<PAGE>
As filed with Securities and Exchange Commission on
May 1, 1998
Registration No. 33-10954
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-6
POST-EFFECTIVE AMENDMENT NO. 13
TO REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------
NEW ENGLAND VARIABLE LIFE SEPARATE ACCOUNT
(Exact Name of Trust)
NEW ENGLAND LIFE INSURANCE COMPANY
(Name of Depositor)
501 Boylston Street
Boston, Massachusetts 02117
(Address of depositor's principal executive offices)
------------------
MARIE C. SWIFT
Counsel
New England Life Insurance Company
501 Boylston Street
Boston, Massachusetts 02117
(Name and address of agent for service)
Copies to:
STEPHEN E. ROTH
Sutherland, Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
------------------
It is proposed that this filing will become effective (check appropriate box)
[X] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
Title of Securities Being Registered: Units of Interest in Single Premium
Variable Life Insurance Policies.
<PAGE>
NEW ENGLAND VARIABLE LIFE SEPARATE ACCOUNT
Registration Statement on Form S-6
Cross-Reference Sheet
Form N-8B-2
Item No. Caption in Prospectus
- ----------- ---------------------
1 Cover Page
2 Cover Page
3 Inapplicable
4 Distribution Agreement and Other Contractual Arrangements
5 How is NEVLICO regulated?
6 The Variable Account
9 Inapplicable
10(a) Other Policy Features
10(b) Principal Policy Features
10(c), (d), (e) Death Benefit; Cash Value and Net Cash Value of the Policy; Is
there a short-term cancellation right or "Free Look"?;
Investment and Transfer Options
10(f), (g), (h) Voting Rights; Rights Reserved by NEVLICO
10(i) Limits to NEVLICO's Right to Challenge the Policy; Payment of
Proceeds
11 The Variable Account
12 Who are NEVLICO and The New England?; What are the Money
Market, Bond Income and Capital Growth Sub-Accounts of the
Variable Account?; Distribution Agreement and Other Contractual
Arrangements
13 Charges and Expenses; Distribution Agreement and Other
Contractual Arrangements; Charge for NEVLICO's Income Taxes;
Appendix A
14 Amount Provided for Investment Under the Policy's Sub-Accounts;
Distribution Agreement and Other Contractual Arrangements
15 How is the Premium Determined?; How is the Premium Invested?;
Amount provided for Investment in a Policy's Sub-Accounts; The
Policy's Actual Investment Return
16 Investments of the Variable Account
17 Captions referenced under Items 10(c), (d) and (e) and (i)
above
18 The Variable Account; The Policy's Actual Investment Return
19 Reports; Distribution Agreement and Other Contractual
Arrangements
20 Captions referenced under Items 6 and 10(g) above
21 Loan Provision
22 Inapplicable
23 Distribution Agreement and Other Contractual Arrangements
24 Limits to NEVLICO's Right to Challenge the Policy
25 Who are NEVLICO and The New England?
<PAGE>
Form N-8B-2
Item No. Caption in Prospectus
- ----------- ---------------------
26 Inapplicable
27 Who are NEVLICO and The New England?
28 Management
29 Who are NEVLICO and The New England?
30 Inapplicable
31 Inapplicable
32 Inapplicable
33 Inapplicable
34 Inapplicable
35 Who are NEVLICO and The New England?
36 Inapplicable
37 Inapplicable
38 Distribution Agreement and Other Contractual Arrangements
39 Distribution Agreement and Other Contractual Arrangements
40 Inapplicable
41(a) Distribution Agreement and Other Contractual Arrangements
42 Inapplicable
43 Inapplicable
44(a) Investments of the Variable Account; Amount Provided for
Investment in a Policy's Sub-Accounts
44(b) Charges and Expenses; Appendix B
44(c) How is the premium determined?; Group or Sponsored Arrangements
45 Inapplicable
46 Investments of the Variable Account; Captions referenced under
Items 10(c), (d) and (e) above; Appendix B
47 Investments of the Variable Account
48 Inapplicable
49 Inapplicable
50 Inapplicable
51 Cover Page; Death Benefit; Charges and Expenses; Exchange of
Policy; Payment of Options; Other Policy Features; Distribution
Agreement and Other Contractual Arrangements; Appendix C
52 Rights Reserved by NEVLICO
53 Tax Considerations
54 Inapplicable
55 Inapplicable
<PAGE>
NEW ENGLAND LIFE
INSURANCE COMPANY
ZENITH LIFE--VARIABLE LIFE INSURANCE POLICIES
ZENITH LIFE ONE--SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICIES
SUPPLEMENT DATED MAY 1, 1998 TO
PROSPECTUS DATED MAY 1, 1988
INTRODUCTION
This supplement updates certain information contained in the prospectus
dated May 1, 1988, as supplemented February 1, 1989, May 1, 1991, May 1, 1992,
May 1, 1993, May 1, 1994, May 1, 1995, May 1, 1996 and May 1, 1997. You should
read and retain this supplement with your Policy. NELICO will send you an
additional copy of the prospectus as supplemented, without charge, on written
request. The Zenith Life and Zenith Life One Policies are no longer available
for sale.
NELICO is an indirect wholly-owned subsidiary of Metropolitan Life Insurance
Company ("MetLife").
NELICO's Home Office is 501 Boylston Street, Boston, Massachusetts 02116.
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 SUPPLEMENT IS NOT VALID UNLESS ACCOMPANIED OR PRECEDED BY THE CURRENT
PROSPECTUS OF THE NEW ENGLAND ZENITH FUND AND OF THE VARIABLE INSURANCE
PRODUCTS FUND AND VARIABLE INSURANCE PRODUCTS FUND II, WHICH ARE ATTACHED AT
THE END OF THIS SUPPLEMENT. THE SUPPLEMENT AND PROSPECTUSES SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.
<PAGE>
CHARGES AND EXPENSES
The amount of a charge may not necessarily correspond to the costs
associated with providing the services or benefits indicated by the
designation of the charge or associated with the particular Policy. For
example, the sales charge and Deferred Sales Charges may not fully cover all
of the sales and distribution expenses actually incurred by the Company, and
proceeds from other charges, including the mortality and expense risk charge,
may be used in part to cover such expenses.
CHARGES AGAINST THE ELIGIBLE FUNDS AND THE SUB-ACCOUNTS OF THE VARIABLE
ACCOUNT
ELIGIBLE FUND EXPENSES. Charges for investment advisory fees and other
expenses are deducted from the assets of the Eligible Funds.
The Zenith Fund Series incur charges for advisory fees and certain other
expenses. The series (other than the Capital Growth Series) are advised by TNE
Advisers, Inc., an affiliate of NELICO. 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 and Westpeak
Growth and Income 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
(other than the Capital Growth 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 up until two years after the end of the fiscal
year in which the expense was incurred. 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 for 1997 (for the Goldman Sachs Midcap Value Series,
anticipated expenses for 1998), after giving effect to the applicable expense
cap or expense deferral arrangement.
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS AFTER ANY EXPENSE CAP)
<TABLE>
<CAPTION>
BACK BAY BACK BAY WESTPEAK LOOMIS
ADVISORS ADVISORS BACK BAY WESTPEAK GROWTH SAYLES
CAPITAL BOND MONEY ADVISORS STOCK AND SMALL
GROWTH INCOME MARKET MANAGED INDEX INCOME CAP
SERIES SERIES SERIES SERIES SERIES SERIES SERIES
------- -------- -------- -------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fee.......... .63% .40% .35% .50% .25% .70% 1.00%
Other Expenses.......... .04% .12% .10% .11% .15% .12% --
---- ---- ---- ---- ---- ---- -----
Total Series Operating
Expenses............. .67% .52% .45% .61% .40% .82% 1.00%
</TABLE>
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS AFTER EXPENSE DEFERRAL)
<TABLE>
<CAPTION>
GOLDMAN MORGAN
SACHS LOOMIS STANLEY DAVIS ALGER
MIDCAP SAYLES INTERNATIONAL VENTURE EQUITY
VALUE BALANCED MAGNUM VALUE GROWTH
SERIES* SERIES EQUITY SERIES SERIES SERIES
------- -------- ------------- ------- ------
<S> <C> <C> <C> <C> <C>
Management Fee................... .75% .70% .90% .75% .75%
Other Expenses................... .15% .15% .40% .15% .12%
---- ---- ----- ---- ----
Total Series Operating Ex-
penses........................ .90% .85% 1.30% .90% .87%
</TABLE>
- --------
* Anticipated annual operating expenses for the Goldman Sachs Midcap Value
Series are based on the management fee approved by shareholders of the
Series that became effective on May 1, 1998, and other expenses actually
incurred for the Series for 1997.
A-2
<PAGE>
The investment adviser for the VIP Fund and VIP Fund II is Fidelity
Management & Research Company, a registered investment adviser under the
Investment Advisers Act of 1940. The Portfolios of the VIP Fund and VIP Fund
II, as part of their operating expenses, pay investment management fees to
Fidelity Management & Research Company. The Portfolios also bear certain other
expenses. For the year ended December 31, 1997, the total operating expenses
incurred by the Portfolios, as a percentage of Portfolio average net assets,
were as follows:
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL ANNUAL
PORTFOLIO FEES EXPENSES EXPENSES
- --------- ---------- -------- ------------
<S> <C> <C> <C>
Equity-Income .50% .08% .58%*
Overseas .75% .17% .92%*
High Income .59% .12% .71%
Asset Manager .55% .10% .65%*
</TABLE>
- --------
* Total annual expenses do not reflect certain expense reductions due to
directed brokerage arrangements and custodian interest credits. Had these
reductions been included, total annual expenses would have been .57% for
Equity-Income Portfolio, .90% for Overseas Portfolio and .64% for Asset
Manager Portfolio.
Affiliates of Fidelity Management & Research Company compensate NELICO
and/or certain affiliates for administrative, distribution, or other services
relating to these Portfolios of VIP Fund and VIP Fund II. Such compensation is
based on assets of the Portfolios attributable to the Policies and certain
other variable insurance products issued by NELICO and its affiliates.
PRINCIPAL POLICY FEATURES
INVESTMENT OPTION (ZENITH LIFE)
The following change is made:
The Policy provides that a minimum of 10% of any premium must be allocated
to each sub-account selected and that percentages allocated must be in whole
numbers; currently, however, NELICO is waiving the requirement of a 10%
minimum and will permit any whole percentage to be allocated to a sub-account.
THE VARIABLE ACCOUNT
INVESTMENTS OF THE VARIABLE ACCOUNT
The Variable Account currently has 16 sub-accounts, each of which invests in
a series of an Eligible Fund. The sub-accounts of the Variable Account are:
--The Zenith Money Market Sub-Account, which invests in the Back Bay
Advisors Money Market Series of the Zenith Fund
--The Zenith Bond Income Sub-Account, which invests in the Back Bay
Advisors Bond Income Series of the Zenith Fund
--The Zenith Capital Growth Sub-Account, which invests in the Capital
Growth Series of the Zenith Fund
--The Zenith Stock Index Sub-Account, which invests in the Westpeak Stock
Index Series of the Zenith Fund
--The Zenith Managed Sub-Account, which invests in the Back Bay Advisors
Managed Series of the Zenith Fund
--The Zenith Growth and Income Sub-Account, which invests in the Westpeak
Growth and Income Series of the Zenith Fund
--The Zenith Small Cap Sub-Account, which invests in the Loomis Sayles
Small Cap Series of the Zenith Fund
--The Zenith Equity Growth Sub-Account, which invests in the Alger Equity
Growth Series of the Zenith Fund
A-3
<PAGE>
--The Zenith Balanced Sub-Account, which invests in the Loomis Sayles
Balanced Series of the Zenith Fund
--The Zenith Venture Value Sub-Account, which invests in the Davis Venture
Value Series of the Zenith Fund
--The Zenith Midcap Value Sub-Account, which invests in the Goldman Sachs
Midcap Value Series (formerly the Loomis Sayles Avanti Growth Series) of
the Zenith Fund
--The Zenith International Magnum Equity Sub-Account, which invests in the
Morgan Stanley International Magnum Equity Series of the Zenith Fund
--The Equity-Income Sub-Account, which invests in the Equity-Income
Portfolio of the VIP Fund
--The Overseas Sub-Account, which invests in the Overseas Portfolio of the
VIP Fund
--The High Income Sub-Account, which invests in the High Income Portfolio
of the VIP Fund
--The Asset Manager Sub-Account, which invests in the Asset Manager
Portfolio of VIP Fund II
The Zenith Fund is an open-end diversified management investment company,
more commonly known as a mutual fund. The Zenith Fund was established as an
investment vehicle for separate investment accounts of NELICO and of other
life insurance companies. Currently the Zenith Fund is the funding vehicle for
the Variable Account and for separate accounts of NELICO and MetLife that
issue variable annuity contracts.
