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SUPPLEMENT TO PROSPECTUS
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
SEPARATE ACCOUNT A
DATED MAY 1, 1998
EXCHANGE OFFER
EXCHANGE OFFER
The certificates under Contracts described in this Prospectus ("New
Certificates") may be issued in exchange for certificates under certain group
annuity contracts previously issued by the Company ("Ven 8 contracts"). The Ven
8 contracts are described in Appendix D. New Certificates may also be issued in
exchange for certain individual annuity contracts ("Old Contracts") previously
issued by the Company in Pennsylvania, South Carolina, Texas and issued prior to
August 15, 1994 in Washington and issued prior to October 3, 1994 in New Jersey,
which are substantially similar to the New Certificates except as noted below.
Ven 8 contracts and Old Contracts are collectively referred to as "Old
Certificates."
The Company will permit an owner of an outstanding Old Certificate to
exchange the Old Certificate for a New Certificate without withdrawal charge,
except a possible market value charge, as described below. For purposes of
computing the applicable withdrawal charge upon any withdrawals made subsequent
to the exchange, the New Certificate will be deemed to have been issued on the
date the Old Certificate was issued, and any purchase payment credited to the
Old Certificate will be deemed to have been credited to the New Certificate on
the date it was credited under the Old Certificate. The death benefit under the
New Certificate on the date of its issue will be the greater of the minimum
death benefit under the Old Certificate or the contract value on the date of
exchange and will "step up" annually thereafter as described in paragraph "6."
below.
Ven 8 contract owners interested in a possible exchange should
carefully review both Appendix D and the remainder of this Prospectus before
deciding to make an exchange. Old Contract owners interested in a possible
exchange should carefully review both the Old Contract prospectus and the
remainder of this Prospectus before deciding to make an exchange.
AN EXCHANGE MAY NOT BE IN THE BEST INTERESTS OF AN OWNER OF AN OLD
CERTIFICATE. Further, under Old Certificates, a market value charge may apply to
any amounts transferred from a three or six year investment account in
connection with an exchange. (Reference should be made to the discussion of the
market value charge in Appendix D in the case of Ven 8 contracts and under
"Market Value Charge" in Appendix C to the Old Contract prospectus in the case
of Old Contract owners.) The Company believes that an exchange of Certificates
will not be a taxable event for Federal tax purposes; however, any owner
considering an exchange should consult a tax adviser. The Company reserves the
right to terminate this exchange offer or to vary its terms at any time.
The principal differences between the Old and New Certificates are as
follows:
1. The New Certificate will waive the $30 annual administration fee
prior to the maturity date if the contract value is equal to or greater than
$100,000 at the time the fee is assessed.
2. The surrender charges under the New Certificate will be higher in
certain cases. The surrender charges are the same under both Old and New
Certificates for the first three certificate years, but thereafter the charges
under the New Certificate are 5%, 4%, 3% and 2% for withdrawals made during
certificate years four, five, six and seven, respectively, while under the Old
Certificate the charges for such years are 4%, 3%, 2% and 0%, respectively.
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3. The minimum interest rate to be credited for any guarantee period
under the fixed portion of the New Certificate will be three percent as opposed
to four percent under the Old Certificate. The market value charge under the New
Certificate will be limited so as to only affect accumulated earnings in excess
of three percent, whereas under the Old Certificate the market value charge is
limited so as to not invade principal.
4. The annuity purchase rates guaranteed in the New Certificate have
been determined using 3% as opposed to 4% under the Old Certificate.
5. (Old Contracts only) Old Contracts are individual deferred annuity
contracts whereas the New Certificates are group deferred annuity certificates.
Ownership of an individual contract is evidenced by the issuance of an
individual annuity contract whereas participation in a group contract is
separately accounted for by the issuance of a certificate evidencing the owner's
interest under the contract. Under the group contract, contracts have been
issued to the Venture Trust, a trust established with United Missouri Bank,
N.A., Kansas City, Missouri, as group holder for groups comprised of persons who
have brokerage accounts with brokers having selling agreements with
Manufacturers Securities Services, LLC.
