<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 11 TO
FORM S-6
File No. 33-11165
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust: IDS Life Variable Life Separate Account
B. Name of depositor IDS LIFE INSURANCE COMPANY
C. Complete address of depositor's principal executive offices:
IDS Tower, Minneapolis, Minnesota 55440-0010
D. Name and complete address of agent for service:
James A. Mitchell
President
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440-0010
Copies to:
William A. Stoltzmann, Esq.
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440-0010
E. Title and amount of securities being registered:
Flexible Premium Variable Life Insurance Policy
F. Proposed maximum aggregate offering price to the public of the
securities being registered.
Registration of Indefinite Amount of Securities Pursuant
to Rule 24f-2 under the Investment Company Act of 1940.
G. Amount of initial filing fee: NA
Registrant's Rule 24f-2 Notice for its most recent fiscal year
was filed on or about February 25, 1994.
H. It is proposed that this filing will become effective (check
appropriate space)
immediately upon filing pursuant to paragraph (b) of Rule 486
on (date) pursuant to paragraph (b) of Rule 486
60 days after filing pursuant to paragraph (a) of Rule 486
X on April 29, 1994, pursuant to paragraph (a) of Rule 486<PAGE>
PAGE 2
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
N-8B-2 Item Caption in Prospectus
1.............................Cover Page; The Variable Account
2.............................IDS Life
3.............................Not Applicable
4.............................Distribution of the Policy
5.............................The Variable Account
6.............................The Variable Account
7.............................Not Applicable
8.............................Not Applicable
9.............................Not Applicable
10............................Loads, fees and charges; Policy
surrenders; Transfers between the
fixed account and the subaccounts;
Grace period; Voting rights;
Substitution of investments;
Premiums; The fixed account;
Allocation of premiums; Transfers
between the fixed account and the
subaccounts; Right to examine policy
11............................The fund; The trust
12............................The fund; The trust
13............................Loads, fees and charges
14............................Purchasing your policy
15............................Allocation of premiums; Transfers
between the fixed account and the
subaccounts; The fund, The trust
16............................Allocation of premiums; Transfers
between the fixed account and the
subaccounts; The fund; The trust;
Policy surrenders
17............................Policy surrenders
18............................The fund; The trust; Federal Taxes
19............................IDS Life
20............................Not applicable
21............................Policy loans
22............................Not Applicable
23............................Management of IDS Life
24............................Death benefits; Optional insurance
benefits
25............................IDS Life
26............................Not Applicable
27............................IDS Life
28............................Management of IDS Life
29............................IDS Life
30............................IDS Life
31............................Not Applicable
32............................Not Applicable
33............................Not Applicable
34............................Not Applicable
35............................Not Applicable
<PAGE>
PAGE 3
36............................Not Applicable
37............................Not Applicable
38............................Distribution of policy
39............................IDS Life
40............................Not Applicable
41............................Distribution of the policy; IDS Life
42............................Management of IDS Life
43............................Not Applicable
44............................Allocation of premium; transfers
between the fixed account and the
subaccounts; Policy value
45............................Not Applicable
46............................Policy value
47............................Not Applicable
48............................Not Applicable
49............................Not Applicable
50............................Not Applicable
51............................IDS Life; Purchasing your policy
52............................Substitution of investments
53............................Federal Taxes
54............................Not Applicable
55............................Not Applicable
56............................Not Applicable
57............................Not Applicable
58............................Not Applicable
59............................Not Applicable
<PAGE>
PAGE 4
Flexible Premium Variable Life Insurance Policy
Prospectus April 29, 1994
IDS Life Variable Life Separate Account
Issued and sold by: IDS Life Insurance Company, IDS Tower 10,
Minneapolis, MN 55440-0010 Telephone: (612) 671-3131
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED OR PRECEDED BY THE
PROSPECTUS OF THE IDS LIFE SERIES FUND, INC. AND OF THE SHEARSON
LEHMAN BROTHERS STRIPPED ("ZERO COUPON") U.S. TREASURY SECURITIES
FUND, SERIES A. ALL PROSPECTUSES SHOULD BE RETAINED FOR FUTURE
REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
IDS LIFE IS NOT A BANK AND THE SECURITIES IT OFFERS ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY ANY BANK
NOR ARE THEY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
<PAGE>
PAGE 5
The Flexible Premium Variable Life Insurance Policy described in
this prospectus is designed to provide life insurance coverage on
the insured named in the policy and flexibility of premium payments
and death benefits. This flexibility allows you to meet changing
insurance needs with a single insurance policy. The policy is
intended to qualify as a life insurance policy under Sections 72,
101 and 7702 of the Code.
You may allocate policy value to one or more of seven subaccounts
of IDS Life Variable Life Separate Account. Five subaccounts
invest in the portfolios of IDS Life Series Fund: Equity, Income,
Money Market, Managed and Government Securities. Two subaccounts
invest in the Shearson Lehman Brothers Stripped ("Zero Coupon")
U.S. Treasury Securities Fund, Series A. There is no guaranteed
minimum policy value with respect to the subaccounts and you bear
the entire investment risk. You may also allocate policy value to
the fixed account which earns at least a guaranteed minimum
interest rate. The fixed account is the general investment account
of IDS Life.
You may withdraw a portion of the policy's cash surrender value
after the first policy year or surrender it in full at any time for
its cash surrender value. Surrender charges are described under
"Loads, fees and charges". You may also take out policy loans.
The frequency of and amount of premium payments are flexible,
subject to certain restrictions and conditions. Payment of the
scheduled premium will not necessarily keep a policy from lapsing
if the cash surrender value is less than the amount needed to pay
the monthly deduction (see "Loads, fees and charges"). However, a
policy will not lapse if the premiums needed to keep the death
benefit guarantee in effect are paid. The death benefit guarantee
may remain in effect until the insured reaches attained insurance
age 70 or the policy has been in effect for five years, whichever
is later.
This prospectus contains detailed information about these and other
policy features, including certain restrictions and limitations
which apply. This prospectus also discusses how the investment
return earned by the policy can affect the policy's death benefit
and cash surrender value.
As in the case of other life insurance policies, it may not be
advantageous to purchase flexible premium variable life insurance
as a replacement for, or in addition to an existing flexible
premium variable or other life insurance policy.
<PAGE>
PAGE 6
Table of contents
Key terms
The policy in brief
The variable account
The fund
Equity Portfolio
Income Portfolio
Money Market Portfolio
Managed Portfolio
Government Securities Portfolio
Portfolio objectives
Relationship between portfolios and subaccounts
Rates of return of the fund and subaccounts
The trusts
Objectives and major investments
Estimated rates of return
Trust maturity
Roles of Shearson Lehman and IDS Life
The fixed account
Purchasing your policy
Application
Right to examine policy
Premiums
Loads, fees and charges
Premium expense charge
Monthly deduction
Note for Massachusetts and Montana residents
Surrender charge
Partial surrender fee
Mortality and expense risk charge
Transaction charge
Fund investment management fee
Death benefit guarantee
Grace period
Reinstatement
Policy value
Fixed account value
Subaccount values
Death benefits
Change in death benefit option
Changes in specified amount
Misstatement of age or sex
Suicide
Beneficiary
Transfers between the fixed account and subaccounts
Fixed account transfer policies
Minimum transfer amounts
Maximum transfer amounts
Maximum number of transfers per year
Two ways to request a transfer, loan or surrender
Automated transfers
Dollar-cost averaging
<PAGE>
PAGE 7
Policy loans
Interest rate
Minimum loan
Maximum loan
Payment of loaned funds
Allocation of loans to accounts
Repayments
Overdue interest
Effects of policy loans
Taxes
Policy surrenders
Total surrenders
Partial surrenders
Allocations of partial surrenders
Effects of partial surrenders
Taxes
Exchange right
Paid-up insurance option
Optional insurance benefits
Waiver of monthly deduction
Accidental death benefit
Other insured rider
Children's insurance rider
Payment of policy proceeds
Payment options
Deferral of payments
Federal taxes
IDS Life's tax status
Taxation of policy proceeds
Modified endowment contracts
Other tax considerations
IDS Life
Ownership
State regulations
Distribution of the policy
Legal proceedings
Experts
Management of IDS Life
Directors
Officers other than directors
Shearson Lehman Brothers Inc.
Other information
Substitution of investments
Voting rights
Reports
Policy illustrations
<PAGE>
PAGE 8
Key terms
Accumulation unit: An accounting unit used to calculate the policy
value of the subaccounts prior to the insured's death. It is a
measure of the net investment results of each of the subaccounts.
Attained insurance age: The insured's insurance age plus the number
of policy anniversaries since the policy date. Attained insurance
age changes only on a policy anniversary.
Cash surrender value: Proceeds received if the policy is
surrendered in full or matures, equal to the policy value minus
indebtedness, minus any applicable surrender charges.
Code: The Internal Revenue Code of 1986, as amended.
Close of business: Closing time of the New York Stock Exchange,
normally 3 p.m., Central time.
Death benefit guarantee: A feature of the policy guaranteeing that
the policy will not lapse before the insured's attained insurance
age 70 (or five policy years, if later). The guarantee is in
effect if, on each monthly anniversary, total premiums paid, minus
any partial surrenders and any indebtedness, equal or exceed the
total required minimum monthly premium payments specified in the
policy.
Fixed account: The general investment account of IDS Life. The
fixed account is made up of all of IDS Life's assets other than
those held in any separate account.
Fixed account value: The portion of the policy value that is
allocated to the fixed account, including indebtedness.
Fund: IDS Life Series Fund, Inc., a diversified open-end management
investment company intended to meet a wide range of investment
goals with its five separate portfolios: Equity Portfolio, Income
Portfolio, Money Market Portfolio, Managed Portfolio and Government
Securities Portfolio. Each of five subaccounts of the variable
account invests in a specific one of these portfolios.
IDS Life: In this prospectus, "we," "us," "our," and "IDS Life"
refer to IDS Life Insurance Company.
Indebtedness: All existing loans on the policy plus interest that
has either been accrued or added to the policy loan.
Insurance age: The age of the insured, based upon his or her
nearest birthday on the date of the application.
Insured: The person whose life is insured by the policy.
Maturity date: The insured's attained insurance age 100, if living.
<PAGE>
PAGE 9
Minimum monthly premium: A monthly premium amount specified in
the policy which determines the total payment required to keep the
death benefit guarantee in effect. The initial minimum monthly
premium, determined by IDS Life when the policy is issued, depends
on the insured's sex, insurance age, rate classification, optional
insurance benefits added by rider, and the initial specified
amount. An increase or decrease in specified amount, or the
addition, change or termination of a policy rider will change the
minimum monthly premium.
Monthly date: The same day each month as the policy date. If there
is no monthly date in a calendar month, the monthly date is the
first day of the next calendar month.
Net amount at risk: A portion of the death benefit, equal to the
total current death benefit minus the policy value. This is the
amount to which cost of insurance rates are applied in determining
the monthly cost of insurance.
Net premium: The portion of a premium that is credited to the
policy, equal to the premium you pay minus a charge of 2.5% to
cover sales loads and a charge of 2.5% to cover state premium
taxes.
Owner: The entity to which, or individual to whom, the policy is
issued, or to whom ownership is subsequently transferred. In the
prospectus "you" and "your" refer to the owner.
Policy anniversary: The same day and month as the policy date each
year the policy remains in force.
Policy date: The date the policy is issued and from which policy
anniversaries, policy years and policy months are determined.
Policy value: The sum of the fixed account value plus the variable
account value.
Proceeds: The amount payable under the policy as follows:
o Upon death of the insured, proceeds will be the death
benefit under the death benefit option in effect as of
the date of the insured's death, minus any indebtedness.
o On the maturity date, proceeds will be the cash surrender
value.
o On surrender of the policy prior to the maturity date,
the proceeds will be the cash surrender value.
Rate classification: A group of insureds that IDS Life expects will
have similar mortality experience.
Scheduled premium: A premium, selected by the owner at the time of
application, of a level amount, at a fixed interval of time.
<PAGE>
PAGE 10
Specified amount: An amount used to determine the death benefit and
the proceeds payable upon death. Under Option 1, it is the death
benefit originally applied for. Under Option 2, it is the initial
net amount at risk. The initial specified amount is shown in your
policy.
Subaccount(s): One or more of the investment divisions of the
variable account, each of which invests in a particular fund
portfolio or trust.