The VIP Fund and VIP Fund II are open-end, diversified management investment
companies (mutual funds) that serve as the investment vehicles for variable
life insurance and variable annuity separate accounts of various insurance
companies. The VIP Fund and VIP Fund II were organized by Fidelity Management
& Research Company.
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 the risks of investing in the Eligible
Funds, is contained in the attached Eligible Fund prospectuses, as well as in
the Zenith Fund's Statement of Additional Information, which is referenced in
the Zenith Fund prospectus, and in the Statement of Additional Information for
the VIP Fund and VIP Fund II, which is referenced in those Funds' prospectus.
The investment objectives and policies of certain Eligible Funds are similar
to the investment objectives and policies of other funds that may be managed
by the same sub-adviser. The investment results of the Eligible Funds,
however, may be higher or lower than the results of such other funds. There
can be no assurance, and no representation is made, that the investment
results of any of the Eligible Funds will be comparable to the investment
results of any other fund, even if the other fund has the same sub-adviser.
The Zenith Back Bay Advisors Money Market Series' investment objective is
the highest possible level of current income consistent with preservation of
capital 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 Bond Income Series' investment objective is to
provide a high level of current income consistent with protection of capital.
The Zenith Capital Growth Series' investment objective is long-term growth
of capital through investment primarily in equity securities of companies
whose earnings are expected to grow at a faster rate than the U.S. economy.
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.
A-4
<PAGE>
The Zenith Back Bay Advisors Managed Series' investment objective is to
provide a favorable total investment return through investment in a
diversified portfolio of common stocks and fixed income securities.
The Zenith Westpeak Growth and Income 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 Goldman Sachs Midcap Value Series' investment objective is long-
term capital appreciation. The Series invests, under normal circumstances,
substantially all of its assets in equity securities and at least 65% of its
total assets in equity securities of companies with public stock market
capitalizations within the range of the market capitalizations of companies
constituting the Russell Midcap Index at the time of investment.
The Zenith Loomis Sayles Small Cap Series' investment objective is long-term
capital growth from investments in common stocks or their equivalent. The
Series invests primarily in stocks of small cap companies with good earnings
growth potential that Loomis Sayles believes are undervalued by the market.
Normally, the Series will invest at least 65% of its assets in companies with
market capitalization in the range of the market capitalization of those
companies which make up the Russell 2000 index at the time of investment.
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. The Series invests at
least 25% of its assets in fixed income securities and, under normal market
conditions, more than 50% of its assets in common stocks.
The Zenith Morgan Stanley International Magnum Equity Series' investment
objective is long-term capital appreciation through investment primarily in
equity securities of non-U.S. issuers, in accordance with the EAFE country
weightings determined by the series' sub-adviser. Under normal circumstances
at least 65% of the total assets of the series will be invested in equity
securities of issuers in at least three countries outside the United States.
The Zenith Davis Venture Value Series' investment objective is growth of
capital. The Series will primarily invest in domestic common stocks that the
Series' subadviser believes have capital growth potential 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 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, primarily of
companies having a total market capitalization of $1 billion or greater.
The VIP Fund Equity-Income Portfolio's investment objective is to seek
reasonable income by investing primarily in income-producing equity
securities. In choosing these securities, the Equity-Income Portfolio will
also consider the potential for capital appreciation.
The VIP Fund Overseas Portfolio's investment objective is long-term growth
of capital primarily through investments in foreign securities. Foreign
investments involve greater risks than U.S. investments, including political
and economic risks and the risks of currency fluctuation.
The VIP Fund High Income Portfolio's investment objective is to obtain a
high level of current income by investing primarily in high-yielding, lower-
rated, fixed-income securities, while also considering growth of capital.
High-yielding, lower-rated debt securities present higher risks of untimely
interest and principal payments, default and price volatility than higher-
rated securities, and may present problems of liquidity and valuation.
The VIP Fund II Asset Manager Portfolio's investment objective is to seek
high total return with reduced risk over the long-term by allocating its
assets among stocks, bonds and short-term instruments.
A-5
<PAGE>
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 Zenith Capital Growth, Zenith Midcap
Value, Zenith Equity Growth, Zenith Venture Value, Zenith Growth and Income,
Zenith Stock Index, Zenith International Magnum Equity or Zenith Small Cap
Sub-Accounts, or the Equity-Income or Overseas Sub-Accounts, or some
combination of these sub-accounts, may, therefore, be a more desirable
selection for Policy Owners who have a long term time horizon and/or are
willing to accept such risks of short term fluctuations in value. For a
demonstration of certain of these market trends, see Appendix C: 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 than "large cap" stocks. 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 taken alone 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 could lose
value if interest rates rise. Common stock prices, which have risen
substantially at times, have also had periods of significant negative returns.
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 High
Income Sub-Account or the Zenith Bond Income Sub-Account. However, because the
High Income Portfolio invests in higher yielding, lower rated and unrated
fixed income securities (including bonds commonly referred to as "junk"
bonds), it 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 Zenith 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.
NELICO guarantees the principal invested in the Fixed Account, although this
guarantee is subject to NELICO's claims paying ability.
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 Zenith Managed Sub-
Account, Zenith Balanced Sub-Account or the Asset Manager 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. The
Asset Manager Portfolio has the ability to invest its stock portfolio more
aggressively than the Back Bay Advisors Managed Series. You may also wish to
diversify your cash value by country. The Overseas Sub-Account and Zenith
International Magnum Equity Sub-Account allow 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.
A-6
<PAGE>
INVESTMENT MANAGEMENT
The adviser and sub-adviser for each series of the Zenith Fund are listed in
the chart below. TNE Advisers, which is an indirect, wholly-owned subsidiary
of NELICO, CGM, and each of the sub-advisers are registered with the SEC as
investment advisers under the Investment Advisers Act of 1940.
<TABLE>
<CAPTION>
SERIES ADVISER SUB-ADVISER
------ ------- -----------
<S> <C> <C>
Capital Growth Capital Growth Management
Limited Partnership ("CGM")*
Back Bay Advisors Money TNE Advisers, Inc. Back Bay Advisors, L.P.*
Market
Back Bay Advisors Bond TNE Advisers, Inc. Back Bay Advisors, L.P.*
Income
Back Bay Advisors TNE Advisers, Inc. Back Bay Advisors, L.P.*
Managed
Westpeak Stock Index TNE Advisers, Inc. Westpeak Investment Advisors,
L.P.*
Westpeak Growth and TNE Advisers, Inc. Westpeak Investment Advisors,
Income L.P.*
Loomis Sayles Small Cap TNE Advisers, Inc. Loomis, Sayles & Company, L.P.*
Loomis Sayles Balanced TNE Advisers, Inc. Loomis, Sayles & Company, L.P.*
Morgan Stanley TNE Advisers, Inc. Morgan Stanley Asset Management,
International Magnum Inc.
Equity
Goldman Sachs Midcap TNE Advisers, Inc. Goldman Sachs Asset Management
Value
Davis Venture Value TNE Advisers, Inc. Davis Selected Advisers, L.P.**
Alger Equity Growth TNE Advisers, Inc. Fred Alger Management, Inc.
</TABLE>
- --------
*An affiliate of NELICO
**Davis Selected may also delegate any of its responsibilities to Davis
Selected Advisers--NY, Inc., a wholly-owned subsidiary of Davis Selected.
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 Growth and Income Series, Goldman Sachs Midcap Value 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-
adviser, except as follows. New England Mutual 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 New England Mutual'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
Capital Growth Series was managed by Loomis, Sayles until March 1, 1990, when
its Capital Growth Management Division was reorganized into CGM. The Morgan
Stanley International Magnum Equity Series' sub-adviser was Draycott Partners,
Ltd. until May 1, 1997, when Morgan Stanley Asset Management became the sub-
adviser. The Goldman Sachs Midcap Value Series' sub-adviser was Loomis, Sayles
until May 1, 1998, when Goldman Sachs Asset Management became the sub-adviser.
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.
Fidelity Management & Research Company, the investment adviser for the VIP
Fund and VIP Fund II, is the original Fidelity company and was founded in
1946. It provides a number of mutual funds and other clients with investment
research and portfolio management services. It maintains a large staff of
experienced investment personnel and a full complement of related support
facilities. For more information regarding the Equity-Income, Overseas, High
Income, and Asset Manager Portfolios and Fidelity Management & Research
Company, see the VIP Fund and VIP Fund II prospectus attached at the end of
this prospectus and their Statement of Additional Information.
A-7
<PAGE>
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 NELICO 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, NELICO 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
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, NELICO believes that the Policy qualifies as a life insurance
contract for federal income tax purposes. This means that:
. the death benefit should be fully excludable 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.
Because of the absence of final regulations or any other pertinent
interpretations, it, however, is unclear whether substandard risk Policies
will, in all cases, meet the statutory life insurance contract definition. 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.
NELICO 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 LAW EFFECTS ON CERTAIN PRE-DEATH DISTRIBUTIONS. Section 7702A of the
Code contains provisions affecting the tax treatment of any loan, assignment
or other pre-death distribution from a life insurance policy which is also a
"modified endowment contract" (defined below under "Modified Endowment
Contracts").
NON-MODIFIED ENDOWMENT CONTRACTS. For Policies not classified as modified
endowment contracts NELICO believes any policy loans received under such
Policies will be treated as indebtedness of the owner and will not be treated
as taxable income to you. This assumes that the Policy has not lapsed, been
surrendered or terminated. As a general rule, policy loan interest is not
deductible under current Federal income tax law.
You may be subject to Federal income tax upon surrender of your Policy if
the net cash surrender value of the Policy is greater than the investment in
the Policy less prior distributions from the Policy that were not taxed. If a
Policy has a policy loan and is surrendered or lapses, the policy loan is
treated as a distribution and would be taxable if there is a gain in the
Policy. In that case, the gain in the Policy would be taxable even if the
Policy has no net cash surrender value. If you incur a loss upon the surrender
it is not likely to be deductible for Federal income tax purposes.
Generally, a partial surrender of the Policy will not be taxable to you
unless it is greater than the investment in the Policy less the untaxed
portions of any prior distributions. The Internal Revenue Code does provide,
however, that in certain situations in the first 15 years of the Policy
partial surrenders may be taxable, in whole or in part, if the net cash
surrender value is greater than the total investment in the Policy less the
previous untaxed distributions. This may be the case even if the amount of the
partial surrender is less than the investment in the Policy.
A-8
<PAGE>
MODIFIED ENDOWMENT CONTRACT. In general, a modified endowment contract is a
life insurance contract issued or materially changed on or after June 21,
1988, which fails to satisfy a "7-pay test". A life insurance policy will fail
to satisfy the 7-pay test if the cumulative amount paid under the policy at
any time during the first seven policy years exceeds the sum of the net level
premiums that would have been paid on or before such time had the policy
provided for paid up future benefits after the payment of seven level annual
premiums. Riders to the policy are considered part of the policy for purposes
of applying the 7-pay test. Any policy received in exchange for a modified
endowment contract will also be a modified endowment contract.