6. DIFFERENCES RELATING TO THE DEATH BENEFIT
a. Differences Between Death Benefit of Old Certificates and New
Certificates
Death Benefit for Old Certificates
The minimum death benefit during the first six certificate years will
be equal to the greater of: (a) the owner's contract value on the date due proof
of death and all required claim forms are received at the Company's Annuity
Service Office, or (b) the sum of all purchase payments made by or on behalf of
the owner, less any amount deducted in connection with partial withdrawals made
by the owner. During any subsequent six contract year period, the minimum death
benefit will be the greater of (a) the owner's contract value on the date due
proof of death and all required claim forms are received at the Company's
Annuity Service Office, or (b) the minimum death benefit on the last day of the
previous six certificate year period plus any purchase payments made by or on
behalf of the owner and less any amount deducted in connection with partial
withdrawals made by the owner since then. If the annuitant dies after the first
of the month following his or her 85th birthday, the minimum death benefit will
be the owner's contract value on the date due proof of death and all required
claim forms are received at the Company's Annuity Service Office.
An Enhanced Death Benefit became available in Washington to contracts
issued August 15, 1994 or later and in New Jersey to certificates issued October
3, 1994 or later.
This Enhanced Death Benefit provides for a minimum death benefit as
described above, except that the death benefit is "stepped up" each certificate
year instead of the six contract year period. In addition, if the annuitant dies
after the first of the month following his or her 85th birthday, the minimum
death benefit is the greater of the contract value or the excess of the sum of
all purchase payments less the sum of any amounts deducted in connection with
partial withdrawals.
Death Benefit for New Certificates Issued on or After May 1,
1998 (See below for state applicability)
In the states of Texas and Washington, the death benefit described
under "Death Benefit for New Certificates Issued Prior to May 1, 1998" will
continue to apply to certificates issued on or after May 1, 1998.
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If any owner dies and the oldest owner had an attained age of less than
81 years on the certificate date, the death benefit will be determined as
follows: During the first certificate year, the death benefit will be the
greater of: (a) the contract value or (b) the sum of all purchase payments made
by or on behalf of the owner, less any amounts deducted in connection with
partial withdrawals made by or on behalf of the owner. During any subsequent
certificate year, the death benefit will be the greater of: (a) the contract
value or (b) the death benefit on the last day of the previous certificate year,
plus any purchase payments made by or on behalf of the owner and less any
amounts deducted in connection with partial withdrawals made by or on behalf of
the owner since then. If any owner dies on or after his or her 81st birthday,
the death benefit will be the greater of (a) contract value or (b) the death
benefit on the last day of the certificate year ending just prior to the owner's
81st birthday, plus any payments made by or on behalf of the owner, less amounts
deducted in connection with partial withdrawals.
If any owner dies and the oldest owner had an attained age of 81 years
or greater on the certificate date, the death benefit will be the greater of:
(a) the contract value or (b) the excess of (i) the sum of all purchase payments
made by or on behalf of the owner over (ii) the sum of any amounts deducted in
connection with partial withdrawals made by or on behalf of the owner.
Death Benefit for New Certificates Prior to May 1, 1998
The death benefit described below applies to New Certificates issued
prior to May 1, 1998 as well as New Certificates issued on or after May 1, 1998
in the states of Texas and Washington.
If any owner dies on or prior to his or her 85th birthday and the
oldest owner had an attained age of less than 81 years on the certificate date,
the death benefit will be determined as follows: During the first certificate
year, the death benefit will be the greater of: (a) the contract value or (b)
the sum of all purchase payments made, less any amounts deducted in connection
with partial withdrawals made by or on behalf of the owner. During any
subsequent certificate year, the death benefit will be the greater of: (a) the
contract value or (b) the death benefit on the last day of the previous
certificate year, plus any purchase payments made and less any amounts deducted
in connection with partial withdrawals made by or on behalf of the owner since
then.
If any owner dies after his or her 85th birthday and the oldest owner
had an attained age of less than 81 years on the certificate date, the death
benefit will be the greater of: (a) the contract value or (b) the excess of (i)
the sum of all purchase payments made by or on behalf of the owner over (ii) the
sum of any amounts deducted in connection with partial withdrawals made by or on
behalf of the owner. If any owner dies and the oldest owner had an attained age
greater than 80 on the certificate date, the death benefit will be the contract
value less any applicable withdrawal charges at the time of payment of benefits.
For certificates issued on or after October 1, 1997, any withdrawal charges
applied against the death benefit shall be waived by the Company.
b. DIFFERENCES REGARDING WHEN DEATH BENEFIT WILL BE PAID
The death benefit of the New Certificate will be payable upon the death
of the owner (or first owner to die if there is more than one owner). The death
benefit of the Old Certificate is payable on the death of the annuitant (or last
annuitant to die if there is more than one annuitant); if the owner predeceases
the annuitant, the Old Certificate contract value is paid, which may be a lesser
amount than the death benefit payable on the death of the annuitant.
