) F. Birthplace (State/Country)
------------------------------------ -------------------------------------------------------
g. Have you smoked tobacco within the past 12 months? [_] YES [_] NO
....................................................................................................................................
BENEFICIARY
4. Primary Beneficiary (Names and Relation to Proposed Insured (s).)
________________________________________________________________________________________________________________________________
--------------------------------------------------------------------------------------------------------------------------------
(Street Address/City/State/Zip)
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Secondary Beneficiary (Names and Relation to Proposed Insured (s).)
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
(Street Address/City/State/Zip)
--------------------------------------------------------------------------------------------------------------------------------
....................................................................................................................................
REPLACEMENT
5. Any life insurance or annuity in this or any other company which has
been or will be replaced as a result of this application for insurance? [_] YES [_] NO
(if yes, complete the following and submit replacement forms, if
required.)
--------------------------------------------------------------------------------------------------------------------------------
PROPOSED INSURED COMPANY 1035 EXCH. POLICY DATE POLICY NUMBER AMOUNT
--------------------------------------------------------------------------------------------------------------------------------
[_] 1 [_] 2 $
--------------------------------------------------------------------------------------------------------------------------------
[_] 1 [_] 2 $
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PART I APPLICATION (continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
PREMIUM PAYMENT/ALLOCATIONS
------------------------
6. Initial Premium* $ Initial Premium Collected (Prepayment)** [_] YES [_] NO
------------------------
(If any part of question 8 or question 9 is answered yes, no prepayment is permitted.)
7. Account allocations (Whole % -- Minimum 10% in each selected account)*
--------- -----------
% Back Bay Advisors Money Market % Draycott International Equity
--------- -----------
% Back Bay Advisors Bond Income % Salomon Brothers U.S. Government Bond
--------- -----------
% Back Bay Advisors Managed % Salomon Brothers Strategic Bond Opportunities
--------- -----------
% Westpeak Stock Index % Venture Value
--------- -----------
% Westpeak Value Growth % Alger Equity Growth
--------- -----------
% Loomis Sayles Avanti Growth %
--------- --------------------------------------------------------------
% Loomis Sayles Balanced %
--------- --------------------------------------------------------------
% Loomis Sayles Small Cap 100% TOTAL
--------- --------------------------------------------------------------
* The initial premium will be allocated to the Money Market account for an initial period described on page 1 of the prospectus.
** If YES, attach completed Prepayment Receipt and Temporary Life Insurance Agreement
............................................................................................----------------------------------------
SIMPLIFIED UNDERWRITING PROPOSED INSURED 1 PROPOSED INSURED 2
----------------------------------------
8. Have you ever been treated for or been diagnosed by a member of the medical profession as having:
(If YES, circle all conditions that apply and give details in REMARKS.)
a. Cancer; tumor; diabetes; high blood pressure; stroke; or disease or
disorder of heart, blood or circulatory system? [_] yes [_] no [_] yes [_] no
b. Any mental or nervous disorder; epilepsy; drug addition; alcoholism;
muscular or skeletal disorder; paralysis or deformity; any disease or
disorder of: kidneys; lungs; stomach; liver; digestive system; or urinary [_] yes [_] no [_] yes [_] no
system?
c. Acquired Immune Deficiency Syndrome (AIDS) or AIDS-related complex (ARC)? [_] yes [_] no [_] yes [_] no
9. Has life or disability insurance on your life ever been declined, postponed or
modified as to plan, amount or rate? (If YES, give details in REMARKS.) [_] yes [_] no [_] yes [_] no
....................................................................................................................................
SUITABILITY/DISCLOSURE SECTION
10. Suitability Statement by Applicant APPLICANT
------------------------
a. Did you receive the prospectus? [_] YES [_] NO
--------------------------------------------------------------
If YES, give date of prospectus. (Month/Day/Year)
--------------------------------------------------------------
b. Do you understand that:
-the death benefit may increase or decrease depending on the policy's investment return, but
will never be less than the guaranteed minimum? [_] YES [_] NO
-the cash value may increase or decrease depending on the policy's investment return? [_] YES [_] NO
c. Do you believe that this policy will meet your insurance needs and financial objectives? [_] YES [_] NO
....................................................................................................................................
COST OF INSURANCE RATES MAY CHANGE. The cost of insurance rates for the policy may change. The rates currently being
charged are not guaranteed; and the Company may charge the full maximum guaranteed rates.
THE DEATH BENEFIT MAY BE VARIABLE OR FIXED UNDER SPECIFIED CONDITIONS.
THE CASH VALUE MAY INCREASE OR DECREASE IN ACCORDANCE WITH SEPARATE INVESTMENT ACCOUNT EXPERIENCE.
....................................................................................................................................
REMARKS (Attach additional sheet, if necessary.)
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PART I APPLICATION (continued)
- --------------------------------------------------------------------------------
----------------------------------
COMPANY USE (ADDITIONS AND AMENDMENTS) POLICY NUMBER ___________________
----------------------------------
- --------------------------------------------------------------------------------
DECLARATIONS
GENERAL. To the best of my knowledge and belief the answers recorded are true
and complete. In those states where written consent is required by law, my
agreement in writing is required to any entry made by the Company in the
"Company Use" section as to: (a) age; or (b) plan of insurance; or (c) riders;
or (d) amounts; or (e) rate class.