1. ZENITH LIFE POLICIES
Normally, payment of the Policy's premiums will not cause it to be a
modified endowment contract. If, however, the Policy's face amount is reduced
in the first seven policy years, either as a result of a partial surrender or
because the Policy Owner allows the Policy to lapse to Paid-up Insurance, the
7-pay test may be applied as if the Policy had originally been issued at the
reduced face amount. In that event, the Policy could fail the 7-pay test and
be classified as a modified endowment contract.
If a "material change" in the benefits or other Policy terms occurs under a
Policy which has satisfied the 7-pay test, the Policy will be treated as a new
Policy entered into on the day on which the material change occurred. The
Policy will be retested under the 7-pay test, after making certain adjustments
to reflect the Policy's existing cash value. For this purpose, only the
addition of a rider to the Policy would constitute a material change requiring
a retesting under the 7-pay test. A Policy subject to retesting in this manner
could fail the 7-pay test.
It is important to be aware that the addition of a rider to any Policy, even
a Policy issued before June 21, 1988, could be a material change which
requires the Policy to be tested under the 7-pay test.
Regardless of when it was issued, if a Policy described in the Zenith Life
prospectus is exchanged on or after June 21, 1988 for another life insurance
policy, the new insurance policy should be reviewed to determine how the rules
regarding modified endowment contracts may apply to the new policy.
2. ZENITH LIFE ONE POLICIES
ALL POLICIES DESCRIBED IN THE ZENITH LIFE ONE PROSPECTUS WHICH WERE ENTERED
INTO ON OR AFTER JUNE 21, 1988 ARE CONSIDERED MODIFIED ENDOWMENT CONTRACTS AND
ARE SUBJECT TO THE TAX TREATMENT OF DISTRIBUTIONS DISCUSSED BELOW UNDER
"DISTRIBUTIONS UNDER MODIFIED ENDOWMENT CONTRACTS". IN ADDITION, ANY INSURANCE
POLICY RECEIVED IN EXCHANGE FOR A MODIFIED ENDOWMENT CONTRACT WILL ALSO BE A
MODIFIED ENDOWMENT CONTRACT.
Regardless of when it was issued, if a Policy described in the Zenith Life
One prospectus is exchanged on or after June 21, 1988 for another life
insurance policy, the new insurance policy should be reviewed to determine how
the rules regarding modified endowment contracts may apply to the new policy.
DISTRIBUTIONS UNDER MODIFIED ENDOWMENT CONTRACTS. If a Policy is a modified
endowment contract, then the following rules will apply to distributions under
such contract:
(a) Distributions will be includible in your gross income to the extent
the cash value of the Policy exceeds your investment in the Policy (i.e.
will be treated as income first.)
(b) Loans (including any unpaid interest) are considered distributions
even if the amount borrowed is retained by NELICO as a premium. Your
investment in the Policy will be increased by the amount of any prior loan
that was included in your gross income.
(c) A policy assignment is treated as a distribution. For example, in a
split dollar insurance plan involving a collateral assignment of the
Policy, the collateral assignment is a distribution which will subject any
gain in the Policy to taxation.
(d) For purposes of determining the amount of the distribution which is
includible in gross income, all modified endowment contracts issued by
NELICO or its affiliates to the same Policy Owner during any calendar year
must be treated as one modified endowment contract.
A-9
<PAGE>
Any taxable distribution will be subject to an additional tax equal to 10%
of the taxable amount of the distribution unless the distribution is:
(a) made on or after the date when you attain age 59 1/2;
(b) is attributable to your becoming disabled; or
(c) is part of a series of substantially equal periodic payments made no
less frequently than annually for your life (or life expectancy).
If a Policy becomes a modified endowment contract, distributions made during
the 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.
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.
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. Regulations specifying the
diversification requirements have been issued by the Department of Treasury,
and NELICO 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 additional
guidance 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. 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.
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, NELICO does not know what standards will be set
forth in the additional guidance which the Treasury has stated it expects to
be issued. NELICO 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 nonqualified
deferred compensation or salary continuance plans, split dollar insurance
plans, executive bonus 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. Moreover, in recent years, Congress has adopted new rules
relating to corporate owned life insurance. Any business contemplating the
purchase of a new life insurance contract or a change in an existing contract
should consult a tax advisor.
POSSIBLE TAX LAW CHANGES. Although the likelihood of legislative changes is
uncertain, there is always the possibility that the tax treatment of the
Policy could change by legislation or other means. For instance, the
President's 1999 Budget Proposal recommended legislation that, if enacted,
would adversely modify the federal taxation of this Policy. It is possible
that any legislative change could be retroactive (that is, effective prior to
the date of the change). A tax adviser should be consulted with respect to
legislative developments and their effect on the Policy.
A-10
<PAGE>
CHARGE FOR NELICO'S INCOME TAXES
Under current Federal income tax law no tax is imposed on NELICO as a result
of the operations of the Variable Account. Thus, no charge is being made
currently to the Variable Account for company Federal income taxes. NELICO
reserves its right to charge the Variable Account for company Federal income
taxes in the future.
Under current laws NELICO may incur state and local taxes (in addition to
premium taxes) in several states. At present these taxes are not significant
and, accordingly, NELICO 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 NELICO and their principal business
experience during the past five years are:
DIRECTORS OF NELICO
<TABLE>
<CAPTION>
PRINCIPAL BUSINESS
EXPERIENCE
NAME AND PRINCIPAL DURING THE PAST FIVE
BUSINESS ADDRESS YEARS
------------------------------ -----------------------------------------------
<C> <S>
James M. Benson President and Chief Executive Officer of NELICO
since 1998; formerly, President and Chief
Operating Officer 1997-1998 of NELICO;
President and CEO 1996-1997 of Equitable Life
Assurance Society and COO of Equitable
Companies, Inc.; Senior Vice President 1993-
1996 of Equitable Life Assurance Society.
Susan C. Crampton Director of NELICO since 1996 and serves as
127 Tarbox Road Principal of The Vermont Partnership, a
Jericho, VT 05465 business consulting firm located in Jericho,
Vermont since 1989; formerly, Director 1989-
1996 of New England Mutual.
Edward A. Fox Director of NELICO since 1996 and Chairman of
RR Box 67-15 the Board of SLM Holdings since 1997;
Harborside, ME 04642 formerly, Director 1994-1996 of New England
Mutual and Dean 1990-1994 of The Amos Tuck
School of Business Administration at Dartmouth
College.
George J. Goodman Director of NELICO since 1996 and author,
Adam Smith's Money World television journalist, and editor.
50th Floor Craig Drill Capital
General Motors Building
767 Fifth Street
New York, NY 10153
Dr. Evelyn E. Handler Director of NELICO since 1996; formerly,
74 Tater St. Executive Director and Chief Executive Officer
Mount Vernon, N.H. 03057 of the California Academy of Sciences 1994-
1997; Director 1987-1996 of New England Mutual
and Research Fellow and an Associate 1991-1994
of the Graduate School of Education at Harvard
University and a Senior Fellow at The Carnegie
Foundation for the Advancement of Teaching.
Philip K. Howard, Esq. Director of NELICO since 1996 and Partner of
Howard, Darby & Levin the law firm of Howard, Darby & Levin in New
1330 Avenue of the Americas York City.
New York, NY 10019
Harry P. Kamen Director of NELICO since 1996 and Chairman of
Metropolitan Life the Board since 1998; formerly Chairman and
One Madison Avenue Chief Executive Officer 1997-1998; Chairman,
New York, NY 10010 President, and Chief Executive Officer 1995-
1997 and Chairman and CEO 1993-1995 of
Metropolitan Life Insurance Company.
Terence Lennon Director of NELICO since 1996 and Senior Vice
Metropolitan Life President of Metropolitan Life Insurance
One Madison Avenue Company since 1994; formerly, Assistant Deputy
New York, NY 10010 Superintendent and Chief Examiner 1984-1994 of
the New York Insurance Department.
</TABLE>
A-11
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL BUSINESS
EXPERIENCE
NAME AND PRINCIPAL DURING THE PAST FIVE
BUSINESS ADDRESS YEARS
--------------------------- --------------------------------------------------
<C> <S>
Bernard A. Leventhal Director of NELICO since 1996; formerly, Vice
Burlington Industries Chairman of the Board of Directors 1995-1997 of
1345 Avenue of the Americas Burlington Industries, Inc.; President since 1978
New York, NY 10105 and Corporate Group Vice President since 1985 and
Director since 1990 of Burlington Menswear
Division.
Thomas J. May Director of NELICO since 1996 and Chairman,
Boston Edison Company President and Chief Executive Officer of Boston
800 Boylston Street Edison Company since 1994; formerly, Director
Boston, MA 02199 1994-1996 of New England Mutual; President and
Chief Operating Officer 1993-1994 of Boston
Edison Co.
Stewart G. Nagler Director of NELICO since 1996 and Senior Executive
Metropolitan Life Vice President and Chief Financial Officer of
One Madison Avenue Metropolitan Life Insurance Company since 1986.
New York, NY 10010
Rand N. Stowell Director of NELICO since 1996 and President of
United Timber Corp. United Timber Corp. of Dixfield, Maine; formerly,
P.O. Box 650 Director 1990-1996 of New England Mutual.
Pine Street
Dixfield, ME 04224
Alexander B. Trowbridge Director of NELICO since 1996 and President of
Trowbridge Partners Inc. Trowbridge Partners, Inc. in Washington, DC;
1317 F Street, NW, formerly, Director 1983-1996 of New England
Suite 500 Mutual.
Washington, D.C. 20004
EXECUTIVE OFFICERS OF NELICO
OTHER THAN DIRECTORS
<CAPTION>
PRINCIPAL BUSINESS
EXPERIENCE
DURING THE PAST FIVE
NAME YEARS
---- --------------------------------------------------
<C> <S>
James M. Benson See Directors above.
David W. Allen Senior Vice President of NELICO since 1996;
formerly, Senior Vice President 1994-1996 and
Vice President 1990-1994 of New England Mutual.
Thom A. Faria President, Career Agency System (a business unit
of NELICO) since 1996; formerly, Executive Vice
President in 1996, Senior Vice President 1993-
1996 of New England Mutual.
Anne M. Goggin Senior Vice President and Associate General
Counsel of NELICO since 1997; formerly, Vice
President and Counsel of NELICO in 1996, Vice
President and Counsel 1994-1996 and Second Vice
President and Counsel 1988-1994 of New England
Mutual.
Daniel D. Jordan Second Vice President, Counsel and Secretary since
1996; formerly, Counsel and Assistant Secretary
1990-1996 of New England Mutual.
Richard D. Keidan Senior Vice President of NELICO since 1996;
formerly, Vice President 1994-1996 of
Metropolitan Life (Chief Marketing Officer of
MetLife Brokerage) and Regional Sales and
Marketing Manager 1989-1994 of Phoenix Home Life.
Alan C. Leland, Jr. Senior Vice President of NELICO since 1996;
formerly, Vice President 1984-1996 of New England
Mutual.
Bruce C. Long President, New England Annuities (a business unit
of NELICO) since 1996; formerly, President 1994-
1996 New England Annuities (a business unit of
New England Mutual) Senior Vice President in 1994
of New England Annuities; Vice President 1992-
1994 of Keyport Life Insurance.
</TABLE>
A-12
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL BUSINESS
EXPERIENCE
DURING THE PAST FIVE
NAME YEARS
---- ------------------------------------------------------
<C> <S>
George J. Maloof Senior Vice President of NELICO since 1996; formerly,
Vice President 1991-1996 of New England Mutual.
Thomas W. McConnell Senior Vice President of NELICO since 1996 and
Director, Chief Executive Officer and President of
New England Securities Corporation since 1993;
formerly, National Sales Manager 1993 of Alliance
Fund Distributors; National Sales Manager 1992-1993
of Equitable Capital Securities.