Certificate owners who do not wish to exchange their Old Certificates
for the New Certificates may continue to make purchase payments to their Old
Certificates. Or, they can keep their Old Certificates and buy a New Certificate
to which to apply additional purchase payments.
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The above comparison does not take into account differences between the
Old Certificates, as amended by qualified plan endorsements, and the New
Certificates, as amended by similar qualified plan endorsements. Owners using
their Old Certificate in connection with a qualified plan should consult a tax
advisor. See also the Federal Tax Matters section of the prospectus.
(Old Contracts Only) Additional Considerations for Ven 1 and Ven 3 Contract
Owners
The comparison of Old Contract and New Certificate provisions set forth
above does not include the Ven 1 and Ven 3 contracts (which are no longer being
issued and which are described in Appendix D to the Old Contract prospectus).
These contracts will also be eligible for voluntary exchange for the New
Contracts. Ven 3 and Ven 1 contract owners should in particular consider the
following differences between the Ven 3 and Ven 1 contracts and the New
Certificate.
1. In general, the death benefit of the New Certificate will be payable on the
death of the owner (or first owner to die if there is more than one owner).
The death benefit of the Ven 3 and Ven 1 contracts is generally payable on
the death of the annuitant (or last annuitant to die if there is more than
one annuitant); if the owner predeceases the annuitant, the Ven 3 or Ven 1
contract value (as applicable) is paid, which may be a lesser amount than
the death benefit payable on the death of the annuitant.
2. The guaranteed death benefit payable under the New Certificate will in most
circumstances be more favorable. The minimum death benefit for the Ven 1
contract is the greater of (a) the contract value or (b) the sum of all
purchase payments made, less any amount deducted in connection with partial
withdrawals. The minimum death benefit for the Ven 3 contract, upon the
death of the annuitant, during the first five contract years, will be the
greater of (a) the contract value or (b) the sum of all purchase payments
made, less any amount deducted in connection with partial withdrawals and,
during any subsequent five contract year period, will be the greater of (a)
the contract value or (b) the minimum death benefit determined in
accordance with these provisions as of the last day of the previous five
contract year period plus any purchase payments made and less any amount
deducted in connection with partial withdrawals since then. The minimum
death benefit for the New Certificate is described above.
3. The New Certificate will waive the $30 annual administration fee prior to
the maturity date if the contract value is equal to or greater than
$100,000 at the time the fee is to be assessed.
4. The surrender charges under the New Certificate are higher in certain
cases. The New Certificate surrender charges are 6%, 6%, 5%, 5%, 4%, 3%, 2%
for withdrawals made within one, two, three, four, five, six and seven
years, respectively, of payment. The surrender charge for the Ven 3 and Ven
1 contract is 5% for withdrawals made within five years of payment (certain
exceptions apply to the withdrawal charge as described in Appendix D) to
the Old Contract.
5. The New Certificate provides for forty investment options (thirty-five
variable and five fixed). Neither the Ven 3 contract nor the Ven 1 contract
provides for fixed investment options. In addition, the Ven 1 contract
offers only three variable investment options.
6. The New Certificate provides for the deduction from each sub-account each
valuation period of a charge at an effective annual rate of 1.40% (1.25%
for mortality and expense risk fees and 0.15% for administration fees) of
the contract reserves allocated to such sub-account. The Ven 1 contract
provides for the deduction from each sub-account each valuation period of a
charge at an effective annual rate of 1.30% (for mortality and expense
risk) of the contract reserves allocated to such sub-account. The Ven 3
charges are the same as those for the New Certificate.
7. The annuity purchase rates guaranteed in the New Certificate have been
determined using 3% as opposed to 4% under the Ven 1 and Ven 3 contracts.
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8. Certain Ven 3 and Ven 1 contracts may not be subject to some changes in the
Federal tax law that have occurred since the contracts were issued, i.e.,
the contracts were "grandfathered." If such a grandfathered contract is
exchanged, the New Certificate is likely to be subject to the changes in
the law. For example, annuity contracts issued on or prior to April 22,
1987 are generally not subject to Federal tax rules treating transfers of
annuity contracts for inadequate consideration as taxable events. See
"Taxation of Partial and Full Withdrawals" in the Federal Tax Matters
section of the prospectus. A New Certificate received in exchange for a Ven
3 or Ven 1 contract would, however, typically be subject to these rules.
THE DATE OF THIS SUPPLEMENT IS NOVEMBER 2, 1998.