Surrender charge: A contingent deferred issue and administrative
expense charge and a contingent deferred sales charge assessed
against the policy value at the time of surrender during the first
10 years of the policy and for 10 years after an increase in
coverage.
Trust: One of two unit investment trusts, both of which are part of
Shearson Lehman Brothers Stripped ("Zero Coupon") U.S. Treasury
Securities Fund, Series A. Two subaccounts of the variable account
invest in these trusts, which contain certain debt obligations of
the United States.
Valuation date: A normal business day, Monday through Friday, on
which the New York Stock Exchange is open. The value of each
subaccount is set at the close of business on each valuation date.
Valuation period: The interval commencing at the close of business
on each valuation date and ending at the close of business on the
next valuation date.
Variable account: IDS Life Variable Life Separate Account
consisting of subaccounts, each of which invests in a particular
mutual fund portfolio or unit investment trust. The policy value
in each subaccount depends on the performance of the particular
portfolio or trust.
Variable account value: The sum of the values that are allocated to
the subaccounts of the variable account.
The policy in brief
The Flexible Premium Variable Life Insurance Policy (the policy) is
designed to provide insurance protection on the life of the insured
and to build cash value. Like other life insurance, the policy
provides a death benefit that is payable to the beneficiary upon
the insured's death. Unlike traditional, fixed-premium life
insurance, the policy allows you, as the owner, to allocate your
premiums (payments), or transfer policy value, to:
The variable account, consisting of subaccounts, each of which
invests in a mutual fund portfolio or unit investment trust
with a particular investment objective. You may direct
premiums to any or all of seven of these subaccounts. Your
policy's value may increase or decrease daily, depending on
the investment return. No minimum amount is guaranteed, as it
would be in a traditional life insurance policy. (p.__)
<PAGE>
PAGE 11
The fixed account, which earns interest at rates that are
adjusted periodically by IDS Life. This rate will never be
lower than 4.5%. (p.__)
The fund: Five subaccounts of the variable account invest in IDS
Life Series Fund, Inc., a series mutual fund of which IDS Life is
investment manager. The fund includes Equity, Income, Money
Market, Managed and Government Securities portfolios. (p.__)
The trusts: Two subaccounts of the variable account invest in units
of the Shearson Lehman Brothers Stripped ("Zero Coupon") U.S.
Treasury Securities Fund, Series A, a series of unit investment
trusts. (p.__)
Purchasing your policy: To apply, send a completed application and
premium payment to IDS Life's home office. For your application to
be accepted, you will need to meet certain conditions stated in the
application form and to supply medical and other evidence that the
person you propose to insure (yourself or someone else) is
insurable according to our underwriting rules. (p.__)
Right to examine policy: You may return your policy for any reason
and receive a full refund of your premiums by mailing us the policy
and a written request for cancellation within a specified period.
(p.__)
Premiums: In applying for your policy, you state how much you
intend to pay, and whether you will pay quarterly, semiannually or
annually. You may also make additional, unscheduled premium
payments in any amount from $25 to $500,000. We may refuse
premiums in order to comply with the Code. (p.__)
Loads, fees and charges: Your policy is subject to the following
charges, which compensate IDS Life for administering and
distributing the policy as well as paying policy benefits and
assuming related risks:
o Premium expense charge -- 5% of each premium payment, which pays
some distribution expenses and state and local premium taxes.
o Monthly deduction -- charged against the value of your policy
each month, covering the cost of insurance, certain administrative
expenses, a death benefit guarantee charge and optional insurance
benefits.
o Surrender charge -- applies if you surrender your policy for its
full cash value, or the policy lapses, during the first ten years
and for ten years after requesting an increase in the specified
amount (the minimum death benefit specified in your application).
The surrender charge consists of a deferred charge for costs of
issuing the policy and a deferred sales charge. It is based on the
initial specified amount and on any increase in the specified
amount.
<PAGE>
PAGE 12
o Partial surrender fee -- applies if you surrender part of the
value of your policy; equals $25 or 2% of the amount surrendered,
if less.
o Mortality and expense risk charge -- applies only to the
subaccounts; equals, on an annual basis, 0.9% of the average daily
net asset value of the subaccounts.
o Transaction charge -- applies only to subaccounts that invest in
the trusts; equals, on an annual basis, 0.25% of their average
daily net asset value.
o Fund investment management fee -- applies only to the fund
portfolios; equals, on an annual basis, 0.5% of the average daily
net assets of the Money Market Portfolio and 0.7% of the average
daily net assets of the other portfolios. (p.__)
Death benefit guarantee: Your policy will not lapse regardless of
investment performance if the death benefit guarantee is in effect.
To keep the death benefit guarantee in effect, you must pay the
minimum monthly premiums specified in the policy. The death
benefit guarantee applies only until the insured reaches attained
insurance age 70 or the policy has been in effect for five years,
whichever is later. (p.__)
Grace period: If the cash surrender value of your policy becomes
less than the amount needed to pay the monthly deduction, and the
death benefit guarantee is not in effect, you will have 61 days to
pay a premium that raises the cash surrender value to an amount
sufficient to pay the monthly deduction. If you don't, the policy
will lapse. (p.__)
Reinstatement: If your policy lapses, it can be reinstated within
five years, if you make certain payments, and present evidence
satisfactory to IDS Life that the insured remains insurable. The
death benefit guarantee cannot be reinstated. (p.__)
Death benefits: Your policy's death benefit can never be less than
the specified amount in your policy application, unless you change
that amount or your policy has outstanding indebtedness. The
relationship between the policy value and the death benefit depends
on which of two options you choose:
o Option 1 level amount: The death benefit is the greater of the
specified amount or a percentage of policy value.
o Option 2 variable amount: The death benefit is the greater of
the specified amount plus the policy value, or a percentage of
policy value.
You may change the death benefit option or specified amount within
certain limits; doing so will generally affect policy charges.
(p.__)
<PAGE>
PAGE 13
Transfers between the fixed account and subaccounts: You may, at
no charge, transfer policy value from one subaccount to another or
between subaccounts and the fixed account. (Certain restrictions
apply to transfers involving the fixed account.) You can request
up to five transfers per year by phone or mail. You can also
arrange for automated transfers on a monthly, quarterly, semiannual
or annual basis. (p.__)
Policy loans: You may borrow against your policy's cash surrender
value. A policy loan, even if repaid, can have a permanent effect
on the death benefit and policy value. A loan may also have tax
consequences if your policy lapses or you surrender it. (p.__)
Policy surrenders: You may cancel the policy while the insured is
living and receive its cash surrender value. The cash surrender
value is the policy value minus indebtedness, minus any applicable
surrender charges.
Exchange right: For two years after the policy is issued, you can
exchange it for one that provides benefits that do not vary with
the investment return of the subaccounts. Because the policy
itself offers a fixed return option, all you need do is transfer
all of the policy value in the subaccounts to the fixed account.
Payment of policy proceeds: Proceeds will be paid when you
surrender the policy, the insured dies or the policy matures, which
occurs when the insured reaches attained insurance age 100. You or
the beneficiary may choose whether payment is to be made in a lump
sum or under one or more of certain options.
Federal taxes: The death benefit is not considered part of the
beneficiary's income and thus is not subject to federal income
taxes. Part or all of any proceeds received through full or
partial surrender, lapse, policy loan or assignment of policy value
may be subject to federal income tax as ordinary income. Proceeds
other than death benefits from certain policies, classified as
"modified endowments," are taxed differently from proceeds of
conventional life insurance contracts and may also be subject to an
additional 10% IRS penalty tax if you are younger than 59 1/2. A
policy is considered to be a modified endowment if it was applied
for or materially changed after June 21, 1988, and premiums paid in
the early years exceed certain modified endowment limits.
The variable account
You can direct your premiums to any or all of seven subaccounts of
the variable account. Five of these invest in portfolios of IDS
Life Series Fund, Inc.:
Subaccount invests exclusively in shares of
U Equity Portfolio
V Income Portfolio
W Money Market Portfolio
X Managed Portfolio
Y Government Securities Portfolio
<PAGE>
PAGE 14
Two subaccounts invest in units of the Shearson Lehman Brothers
Stripped ("Zero Coupon") U.S. Securities Fund, Series A, unit
investment trusts:
Subaccount invests in a trust with maturity date of
1995V Nov. 15, 1995
2004V Nov. 15, 2004
The variable account was established on Oct. 16, 1985, under
Minnesota law and is registered as a single unit investment trust
under the Investment Company Act of 1940. Such registration does
not involve any SEC supervision of the account's management or
investment practices or policies.
The variable account meets the definition of a "separate account"
under federal securities laws. Income, capital gains or capital
losses of each subaccount are credited to or charged against the
assets of that subaccount alone. No subaccount will be charged
with liabilities of any other subaccount or of any other business
conducted by IDS Life.
At all times IDS Life will maintain assets in the subaccounts with
total market value at least equal to the reserves and other
liabilities required to cover insurance benefits under all
contracts participating in the subaccount.
The fund
IDS Life Series Fund, Inc., a Minnesota corporation, is a
diversified, open-end management investment company incorporated on
May 8, 1985. The fund consists of five portfolios:
Equity Portfolio
Objective: capital appreciation. Invests primarily in common
stocks listed on national securities exchanges and other securities
convertible into common stock.
Income Portfolio
Objective: to maximize current income while attempting to conserve
the value of the investment and to continue the high level of
income for the longest period of time. At least 50% of net assets
will normally be invested in high-quality, lower-risk corporate
bonds, unrated corporate bonds believed to have the same investment
qualities, and government bonds. Other investments may include
lower-rated corporate bonds, bonds and common stocks sold together
as a unit, preferred stock and foreign securities.
Money Market Portfolio
Objective: to provide maximum current income consistent with
liquidity and conservation of capital. Invests in relatively
short-term money-market securities, such as marketable debt
securities issued or guaranteed as to principal and interest by the
U.S. government or its agencies or instrumentalities, bank
certificates of deposit, bankers' acceptances, letters of credit
and high-grade commercial paper.<PAGE>
PAGE 15
Managed Portfolio
Objective: to maximize total investment return through a
combination of capital appreciation and current income. If the
investment manager believes the stock market will be moving higher,
it can emphasize stocks that offer potential for appreciation. At
other times, the manager may increase the portfolio's holdings in
bonds and money-market securities providing high current income.
Government Securities Portfolio
Objective: to provide a high current return and safety of
principal. Invests primarily in debt obligations issued or
guaranteed as to principal and interest by the U.S. government, its
agencies and instrumentalities.
Portfolio objectives
Portfolio objectives can be changed only if holders of a majority
of outstanding shares agree. Because portfolio investments are
subject to the risk of changing economic conditions and the ability
of the investment manager to anticipate such changes, there can be
no guarantee that the investment objectives of a portfolio will be
achieved.
Relationship between portfolios and subaccounts
Shares of each portfolio are sold to the appropriate subaccount at
net asset value without a sales charge. Dividends and capital gain
distributions from a portfolio are reinvested at net asset value
without a sales charge and retained as an asset of the appropriate
subaccount. Portfolio shares will be redeemed by the appropriate
subaccount, without fee to the subaccount, to the extent necessary
to make death benefit or other payments under the policy.
Portfolio shares are sold only to fund life insurance benefits
under variable life insurance policies issued by IDS Life and IDS
Life Insurance Company of New York. Currently shares are sold only
to:
o the respective subaccounts of the variable account;
o IDS Life Variable Account for Shearson Lehman;
o IDS Life of New York Account 7; and
o IDS Life of New York Account 8.
Also, there are additional subaccounts of the variable account,
which fund other insurance policies issued by IDS Life and are not
discussed here.
Shares may, in the future, be sold to other separate accounts to
fund benefits of other variable life insurance policies and
variable annuity contracts.
IDS Life acts as the investment manager of the fund and receives a
fee for its services as described under "Loads, fees and charges."
IDS Bank & Trust acts as custodian of the fund's investments.
<PAGE>
PAGE 16
Detailed information about the fund, its investment objectives,
policies and risks, and its five separate investment portfolios may
be found in its prospectus.
Diversification: The Internal Revenue Service (IRS) has issued
final regulations relating to the diversification requirements
under section 817(h) of the Code. Each fund portfolio intends to
comply with these requirements.
Ownership rules: The U.S. Treasury and the IRS have indicated they
may provide additional guidance concerning investment control--how
many subaccounts may be offered and how many exchanges among
subaccounts may be allowed before the owner is considered to have
investment control and thus is currently taxed on income earned
within subaccount assets. We do not know at this time what the
additional guidance will be or when action will be taken. We
reserve the right to modify the policy, as necessary, to ensure
that the owner will not be subject to current taxation as the owner
of the subaccount assets.