Thomas W. Moore Senior Vice President of NELICO since 1996; formerly,
Vice President 1990-1996 of New England Mutual.
Robert W. Powell President, Life Brokerage (a business unit of NELICO)
since 1996; formerly, Officer-In-Charge 1994-1996 of
MetLife Brokerage (a subsidiary of Metropolitan Life
Insurance Company) and Marketing Vice President 1988-
1994 of MetLife.
Richard A. Robinson Second Vice President and chief accounting officer of
NELICO since 1998; formerly, Second Vice President
1997-1998 of NELICO; Manager of Life Insurance.
Accounting 1994-1997 and Chief Accountant 1992-1994
of Liberty Life Assurance Company.
Robert E. Schneider Executive Vice President and Chief Financial Officer
of NELICO since 1996; formerly, Director, Executive
Vice President and Chief Financial Officer 1993-1996
and Executive Vice President and Chief Financial
Officer 1990-1993 of New England Mutual.
John G. Small, Jr. President, New England Services (a business unit of
NELICO) since 1997; formerly, Senior Vice President
1996-1997 of NELICO and Senior Vice President 1990-
1996 of New England Mutual.
Ellen D. Sullivan Senior Vice President and Associate General Counsel of
NELICO since 1997; formerly, Vice President and
Counsel in 1996 of NELICO; Vice President and Counsel
1994-1996 and Second Vice President and Counsel 1985-
1994 of New England Mutual.
H. James Wilson Executive Vice President and General Counsel of NELICO
since 1996; formerly, Executive Vice President and
General Counsel 1993-1996, Senior Vice President and
General Counsel 1992-1993 of New England Mutual.
John W. Wright President, New England Employee Benefits Group (a
business unit of NELICO) since 1996; formerly,
President 1993-1996 New England Employee Benefits
Group (a business unit of New England Mutual), Senior
Vice President 1989-1993 of New England Employee
Benefits Group of New England Mutual.
Frederick K. Zimmermann Executive Vice President and Chief Investment Officer
of NELICO since 1996; formerly, Executive Vice
President and Chief Investment Officer 1993-1996 and
Senior Vice President--Investments 1989-1993 of New
England Mutual.
</TABLE>
The principal business address for each of the directors and officers is the
same as NELICO's except where indicated otherwise.
Like all financial services providers, NELICO utilizes systems that may be
affected by Year 2000 transition issues and it relies on a number of third
parties, including banks, custodians, and investment managers, that also may
be affected. NELICO and its affiliates have developed, and are in the process
of implementing, a Year 2000 transition plan, and are confirming that their
service providers are also so engaged. The resources that are being devoted to
this effort are substantial. It is difficult to predict with precision whether
the amount of resources ultimately devoted, or the outcome of these efforts,
will have any negative impact on NELICO. However, as of the date of this
prospectus, it is not anticipated that Owners will experience negative effects
on their investment, or on the services provided in connection therewith, as a
result of Year 2000 transition implementation. NELICO currently anticipates
that its systems will be Year 2000 compliant on or about December 31, 1998,
with systems testing and compliance verification to follow. There can,
however, be no assurance that the other service providers have anticipated
every step necessary to avoid any adverse effect on the Variable Account
attributable to Year 2000 transition.
A-13
<PAGE>
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, premium reallocations, or Statements of
Additional Information for the Eligible Funds, call the toll-free number 1-
800-200-2214.
You may also call our Client TeleService Center toll-free at 1-800-388-4000
to request current information about your Policy values, to change or update
Policy information such as your address, billing mode, beneficiary or
ownership, or to request Policy loans of less than $25,000. Requests must be
in writing if the Policy is owned by a corporation or a pension trust.
For all other types of Policy changes, please contact your registered
representative.
ADVERTISING PRACTICES
The following paragraph is added to this section:
NELICO is a member of the Insurance Marketplace Standards Association
("IMSA"), and as such may include the IMSA logo and information about IMSA
membership in its advertisements. Companies that belong to IMSA subscribe to a
set of ethical standards covering the various aspects of sales and service for
individually sold life insurance and annuities.
EXPERTS
The financial statements of New England Variable Life Separate Account of
New England Life Insurance Company ("NELICO") (formerly New England Variable
Life Insurance Company) and the consolidated financial statements of NELICO
and subsidiaries as of and for the years ended December 31, 1997 and 1996
included in this Prospectus have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports appearing herein (whose
reports express unqualified opinions and, with respect to NELICO, includes an
explanatory paragraph referring to the change in the basis of accounting and
the change in corporate organization), and have been so included in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing. The adjustments that were applied to restate the 1995
financial statements to reflect the effects of the changes for adoption of
generally accepted accounting principles and the changes in corporate
organization have also been audited by Deloitte & Touche LLP.
The statutory statements of operations, surplus, and cash flows of New
England Variable Life Insurance Company and New England Pension and Annuity
Company for the year ended December 31, 1995 (not included herein), have been
incorporated herein in reliance on the reports (which reports include adverse
opinions as to generally accepted accounting principles and unqualified
opinions as to statutory accounting practices prescribed or permitted by the
Insurance Department of the State of Delaware) of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing. The statutory statements of operations and surplus,
and cash flows of Exeter Reassurance Company, Ltd. for the year ended December
31, 1995 (not included herein), have been incorporated herein in reliance on
the report (which report includes an adverse opinion as to generally accepted
accounting principles and an unqualified opinion as to conformity with The
Insurance Act 1978, amendments thereto and related regulations) of Coopers &
Lybrand, chartered accountants, given on the authority of that firm as experts
in accounting and auditing.
The consolidated statements of operations, shareholder's equity, and cash
flows of New England Securities Corporation for the year ended December 31,
1995 (not included herein); the statements of operations, changes in
shareholder's equity, and cash flows of TNE Advisers, Inc. for the year ended
December 31, 1995 (not included herein), have been incorporated herein in
reliance on the reports of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing. The
statements of earnings and retained earnings, and cash flows of Newbury
Insurance Company, Limited for the year ended December 31,
A-14
<PAGE>
1995 (not included herein), have been incorporated herein in reliance on the
reports of Coopers & Lybrand, chartered accountants, given on the authority of
that firm as experts in accounting and auditing.
The statements of operations and changes in net assets of New England
Variable Life Separate Account for the period ended December 31, 1995 have
been incorporated herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
A-15
<PAGE>
This registration statement incorporates by reference the prospectus dated May
1, 1988 and the supplement dated February 1, 1989 to the prospectus dated May 1,
1988 for the policies, each as filed in Post-Effective Amendment No. 11 to the
Registration Statement on Form S-6 (File No. 33-10954).
<PAGE>
Part II
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 9 of NELICO's By-Laws provides that NELICO shall, to the
extent legally permissible, indemnify its directors and officers against
liabilities and expenses relating to lawsuits and proceedings based on such
persons' roles as directors or officers. However, Section 9 further provides
that no such indemnification shall be made with respect to any matter as to
which a director or officer is adjudicated not to have acted in good faith in
the reasonable belief that his action was in the best interest of the
corporation. Section 9 also provides that in the event a matter is disposed of
by a settlement payment by a director or officer, indemnification will be
provided only if the settlement is approved as in the best interest of the
corporation by (a) a disinterested majority of the directors then in office, (b)
a majority of the disinterested directors then in office, or (c) the holders of
a majority of outstanding voting stock (exclusive of any stock owned by any
interested director or officer).
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
NELICO pursuant to the foregoing provisions, or otherwise, NELICO 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 NELICO of expenses incurred or paid by a
director, officer, or controlling person of NELICO 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. NELICO
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.
II - 1
<PAGE>
REPRESENTATIONS
New England Life Insurance Company hereby represents that the fees and
charges deducted under the single premium variable life insurance policies
described in this registration statement, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by New England Life Insurance Company.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and
documents:
The facing sheet.
A reconciliation and tie-in of the information shown in the prospectus
with the items of Form N-8B-2.
The prospectus consisting of 69 pages.
The undertaking to file reports.
The undertaking pursuant to Rule 484(b) under the Securities Act of
1933.
The signatures.
Written consents of the following persons:
Edward N. Wadsworth, Esq. (see Exhibit 3(a)(ii) below)
Robert E. Schneider, F.S.A. (see Exhibit 3(b) below)
Sutherland, Asbill & Brennan LLP (see Exhibit 6 below)
Independent Auditors (see Exhibit 12 below)
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 NELICO and its General
Agents ***
(c) Commission Schedule for Variable Life Policies
(d) Form of Independent Contract Agreement
Concerning Insurance Product Sales *
II - 2
<PAGE>
(5) (a) Specimen of Policy
(b) Fixed Account Endorsement
(c) Acceleration of Benefit Rider ###
(6) (a) Amended and restated Articles of Incorporation
of NELICO ##
(b) Amended and restated By-Laws of NELICO *
(7) None
(8) None
(9) None
(10) The Form of Application
2. See Exhibit 1.A. (10)
3.(a)(i) Opinion of Edward N. Wadsworth, Esquire
(ii) Consent of Edward N. Wadsworth, Esquire
(b) Opinion and Consent of Robert E. Schneider,
F.S.A.
6. Consent of Sutherland, Asbill & Brennan LLP
7. (i) Powers of Attorney ##
(ii) Power of Attorney for James M. Benson *
(iii) Power of Attorney for Richard Robinson **
10. Notice of Withdrawal Right for Variable Life
Policies
11. Inapplicable
12. Consent of Independent Auditors
13. Schedule for computation of performance
quotations ****
14. Consolidated memorandum describing certain
procedures, filed pursuant to Rule
6e-2(b)(12)(ii) and Rule 6e-3(T)(b)(12)(iii)
****
15. (i) Participation Agreement among Variable
Insurance Products Fund, Fidelity Distributors
Corporation and New England Variable Life
Insurance Company ****
(ii) Amendment No. 1 to Participation Agreement among
Variable Insurance Products Fund, Fidelity
Distributors Corporation and New England
Variable Life Insurance Company #
(iii) Participation Agreement among Variable Insurance
Products Fund II, Fidelity Distributors
Corporation and New England Variable Life
Insurance Company #
- ----------
# Incorporated herein by reference to Pre-Effective Amendment No. 1 to the
Variable Account's Form S-6 Registration Statement, File No. 33-88082,
filed June 22, 1995.
II - 3
<PAGE>
## Incorporated herein by reference to the Variable Account's Form S-6
Registration Statement, File No. 333-21767, filed February 13, 1997.
### Incorporated herein by reference to Post-Effective Amendment No. 8 to
the Variable Account's Form S-6 Registration Statement, File No. 33-
52050, filed April 30, 1997.
* Incorporated herein by reference to the Pre-effective Amendment No. 1
to the Variable Account's Form S-6 Registration Statement, File No.
333-21767, filed July 16, 1997.
** Incorporated herein by reference to the Variable Account's Form S-6
Registration Statement, File No. 333-46401, filed February 17, 1998.
*** Incorporated herein by reference to Post-Effective Amendment No. 9 to
the Variable Account's Form S-6 Registration Statement, File No. 33-
66864, filed February 25, 1998.
**** Incorporated herein by reference to Post-Effective Amendment No. 9 to
the Variable Account's Form S-6 Registration Statement, File No. 33-
52050, filed April 24, 1998.
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II - 4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
New England Variable Life Separate Account, certifies that it meets all of the
requirements for effectiveness of this amendment to the Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this amendment to the Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the city of Boston, and the Commonwealth of Massachusetts, on
the 29th day of April, 1998.
New England Variable Life Separate
Account
(Registrant)
By: New England Life Insurance
Company
(Depositor)
By:
--------------------------------------
H. James Wilson
Executive Vice President
and General Counsel
Attest:
- -----------------------
Marie C. Swift
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, New England
Life Insurance Company certifies that it meets all of the requirements for
effectiveness of this amendment to the Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this amendment to
the Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the city of Boston, and the Commonwealth of Massachusetts, on the 29th day of
April, 1998.