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SUPPLEMENT TO PROSPECTUS
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
SEPARATE ACCOUNT A
DATED MAY 1, 1998
DCA PROMOTIONAL RATES
The Company is currently offering promotional rates in connection with
the Dollar Cost Averaging (DCA) program. The promotional rates are available for
a limited time for new purchase payments of $100,000 or more allocated to either
a 6-month or a 12-month DCA fixed account investment option. Payments must be
received on or after August 31, 1998 but not later than December 31, 1998 to be
eligible.
As of the date of this supplement, the promotional rates are 8% for the
12-month DCA option and 10% (annualized) for the 6-month DCA option. Both the 8%
and the 10% rates are effective annual interest rates and interest is earned for
the period of time amounts are in the DCA account. Since pre-determined amounts
in the DCA account will be transferred monthly into other sub-accounts, the
total dollar amount of interest earned in the 6-month DCA investment option will
be less than 10% of the initial amount invested. Similarly, the total dollar
amount of interest earned in the 12-month DCA investment option will be less
than 8% of the initial amount invested. The Company reserves the right to change
the promotional rates at any time for purchase payments made after the effective
date of the change.
To receive the promotional rates, the portion of your new purchase
payment allocated to the DCA investment option must be systematically
transferred into variable investment options over a 6 month or 12 month period,
as applicable. The monthly DCA transfer amount is determined by dividing the
portion of your new purchase payment allocated to the DCA investment option by
5.6 for the 6 month option, or 11 for the 12 month option. Each month, on the
date designated by the contract owner, the monthly DCA transfer amount will be
transferred to the variable investment options selected. At the end of the DCA
period, the remaining DCA account balance will be transferred to the variable
investment options selected. Contract owners should not rely on the promotional
rates being in effect for subsequent payments. Subsequent payments will receive
the interest rate in effect at the time of payment.
A contract owner may discontinue the Dollar Cost Averaging program at
any time. The remaining balance of the contract owner's DCA account will then be
transferred to the 1-year fixed account and receive the interest rate in effect
at the time of the transfer, guaranteed for one year. For current 1-year fixed
account rates, call 1-800-557-2223.
FINANCIAL RATINGS OF THE COMPANY
The contracts described in the Prospectus are issued by The
Manufacturers Life Insurance Company of North America (the "Company"). The
Company's financial ratings are as follows:
A++ A.M. Best
Superior in financial strength; 1st category of 15
AAA Duff & Phelps
Highest in claims paying ability; 1st category of 18
AA+ Standard & Poor's
Excellent in claims paying ability; 2nd category of 21
Aa2 Moody's
Excellent in financial strength; 3rd category of 21
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These ratings, which are current as of November 2, 1998 and are subject
to change, are assigned to The Manufacturers Life Insurance Company of North
America as a measure of the Company's ability to honor the death benefit and
life annuitization guarantees but not specifically to its products, the
performance (return) of these products, the value of any investment in these
products upon withdrawal or to individual securities held in any portfolio.
DEATH BENEFIT BEFORE MATURITY DATE - AMOUNT OF DEATH BENEFIT
The section entitled "Death Benefit Before Maturity Date - Amount of
Death Benefit" is amended as follows:
Effective October 1, 1998, for certificates issued on or after October
1, 1998 in Texas, the death benefit will be the death benefit described under
the subsection "Certificates Issued On or After May 1, 1998."
DEATH BENEFIT PROVISIONS - PRIOR CONTRACT DEATH BENEFIT PROVISIONS
The section entitled "Death Benefit Provisions - Prior Contract Death
Benefit Provisions" of Appendix D is supplemented as follows:
An Enhanced Death Benefit became available in Washington to contracts
issued August 15, 1994 or later and in New Jersey to contracts issued October 3,
1994 or later.
This Enhanced Death Benefit provides for a minimum death benefit as
described above, except that the death benefit is "stepped up" each contract
year instead of the six contract year period. In addition, if the annuitant dies
after the first of the month following his or her 85th birthday, the minimum
death benefit is the greater of the contract value or the excess of the sum of
all purchase payments less the sum of any amounts deducted in connection with
partial withdrawals.
Contracts with a contract date prior to the date the Enhanced Death
Benefit first became available in that state may also be exchanged for a new
contract which provides for an alternative enhanced death benefit. See
supplement to this prospectus for The Manufacturers Life Insurance Company of
North America Separate Account A entitled "Exchange Offer."
CHANGE OF ANNUITANT
The section entitled "Guaranteed Retirement Income Program" is
supplemented as follows:
The Annuitant may only be changed to an individual that is the same age
or younger than the current Annuitant.
SUPPLEMENT DATED NOVEMBER 2, 1998.