Rates of return of the fund and subaccounts
This section presents actual rates of return first for the five
portfolios of the fund, and then for the five corresponding
subaccounts. Rates of return are different in the two cases
because those of the subaccounts reflect additional expenses. All
expenses mentioned in the section are explained fully under "Loads,
fees and charges."
Rates of return of fund portfolios
In the following table are average annual rates of return based on
the actual investment performance of the fund portfolios after
deduction of applicable portfolio expenses (including the
investment management fees) for the periods indicated. These rates
do not reflect expenses that apply to the subaccounts or the policy
and therefore do not illustrate how actual investment performance
will affect policy benefits. Moreover, these rates of return are
not an estimate or guarantee of future performance.
Period Ending 12/31/93
Portfolio 1 Year 3 Years 5 Years Since Inception*
Equity 13.36% 25.63% 18.46% 13.63%
Income 14.78 13.25 11.45 8.80
Money Market 2.66 3.87 5.65 5.81
Managed 19.87 20.45 19.86 14.83
Government Securities 12.10 11.65 11.23 8.37
*The portfolios of the fund commenced operations on January 20,
1986.
<PAGE>
PAGE 17
Rates of return of subaccounts
Average annual rates of return in the following table reflect all
expenses incurred by the portfolios and charges against the
subaccounts (including the mortality and expense risk charge). The
rates do not reflect the premium expense charge, surrender charge
or monthly deduction.
<TABLE><CAPTION>
Subaccount Investment 1 Year 3 Years 5 Years Since Inception*
<S> <C> <C> <C> <C> <C>
U Equity 12.35% 24.51% 17.30% 11.23%
V Income 13.89 12.28 10.48 8.86
W Money Market 1.73 2.94 4.70 4.84
X Managed 18.80 19.37 18.58 13.35
Y Government Securities 11.17 10.68 10.25 8.58
*The subaccounts commenced operations on June 17, 1987.
</TABLE>
The trusts
Shearson Lehman Brothers Stripped ("Zero Coupon") U.S. Treasury
Securities Fund, Series A is a series of unit investment trusts.
Currently two are available for investment, one maturing in 1995
and one in 2004.
Objectives and major investments
The objective of each trust is to provide safety of capital and
income through investment in a portfolio consisting primarily of:
o bearer debt obligations issued by the United States that
have been stripped of their unmatured interest coupons,
o coupons stripped from debt obligations of the United
States, and
o receipts and certificates for such stripped debt
obligations and coupons.
Each trust will also contain a Treasury note or notes providing
interest income to pay anticipated expenses of the trust.
U.S. Treasury securities that have been stripped of their unmatured
interest coupons are essentially bonds or notes that pay no
interest. For this reason they are purchased at a deep discount
from their face value and, if held to maturity, return the full
face value.
Before maturity, the value of trust units will be more volatile
than would the value of units of a trust containing unstripped U.S.
Treasury securities of comparable maturities. The value may affect
death benefits and policy value, which will fluctuate accordingly.
<PAGE>
PAGE 18
Estimated rates of return
Because amounts invested in stripped U.S. Treasury securities will
grow to their face values if held to maturity, we can estimate the
compound rate of growth to maturity, based on certain assumptions
about trust expenses. The net rate of return to maturity is
calculated based on the estimated compound rate of growth in the
units and these charges. Since the value of the trusts' units will
vary daily, reflecting the market value of the underlying
securities, the compound rate of growth to maturity and net rate of
return to maturity will also vary daily. Estimated net rates of
return from March 31, 1994 to maturity for the two trusts, taking
account of anticipated expenses are:
Trust maturity date Net rate of return to maturity
Nov. 15, 1995 ____%
Nov. 15, 2004 ____%
Rates of return to owners will be less than rates of return for
trust units themselves, because the units are held in subaccounts
of the variable account, which are subject to policy charges not
reflected in the above estimates. (See "Loads, fees, and charges"
for a full discussion of applicable charges.)
Trust maturity
On the maturity date of a particular trust, the policy value
allocated to the subaccount that invests in the trust will
automatically be reallocated to Subaccount W, which invests in the
Money Market Portfolio, unless you give us other directions in
writing at least seven days before the maturity date. We will
notify you in writing, 30 days before the trust matures.
Roles of Shearson Lehman and IDS Life
Shearson Lehman sponsors the trusts and sells units to the
subaccounts. Because each trust invests in a specified portfolio,
there is no investment manager.
The price of each trust's units includes a transaction charge, paid
directly by IDS Life to Shearson Lehman out of IDS Life's general
account assets. This charge is limited by agreement between IDS
Life and Shearson Lehman and will not be greater than that
ordinarily paid by a dealer for similar securities. We will seek
reimbursement for the amounts paid through a daily asset charge,
described under "Loads, fees and charges."
Trust units will be sold to the extent necessary for IDS Life to
provide benefits and make reallocation under the policies. Units
will be sold to Shearson Lehman, which has undertaken to maintain a
secondary market in units of the trusts.
IDS Life and Shearson Lehman reserve the right to discontinue the
sale of new units of a trust and to create additional trusts in the
future.
<PAGE>
PAGE 19
More detailed information may be found in the current prospectus
for the Shearson Lehman Brothers Stripped ("Zero Coupon") U.S.
Treasury Securities Fund, Series A.
The fixed account
You can allocate premiums to the fixed account or transfer policy
value from the subaccounts to the fixed account (with certain
restrictions, explained in "Transfers between the fixed account and
subaccounts").
The fixed account is the general investment account of IDS Life.
It includes all assets owned by IDS Life other than those in the
variable account and other separate accounts. Subject to
applicable law, IDS Life has sole discretion to decide how assets
of the fixed account will be invested.
Placing policy value in the fixed account does not entitle you to
share in the fixed account's investment experience, nor does it
expose you to the account's investment risk. Instead, IDS Life
guarantees that the policy value you place in the fixed account
will accrue interest at an effective annual rate of at least 4.5%,
independent of the actual investment experience of the account.
IDS Life bears the full investment risk for amounts allocated to
the fixed account.
IDS Life is not obligated to credit interest at any rate higher
than 4.5%, although we may do so at our sole discretion. In recent
years interest was credited as follows:
1987 -- 8.5 to 9.25%
1988 -- 8.0 to 9.25%
1989 -- 8.25 to 9.5%
1990 -- 8.25 to 9.2%
1991 -- 7.55 to 8.55%
1992 -- 6.5 to 8.05%
1993 -- 5.7 to 7.4%
These rates are not indicative of future interest rates. The rate
of return to you as owner will be less than the rate credited,
because policy charges (described under "Loads, fees and charges")
reduce your net return.
Interest in excess of 4.5% will not be credited on any portion of
policy value in the fixed account against which you have a policy
loan outstanding.
Because of exemptive and exclusionary provisions, interests in the
fixed account have not been registered under the Securities Act of
1933, and the fixed account has not been registered as an
investment company under the Investment Company Act of 1940.
Accordingly, neither the fixed account nor any interests in it are
subject to the provisions of these Acts and the staff of the SEC
<PAGE>
PAGE 20
has not reviewed the disclosures in this prospectus relating to the
fixed account. Disclosures regarding the fixed account may,
however, be subject to certain generally applicable provisions of
the federal securities laws relating to the accuracy and
completeness of statements made in prospectuses.
Purchasing your policy
Application
To apply for coverage, complete an application and send it with
your premium payment to IDS Life's home office. In your
application, you:
o select a specified amount of insurance;
o select a death benefit option;
o designate a beneficiary; and
o state how premiums are to be allocated among the fixed
account and/or the subaccounts.
Insurability: Before issuing your policy, IDS Life requires
satisfactory evidence of the insurability of the person whose life
you propose to insure (yourself or someone else). Our underwriting
department will review your application and any medical information
or other data required to determine whether the proposed individual
is insurable under our underwriting rules. Your application may be
declined if IDS Life determines the individual is not insurable and
any premium you have paid will be returned.
Age limit: IDS Life generally will not issue a policy to persons
over the insurance age of 75. It may, however, do so at its sole
discretion.
Rate classification: The rate classification is based on the
insured's health, occupation, or other relevant underwriting
standards. This classification will affect your monthly deduction
and may affect the cost of certain optional insurance benefits.
(See "Loads, fees and charges" and "Optional insurance benefits.")
Other conditions: In addition to proving insurability, you and the
insured must also meet certain conditions, stated in the
application form, before coverage will become effective and your
policy will be delivered to you.
Death of the insured: If the insured dies before the policy is
issued and:
o if all conditions stated in the application have not been
met, IDS Life's sole liability will be to return the
premium paid plus any interest earned.
o if all conditions stated in the application have been
met, IDS Life's liability will be the lesser of the death
benefit applied for or $150,000.
<PAGE>
PAGE 21
Incontestability: IDS Life will have two years from the effective
date of your policy to contest the truth of statements or
representations in your application. After the policy has been in
force during the insured's lifetime for two years from the policy
date, IDS Life cannot contest the policy.
Right to examine policy
You may return your policy for any reason, and receive a full
refund of all premiums paid. To do so you must mail or deliver the
policy to IDS Life or your IDS financial planner, with a written
request for cancellation, by the latest of:
o the 10th day after you receive it;
o the 10th day after IDS Life mails or personally delivers a
written notice of withdrawal right; or
o the 45th day after you sign your application.
On the date your request is postmarked or received, the policy will
immediately be considered void from the start.
Premiums
Payment of premiums
In applying for your policy, you decide how much you intend to pay
and how often you will make payments. During the first several
policy years, IDS Life requires that premiums sufficient to keep
the death benefit guarantee in effect be paid to keep the policy in
force.
You may schedule payments annually, semiannually, or quarterly.
(Payment at any other interval must be approved by IDS Life.) This
premium schedule is shown in your policy.
The scheduled premium serves only as an indication of your intent
as to the frequency and amount of future premium payments. You may
skip scheduled premium payments at any time if your cash surrender
value is sufficient to pay the monthly deduction, or if the death
benefit guarantee will remain in effect.
You may also change the amount and frequency of scheduled premium
payments by written request. IDS Life reserves the right to limit
the amount of such changes. Any change in the premium amount is
subject to applicable tax laws and regulations.
Although you have flexibility in paying premiums, the amount and
frequency of your payments will affect the policy value, cash
surrender value and length of time your policy will remain in
force, as well as affect whether the death benefit guarantee
remains in effect.
<PAGE>
PAGE 22
Premium limitations
You may make unscheduled premium payments at any time and in any
amount from $25 to $500,000. IDS Life reserves the right to limit
the number and amount of unscheduled premium payments.
Also, in order to receive favorable tax treatment under the Code,
premiums paid during the life of the policy must not exceed certain
limitations. To comply with the Code, IDS Life can either refuse
excess premiums as they are paid, or refund excess premiums with
interest no later than 60 days after the end of the policy year in
which they were paid.
Allocation of premiums
Until your application is approved by IDS Life, we hold all
premiums in the fixed account, and we credit interest on the net
premiums (gross premiums minus premium expense charge) at the
current fixed account rate. As of the date your application is
approved, we will allocate the net premiums plus accrued interest
to the account(s) you have selected in your application. At that
time, we will begin to assess the various loads, fees, charges and
expenses.
Any amount allocated to a subaccount is converted into accumulation
units of that subaccount, as explained under "Policy value."
Similarly, when transferring value between subaccounts,
accumulation units in one subaccount are converted into a cash
value, which is then converted into accumulation units of the
second subaccount.
Your ability to allocate policy value to the trusts may be limited
by the availability of trust units.
Loads, fees and charges
Policy charges compensate IDS Life for:
o providing the insurance benefits of the policy;
o administering the policy;
o assuming certain risks in connection with the policy; and
o distributing the policy.
Some of these charges are deducted from your premium payments.
Others are deducted periodically from your policy value in the
fixed and/or subaccounts. You may also be assessed a charge if you
surrender your policy or the policy lapses.
Premium expense charge
We deduct this charge from each premium payment. The amount
remaining after the deduction, called the net premium, is credited
to the account(s) you have selected. The premium expense charge
has two parts:
<PAGE>
PAGE 23
Sales charge: 2.5% of each premium payment. Partially compensates
IDS Life for expenses in distributing the policy, including agents'
commissions, advertising and printing of prospectuses and sales
literature. (These expenses also may be partially compensated by
the contingent deferred sales charge, discussed under "Surrender
charge," below.)