New England Life Insurance Company
(Seal)
Attest: By:
------------------------ -------------------------------
Marie C. Swift H. James Wilson
Executive Vice President and
General Counsel
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities indicated on April 29, 1998.
* President and Chief Executive Officer
- ----------------------
James M. Benson
* Director
- ----------------------
Susan C. Crampton
* Director
- ----------------------
Edward A. Fox
* Director
- ----------------------
George J. Goodman
* Director
- ----------------------
Evelyn E. Handler
* Director
- ----------------------
Philip K. Howard
* Director
- ----------------------
Harry P. Kamen
* Director
- ----------------------
Terence Lennon
<PAGE>
* Director
- ----------------------
Bernard A. Leventhal
* Director
- ----------------------
Thomas J. May
* Director
- ----------------------
Stewart G. Nagler
Second Vice President and
* Chief Accounting Officer
- ----------------------
Richard A. Robinson
* Executive Vice President and
- ---------------------- Chief Financial Officer
Robert E. Schneider
* Director
- ----------------------
Rand N. Stowell
* Director
- ----------------------
Alexander B. Trowbridge
By: /s/ Anne M. Goggin
--------------------
Anne M. Goggin, Esq.
Attorney-in-fact
* Executed by Anne M. Goggin, Esquire on behalf of those indicated pursuant
to powers of attorney filed with the Variable Account's Form S-6
Registration Statement, File No. 333-21767, on February 13, 1997, Pre-
Effective Amendment No. 1 to the Variable Account's Form S-6 Registration
Statement, File No. 333-21767, on July 16, 1997, and the Variable Account's
Form S-6 Registration Statement, File No. 333-46401, on February 17, 1998.
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<PAGE>
EXHIBIT LIST
Sequentially
Exhibit Number Title Numbered Page*
- -------------- ----- --------------
1.A.(3)(c) Commission Schedule for Policies
1.A.(5)(a) Specimen of Policy
1.A.(5)(b) Endorsement
1.A.(10) Form of Application
3.(a)(i) Opinion of Edward N. Wadsworth
3. (ii) Consent of Edward N. Wadsworth
(b) Opinion and Consent of Robert
E. Schneider
6. Consent of Sutherland, Asbill
& Brennan LLP
10. Notice of Withdrawal Right
12. Consent of Independent Auditors
- ----------------
* Page numbers inserted on manually-signed copy only.
<PAGE>
EXHIBIT 1-A(3)(c)
Commission Schedule
The following commissions will be paid with respect to the sale of a
Policy:
Percentage of Single
Premium
--------------------
Agent 3%
General Agent 1/2%
<PAGE>
NEV-4
New England Variable Life Insurance Company
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 the provisions of the Policy.
Signed on the Date of Issue for the Company at its Administrative Office, 501
Boylston Street, Boston, Massachusetts 02117.
John A. Fibiger
/s/ John A. Fibiger
- -------------------
President
Kernan F. King
/s/ Kernan F. King
- ------------------
Secretary
Single Premium Variable Life Policy
. The Death Benefit is payable at the death of the Insured.
. Values and benefits are affected by investment performance.
. The Policy does not participate in dividends.
Please Read Your Policy Carefully
This Policy is a legal contract between you and the Company.
The Death Benefit for the first policy month will be equal to the Face Amount
shown in Section 1. For policy months after the first, the Death Benefit can
increase or decrease, depending on separate investment account performance; but
it will not be less than the Face Amount. 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 6.
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 the latest of: (a) 10 days after
you receive it from
<PAGE>
the Company; (b) 45 days after Part I of the Application is
signed; and (c) 10 days after the Company mails the separate Notice of
Withdrawal Right. If you do, the Policy will be cancelled. The Company will
refund an amount equal to any premium paid plus or minus any separate investment
account performance as of the date the returned Policy is received by the
Company or its Agent; except that if required by state or Federal law or
regulation, the Company will refund an amount equal to any premium paid. The
Policy will then be void from the beginning.
<PAGE>
Policy Provisions Alphabetical Guide
Section Section
1 Policy Schedule 1,3 Age of Insured
2 Table of Values 10 Assignments
3 Contract 10 Beneficiary
4 Premium 11 Benefits, Payment of
5 The Variable Account 2,6 Cash Value
6 Cash Value of the Policy 3 Claims of Creditors
7 Death Benefit 3 Contestable
8 Policy Loans 3 Contract
9 Exchange of Policy 6 Cost of Insurance
10 Owner and Beneficiary 1,3 Date of Issue
11 Payment of Benefits 1,3 Date, Policy
12 Payment Options 7 Death Benefit
13 Life Income Tables 6 Deferred Charge
__ Riders, if any 9 Exchange of Policy
__ Copy of the Application 1 Face Amount
__ Amendments and Endorsements 6 Investment Return
11,12 Life Income Options
13 Life Income Tables
1 Loan Interest Rate
2,8 Loans, Policy
6 Net Cash Value
10 Owner
12 Payment Options
3 Periodic Reports
8 Policy Loan Balance
3 Postponement of Payments
4 Premium
1 Schedule, Policy
5 Sub-Accounts
3 Suicide
6 Surrender of the Policy
2 Values, Table of
5 Variable Account
<PAGE>
1. Policy Schedule
Owner and Beneficiary: As named in the Application or as later changed. See the
Owner and Beneficiary Section of the Policy.
Insured: JOHN ALDEN Age and Sex: 35 MALE
Policy Number: SPECIMEN Policy Date: MARCH 1, 1987
Face Amount: $50,000 Date of issue: MARCH 1, 1987
Plan: SINGLE PREMIUM VARIABLE LIFE
POLICY LOAN INTEREST RATE: 5%
Policy Class: STANDARD
SCHEDULE OF BENEFITS
SINGLE PREMIUM VARIABLE LIFE
SINGLE PREMIUM $14,860.50
NET PREMIUM (AMOUNT INVESTED) $14,610.50
ADMINISTRATIVE CHARGE $ 250.00
TOTAL TEN YEAR DEFERRED CHARGE $ 1,095.79
(SEE SECTION 6)
New England Variable Life Insurance Company
Kernan F. King
/S/ Kernan F. King
- ------------------
Secretary
<PAGE>
2. TABLE OF VALUES
The amounts shown in this Table are not guaranteed. These amounts would
accrue if: the Cash Value earns 4% per year; the maximum guaranteed cost of
insurance rates are charged; and there is no Policy Loan Balance. The actual
amounts may be more or less than the amounts shown here. Values at other dates
will be quoted by the Company on request.
INSURED: JOHN ALDEN AGE AND SEX: 35 MALE
POLICY NUMBER: SPECIMEN FACE AMOUNT: $10,000
PLAN: SINGLE PREMIUM
VARIABLE LIFE
END OF CASH NET
POLICY VALUE CASH
YEAR VALUE
1 14,992.28 14,006.07
2 15,385.65 14,509.02
3 15,789.99 15,022.93
4 16,204.12 15,546.65
5 16,627.66 16,079.77
6 17,059.88 16,621.56
7 17,500.44 17,171.70
8 17,949.40 17,730.25
9 18,406.54 18,296.97
10 18,871.69 18,871.69
11 19,454.00 19,454.00
12 20,047.58 20,047.58
13 20,651.96 20,651.96
14 21,266.47 21,266.47
15 21,890.52 21,890.52
16 22,523.32 22,523.32
17 23,164.22 23,164.22
18 23,812.95 23,812.95
19 24,468.83 24,468.83
20 25,131.32 25,131.32
25 AGE 60 28,512.57 28,512.57
30 AGE 65 31,911.37 31,911.37
35 AGE 70 35,160.88 35,160.88
New England Variable Life Insurance Company
Kernan F. King
/s/ Kernan F. King
- ------------------
Secretary
<PAGE>
3. 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. No change in or waiver of the provisions of the Policy is
valid unless the change or waiver is signed by the President or the Secretary of
the Company.
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. The contestable and suicide periods start on the Date of Issue. The Policy
Date and the Date of Issue are both 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 for
two years from the Date of Issue.
Suicide Within Two Years. If the Insured dies by suicide within two years from
the Date of Issue, the Death Benefit will be limited to the amount of the
premium paid less any Policy Loan Balance on the date of death.
Age of Insured. The age of the Insured on the Policy Date and on policy
anniversaries means the age at the nearest birthday of the Insured. Between
anniversaries, age means age on the last anniversary plus elapsed time. If the
age or sex of the Insured has not been correctly stated in the Application, the
values and benefits will be the amounts which the premium paid would have
purchased for the correct age and sex.
<PAGE>
Claims of Creditors. The Policy and payments under it will be exempt from the
claims of creditors to the extent allowed by law.
Basis of Values. Reserves and Cash Values are not less than those based on the
Commissioners 1958 Standard Ordinary Mortality Table. Reserves are not less than
reserves computed by the Net Level Premium Reserve Method. Net Single Premiums
are based on the Commissioners 1958 Standard Ordinary Mortality Table. Curtate
monthly functions are used. Interest is compounded yearly at the effective rate
of 4% per year. A detailed statement of the method of computing values and net
single premiums has been filed with the Insurance Department of the state in
which the Policy is delivered. All values are equal to or are in excess of the
minimum values required by and all comply with the law of that state.
Periodic Reports. The Company will send you all reports required by law and
regulation. Such reports will be sent 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 required information.
Expense and Mortality Experience. Regardless of the Company's expense and
mortality experience, the following policy charges will not be increased: the
maximum guaranteed cost of insurance rates; the Administrative Charge; the
Deferred Charge; and the charge for mortality risk and expense risk.
Postponement of Variable Benefits. 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 dosed for trading; or
. The Securities and Exchange Commission determines that a state of emergency
exists which may make payment or transfer impractical; or
. The New England Zenith Fund is permitted under law or regulation to
postpone payment of redemption proceeds.
<PAGE>
4. Premium
Payment. The premium is your payment to the Company for the Policy. The premium
is due on the Policy Date. Payment 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 furnished on request. The Policy will not be in
force until the premium is paid.
5. 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; but the Account is not chargeable with liabilities arising out of any
other business the Company may conduct.
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. Shares
of a portfolio are purchased for a sub-account at their net asset value.
The Policy's first investment will be made as of the latest of:
. The Policy Date;
. The date of Part II of the Application; and
. The date the full premium is received by the Company.
The Policy's Cash Value will be transferred to the sub-accounts you elected as
of the later of: 45 days after Part 1 of the Application is signed; and 10 days
after the Company mails the separate Notice of Withdrawal Right. Before this
transfer, the values and benefits of the Policy will depend on the net
investment performance of the Money Market Series of the New England Zenith Fund
less any charges for mortality risk and expense risk.
Each distribution of income, dividends and capital gains from a portfolio to the
Account will be reinvested for the benefit of the owners of the policies 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.
<PAGE>
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. You bear the investment
risk for amounts invested for your Policy.
Election of Sub-Accounts. You elect the sub-accounts in which the Cash Value is
invested.
The portfolios as of the Date of Issue are listed in the then current prospectus
for the Account.
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 in the New England Zenith Fund; 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.
Transfer Option. After the Right to Return the Policy period you can transfer
all or a portion of the Policy's existing share in a sub-account to another sub-
account. Transfers of existing shares will be subject to a limit of 4 in each
policy year, except with the consent of the Company.
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 the investment policy of the Account is changed, the Company will
give you written notice of the change. You can then choose to exchange this
Policy for a new policy which has a fixed death benefit. The exchange will be on
the same basis as that described in the Exchange of Policy section. If you
choose to make the exchange, the request for the exchange 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 and, if required, the approval of the
owners of the policies. These actions are: (a) to create new investment
<PAGE>
accounts; (b) to combine any two or more separate investment accounts, including
the Account; (c) to invest the assets of the Account other than in the New
England Zenith Fund; (d) to operate the Account as a management investment
company and to charge investment advisory fees under the Investment Company Act
of 1940 or in any other form permitted by law; and (e) to deregister the Account
under the Investment Company Act of 1940 if registration is no longer required.