WHEN INSURANCE TAKES EFFECT. If the initial premium is prepaid in connection
with this Application, the insurance will take effect as stated in the
Prepayment Receipt and Temporary Life Insurance Agreement. Otherwise, the
insurance will take effect only when the initial premium is paid; provided that
at the time of such payment: (a) this Application has been approved at the
Company's Administrative Office; and (b) there has been no change in
insurability as represented in this Application since the date of the
Application .
LIMITATION ON AUTHORITY OF AGENTS, REGISTERED REPRESENTATIVES AND EXAMINERS.
AGENTS, REGISTERED REPRESENTATIVES AND Examiners do not have authority: (a) to
determine insurability; (b) to change any terms of this Application ; or (c) to
make a contract for the Company.
................................................................................
AUTHORIZATION
In order that insurance can be issued, I authorize each of the following having
records or knowledge of me or my health to give this information to the
Company: a medical practitioner; a medical facility; an insurance company; the
Medical Information Bureau; a consumer reporting bureau; and any other company,
concern or person. Information received by the Company may be disclosed to
third parties in the conduct of the Company's business.
I understand that: I have a right of access to and correction of all
information obtained by the Company; I can ask to be interviewed with respect
to any investigative consumer report; and I can ask for a copy of any such
report. A photocopy of this authorization is as valid as the original. This
authorization is valid for 30 months from the date it is signed. I have
received a Notice of Insurance Practices; this Notice gives a more detailed
description of the information practices of the Company.
................................................................................
SIGNATURES
------------------------------
Signed At (City/state)
------------------------------
------------------------------
Date (Month/day/year)
------------------------------
------------------------------
Applicant (If Other Than Proposed Insured(s))
------------------------------
------------------------------
Proposed Insured 1
------------------------------
------------------------------
Proposed Insured 2
------------------------------
------------------------------
Agent Or Registered Representative
------------------------------
END OF APPLICATION
================================================================================
OWNER'S CERTIFICATION (IN LIEU OF W9)
Owner's Social Security Or Taxpayer Identification Number
[_] I am [_] I am not subject to backup withholding under Section
3406(a)(l)(C) of the Internal Revenue Code. Under
penalties of perjury, I certify that the information in
this section is true, correct and complete.
-------------------------------------------------------
Signature Of Owner
-------------------------------------------------------
-------------------------------------------------------
Date (Month/Day/Year)
-------------------------------------------------------
NEV APP-36-95
<PAGE>
- --
NE THE NEW ENGLAND (R)
Insurance and Investment
- --
- --------------------------------------------------------------------------------
REGISTERED REPRESENTATIVE CERTIFICATE (completion required in every case.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------
QUESTIONS PROPOSED INSURED 1 PROPOSED INSURED 2
-------------------------------------------
<S> <C>
1. Did you see the Proposed Insured on the date the application was
signed? [_] YES [_] NO [_] YES [_] NO
2. Is the Proposed Insured a citizen of the US? [_] YES [_] NO [_] YES [_] NO
-------------------------------------------
If NO, specify: Date of entry:
___________________________________________
Type of visa:
___________________________________________
___________________________________________
3. If the name of the Proposed Insured(s) has been changed in the past 10
years give former name(s).
___________________________________________
-------------------------------------------
4. Provide phone number where Proposed Insured can be contacted. ( ) ( )
-------------------------------------------
-------------------------------------------
Preferred Calling Time: ___a.m. ___p.m. ___a.m. ___p.m.
-------------------------------------------
5. Do you have knowledge or reason to believe that any insurance or
annuity in this or any other company has been or will be replaced as a
result of this Application for insurance? [_] YES [_] NO [_] YES [_] NO
________________________________________________________________
6. State Source of Funds if $10,000 or greater.
________________________________________________________________
...............................................................................................................................
OWNER SUITABILITY
______________________________________________________________________________________________________
7. Occupation
______________________________________________________________________________________________________
------------------------------------------------------------------------------------------------------
8. Employer (Give name and address.)
--------------------------------------------------------------------------------------------------
_________________________________________________________________________________
------------------------------------------------------------------------------------------------------
------------------------------
9. Financial Status: a. Annual Income $
------------------------------
b. Net worth, exclusive of home, furnishings and autos $
------------------------------
----------------------------------------- ______________________________
10. Tax Bracket % 11.Age
----------------------------------------- ______________________________
_________________________________________
12. State of Residence
_________________________________________
13. Is Owner associated with a member firm of the NASD? (If YES, give name and address of firm.) [_] YES [_] NO
----------------------------------------------------------------------------------------------------------------------
____________________________________________________________________________________________________________________
----------------------------------------------------------------------------------------------------------------------
...............................................................................................................................
SIGNATURE
To the best of my knowledge, I have presented the Company all pertinent facts regarding the Proposed Insured(s) and
regarding this Application. I Have conducted a qualified suitability review and found this Application to be acceptable.
_________________________________________________________________________________
Signature of Registered Representative
_________________________________________________________________________________
_________________________________________________________________________________
Date (Month/Day/Year)
_________________________________________________________________________________
...............................................................................................................................
REGISTERED REPRESENTATIVE INFORMATION
____________________________________________________________________________________________
Company Name
____________________________________________________________________________________________
____________________________________________________________________________________________
Representative Number
____________________________________________________________________________________________
____________________________________________________________________________________________
Office phone number
____________________________________________________________________________________________
Office Address (Street/City/StatE/Zip)
____________________________________________________________________________________________
____________________________________________________________________________________________
Product or Commission Code
____________________________________________________________________________________________
COMPLETE ABOVE DATA IN ALL CASES FOR PROPER CREDITING OF COMMISSIONS.
</TABLE>