Premium tax charge: 2.5% of each premium payment. Compensates
IDS Life for paying taxes imposed by certain states and
governmental subdivisions on premiums received by insurance
companies. All policies in all states are charged 2.5% even though
taxes vary from state to state; this is the average rate IDS Life
expects to pay on premiums from all states.
Monthly Deduction
On each monthly date we deduct from the value of your policy in the
fixed and/or subaccounts an amount equal to the sum of:
1. the cost of insurance for the policy month;
2. the policy fee shown in your policy;
3. the death benefit guarantee charge shown in your policy;
and
4. charges for any optional insurance benefits provided by
rider for the policy month.
Each of the four components is explained below.
You specify, in your policy application, what percentage of the
monthly deduction from 0% to 100% will be taken from the fixed
account and from each of the subaccounts. You may change these
percentages for future monthly deductions by written request.
Monthly deductions will be taken from the fixed account and the
subaccounts on a pro rata basis if:
o you do not specify the accounts from which the monthly
deduction is to be taken;
o the value in the fixed account or any subaccount is
insufficient to pay the portion of the monthly deduction you
have specified; or
o you purchased the policy in Texas.
If the cash surrender value of your policy is not enough to cover
the monthly deduction on a monthly anniversary, the policy may
lapse. However, the policy will not lapse if the death benefit
guarantee is in effect. (See "Death benefit guarantee"; also
"Grace period" and "Reinstatement" at the end of this section on
policy costs.)
<PAGE>
PAGE 24
Components of the monthly deduction
1. Cost of insurance: primarily, the cost of providing the death
benefit under your policy, which depends on:
o the amount of the death benefit;
o the policy value; and
o the statistical risk that the insured will die in a
given period.
The cost of insurance for a policy month is calculated as:
[a x (b - c)] + d
where:
(a) is the monthly cost of insurance rate, which reflects the
insured's statistical mortality risk, based on his or her sex,
attained age (age at last policy anniversary) and rate
classification. Generally the cost of insurance rate will increase
as the insured's attained age increases.
Rates are set by IDS Life, based on its expectations as to future
mortality experience. We may change the rates from time to time;
any change will apply to all individuals of the same rate
classification. However, rates will not exceed the Guaranteed
Maximum Monthly Cost of Insurance Rates shown in your policy, which
are based on the 1980 Commissioners Standard Ordinary Smoker and
Non-Smoker Mortality Tables, Age Nearest Birthday.
Policies purchased on or after May 1, 1991 with an initial
specified amount of $350,000 or greater qualify for lower cost of
insurance rates than policies purchased with a specified amount
less than $350,000. In addition, all policies purchased on or
after May 1, 1993 (October 1, 1993 for policies purchased in New
Jersey) qualify for lower cost of insurance rates than policies
purchased earlier.
(b) is the death benefit on the monthly date divided by 1.0036748
(which reduces IDS Life's net amount at risk, solely for computing
the cost of insurance, by taking into account assumed monthly
earnings at an annual rate of 4.5%);
(c) is the policy value on the monthly date. At this point, the
policy value has been reduced by the policy fee, death benefit
guarantee charge and any charges for optional riders;
(d) is any flat extra insurance charges assessed as a result of
special underwriting considerations.
Note for Massachusetts and Montana residents
Please disregard all policy provisions in this prospectus that are
based on the sex of the insured. The policy will be issued on a
unisex basis. Also disregard references to mortality tables; the
<PAGE>
PAGE 25
tables will be replaced with an 80% male, 20% female blend of the
1980 Commissioners Standard Ordinary Smoker and Non-Smoker
Mortality Tables, Age Nearest Birthday.
2. Policy Fee: $5 per month for policies with an initial specified
amount less than $350,000. Waived for policies purchased on or
after May 1, 1991 with an initial specified amount of $350,000 or
more. This charge reimburses IDS Life for expenses of
administering the policy, such as processing claims, maintaining
records, making policy changes and communicating with owners. IDS
Life does not expect to make any profit on this charge. We reserve
the right to change the charge in the future, but guarantee that
it will never exceed $7.50 per month.
3. Death benefit guarantee charge: 1 cent per $1,000 of the current
specified amount and 1 cent per $1,000 of coverage under any other
insured rider. This charge compensates IDS Life for the risk
assumed in providing the death benefit guarantee. The charge is
included in the monthly deduction in the first five policy years or
until the insured's attained insurance age 70, whichever is later.
The charge will not be deducted if the death benefit guarantee is
no longer in effect. For any policy month in which the monthly
deduction is paid by a waiver of monthly deduction rider, the
minimum monthly premium will be zero. (See "Death benefit
guarantee," later in this section for an explanation of the minimum
monthly premium and "Other insured rider," under "Optional
insurance benefits.")
4. Optional insurance benefit charges: charges for any optional
benefits added to the policy by rider. See "Optional insurance
benefits."
Surrender charge
If you surrender your policy or the policy lapses during the first
ten policy years and in the ten years following an increase in
specified amount a surrender charge will be assessed. The
surrender charge is the sum of two parts:
- -Contingent deferred issue and administrative expense charge:
Reimburses IDS Life for costs of issuing the policy, such as
processing the application (primarily underwriting) and setting up
computer records. IDS Life does not expect to make a profit on
this charge. For the initial specified amount, this charge is $4
per thousand dollars of initial specified amount. It remains level
during the first five policy years and then decreases monthly until
it is zero at the end of ten policy years. If the specified amount
of the policy is increased, an additional charge will apply. The
additional charge will be $4 per thousand dollars of increase in
specified amount. It remains level during the first five years
following the effective date of the increase and then decreases
monthly until it is zero at the end of the tenth year following the
increase.
<PAGE>
PAGE 26
- -Contingent deferred sales charge:
Partially compensates IDS Life for expenses of distributing the
policy, including IDS financial planners' commissions, advertising
and printing the prospectus and sales literature. For the initial
specified amount, this charge is the sum of 27.5% of premium
payments up to a maximum amount shown in the policy plus 6.5% of
all other premium payments. The maximum amount shown in the policy
will be based on the insured's insurance age, sex, rate
classification and initial specified amount. If the specified
amount of the policy is increased, an additional charge will apply.
The additional charge will be 6.5% of all premium payments
attributable to the increase. Premiums attributable to the
increase are calculated as a x (b + c) where:
(a) is the amount of the increase in the specified amount divided
by the total specified amount after the increase;
(b) is the policy value on the date of the increase; and
(c) is all premium payments paid on or after the date of the
increase.
- -Maximum surrender charge:
The total surrender charge is subject to an overall upper limit or
"maximum surrender charge". The "maximum surrender charge" for the
initial specified amount will be shown in the policy. It is based
on the insured's insurance age, sex, rate classification and
initial specified amount. The "maximum surrender charge" for the
initial specified amount will remain level during the first five
policy years and then decrease monthly until it is zero at the end
of ten policy years. If the specified amount is increased, an
"additional maximum surrender charge" will apply. The "additional
maximum surrender charge" will be shown in a revised policy. It
will be based on the insured's attained insurance age, sex, rate
classification and the amount of the increase. The "additional
maximum surrender charge" will remain level during the first five
years following the effective date of the increase and then
decrease monthly until it is zero at the end of the tenth year
following the increase.
If premium payments are equal to or somewhat higher than the
premiums needed to keep the death benefit guarantee in effect, for
several years the surrender charge will generally be the charge
described in the "Contingent deferred issue and administrative
expense charge" and "Contingent deferred sales charge" sections
above. After that, the "Maximum surrender charge" will generally
apply. If premium payments are paid at a significantly higher
level, the "Maximum surrender charge" will generally apply in all
years.
Partial surrender fee
If you surrender part of the value of your policy, you will be
charged $25 (or 2% of the amount surrendered, if less). This fee
is guaranteed not to increase for the duration of your policy. IDS
Life does not expect to make a profit on this fee.
<PAGE>
PAGE 27
Mortality and expense risk charge
This charge applies only to the subaccounts and not to the fixed
account. It is equal, on an annual basis, to 0.9% of the daily net
asset value of the subaccounts -- a level guaranteed for the life
of the policy. Computed daily, the charge compensates IDS Life
for:
o Mortality risk -- the risk that the cost of insurance
charge will be insufficient to meet actual claims.
o Expense risk -- the risk that the policy fee and the
contingent deferred issue and administrative expense
charge (described above) may be insufficient to cover the
cost of administering the policy.
IDS Life may profit from the mortality and expense risk charge.
Any such profit would be available to IDS Life for any proper
corporate purpose including, among others, payment of sales and
distribution expenses, which we do not expect to be covered by the
sales and surrender charges discussed earlier. Any further deficit
will have to be made up from IDS Life's general assets.
Transaction charge
IDS Life makes a daily charge against the assets of the two
subaccounts that invest in the trusts. This charge is intended to
reimburse us for the transaction fee we pay from our general
account assets to Shearson Lehman Brothers on the sale of the trust
units to the subaccounts.
The asset charge is equivalent to an effective annual rate of 0.25%
of the value of the subaccounts investing in the trusts. This
amount may be increased in the future but will not exceed an
effective annual rate of 0.5% of the value of these subaccounts.
The charge will be based on our costs (taking into account the
interest we lose on the amounts paid to Shearson Lehman Brothers.)
We do not expect to profit from this transaction charge.
Fund investment management fee
IDS Life receives a fee for its services as investment manager of
the fund. The fund also reimburses IDS Life for certain
nonadvisory expenses, such as custodian and trustee fees,
registration fees for shares, postage, fidelity and security bond
costs, legal fees and other miscellaneous fees and charges.
This fee is deducted from the fund portfolios daily and paid to IDS
Life monthly.
The investment management fee equals, on an annual basis:
o Money Market Portfolio -- 0.5% of aggregate average daily
net assets
o Equity, Income, Managed and Government Securities Portfolios
-- 0.7% of aggregate average daily net assets
<PAGE>
PAGE 28
Other information on charges
IDS Life may reduce or eliminate various fees and charges when we
incur lower sales costs and/or perform fewer administrative
services than usual. The two most common cases are:
o Policies made available by an employer to a group of
employees
o Policies purchased on or after May 1, 1991 with an initial
specified amount of $350,000 or greater.
Death benefit guarantee
Your policy will remain in force even if the cash surrender value
is insufficient to cover the monthly deduction if you have paid the
minimum monthly premiums shown in the policy. Although the minimum
premium is specified as a monthly amount, you may pay on any
schedule you choose, as long as:
the sum of premiums paid - partial surrenders - outstanding
indebtedness
equals or exceeds
minimum monthly premium x number of months since policy date
(including the current month)
This guarantee applies only until the insured reaches attained
insurance age 70 or the policy has been in force for five years,
whichever is later. For factors affecting the minimum monthly
premium, see "Changes in specified amount" under "Death benefit"
and "Optional insurance benefits."
If, on a monthly date, you have not paid enough premiums to keep
the death benefit guarantee in effect, we will mail a notice to
your last known address, asking you to pay a premium sufficient to
bring your total up to the required minimum. If you do not pay
this amount within 61 days, your policy will lapse (terminate) if
the cash surrender value is less than the amount needed to pay the
monthly deduction. Although the policy can be reinstated as
explained below, the death benefit guarantee cannot be reinstated.
Grace period
If on a monthly date the cash surrender value of your policy is
less than the amount needed to pay the next monthly deduction, your
policy will still remain in force for at least 61 days.
IDS Life will mail a notice to your last known address, requesting
payment of a premium that will raise the cash surrender value to an
amount sufficient to cover the next three monthly deductions. If
we receive this premium before the end of the 61-day grace period,
we will use the payment to cover all monthly deductions and any
other charges then due. Any balance will be added to the policy
value and allocated in the same manner as other premium payments.
If you do not pay the premium, the policy will lapse without value,
unless the death benefit guarantee described above is in effect.
<PAGE>
PAGE 29
If a policy lapses with outstanding indebtedness, any excess of the
outstanding indebtedness over the premium paid generally will be
taxable to the owner. (See"Federal taxes.") If the insured dies
during the grace period, any overdue monthly deductions will be
deducted from the death benefit.
Reinstatement
Your policy may be reinstated within five years after it lapses,
unless you surrendered it for cash. To reinstate, IDS Life will
require:
o a written request;
o evidence satisfactory to IDS Life that the insured remains
insurable;
o payment of a premium that will keep the policy in force for
at least three months;
o payment of the monthly deductions that were not collected
during the grace period; and
o payment or reinstatement of any indebtedness.