6. Cash Value of the Policy
Surrender of the Policy. You can surrender the Policy for its Net Cash Value at
any time by notice to the Company in writing. Upon surrender, the Policy will
terminate. The Net Cash Value will be paid to you in one sum, unless you elect
in writing to apply all or part of the Value to any Payment Option. (See Payment
of Benefits, Section 11.)
Net Cash Value. The Net Cash Value of the Policy is equal to:
. The Cash Value of the Policy;
LESS
. Any Policy Loan Balance;
LESS
. Any remaining Deferred Charge.
Cash Value. Before the initial transfer to the elected sub-accounts, the Cash
Value of the Policy will depend on the net investment performance of the Money
Market Series of the New England Zenith Fund less any charges for mortality risk
and expense risk. Thereafter, the Cash Value of the Policy is equal to the total
of the Policy's share of the elected sub-accounts and the amount of any assets
transferred to the general investment account of the Company because of Policy
Loans. (See Section 8.)
The amount of the Cash Value depends on: the amount of the net premium;
investment performance; cost of insurance charges; transfers among sub-accounts;
and Policy Loans. The Cash Value can increase or decrease on a daily basis,
depending on the separate account performance. (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.
Cost of Insurance. The cost of insurance is deducted from the Cash Value:
<PAGE>
. On the last day of each policy month; and
. On the date the Policy is surrendered if it is other than the last day of
the policy month.
The cost of insurance will be deducted in the same proportion as the Policy is
invested in the sub-accounts.
The cost of insurance depends on the cost of insurance rate at the time of the
deduction and on the difference between: the Variable Death Benefit; and the
Cash Value on the last day of the month less any remaining Deferred Charge. The
cost is pro rated for surrender during a policy month.
If a Policy Loan Balance exists and the Net Cash Value is not enough to cover
the cost of insurance, the difference will be treated in the same manner as an
excess Policy Loan. (See Section 8.)
Total Ten Year Deferred Charge. The Total Ten Year Deferred Charge is shown in
Section 1. On each of the first 10 policy anniversaries, the Company will deduct
1/10 of the Charge from the Cash Value of the Policy. The Charge will be
deducted in the same proportion as the Policy is invested in the sub-accounts.
Cost of Insurance Rates. The cost of insurance rates for each policy year are
based on: the sex of the Insured; the underwriting class of the Insured; and the
age of the Insured on the first day of the policy year. The rates will be
determined by the Company each year on the policy anniversary, based on the
expectations of the Company as to future experience. The procedures and
standards used to determine those rates are on file with the Insurance
Department of the state in which the Policy is delivered. The rates are
guaranteed for one year. The rates are guaranteed not to be greater than those
based on the Commissioners 1958 Standard Ordinary Mortality Table.
Base Investment Return. The Policy has a Base Investment Return for each elected
sub-account for each Valuation Period. The Policy's Base Investment Return is
the amount which would be earned by the Policy's Cash Value less any remaining
Deferred Charge at a monthly rate equivalent to an effective rate of 4% per
year.
Actual Investment Return. The Policy's Actual Investment Return for each sub-
account for each Valuation Period is equal to (a) minus (b); where:
<PAGE>
. (a) is equal to the Policy's share of the sub-account as of the end of the
Valuation Period;
PLUS
the cost of insurance deducted in the Valuation Period;
PLUS
The interest credited during the Valuation Period to any borrowed portion
of the Policy's Cash Value;
PLUS or MINUS
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 for the next
preceding Valuation Period;
PLUS or MINUS
. a charge or credit for the Policy's share of any reserve for taxes which
the Company determines to apply to the sub-account.
There is a daily charge for mortality risk and expense risk against the Policy's
share of the sub-accounts. This charge is equivalent to .45% per year.
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.
7. Death Benefit
Death Benefit. The Death Benefit will be equal to:
. The greater of the Variable Death Benefit and the Guaranteed Minimum Death
Benefit;
LESS
. Any Policy Loan Balance.
Guaranteed Minimum Death Benefit. The Guaranteed Minimum Death Benefit is equal
to the Face Amount shown in Section
<PAGE>
1, regardless of the investment performance of the sub-accounts.
Variable Death Benefit. The Variable Death Benefit for the first policy month is
equal to the Face Amount. The Variable Death Benefit for each later policy month
is adjusted on the first day of that policy month. For each policy month after
the first, the Variable Death Benefit:
. Will increase if the Policy's Actual Investment Return for the Period plus
any cost of insurance adjustment is greater than the Base Investment
Return;
. Will remain the same if the Policy's Actual Investment Return for the
Period plus any cost of insurance adjustment is equal to the Base
Investment Return; and
. Will decrease if the Policy's Actual Investment Return for the Period plus
any cost of insurance adjustment is less than the Base Investment Return.
The amount by which the Variable Death Benefit will change each policy month is
equal to:
. The dollar amount by which the Policy's Actual Investment Return for the
Period plus any cost of insurance adjustment is greater or less than its
Base Investment Return;
DIVIDED BY
. The Net Single Premium per $1.00 of Variable Death Benefit at the age of
the Insured on the first day of the policy month.
The cost of insurance adjustment, if any, to be added to the Policy's Actual
Investment Return for the Period to compute the Variable Death Benefit is equal
to the difference between the maximum guaranteed cost of insurance and the
actual cost of insurance for the Policy.
8. Policy Loans
Policy Loans. After the Right to Return the Policy period you can borrow all or
part of the Loan Value of the Policy from time to time by written application to
the Company. Policy Loans are made on the sole security of the Policy. The
amount available to be borrowed at any time is equal to the Loan Value less any
Policy Loan Balance at that time. Policy Loans will reduce the Policy's share of
the sub-
<PAGE>
accounts proportionately, unless you request otherwise. Assets equal to the
amount of the Loan:
. Will be transferred to the general investment account of the Company; and
. Will earn interest at the effective rate per year of 1% less than the
Policy Loan interest rate.
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 the amount which with loan interest
will equal 90% of: the Cash Value of the Policy projected to the next policy
anniversary; less any remaining Deferred Charge. The Cash Value will be
projected with interest at the effective rate per year of 1% less than the
Policy Loan interest rate.
Interest on Loans; Policy Loan Balance. Policy Loans bear interest as 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
each year on the policy anniversary date. Loan interest not paid when due will
be added to the Loan and will bear interest.
Repayment of Loans. Policy Loans may be repaid to the Company at any time in
whole or part. Loan repayments will be allocated in the same proportion as the
Policy is invested in the sub-accounts, unless you request otherwise. A Policy
Loan is a charge against the Policy. The proceeds of the Policy will be reduced
by any Policy Loan Balance on the date of death of the Insured. If the Policy
Loan Balance at any time exceeds the Cash Value of the Policy less any remaining
Deferred Charge, the Company will mail a notice to you and to any assignee. The
notice will be mailed to the addresses on record with the Company. If the excess
amount is not paid to the Company within 31 days after mailing of the notice,
the Policy will lapse without value.
9. Exchange of Policy
Exchange of Policy. Within 24 months after its Date of Issue, you can exchange
this Policy for a policy which provides fixed benefit insurance. The new policy
will be issued:
. By New England Mutual Life Insurance Company;
<PAGE>
. On any plan of Single Premium Whole Life insurance with a level face amount
issued by New England Mutual Life Insurance Company on the Policy Date;
. With the same Insured, Age, Policy Date, Face Amount and underwriting class
as this 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 with the Insurance Department of the state in which the Policy is
delivered.
10. Owner and Beneficiary
Owner. The Owner of the Policy is named in the Application. (See copy attached.)
However, the Owner can be changed from time to time. The new Owner will succeed
to all of the 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 an individual, a partnership, a corporation, a fiduciary or any
other legal entity. The rights of the Owner will terminate at the death of the
Insured, except for Payment of Benefits. (See Section 11.)
Beneficiary. The Beneficiary is named in the Application. (See copy attached.)
However, the Beneficiary can be changed from time to time before the death of
the Insured. The Beneficiary has no rights in the Policy until the death of the
Insured. An individual must survive the Insured to qualify as Beneficiary. If
none survives, the proceeds will be paid to the Owner. The Beneficiary can also
be a corporation, a partnership, a fiduciary or any other legal entity.
<PAGE>
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. 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.
11. Payment of Benefits
Payment. The policy proceeds will be paid in one sum, unless you elect to apply
all or part of the proceeds to any Payment Option. (See Section 12.) The Company
will pay interest on the proceeds from the date they become payable to the date
of payment in one sum, or to the Option Date. The rate of interest will be
determined each year by the
<PAGE>
Company; but the rate on death and maturity proceeds will not be less than that
required by law and the rate on other proceeds will not be less than 3 1/2% per
year.
Election of Payment Options; Option Date. The election 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 election from time to time before the death of
the Insured. The Option Date is the effective date of the Payment Option, as
stated in the election.
Payee. A Payee is any individual, corporation, partnership, fiduciary or any
other legal entity entitled to receive payment in one sum or under a Payment
Option.
Election 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 at the
election of the Payee. Further, subject to the consent of the Company, any Payee
who is entitled to receive proceeds in one sum at the expiration of a Payment
Option, or at the death of a prior Payee, or upon withdrawal of the proceeds,
can elect to apply the proceeds to a Payment Option.
Rights of Payees. In the election 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.
Payments under the Life Income Options cannot be commuted, except for payments
certain. No Payee can assign, anticipate, commute or withdraw the payments under
any Payment Option, unless the right is reserved in the election of the Option.
Limitations. If installments 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. 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 13), or on the Payment Option rates of the Company on the
Option Date, whichever rates are more favorable to the Payee. If the rates at a
given age are the
<PAGE>
same for different periods certain, the longest period certain will be deemed to
have been elected.
Purchase of Increased Life Income Benefits. On the Option Date a one sum
purchase payment can be made to the Company to add to the proceeds being applied
to any Life Income 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 13). 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. Amounts to be paid after the death of a Payee under a Payment
Option will be paid as due to the surviving or next succeeding Payee. If no
Payee survives, 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. 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 elected.
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.
12. Payment Options
Payment Options. You can elect to have all or part of the policy proceeds
applied to provide payments under any one of the following Options, subject to
Section 11, Payment of Benefits:
First Option: Income for a Specified Number of Years. The Company will make
equal monthly payments which will include both principal and interest. Payments
will begin on the Option Date and will continue for the number of years elected;
the number of years elected 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.
<PAGE>
Guaranteed monthly payments per $1,000 of proceeds applied to the First Option
are shown below:
- -------------------------------------------------------------
Number Number Number
of Years of Years of Years
- -------------------------------------------------------------
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
- -------------------------------------------------------------
Second Option: Life Income. The Company will make equal monthly payments.
Payments will begin 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 begin on the Option Date and will continue during the
life of the Payee. At the death of the Payee, if the total of the payments made
is 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."
<PAGE>
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 beginning one month after the Option
Date; or
. Will be added to the principal amount each year and 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 determined 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 equal monthly
payments which will include both principal and interest. Payments will be in the
amount elected. Payments may be quarterly or at any other frequency elected, and
payments may be in variable amounts, all subject to the consent of the Company.
Payments 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 determined 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 equal monthly
payments. Payments will begin 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>
13. Life Income Tables
Life Income Tables. Guaranteed monthly payments per $1,000 of proceeds applied
to the Life Income Options are shown below:
Second and Third Options: Life Income
- ------------------------------------------------------------
Age of No 10 Years 20 Years Cash Instalment
Payee Refund Certain Certain Refund Refund
- ------------------------------------------------------------
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
<PAGE>
Second and Third Options: Life Income
- ------------------------------------------------------------
Age of No 10 Years 20 Years Cash Instalment
Payee Refund Certain Certain Refund Refund
- ------------------------------------------------------------
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
*and under +and over
<PAGE>
- ----------------------------------------------------------
Sixth Option: Life Income for Two Lives
- ----------------------------------------------------------
Age of One Age of Other Payee
Payee
55 60 65 70 75
- ----------------------------------------------------------
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
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>
Single Premium Variable Life Policy
. The Death Benefit is payable at the death of the Insured.