The effective date of a reinstated policy will be the monthly date
on or next following the day IDS Life accepts your application for
reinstatement. The suicide period (see "Death benefits") will
apply from the effective date of reinstatement. Surrender charges
will also be reinstated.
IDS Life will have two years from the effective date of
reinstatement to contest the truth of statements or representations
in the reinstatement application.
Policy value
The value of your policy is the sum of values in the fixed account
and each subaccount of the variable account.
Fixed account value
The value in the fixed account on the policy date (when the policy
is issued) equals the portion of your initial net premium that you
have allocated to the fixed account, plus interest accrued before
the policy date, minus the portion of the monthly deduction for the
first policy month that you have allocated to the fixed account.
On any later date, the value in the fixed account equals:
o the value on the previous monthly date; plus
o net premiums allocated to the fixed account since the last
monthly date; plus
o any transfers to the fixed account from the subaccounts,
including loan transfers, since the last monthly date; plus
o accrued interest on all of the above; minus
o any transfers from the fixed account to the subaccounts,
including loan repayment transfers, since the last monthly
date; minus
<PAGE>
PAGE 30
o any partial surrenders or partial surrender fees allocated
to the fixed account since the last monthly date; minus
o interest on any transfers or partial surrenders, from the
date of the transfer or surrender to the date of
calculation; minus
o any portion of the monthly deduction for the coming month
that is allocated to the fixed account if the date of
calculation is a monthly date.
Subaccount values
The value in each subaccount changes daily, depending on the
investment performance of the fund portfolio or trust in which that
subaccount invests and on other factors detailed below. There is
no guaranteed minimum subaccount value. You as owner bear the
entire investment risk.
Calculation of subaccount value: The value of each subaccount on
each valuation date equals:
o the value of the subaccount on the preceding valuation date,
multiplied by the net investment factor for the current valuation
period (explained below); plus
o net premiums received and allocated to the subaccount during the
current valuation period; plus
o any transfers to the subaccount (from the fixed account or
other subaccounts, including loan repayment transfers) during the
period; minus
o any transfers from the subaccount including loan transfers
during the current valuation period; minus
o any partial surrenders and partial surrender fees allocated to
the subaccount during the period; minus
o any portion of the monthly deduction allocated to the subaccount
during the period.
The net investment factor measures the investment performance of a
subaccount from one valuation period to the next. Because
performance may fluctuate, the value of a subaccount may increase
or decrease from day to day.
Accumulation units: The policy value allocated to each subaccount
is converted into accumulation units. Each time you direct a
premium payment or transfer policy value into one of the
subaccounts, a certain number of accumulation units are credited to
your policy for that subaccount. Conversely, each time you take a
partial surrender or transfer value out of a subaccount, a certain
number of accumulation units are subtracted.
Accumulation units are the true measure of investment value in each
subaccount. For subaccounts investing in the fund portfolios,
they're related to, but not the same as, the net asset value of the
corresponding fund portfolio. The dollar value of each
accumulation unit can rise or fall daily, depending on the
investment performance of the underlying fund portfolio, on any
change in the value of trust units, and on certain charges. Here's
how unit values are calculated:
<PAGE>
PAGE 31
Number of units: To calculate the number of units for a particular
subaccount, we divide your investment (net premium or transfer
amount) by the current accumulation unit value.
Accumulation unit value: The current value for each subaccount
equals the last value times the current net investment factor.
Net investment factor: Determined at the end of each valuation
period, this factor equals (a divided by b) - c, where:
(a) equals:
o net asset value per share of the portfolio or value of a unit of
the trust; plus
o per-share amount of any dividend or capital gain distribution
made by the relevant fund portfolio to the subaccount; plus
o any credit or minus any charge for reserves to cover any tax
liability resulting from the investment operations of the
subaccount.
(b) equals:
o net asset value per share of the portfolio or value of a unit of
the trust at the end of the preceding valuation period; plus
o any credit or minus any charge for reserves to cover any tax
liability in the preceding valuation period.
(c) is a percentage factor representing the mortality and expense
risk charge and, for the two subaccounts investing in the trusts,
the transaction charge, as described in "Loads, fees and charges,"
above.
Factors that affect subaccount accumulation units
Accumulation units may change in two ways; in number and in value.
Here are the factors that influence those changes:
The number of accumulation units you own may fluctuate due to:
o additional purchase payments allocated to the subaccounts;
o transfers into or out of the account(s);
o partial surrenders;
o surrender charges; and/or
o contract administrative charges
Accumulation unit values may fluctuate due to:
o changes in underlying fund portfolio(s) net asset value;
o dividends distributed to the subaccount(s);
o capital gains or losses of underlying fund portfolios;
o fund portfolio operating expenses; and/or
o mortality and expense risk fees
Death benefits
When you purchase your policy, you decide on the minimum amount of
protection you want for the beneficiary if the insured dies. This <PAGE>
PAGE 32
amount is called the specified amount. Your policy's death benefit
can never be less than this amount unless you change it or unless
your policy has an outstanding indebtedness.
You also choose one of two death benefit options, which determines
how the policy's value will affect the amount paid to the
beneficiary if the insured dies while the policy is in force:
Option 1 (level amount): Under this option, the policy's value is
part of the specified amount. The Option 1 death benefit is the
greater of:
o the specified amount on the date of the insured's death; or
o the applicable percentage of the policy value on the date of
death, if death occurs on a valuation date, or on the next
valuation date following the date of death. (See table
below.)
Thus the death benefit remains level -- at the specified amount --
as long as the applicable percentage of policy value is less than
or equal to that amount. Only when the applicable percentage of
policy value exceeds the specified amount will the death benefit
vary with the policy value. After attained insurance age 40, the
applicable percentage decreases as the insured's age increases.
Applicable Percentage Table
Insured's Applicable Insured's Applicable
attained percentage of attained percentage of
insurance policy insurance policy
age value age value
40 or younger 250% 61 128%
41 243 62 126
42 236 63 124
43 229 64 122
44 222 65 120
45 215 66 119
46 209 67 118
47 203 68 117
48 197 69 116
49 191 70 115
50 185 71 113
51 178 72 111
52 171 73 109
53 164 74 107
54 157 75-95 105
55 150 96 104
56 146 97 103
57 142 98 102
58 138 99 101
59 134 100 100
60 130
<PAGE>
PAGE 33
Option 2 (variable amount): Under this option, the policy value is
added to the specified amount. The Option 2 death benefit is the
greater of:
o the policy value plus the specified amount; or
o the applicable percentage of policy value (from the
preceding table) on the date of death, if death occurs on a
valuation date, or on the next valuation date following the
date of death.
Under Option 2 the death benefit will always vary as the policy
value varies. The death benefit will equal the sum of the
specified amount plus the policy value until the applicable
percentage of the policy value exceeds that sum.
Examples: Option 1 Option 2
specified amount $100,000 $100,000
policy value $5,000 $5,000
death benefit $100,000 $105,000
policy value increases to $8,000 $8,000
death benefit $100,000 $108,000
policy value decreases to $3,000 $3,000
death benefit $100,000 $103,000
If you want to have premium payments and favorable investment
performance reflected partly in the form of an increasing death
benefit, you should consider Option 2. If you are satisfied with
the specified amount of insurance protection and prefer to have
premium payments and favorable investment performance reflected to
the maximum extent in the policy value, you should consider Option
1. Under Option 1, the cost of insurance is lower because IDS
Life's net amount at risk is generally lower; for this reason the
monthly deduction is less, and a larger portion of your premiums
and investment returns is retained in the policy value.
Change in death benefit option
You may make a written request to change the death benefit option
once per policy year. A change in the death benefit option also
will change the specified amount. You do not need to provide
additional evidence of insurability.
If you change from Option 1 to Option 2: The specified amount will
decrease by an amount equal to the policy value on the effective
date of the change. You cannot change from Option 1 to Option 2 if
the resulting specified amount would fall below the minimum
specified amount (currently $50,000 for the first two policy years,
$40,000 in years three through ten and $25,000 thereafter).
The minimum specified amount for policies purchased on or after May
1, 1991 with an initial specified amount of $350,000 or more is
$350,000 in the first policy year, $325,000 in years two to five,
$300,000 in years six to ten and $275,000 thereafter.
<PAGE>
PAGE 34
If you change from Option 2 to Option 1: The specified amount will
increase by an amount equal to the policy value on the effective
date of the change.
An increase or decrease in specified amount resulting from a change
in the death benefit option will affect the monthly deduction
because the cost of insurance and the death benefit guarantee
charge both depend upon the specified amount. The charge for
certain optional insurance benefits may also change. The surrender
charge, however, will not be affected.
Changes in specified amount
Subject to certain limitations, you may make a written request to
increase or decrease the specified amount once each policy year
after the first. Changes in specified amount may have tax
implications, discussed in the section "Modified endowment
contracts" under "Federal taxes."
Increases: If you increase the specified amount, additional
evidence of insurability that is satisfactory to IDS Life may be
required. The effective date of the increase will be the monthly
anniversary on or next following our approval of the increase. The
increase may not be less than $10,000, and no increase will be
permitted after the insured's attained insurance age 75.
An increase in the specified amount will have the following effects
on policy charges:
o Your monthly deduction will increase because the cost of
insurance and the death benefit guarantee charge both depend
upon the specified amount.
o Charges for certain optional insurance benefits will
increase.
o The minimum monthly premium will increase if the death
benefit guarantee is in effect.
o The surrender charge will increase.
At the time of the increase in specified amount, the cash surrender
value of your policy must be sufficient to pay the monthly
deduction on the next monthly anniversary. The increased surrender
charge will reduce the cash surrender value. If the remaining cash
surrender value is not sufficient to cover the monthly deduction,
we will require you to pay additional premiums within the 61-day
grace period. If you do not, the policy will lapse unless the
death benefit guarantee is in effect. Because the minimum monthly
premium will increase, additional premiums may also be required to
keep the death benefit guarantee in effect.
Decreases: Any decrease in specified amount will take effect on the
monthly anniversary on or next following our receipt of your
written request. The specified amount remaining after the decrease
may not be less than the minimum specified amount (currently
$50,000 for the first two policy years, $40,000 in years three
<PAGE>
PAGE 35
through ten, and $25,000 thereafter). If, following a decrease in
specified amount, the policy would no longer qualify as life
insurance under federal tax law, the decrease may be limited to the
extent necessary to meet these requirements.
The minimum specified amount for policies purchased on or after May
1, 1991 with an initial specified amount of $350,000 or more is
$350,000 in the first policy year, $325,000 in years two to five,
$300,000 in years six to ten and $275,000 thereafter.
A decrease in specified amount will affect your costs as follows:
o Your monthly deduction will decrease because the cost of
insurance and the death benefit guarantee charge both depend
upon the specified amount.
o Charges for certain optional insurance benefits will
decrease.
o The minimum monthly premium will decrease if the death
benefit guarantee is in effect.
o The surrender charge will not change.
No surrender charge is imposed when you request a decrease in the
specified amount.
Decreases in the specified amount will be deducted from the current
specified amount in this order:
1. First from the portion due to the most recent increase;
2. Next from portions due to the next most recent increases
successively; and
3. Then from the initial specified amount when the policy was
issued.
This procedure may affect the cost of insurance if different rate
classifications have been applied to the current specified amount.
The rate classification applicable to the most recent increase in
the specified amount will be eliminated first, then the rate
classification applicable to the next most recent increase, and so
on.
Misstatement of age or sex
If the insured's age or sex has been misstated, the proceeds
payable upon death will be:
o the policy value on the date of death; plus
o the amount of insurance that would have been purchased by
the cost of insurance deducted for the policy month
during which death occurred, if that cost had been
calculated using rates for the correct age and sex; minus
o the amount of any outstanding indebtedness on the date of
death.
<PAGE>
PAGE 36
Suicide
Suicide by the insured, whether sane or insane, within two years
from the policy date is not covered by the policy. If suicide
occurs, the only amount payable to the beneficiary will be the
premiums paid, minus the amount of any outstanding indebtedness.
In Colorado and North Dakota, the suicide period is shortened to
one year. In Missouri, IDS Life must prove that the insured
intended to commit suicide at the time he or she applied for
coverage.
Beneficiary
Initially the beneficiary will be the person you designate in your
application for the policy. You may change the beneficiary by
giving written notice to IDS Life, subject to requirements and
restrictions stated in the policy. If you do not designate a
beneficiary, or if the designated beneficiary dies before the
insured, the beneficiary will be you or your estate.
Transfers between the fixed account and subaccounts
You may transfer policy values from one subaccount to another or
between subaccounts and the fixed account. For most transfers, if
we receive your request before the close of business, we will
process it that day. Requests received after the close of business
will be processed the next business day. There is no charge for
transfers. Before transferring policy value, you should consider
the risks involved in switching investments.
We may suspend or modify the transfer privilege at any time.
Transfers involving the fixed account are subject to the
restrictions below.
Fixed account transfer policies
o Transfers from the fixed account must be made during a 30-day
period starting on a policy anniversary, except for automated
transfers, which can be set up for monthly, quarterly or semiannual
transfer periods.
o If we receive your request to transfer funds from the fixed
account within 30 days before the policy anniversary, the transfer
will become effective on the anniversary.
o If we receive your request on or within 30 days after the policy
anniversary, the transfer will be effective on the day we receive
it.
o We will not accept requests for transfers from the fixed account
at any other time.
o If you have made a transfer from the fixed account to one or more
subaccounts, you may not make a transfer from any subaccount back
to the fixed account until the next policy anniversary. We will
waive this limitation once during the first two policy years if you
exercise the policy's right to exchange provision. See "Exchange
right."<PAGE>
PAGE 37
Minimum transfer amounts
From a subaccount to another subaccount or the fixed account: For
mail and phone transfers, $250 or the entire subaccount balance,
whichever is less. For automated transfers, $50.
From the fixed account to a subaccount: $250 or the entire fixed
account balance minus any outstanding indebtedness, whichever is
less. For automated transfers, $50.
Maximum transfer amounts
From a subaccount to another subaccount or the fixed account: None.
From the fixed account to a subaccount: Entire fixed account
balance minus any outstanding indebtedness.
Maximum number of transfers per year
Five for mail and phone transfers. Twelve for automated transfers.
Two ways to request a transfer, loan or surrender
Provide your name, policy number, Social Security Number or
Taxpayer Identification Number when you request a transfer.
1 By letter
Regular mail:
IDS Life Insurance Company
P.O. Box 499
Minneapolis MN 55440-0499
Express mail:
IDS Life Insurance Company
733 Marquette Avenue
Minneapolis MN 55402
2 By phone
Call between 7 a.m. and 6 p.m. Central Time:
1-800-437-0602 (toll free) or
(612) 671-4738 (Minneapolis/St. Paul area)
TTY service for the hearing impaired:
1-800-285-8846 (toll free) or
o We answer phone requests promptly, but you may experience delays
when call volume is unusually high. If you are unable to get
through, use mail procedure as an alternative.
<PAGE>
PAGE 38
o We will honor any telephone transfer or surrender request
believed to be authentic and will use reasonable procedures to
confirm that they are. These include asking identifying questions
and tape recording calls. As long as the procedures are followed,
neither IDS Life nor IDS will be liable for any loss resulting from
fraudulent requests.
o You may request that telephone transfers not be authorized from
your account by writing IDS Life.
Automated transfers
In addition to written and phone requests, you can arrange to have
policy value transferred from one account to another automatically.
Your financial planner can help you set up an automated transfer.
Automated transfer policies:
o Minimum automated transfer: $50
o Frequency: monthly, quarterly, semiannually or annually
o Only one automated transfer arrangement can be in effect at any
time. Policy values may be transferred to one or more subaccounts
and the fixed account but can be transferred from only one account.
o You can start or stop this service by written request. You must
allow seven days for us to change any instructions that are
currently in place.
o Automated transfers from the fixed account may not exceed an
amount that, if continued, would deplete the fixed account within
12 months.
o If you have made a transfer from the fixed account to one or more
subaccounts, you may not make a transfer from any subaccount back
to the fixed account until the next policy anniversary.
o If your request is submitted with an application for a policy, it
will not take effect until the policy is issued.
o If the value of the account from which policy value is being
transferred is less than the $50 minimum, the transfer arrangement
will automatically be stopped.
o Automated transfers are subject to all other policy provisions
and terms including provisions relating to the transfer of money
between the fixed account and the subaccounts.
Automated dollar-cost averaging during the accumulation period
You can use automated transfers to take advantage of dollar-cost
averaging -- investing a fixed amount at regular intervals. For
example, you might have a set amount transferred monthly from a
relatively conservative subaccount to a more aggressive one, or to
several others.
<PAGE>
PAGE 39
This systematic approach can help you benefit from fluctuations in
accumulation unit value, caused by fluctuations in the market
value(s) of the underlying fund portfolio. Since you invest the
same amount each period, you automatically acquire more units when
the market value falls, fewer units when it rises. The potential
effect is to lower your average cost per unit and increase your
long-term return.
How dollar-cost averaging works
Amount Accumulation Number of units
Month invested unit value purchased
Jan $100 $20 5.00
Feb 100 16 6.25
Mar 100 9 11.25
Apr 100 5 20.00
May 100 7 14.29
June 100 10 10.00
July 100 15 6.67
Aug 100 20 5.00
Sept 100 17 5.88
Oct 100 12 8.33
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more units
when the per unit market price is low
(arrow in table pointing to August) and fewer units when the per
unit market price is high.
You have paid an average price of only $10.81 per unit over the 10
months, while the average market price actually was $13.10.
Dollar-cost averaging does not guarantee that any subaccount will
gain in value, nor will it protect against a decline in value if
market prices fall. However, if you can continue to invest
regularly throughout changing market conditions, it can be an
effective strategy to help meet your long term goals.
Policy loans
You may borrow against your policy by written or telephone request.
(See chart under "Transfers between the fixed account and
subaccounts" for address and phone numbers for your requests.) A
loan request received before close of business will be processed
the same day. A request received after close of business will be
processed the following business day.
Interest rate: 6.1% payable in advance, which is equivalent to a
6.5% effective rate. For policies purchased on or after May 1,
1993 (October 1, 1993 for New Jersey), we expect to reduce the loan
<PAGE>
PAGE 40
interest rate after a policy's tenth anniversary to 4.3% payable in
advance, equivalent to a 4.5% effective rate.
Minimum loan: $500 ($200 for Connecticut residents) or the
remaining loan value, whichever is less.
Maximum loan:
o In Texas, 100% of the policy value in the fixed account,
minus a pro rata portion of surrender charges
o In Virginia, 90% of the policy value minus surrender
charges.
o In all other states, 85% of the policy value minus surrender
charges.
We will compute the maximum loan value as of the end of the
valuation period during which we receive your loan request. In
doing so, we will deduct from the loan value interest for the
period until the next policy anniversary.
Payment of loaned funds: Generally, we will pay loans within seven
days after we receive your request (with certain exceptions -- see
"Deferral of payments," under "Payment of policy proceeds").
Allocation of loans to accounts: If you do not specify whether the
loan is to come from the fixed account or the subaccounts, it will
be made from the subaccounts and the fixed account in proportion to
their values, minus indebtedness. When a loan is made from a
subaccount, accumulation units are redeemed and the proceeds
transferred into the fixed account. We will credit the loaned
amount with 4.5% annual interest.
Repayments: Loan repayments will be allocated to subaccounts and/or
the fixed account using the premium allocation percentages in
effect unless you tell us otherwise. Repayments must be in amounts
of at least $25.
Overdue interest: If accrued interest is not paid when due, we will
increase the amount of indebtedness in the fixed account to cover
the amount due. Interest added to a policy loan will be charged
the same interest rate as the loan itself. We will take such
interest from the fixed account and/or subaccounts, using the
monthly deduction allocation percentages. If the value in the
fixed account or any subaccount is not enough to pay the interest
so allocated, all of the interest will be taken from all of the
accounts in proportion to their value, minus indebtedness.
Effects of policy loans: If you do not repay your loan, it will
reduce the death benefit and policy value. Even if you do repay
it, your loan can have a permanent effect on death benefits and
policy values, because money borrowed against the subaccounts will
not share in the investment results of the relevant portfolio(s) or
trusts(s).
<PAGE>
PAGE 41
Taxes: If your policy lapses or you surrender it with an
outstanding indebtedness, and the amount of outstanding
indebtedness plus the cash surrender value is more than the sum of
premiums you paid, you will generally be liable for taxes on the
excess. (See "Federal taxes.")
Policy surrenders
You may surrender your policy in full or in part by written or
telephone request. (See chart under "Transfers between the fixed
account and subaccounts.") A surrender request received before
close of business will be processed the same day. A request
received after close of business will be processed the following
business day. We may require that you return your policy.
We will normally process your payment within seven days; however,
we reserve the right to defer payment (see "Deferral of payments,"
under "Payment of policy proceeds").
Total surrender: If you surrender your policy totally, you receive
its cash surrender value -- the policy value minus outstanding
indebtedness and applicable surrender charges (see "Loads, fees and
charges). We will compute the value of each subaccount as of the
end of the valuation period during which your request is received.
Partial surrenders: After the first policy year, you may surrender
any amount from $500 up to 85% of the policy's cash surrender
value. (Partial surrenders by telephone are limited to $25,000.)
You will be charged a partial surrender fee, described under
"Loads, fees and charges."
Allocation of partial surrenders: Unless you specify otherwise, IDS
Life will make partial surrenders from the fixed account and
subaccounts in proportion to their values at the end of the
valuation period during which your request is received. In
determining these proportions, we first subtract the amount of any
outstanding indebtedness from the fixed account value.
Effects of partial surrenders:
o The policy value will be reduced by the amount of the partial
surrender and fee.
o The death benefit will be reduced by the amount of the partial
surrender and fee, or, if the death benefit is based on the
applicable percentage of policy value, by an amount equal to the
applicable percentage times the amount of the partial surrender.
o A partial surrender may terminate the death benefit guarantee.
The surrender amount is deducted from total premiums paid, which
may reduce the total below the level required to keep the death
benefit guarantee in effect.
<PAGE>
PAGE 42
o If Option 1 is in effect, the specified amount will be reduced by
the amount of the partial surrender and fee. IDS Life will deduct
this decrease from the current specified amount in this order:
1. First from the specified amount provided by the most recent
increase;
2. Next from the next most recent increases successively;
3. Then from the initial specified amount when the policy was
issued.
Because they reduce the specified amount, partial surrenders may
affect the cost of insurance. IDS Life will not allow a partial
surrender if it would reduce the specified amount below the
required minimum. (See "Decreases" under "Death benefits.")
o If Option 2 is in effect, a partial surrender does not affect the
specified amount.
Taxes: Upon surrender, you will generally be liable for taxes on
any excess of the cash surrender value plus outstanding
indebtedness over the premium paid. (See "Federal taxes.")
Exchange right
For two years after the policy is issued, you can exchange it for
one that provides benefits that do not vary with the investment
return of the subaccounts. Because the policy itself offers a
fixed return option, all you need to do is transfer all of the
policy value in the subaccounts to the fixed account. We will
automatically credit all future premium payments to the fixed
account unless you request a different allocation.
Such transfer will not count against the five-transfers-per-year
limit. Also, any restrictions on transfers into the fixed account
will be waived.
There will be no effect on the policy's death benefit, specified
amount, net amount at risk, rate classification(s) or issue age.
Only the method of funding the policy value will be affected.
Paid-up insurance option
You may request that the cash surrender value of the policy be used
to purchase an amount of paid-up insurance. Your request may be
made in writing during the 30 days before any policy anniversary.
The paid-up insurance policy will take effect as of the policy
anniversary and will mature on the original policy's maturity date.
You will forfeit all rights to make future premium payments, and
all riders will terminate.
The amount and cash surrender value of the paid-up insurance will
be based on the cost of insurance rates guaranteed in the policy
and on the fixed account guaranteed interest rate. The paid-up
<PAGE>
PAGE 43
policy's death benefit amount, minus its cash surrender value,
cannot be greater than your current policy's death benefit, minus
its policy value, (both as of the date of the paid-up policy's
purchase). The amount of paid-up insurance will remain level and
will not be less than required by law.
Any cash surrender value that is not used to purchase the paid-up
insurance amount will be paid to you. At any time before the
insured's death, you may surrender the paid-up insurance for its
cash surrender value.