. Values and benefit are affected by investment performance.
. The Policy does not participate in dividends.
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
<PAGE>
- --------------------------------------------------------------------------------
Exhibit 1.A.5(b)
Endorsement
As of the Endorsement Date the following changes are made:
"The Fixed Account
The Fixed Account is a segmented fund within the general account of the
Company.
If you elect the Fixed Account, the first date on which money is applied to the
Fixed Account for the Policy is the latest of:
. 45 days after Part I of the Application is signed;
. 10 days after the Company mails the separate Notice of Withdrawal Right;
. The date the full premium is received by the Company; and
. The effective date of the election of the Fixed Account.
Before this date, the value of the portion of the net premium allocated to the
Fixed Account will depend on the net investment performance of the Money Market
Series of the New England Zenith Fund less any charges for mortality risk and
expense risk.
Each transfer to the Fixed Account will be applied as of the transfer date.
Fixed Account Interest
The rate of interest for each amount applied to the Fixed Account: will be the
rate set by the Company in advance for the date the amount is applied to the
Fixed Account; and will not be less than a rate equivalent to an annual
effective rate of 4%. The effective interest rate used on your Policy will be
the weighted average of all such rates for your Policy.
Each year, on the policy anniversary, the Company will determine a portion, if
any, of the Policy's share of the Fixed Account which will be reinvested at the
rate effective on that date.
Interest will be credited to the Fixed Account on a daily basis.
Restriction of New Amounts Applied to the Fixed Account
The Company reserves the right to restrict new amounts applied to the Fixed
Account if the rate of interest that would be used for the new amount is a rate
equivalent to an annual effective rate of 4%.
Endorsement Date:
Transfers Out of the Fixed Account
You can transfer a limited portion of the Policy's share of the Fixed Account
to the sub-accounts once within 30 days before each policy anniversary. The
transfer will be limited to the greater of: 15% of the Policy's share of the
Fixed Account; and the amount of the Policy's share of the Fixed Account
transferred to the sub-accounts the prior year."
is added to the Policy.
Modification of the Contract Section
"Postponement of Surrenders, Transfers and Loans From The Fixed Account
The Company can postpone the payment of the portion of the Policy's Net Cash
Value which is in the Fixed Account for not more than six months after
surrender. If payment is postponed for more than 30 days, it will be credited
with interest from the date of surrender. 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.
The Company can postpone transfers from the Fixed Account for not more than six
months from the date of the request. The effective date of the transfer is the
date on which values are transferred from the Fixed Account.
The Company can postpone the making of any Policy Loan from the Fixed Account
for not more than six months from the day you apply, except Loans to pay
premiums on policies issued by the Company."
is added to the Contract Section.
Modification of the Variable Account Section
"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; and the Fixed Account
will be counted in the limit of 10.
<PAGE>
The values and benefits of a policy depend on: the investment performance of
the portfolios in which the sub-accounts are invested; and the interest
credited to the Policy's share of the Fixed Account. 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."
is substituted for the fourth and fifth paragraphs of the Sub-Accounts
provision.
"After the Right to Return the Policy period you can transfer all or a portion
of the Policy's existing share in a sub-account to another sub-account or to
the Fixed Account. (See the Registration of New Amounts Applied to the Fixed
Account provision.)"
is substituted for the first sentence of the Transfer Option provision.
Modification of the Cash Value of the Policy Section
"The Cash Value of the Policy will depend on the net investment performance of
the Money Market Series of the New England Zenith Fund less any charges for
mortality risk and expense risk until the later of: 45 days after Part I of the
Application is signed; and 10 days after the Company mails the separate Notice
of Withdrawal Right. Thereafter, the Cash Value of the Policy is equal to: the
Policy's share of the elected sub-accounts; plus the Policy's share of the Fixed
Account; plus the amount of any assets transferred to the general account of the
Company because of Policy Loans. (See Section 8.) The amount of the Cash Value
depends on: the amount of the net premium; investment performance of the elected
sub-accounts; interest credited to the Policy's share of the Fixed Account; cost
of insurance charges; transfers among sub-accounts and the Fixed Account; and
Policy Loans. The Cash Value can increase or decrease on a daily basis,
depending on: the investment performance of the elected sub-accounts; and the
interest credited to the Policy's share of the Fixed Account. (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."
is substituted for the Cash Value provision.
"The cost of insurance will be deducted in the same proportion as the Cash
Value of the Policy is in the sub-accounts and the Fixed Account."
is substituted for
"The cost of insurance will be deducted in the same proportion as the Policy is
invested in the sub-accounts."
in the Cost of Insurance provision.
"The Charge will be deducted in the same proportion as the Cash Value of the
Policy is in the sub-accounts and the Fixed Account."
is substituted for
"The Charge will be deducted in the same proportion as the Policy is invested
in the sub-accounts."
in the Total Ten Year Deferred Charge provision.
"Base Investment Return
The Policy has a Base Investment Return for each Valuation Period for its share
of each elected sub-account and of the Fixed Account. The Policy's Base
Investment Return is the amount which would be earned by the Policy's share if
the sub-account had investment performance and the Fixed Account had interest
credited at a monthly compounded rate equivalent to an annual effective rate of
4%.
is substituted for the Base Investment Return provision.
<PAGE>
- --------------------------------------------------------------------------------
"The Policy has an Actual Investment Return for each Valuation Period for its
share of each elected sub-account and of the Fixed Account.
The Actual Investment Return for the Fixed Account for each Valuation Period is
equal to (a) minus (b); where:
. (a) is equal to the Policy's share of the Fixed Account as of the end of the
Valuation Period;
PLUS
the cost of insurance deducted in the Valuation Period;
PLUS
the interest credited during the Valuation Period to any borrowed portion of
the Policy's Cash Value; and
. (b) is equal to the Policy's share of the Fixed Account for the next
preceeding Valuation Period."
is added to the Actual Investment Return provision.
Modification of the Death Benefit Section
"Guaranteed Minimum Death Benefit
The Guaranteed Minimum Death Benefit is equal to the Face Amount shown in
Section 1, regardless of investment performance and interest credited."
is substituted for the Guaranteed Minimum Death Benefit provision.
Modification of the Policy Loans Section
"Unless you request otherwise, Policy Loans will reduce first, the Policy's
share of the sub-accounts proportionately and second, the Policy's share of
the Fixed Account, except as noted below in the Interest on Loans; Policy Loan
Balance provision."
is substituted for
"Policy Loans will reduce the Policy's share of the sub-accounts
proportionately, unless you request otherwise."
in the Policy Loans provision.
"Loan interest not paid when due will be added to the Loan and will bear
interest; when loan interest is added to the Loan, the Policy's share of the
sub-accounts and of the Fixed Account will be reduced proportionately."
is substituted for the last sentence of the Interest on Loans; Policy Loan
Balance provision.
"Loan repayments will be allocated: first, to repay the Loans made against the
Fixed Account; and second, unless you request otherwise, to repay the Loans
made against the sub-accounts in the the same proportion as the Policy is
invested in the sub-accounts."
is substituted for
"Loan repayments will be allocated in the same proportion as the Policy is
invested in the sub-accounts, unless you requested otherwise."
in the Repayment of Loans provision.
New England Life Insurance Company
501 Boylston Street, Boston, Massachusetts
/s/ Robert A. Shufto /s/ David D. Jordan
President Secretary
<PAGE>
Exhibit 1.A.5(a)
NEV APP 1-83
NEW ENGLAND VARIABLE
For Company Use Only
No___________________
PART I - APPLICATION TO THE
New England Variable Life INSURANCE COMPANY
for INSURANCE ON THE PROPOSED INSURED
Questions below pertain to Proposed Insured unless otherwise indicated.
1. Address (Include street and number, city, state and zip code)
a. Residence
---------
b. Business
--------
2. Premium Notice Address - Proposed Insured
___ at 1 .a. ____ at 1 .b.
___ Other than Proposed Insured (Give Name and Address)
________________________________________________________________________________
(Street) (City) (State) (Zip Code)
3. Social Security or Employer Identification Number
Proposed
Insured
- ---------------------------------
First Owner
- ---------------------------------
4. Birthplace
------------------------------------
(City) (State or Country)
5. Citizen of
-------------------------------------
6. Marital Status
___ Married ___ Single
___ Divorced ___ Widowed ___ Separated
7. Birthdate
-------------------------------------
(mo/day/yr)
8. Age (Nearest Birthday)
--------------------------------------
9. Sex ___ Male ____ Female
<PAGE>
10. a. Occupation
-------------------------------------------------------
b. Principal Duties
-------------------------------------------------------
c. Other Duties
-------------------------------------------------------
11. a. Employer
-------------------------------------------------------
b. Nature of Business
-------------------------------------------------------
12. a. Annual income after business expenses and before income taxes:
(Answer every item)
Earned income: $ Other income:$
------------------- --------------------
(Describe in 25)
b. Net worth: $
------------------------
13. Life Insurance (Personal, Business and Group) in Force (If none, so state)
<TABLE>
<CAPTION>
Company Year of Issue Amount ADB
<S> <C> <C> <C>
- ------------------------------------- --------------- -------------- ---------------
- ------------------------------------- --------------- -------------- ---------------
- ------------------------------------- --------------- -------------- ---------------
(Put "B" to the left of any business insurance listed)
</TABLE>
14. Disability Insurance (Personal, Business and Group) in Force (If none, so
state)
<TABLE>
<CAPTION>
Accident Death
Company Year of Issue Monthly Income Benefit Period Benefit
<S> <C> <C> <C> <C>
- ------------------------------------- --------------- -------------- --------------- ---------------
- ------------------------------------- --------------- -------------- --------------- ---------------
- ------------------------------------- --------------- -------------- --------------- ---------------
(Put "B" to the left of any business insurance listed)
</TABLE>
15. Any other negotiations for life, disability or accidental death insurance
pending or contemplated? ____ Yes ___No
(If "Yes", see 23)
16. Any 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 required replacement forms; list company, policy number & amounts
in 23)
___ Yes ____ No
<PAGE>
17. Any intent to travel or reside outside USA? ___ Yes ___ No
(If "Yes", see 23)
18. Any flights made as a trainee, pilot or crew member within 3 years, or any
intent to learn to fly? ___ Yes ___ No
(If YES, complete Aviation Questionnaire)
19. Any participation within the past 3 years or intent to participate in: any
flights as a trainee, pilot or crew member; SCUBA diving; sky diving; hang
gliding; or motor racing? (If "Yes", complete applicable Questionnaire
___Yes ___ No
20. Any suspension or revocation of driver's license within past 2 years? ___
___ Yes ___ No (If "Yes" see 23)
21. a. Any cigarette smoking in past year? ____ Yes ___No
(If YES, state number of cigarettes per day_____)
22. Any treatment for or consultation with a physician concerning a heart
attack, a stroke or cancer (other than skin cancer) within past 2 years?
____ Yes ___No
23. Any change in health or any treatment by or consultation with a physician
since the date of Part II of this Application? (Answer only if Part II is
dated prior to Part I. If "Yes'; see 23)
____ Yes ___No
24. Is Proposed Insured currently employed less than full time? ____ Yes ___No
25. Explain "Yes" answers (Attach memo if more space needed)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
26. Plan of Insurance
-----------------
Riders (Complete any additional application needed)
___ Waiver of Premiums
___ Acc. Death Ben. $
------------------
___ Purchase Option $
------------------
___ Level Term $
------------------
27. Indicate any special request (Attach memo if more space needed)
28. Beneficiary (Include relation to Proposed Insured) Continued on
Reverse Side
<PAGE>
(1) Primary (2) Secondary
- --------------------------- --------------------------------------------------
29. Is Proposed Insured to own the policy? ____ Yes ___No
(If "No" name the Owner (Include relation to Proposed Insured) (Note: a
numbered sequence may be used to name successive Owners)
- --------------------------------------------------------------------------------
30. Premium Mode
___ Annual ___ Semi-Annual ___ Quarterly
___ Other (see 28)
31. If available under policy applied for, are premiums in default to be paid
automatically by policy loan?
____ Yes ___No
32. If available under policy applied for, are premiums in default to be paid
automtcially by policy loan?
____ Yes ___No
33. Prepayment $ ____ None (If Question 22 or 23 is answered
-
"Yes", no prepayment is permitted)
34. Account Allocation (whole %) (Minimum 10% in each selected account)
___% Capital Growth
___% Money Market
___% Bond Income
100% Total
35. Suitability Statement by Applicant
a. Did you receive the prospectus? ____ Yes ___No
(If "Yes", give date of prospectus)__________
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
investment return? ____ Yes ___No
c. Do you believe that this policy will meet insurance needs & financial
objectives? ____ Yes ___No
Administrative Office Use: Additions and Amendments
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 "Additions
and Amendments" as to: (a) age; or (b) plan of insurance; or (c) riders; or (d)
amounts; or (e) rate class.
<PAGE>
When Insurance Takes Effect. If a prepayment is made 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 first premium is paid; provided that at the time of such
payment: (a) this Application has been approved by the Company at its
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; or (b) to change any terms of
this Application; or (c) to make a contract for the Company.
Signed at (City and State) Date 19
---------------------------- ----------- ------
- -------------------- ----------------------------- -------------------------
Agent Proposed Insured Applicant if other than
Proposed Insured
<PAGE>
EXHIBIT 3 (a)(i)
New England Variable Life Separate Account
New England Variable Life Insurance Company
501 Boylston Street
Boston, MA 02117
Gentlemen:
In my capacity as General Counsel of New England Variable Life Insurance
Company, I have provided legal advice concerning:
The establishment of New England Variable Life Separate Account (the
"Account") by the Board of Directors of New England Variable Life Insurance
Company (the "Company") as a separate investment account in accordance with
Section 2932 of the Delaware Insurance Code; and
The preparation of a registration statement on Form S-6, filed by the
Account and the Company with the Securities and Exchange Commission under
the Securities Act of 1933 with respect to Single Premium Variable Life
Insurance Policies (the "Registration Statement").
It is my professional opinion that:
1. The Account is a separate investment account of the Company and is duly
created and validly existing pursuant to the Laws of the State of
Delaware;
2. The Single Premium Life Policies, when issued in accordance with the
prospectus contained in the Registration Statement and in compliance
with applicable local law, are and will be legal and binding
obligations of the Company in accordance with their terms; and
3. Assets attributable to reserves and other contract liabilities and held
in the Account will not be chargeable with liabilities arising out of
any other business the Company may conduct.
In forming this opinion, I have made such examination of law and examined such
records and other documents as in my judgment are necessary and appropriate.
<PAGE>
New England Variable Life Separate Account
New England Variable Life Insurance Company
December 17, 1986
Page 2
I hereby consent to the filing of this opinion letter as an exhibit to the
Registration Statement and to the use of my name under the caption "Legal
Matters" in the prospectus contained in the Registration Statement.
Very truly yours,
Edward N. Wadsworth
General Counsel
<PAGE>
Exhibit 3(a)(ii)
March 4, 1988
New England Variable Life Insurance Company
501 Boylston Street
Boston, MA 02117
Re: Registration Statement No. 2-10954 on Form S-6 of New
England Variable life Separate Account
Gentlemen:
I hereby consent to the incorporation by reference in this Post-Effective
Amendment No. 2 to the above-referenced Registration Statement of my opinion
and consent included in the Registration Statement filed with the Securities and
Exchange Commission on December 19, 1986.
I further consent to the use of my name under the caption "Legal Matters"
in the Prospectus.
Very truly yours,
Edward N. Wadsworth
General Counsel
ENW:nlf
<PAGE>
EXHIBIT 3(b)
Robert E. Schneider, F.S.A.
Vice President and Chief Actuary
Gentlemen:
In my capacity as Vice President and Chief Actuary of New England Variable Life
Insurance Company (the "Company"), I have provided actuarial advice concerning:
The preparation of Post-Effective Amendment No. 3 to the registration statement
on Form S-6 (File No. 33-10954), filed by New England Variable Life Separate
Account and the Company with the Securities and Exchange Commission under the
Securities Act of 1933 with respect to variable life insurance policies (the
"Registration Statement"); and
The preparation of policy forms for the variable life insurance policies
described in the Registration Statement (the "Policies").
It is my professional opinion that:
1. The "sales load" as defined in paragraph (c) (4) of Rule 6(e)-2 under the
Investment Company Act of 1940, shall not exceed 9 per centum of the single
premium.
2. The Prospectus information contained in (i) the example of variations in
death benefits on page 14; (ii) the example of how the maximum loanable
amount is determined on page 16; and (iii) the example of the impact of a
policy loan on page 16, based on the assumptions stated in the
illustrations, is consistent with the provisions of the Policies.
3. The prospectus information contained in the demonstration of the increase
in variable death benefit and table of net single premiums in Appendix B,
the description of the Cost of Insurance Factor in Appendix C, and the
description of historical investment experience in Appendix D, based on the
assumptions stated in the appendices, is consistent with the provisions of
the Policies.
4. The illustration of death benefits, cash values, net cash surrender values,
accumulated premiums and internal rates of return on net cash surrender
values shown in Appendix A of the Prospectus, based on the assumptions
stated in the illustrations, are consistent with the provisions of the
Policies. The rate structure of the Policies has not been designed so as
to make the relationship between premiums and benefits, as shown in the
illustrations,
<PAGE>
appear to be correspondingly more favorable to prospective purchasers of
Policies for males aged 25 or 40 in the underwriting class illustrated than
to prospective purchasers of Policies for males at other ages or
underwriting classes or for females.
I hereby consent to the filing of this opinion as an Exhibit to this Post-
Effective Amendment to the Registration Statement and to the use of my name
under the heading "Experts" in the Prospectus.
Sincerely,
Robert E. Schneider, F.S.A.
Vice President and Chief Actuary
<PAGE>
Exhibit 6
Sutherland, Asbill & Brennan LLP
CONSENT OF SUTHERLAND, ASBILL & BRENNAN LLP
We consent to the reference to our firm under the heading "Legal Matters"
in the prospectus included in Post-Effective Amendment No. 13 to the
Registration Statement on Form S-6 for certain variable life insurance policies
issued through of New England Variable Life Separate Account of New England Life
Insurance Company (File No. 33-10954). In giving this consent, we do not admit
that we are in the category of persons whose consent is required under Section 7
of the Securities Act of 1933.
SUTHERLAND, ASBILL & BRENNAN LLP
Washington, D.C.
April 28, 1998
<PAGE>
EXHIBIT 10
NEW NOTICE OF WITHDRAWAL
ENGLAND
VARIABLE New England Variable Life
Insurance Company
[Owner's Name] 501 Boylston Street
Boston, Massachusetts 02117
[Owner's Address]
[Date of Mailing]
RE: [Contract Number
Insured's Name
Plan Name
Single Premium]
This notice is sent to you in accordance with the laws administered by the
United States Securities and Exchange Commission ("SEC"). Please read it
carefully and retain it with your important records.
You have recently purchased a variable life insurance contract from New England
Variable Life Insurance Company ("NEVLICO") under which benefits depend on the
investment experience of New England Variable Life Separate Account ("Account").
You have, pursuant to requirements of the SEC and your contract, the right to
examine and return your contract for cancellation, and receive a full refund of
the premium paid, at any time within 10 days from delivery of the contract or 45
days from the date of Part 1 of the application, whichever is later, but in any
event you have until 10 days from the date of mailing of this notice, as
determined by its post mark, to return the contract for cancellation.
In determining whether or not to exercise your right, you should consider, among
other things, the cost of your contract. To purchase your contract, you have
paid the single premium payment stated above. Also you have already been
furnished a prospectus which describes the administrative charge deducted from
the single premium before the balance of the premium is allocated to the
Account, and the deferred charge which is deducted from the cash value of the
contract. These charges are:
For administrative expenses, a charge of $250 is deducted from the single
premium.
The following charges collectively comprise the deferred charge:
- For sales load, a charge equal to 4% of the net premium. (The net
premium is the total premium less the $250 administrative charge.)
- For the minimum death benefit risk, a charge equal to 1.2% of the net
premium for a preferred risk contract and 1.5% of the net premium for a
standard risk contract.
<PAGE>
- For state premium taxes, a charge equal to 2% of the net premium.
On each of the first 10 policy anniversaries, an amount equal to 10% of the
total deferred charge is deducted from the cash value of the contract.
Should you decide to exercise this right of cancellation, complete the enclosed
form and return your contract in accordance with the enclosed instructions, post
marked on or before the latest date permitted for cancellation as described
above.
Kernan F. King
Secretary
2
<PAGE>
Instructions
Please Read Carefully
To the Contract Owner:
If, after reading the enclosed notice, you elect to return your contract for
cancellation you must:
1. Sign and date the bottom of this form.
2. Mail the form together with your contract (if received by you)
to:
New England Variable Life Insurance Company
501 Boylston Street
Boston, Massachusetts 02117
3. The post mark on the envelope must be on or before the latest date
permitted for cancellation as described in the attached letter.
4. Please check the box below if you have not yet received your contract
when mailing this card.
- --------------------------------------------------------------------------------
To: New England Variable Life Insurance Company
Pursuant to the terms of the notice previously furnished me by New England
Variable Life Insurance Company I hereby return the contract numbered below for
cancellation and request a full refund of the premium paid by me for the
contract.
- -------------- -------------------------------------
Date Signature of Contract Owner
-------------------------------------
Contract Number
[_] I have not yet received the contract and should it be received I will
return it to New England Variable Life Insurance Company.
3
<PAGE>
Exhibit 12
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post Effective Amendment No. 13 to the
Registration Statement No. 33-10954 of New England Variable Life Separate
Account (the "Separate Account") of New England Life Insurance Company (the
"Company") of our reports dated February 10, 1998 and February 17, 1998, on
the financial statements of the Separate Account and the Company for the
years ended December 31, 1997 and 1996 appearing in the Supplement (which
expressed unqualified opinions and, with respect to the Company, includes
an explanatory paragraph referring to the change in the basis of accounting
and the change in corporate organization), which is part of such
Registration Statement.
We also consent to the reference to us under the heading "Experts" in such
Supplement.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
April 28, 1998
<PAGE>
Exhibit 12
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the inclusion in Post-Effective Amendment No. 13 to the
Registration Statement on Form S-6 (File No. 33-10954) of our reports, which
include adverse opinions as to generally accepted accounting principles and
unqualified opinions as to statutory accounting practices prescribed or
permitted by the Insurance Department of the State of Delaware, dated March 8,
1996, except as to the information in the second paragraph under "Basis of
Presentation and Principles of Consolidation" of Note 1, for which the date is
February 18, 1997, on our audits of the statutory financial statements of New
England Variable Life Insurance Company and New England Pension and Annuity
Company, and our report dated February 6, 1996, on our audit of New England
Variable Life Separate Account of New England Variable Life Insurance Company.
We also consent to the inclusion in this registration statement of our report,
which includes an adverse opinion as to generally accepted accounting principles
and an unqualified opinion as to conformity with The Insurance Act 1978, dated
April 23, 1996, on our audit of the statutory financial statements of Exeter
Reassurance Company, Ltd., and our report dated February 9, 1996, on our audit
of New England Securities Corporation, and our report dated February 29, 1996,
on our audit of TNE Advisors, Inc., and our report dated March 14, 1996, on our
audit of Newbury Insurance Company, Limited. We also consent to the reference
to our firm under the caption "Experts" in this Post-Effective Amendment.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
April 28, 1998