Optional insurance benefits
You may choose to add the following benefits to your policy, in the
form of riders (if certain requirements are met):
Waiver of Monthly Deduction (WMD): Under WMD, we will waive the
monthly deduction if the insured becomes totally disabled for six
months or longer prior to the attained insurance age 60 policy
anniversary. The waiver will not start until the disability has
continued for at least six months; however, once it starts, monthly
deductions taken from policy values during the six-month waiting
period will be credited back to the policy, using the premium
allocation percentage then in effect. Monthly deductions will then
be waived as long as the insured remains disabled. For any month
in which the monthly deduction is covered by this rider, the
minimum monthly premium needed to keep the death benefit guarantee
in effect will be zero.
During disability the specified amount cannot be increased, the
death benefit option cannot be changed to Option 1 and any benefits
provided by riders cannot be increased.
Accidental Death Benefit (ADB): ADB provides an additional death
benefit if the insured's death is caused by accidental injury prior
to the insured's attained insurance age 70 policy anniversary.
Other Insured Rider (OIR): OIR provides a level, adjustable death
benefit on the life of each other insured covered. The minimum
face amount that can be issued to each other insured is $25,000.
OIR does not develop policy value.
Coverage under OIR will terminate on the earliest of the following:
o The monthly anniversary date on or next following receipt of a
written request to end coverage.
o The date the basic policy matures, is surrendered or terminates
for any reason other than the insured's death.
o 31 days after the insured's death. No charge is made for
coverage during this period.
o The date of conversion of the coverage to an individual life
insurance policy on the life of the other insured. OIR is
convertible to any level benefit, level premium whole life or
flexible premium adjustable whole life insurance policy offered
by us at the time of conversion.
o The date the other insured attains insurance age 100.
<PAGE>
PAGE 44
If the other insured's age or sex has been misstated, the amount
payable upon his or her death will be the amount of insurance that
would have been purchased by the cost of the OIR for the policy
month during which death occurred, had the cost been calculated
using rates for the correct age and sex.
Children's Insurance Rider (CIR): Each unit of CIR provides $1,000
level term insurance on each eligible child. To be eligible,
children must:
o be insurable children, stepchildren or legally adopted children
of the insured;
o be named in the application for this rider;
o be members of the primary insured's household (actually living
with the insured) at the time of application; and
o be at least 15 days old and have not passed their 19th
birthday.
After the CIR is issued, it automatically insures children born to,
legally adopted by, or who become stepchildren of the insured after
the date of the CIR application, if they are at least 15 days old
and have not passed their 19th birthday. The maximum number of
units for one family is 10.
Insurance under CIR expires on the earlier of the child's 22nd
birthday or the primary insured's attained insurance age 65 policy
anniversary. If the primary insured parent dies, the insurance on
each child will be changed to paid-up term insurance, which will
provide the same coverage as provided under the CIR and will expire
at the same time coverage under the CIR would have expired.
The coverage provided on each child may be converted, without
evidence of insurability, to level premium whole life or flexible
premium adjustable whole life insurance within 31 days before or
after the earlier of the child's 22nd birthday or the primary
insured's attained insurance age 65 policy anniversary. Up to five
times the amount of insurance on each child may be converted.
Payment of policy proceeds
Proceeds will be paid when:
o you surrender the policy;
o the insured dies; or
o the policy maturity date is reached, which occurs when
the insured reaches attained insurance age 100.
All proceeds will be paid by check. We will compute the amount of
the death benefit and pay it in a single sum unless you select one
of the payment options below. We will pay interest at a rate not
less than 4% per year on single sum death proceeds, from the date
of the insured's death to the settlement date (the date on which
proceeds are paid in a lump sum or first placed under a payment
option).
<PAGE>
PAGE 45
Payment options
During the insured's lifetime, you may request in writing that we
pay policy proceeds under one or more of the three payment options
below. (The beneficiary may also select a payment option, unless
you say that he or she can't.) You decide how much of the proceeds
will be placed under each option (minimum: $5,000). Any such
amount will be transferred to IDS Life's general account. Unless
we agree otherwise, payments under all options must be made to a
natural person.
You may also, by written request, change a prior choice of payment
option, or elect a payment option other than the three below if we
agree.
If you elect a payment option for pre-death proceeds, payments
under this option may be subject to federal income tax as ordinary
income. If you elect Option A, the full pre-death proceeds will be
taxed as a full surrender or maturity as described in "Taxation of
policy proceeds" and may also be subject to an additional 10%
penalty tax if the policy is a modified endowment. The interest
paid under Option A will be ordinary income subject to income tax
in the year earned. The interest payments will not be subject to
the 10% penalty tax.
If you elect Option B or Option C for payment of pre-death
proceeds, any indebtedness at the time of election will be taxed as
a partial surrender as described in "Taxation of policy proceeds"
and may also be subject to an additional 10% penalty tax if the
policy is a modified endowment. The remainder of the proceeds will
be used to make payments under the option elected. A portion of
each payment will be taxed as ordinary income, and a portion of
each payment will be considered a return of the investment in the
policy and will not be taxed. An owner's investment in the policy
is described in "Taxation of policy proceeds." All payments made
after the investment in the policy is fully recovered will be
subject to tax. Amounts paid under Option B or Option C that are
subject to tax may also be subject to an additional 10% penalty tax
(see "Penalty tax").
Death benefit proceeds applied to any payment option are not
considered part of the beneficiary's income and thus are not
subject to federal income tax. The beneficiary's investment in the
policy is the death benefit proceeds applied to the payment option.
Payments of interest under Option A will be ordinary income subject
to tax. Under Option B or Option C, a portion of each payment will
be ordinary income, subject to tax and a portion of each payment
will be considered a return of the beneficiary's investment in the
policy. All payments made after the investment in the policy is
fully recovered will be subject to tax. Payments made under Option
B or Option C may also be subject to an additional 10% penalty tax
(see "Penalty tax").
<PAGE>
PAGE 46
Option A -- Interest payments: We will pay interest on any proceeds
placed under this option at a rate of 4% per year compounded
annually, at regular intervals and for a period that is agreeable
to both you and us. At the end of any payment interval, you may
withdraw proceeds in amounts of at least $100. At any time, you
may withdraw all of the proceeds that remain, or you may place them
under a different payment option approved by us.
Option B -- Payments for a specified period: We will make fixed
monthly payments for any number of years you specify. Here are
examples of monthly payments for each $1,000 placed under this
option:
Payment period Monthly Payment per $1,000
(years) placed under Option B
5 $18.32
10 10.06
15 7.34
20 6.00
25 5.22
30 4.72
Monthly amounts for other payment periods will be furnished at your
request, free of charge.
Option C -- Lifetime Income: We will make monthly payments for the
life of the person (payee) who is to receive the income. Payment
will be guaranteed for 10, 15 or 20 years.
The amount of each monthly payment per $1,000 placed under this
option will be based on the table of settlement rates in effect at
the time of the first payment. The amount depends on the sex and
adjusted age of the payee on that date. Adjusted age means the age
of the payee (on the payee's nearest birthday) minus an adjustment
as follows:
Calendar year of Adjustment Calendar year of Adjustment
payee's birth payee's birth
Before 1920 0 1945-1949 6
1920-1924 1 1950-1959 7
1925-1929 2 1960-1969 8
1930-1934 3 1970-1979 9
1935-1939 4 1980-1989 10
1940-1944 5 After 1989 11
The amount of each monthly payment per $1,000 placed under this
option will not be less than amounts shown in the next table.
Monthly amounts for any adjusted age not shown will be furnished at
your request, without charge.
<PAGE>
PAGE 47
Adjusted
Age Life Income Per $1,000 with
Payee Payments Guaranteed for
10 years 15 years 20 years
Male Female Male Female Male Female
50 4.81 4.47 4.74 4.45 4.65 4.40
55 5.20 4.80 5.09 4.74 4.94 4.67
60 5.70 5.22 5.51 5.12 5.25 4.98
65 6.35 5.77 5.98 5.58 5.54 5.32
70 7.14 6.50 6.47 6.12 5.77 5.63
75 8.00 7.40 6.87 6.64 5.91 5.85
Deferral of payments
We reserve the right to defer payments of cash surrender value,
policy loans, or variable death benefits in excess of the specified
amount if:
o the payments derive from a premium payment made by a check that
has not cleared the banking system (good payment has not been
collected);
o the NYSE is closed (other than customary weekend and holiday
closings);
o in accordance with SEC rules, trading on the NYSE is restricted
or, because of an emergency, it is not practical to dispose of
securities held in the subaccount or determine the value of the
subaccount's net assets.
Any loans or surrenders from the fixed account may be delayed up to
six months from the date we receive the request. If we postpone
the payment of surrender proceeds more than 30 days, we will be pay
you interest on the amount surrendered at an annual rate of 3% for
the period of postponement.
Federal taxes
The following is a general discussion of the policy's federal
income tax implications. It is not intended as tax advice.
Because the effect of taxes on the value and benefits of your
policy depends on your individual situation as well as IDS Life's
tax status, YOU SHOULD CONSULT A TAX ADVISER TO FIND OUT HOW THESE
GENERAL CONSIDERATIONS APPLY TO YOU. The discussion is based on
our understanding of federal income tax laws as currently
interpreted by the Internal Revenue Service (IRS); both the laws
and their interpretation may change. IDS Life reserves the right
to change the policy in order to assure that it will continue to
qualify as life insurance for tax purposes.
IDS Life's tax status
IDS Life is taxed as a life insurance company under the Code. For
federal income tax purposes, the subaccounts are considered a part
of IDS Life, although their operations are treated separately in
<PAGE>
PAGE 48
accounting and financial statements. Investment income from the
subaccounts is reinvested and becomes part of the subaccounts'
value. This investment income, including realized capital gains,
is not taxed to IDS Life, and no charge is made against the
subaccounts for our federal income taxes that relates to the
investment income of the subaccounts. IDS Life reserves the right
to make such a charge in the future if there is a change in the tax
treatment of variable life insurance contracts or in IDS Life's tax
status as we currently understand it.
Taxation of policy proceeds
The death benefit is not considered part of the beneficiary's
income and thus is not subject to federal income taxes.
Part or all of any pre-death proceeds received through full
surrender or maturity, lapse, partial surrender, policy loan or
assignment of policy value, or payment options may be subject to
federal income tax as ordinary income. (See table below.) In some
cases the tax liability depends on whether the policy is a modified
endowment (explained following the table). The taxable amount may
also be subject to an additional 10 % penalty tax if the policy is
a modified endowment.
Source of proceeds Taxable portion of pre-death proceeds
Full Surrender/Maturity: Amount received plus any
indebtedness, minus your
investment in the policy*.
Lapse: Any outstanding indebtedness minus
your investment in the policy*.
Partial Surrenders Lesser of:
(modified endowments) the amount received or policy
value minus your investment in the
policy*.
Policy Loans and Lesser of:
Assignments the amount of the loan/assignment
(modified endowments): or policy value minus your
investment in the policy*.
Partial Surrenders Generally, if the amount received
(other policies): is greater than your investment in
the policy* the amount in excess
of your investment is taxable.
However, during the first 15
policy years, a different amount
may be taxable if the partial
surrender results in or is
necessitated by a reduction in
benefits.
<PAGE>
PAGE 49
Policy Loans and None
Assignments
(other policies):
Payment Options: If proceeds of the policy will be
paid under one of the payment
options, see the "Payment option"
section for tax information.
* The owner's investment is equal to premiums paid, minus the
nontaxable portion of any previous partial surrenders, plus the
taxable portion of any previous policy loans.
Modified endowment contracts
In 1988 Congress created a new class of life insurance policies
called "Modified Endowment Contracts," which are taxed differently
from conventional life insurance contracts. Policies applied for,
or materially changed, on or after June 21, 1988, are considered to
be modified endowments if premiums paid in the first seven years of
the policy, or the first seven years following a material change,
exceed certain limits. (Also, any life insurance policy received in
exchange for a modified endowment is itself a modified endowment.)
We have established procedures for monitoring whether a contract
may become a modified endowment contract, and intend to notify you
if this happens, so you can make adjustments if necessary.
Modified endowment limits are calculated when the policy is issued,
and are based on the benefits provided and on the risk
classification of the insured. They are later recalculated if
certain increases or reductions in benefits occur.
Increases in benefits: Limits are recalculated when an increase is
considered a "material change," as are most increases requested by
the owner, such as an increase in specified amount, addition of a
rider benefit, or an increase in an existing rider benefit.
(Automatic increases under the terms of the policy, such as an
increase in death benefit due to operation of the applicable
percentage table described in the "Death benefits" section or to
policy value growth under Option 2, are generally not considered
material changes.) A policy becomes a modified endowment if
premiums paid in the early years following a material change exceed
the recalculated limits.
Reductions in benefits: When benefits are reduced within seven
years after issue or after the most recent material change, the
limits are recalculated as if the reduced level of benefits had
always been in effect. In most cases, this recalculation will
further restrict the amount of premium that can be paid without
exceeding modified endowment limits. If premiums already paid
exceed the recalculated limits, the policy becomes a modified
endowment even if no further premiums are paid.
Distributions affected: Modified endowment rules apply to
distributions in the year the policy becomes a modified endowment
<PAGE>
PAGE 50
and in all subsequent years. In addition, the rules apply to
distributions taken two years before the policy becomes a modified
endowment, which are presumed to be taken in anticipation of that
event.
Serial purchase of modified endowments: All modified endowments
issued by the same insurer (or affiliated companies of the insurer)
to the same owner during any calendar year are treated as one
policy in determining the amount of any loan or distribution that
is taxable.
Penalty tax: If a policy is a modified endowment, the taxable
portion of pre-death proceeds from a full surrender, maturity,
lapse, partial surrender, policy loan or assignment of policy
value, or certain payment options may be subject to a 10% penalty
tax unless:
o the distribution occurs after the owner attains age
59-1/2;
o the distribution is attributable to the owner becoming
disabled (within the meaning of Code Section 72(m)(7); or
o the distribution is part of a series of substantially
equal periodic payments made at least once a year over
the life (or life expectancy) of the owner or over the
joint lives (or life expectancies) of the owner and the
owner's beneficiary.
Other tax considerations
Interest paid on policy loans: If the loan is used for personal
purposes, such interest is not tax-deductible. Other rules apply
if the loan is used for trade or business or investment purposes,
or if the policy is owned by a business or a corporation.
Policy changes: Changing ownership, exchanging or assigning the
policy may have tax consequences, depending on the circumstances.
Other taxes: Federal estate tax, state and local estate tax,
inheritance tax, gift tax and other tax consequences of ownership
or receipt of policy proceeds will also depend on the
circumstances.
Qualified retirement plans: The policy may be used in conjunction
with certain qualified plans. Since the rules governing such use
are complex, a purchaser should consult a competent pension
consultant.
On July 6, 1983, the Supreme Court held in Arizona Governing
Committee v. Norris that optional annuity benefits provided under
an employee's deferred compensation plan could not, under Title VII
of the Civil Rights Act of 1964, vary between men and women on the
basis of sex. Since the policy's cost of insurance rates and
purchase rates for certain settlement options distinguish between
men and women, employers and employee organizations should consult
with legal counsel before purchasing the policy for any
employment-related insurance or benefit program.
<PAGE>
PAGE 51
IDS Life
IDS Life is a stock life insurance company organized under the laws
of the State of Minnesota in 1957. Our address is in IDS Tower 10,
Minneapolis, MN 55440-0010.
IDS Life conducts a conventional life insurance business in the
District of Columbia and all states except New York. A wholly
owned subsidiary of IDS Life, IDS Life Insurance Company of New
York, conducts a substantially identical business in New York.
IDS Life has been in the variable annuity business since 1968 and
has sold a number of different variable annuity contracts and
variable life insurance policies, utilizing other separate
accounts, unit investment trusts and mutual funds.
Ownership
IDS Life is a wholly owned subsidiary of IDS Financial Corporation;
IDS Financial Corporation, a Delaware corporation, is a wholly
owned subsidiary of American Express Company.
State regulation
IDS Life is subject to the laws of Minnesota governing insurance
companies and to regulation by the Minnesota Department of
Commerce. In addition, IDS Life is subject to regulation under the
insurance laws of other jurisdictions in which it may operate. An
annual statement in a prescribed form is filed with Minnesota's
Department of Commerce each year and in each state in which IDS
Life does business. IDS Life's books and accounts are subject to
review by the Minnesota Department of Commerce at all times and a
full examination of its operations is conducted periodically. Such
regulation does not, however, involve any supervision of management
or investment practices or policies.
Distribution of the policy
IDS Life is the sole distributor of the policy. IDS Life is
registered as a broker-dealer under the Securities Exchange Act of
1934 and is a member of the National Association of Securities
Dealers, Inc. (NASD). Representatives of IDS Life are licensed
insurance and annuity agents, and are registered with the NASD as
representatives of IDS Life.
IDS Life pays its representatives a commission of up to 50% of the
initial minimum monthly premium (annualized) when the policy is
sold, plus 3% of all premiums in excess of 12 times the minimum
monthly premium. At the end of policy years one through ten, IDS
Life pays a service fee not greater than 0.3% of the policy value,
net of indebtedness. Additional commissions are paid if an
increase in coverage occurs. IDS Life also pays approximately 27%
of the total representative's commission to the division and
district sales managers of the selling representative.
<PAGE>
PAGE 52
Legal proceedings
As an insurance company, IDS Life is involved in a number of items
of litigation. We believe that these items are not material and we
do not expect to incur significant losses resulting from the
litigation.
Experts
The financial statement of IDS Life and of the segregated asset
subaccounts of IDS Life Variable Life Separate account for Flexible
Premium Variable Life Insurance appearing in this prospectus have
been audited by Ernst & Young, independent auditors, as set forth
in their reports thereon appearing elsewhere herein, and are
included in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.
Actuarial matters included in the prospectus have been examined by
Timothy V. Bechtold, F.S.A., M.A.A.A., Vice President, Insurance
Product Development, as stated in his opinion filed as an exhibit
to the Registration Statement.
Management of IDS Life
Directors
David R. Hubers, 51,
Director since 1989; Senior Vice President, Finance, Chief
Financial Officer and Director of IDS since 1984.
Richard W. Kling, 53
Director since 1984; Executive Vice President, Marketing and
Products since 1988. Director of IDS Life Series Fund, Inc.
Paul F. Kolkman, 47
Director and Vice President, Finance since 1984; Vice President,
Corporate Actuary, IDS, since 1987.
Christopher R. Kudrna, 40
Director and Vice President, Systems and Technology Development
since 1987.
James A. Mitchell, 52
Director and President since 1984; Chief Executive Officer since
1986; Senior Vice President and Director, IDS, since 1984; Director
of IDS Life Variable Annuity Funds A & B and IDS Life Series Fund,
Inc.
ReBecca K. Roloff, 39
Director and Executive Vice President, Operations since 1988;
William A. Smith, 45
Director since July 1986; Vice President and Controller from 1986
to 1991; Treasurer from 1989 to 1991; Vice President, Finance and
Chief Financial Officer/UK, IDS, since 1991; Vice President and
Insurance Controller, IDS, from 1986 to 1991.
<PAGE>
PAGE 53
Jeffrey E. Stiefler, 47
Director and Chairman of the Board since 1990; Director, IDS, since
1987; President and Chief Executive Officer of IDS since 1991;
President of IDS since 1990. Executive Vice President of IDS from
1987 to 1990.
Melinda S. Urion, 40
Director, Vice President, Controller and Treasurer since 1991.
Chief Accounting Officer, IDS, from 1988 to 1991.
Officers other than directors
William H. Dudley, 61
Vice President since 1974; Director and Executive Vice President,
Investment and Brokerage Operations, IDS, since 1987. Director of
all publicly offered funds in the IDS MUTUAL FUND GROUP.
Lorraine R. Hart, 43
Vice President, Investments since 1992; Vice President and Senior
Portfolio Manager, IDS, since 1992; Vice President, Insurance
Investments, IDS, from 1989 to 1992.
William A. Stoltzmann, 45
Vice President, General Counsel and Secretary since 1985.
The address for all of the directors and principal officers is:
IDS Tower 10, Minneapolis, MN 55440-0010.
The officers, employees and sales force of IDS Life are bonded, in
the amount of $10 million, by virtue of a blanket fidelity bond
issued by United Pacific Insurance Company to IDS Life's parent,
IDS Financial Corporation. An additional $12 million in fidelity
coverage is extended by a second policy issued by Lloyd's of London
to the directors, officers and employees of IDS Life. An
additional $10 million in fidelity coverage is extended by a third
policy issued by Federal Insurance Company to the directors,
officers and employees of IDS Life.
Shearson Lehman Brothers Inc.
Shearson Lehman, sponsor of the trusts, is a Delaware corporation
and a subsidiary of American Express Company. Shearson Lehman is
in the underwriting, securities and commodities brokerage
businesses, and is a member of the NYSE, other major securities
exchanges and commodity exchanges, and the NASD. The sponsor and
its wholly owned subsidiaries, Berstein-Macaulay Inc., Lehman
Management Co., Inc., Shearson Asset Management, Inc. and Shearson
Management Inc., are in the investment advisory business. The
sponsor has acted as principal underwriter and managing underwriter
of other investment companies. In addition to participating as a
member of various selling groups or as an agent of other investment
companies, Shearson Lehman executes orders on behalf of investment
companies for the purchase and sale of securities of such companies
and sells securities to such companies in its capacity as a broker
or dealer in securities.
<PAGE>
PAGE 54
Lehman Government Securities, Inc. and Lehman Special Securities
Incorporated, both of which are indirectly wholly owned
subsidiaries of the sponsor, may act as agents for the sponsor with
respect to certain of the matters described in this prospectus.
Other information
A registration statement has been filed with the Securities and
Exchange Commission (SEC) under the Securities Act of 1933, as
amended. For further information concerning the policy, its
separate account (the variable account) and IDS Life, please refer
to the registration statement, as amended, with exhibits.
Substitution of investments
If shares of any fund portfolio or trust units are unavailable for
purchase by the appropriate subaccount or if, in the judgment of
IDS Life's management, further investment in such shares is no
longer appropriate, shares of another registered, open-end
management investment company or unit investment trust may be
substituted.
If deemed by IDS Life to be in the best interest of persons having
voting rights under the policy, the variable account may be
operated as a management company under the Investment Company Act
of 1940, or it may be deregistered under the Act if such
registration is no longer required.
In the event of any such substitution or change, IDS Life may,
without the consent or approval of owners, amend the policy and
take whatever action is necessary and appropriate. However, no
such substitution or change will be made without any necessary
approval of the SEC or state insurance departments. IDS Life will
notify owners within five days of any substitution or change.
Voting rights
All shares issued by the fund are the same class (kind) -- capital
stock. They are fully paid and nonassessable and can be redeemed
or transferred. They can be issued as full shares or fractions.
All shares have equal voting rights; a fraction of a share has the
same kind of rights and privileges as a full share.
Each of the fund's five portfolios issues its own series of common
stock. The shares of each portfolio represent an interest only in
that portfolio's assets (and profits or losses) and in the event of
liquidation, each share of a portfolio would have the same rights
to dividends and assets as every other share of that portfolio.
Each share of a portfolio has one vote. On some issues, such as
election of directors, all shares of the fund vote together as one
series. When electing directors, all shares have cumulative voting
rights. Cumulative voting means that shareholders are entitled to
<PAGE>
PAGE 55
a number of votes equal to the number of shares they hold
multiplied by the number of directors to be elected, and they have
the right to divide votes among candidates.
On an issue affecting only one portfolio -- for example, a
fundamental investment restriction pertaining only to that
portfolio -- its shares vote as a separate series. If shareholders
of a particular portfolio vote approval of the Investment
Management and Services Agreement, the agreement becomes effective
with respect to that portfolio, whether or not it is approved by
shareholders of the other portfolios.
IDS Life is the owner of all fund shares and as such holds all
voting rights. However, IDS Life will vote the shares of each
portfolio in accordance with instructions received from owners. If
we do not receive timely instructions from you, we will vote your
shares in the same proportion as the shares for which instructions
are received. Fund shares that are not otherwise attributable to
owners will also be voted by IDS Life in the same proportion as
those shares in that subaccount for which instructions are
received.
We determine the number of fund shares in each subaccount for which
you may give instructions by applying your percentage interest in
the subaccount to the total number of votes attributable to the
subaccount. The number will be determined as of a date chosen by
IDS Life, but not more than 60 days before the meeting of the fund.
Fractional votes are counted. You will receive notice of each
shareholder meeting, together with any proxy solicitation materials
and a statement of the number of votes for which you are entitled
to give instructions.
If required by state insurance officials, IDS Life may disregard
voting instructions that would change the goals of one or more of
the fund's portfolios, or would result in approval or disapproval
of an investment advisory contract. In addition, IDS Life itself
may disregard voting instructions that would require changes in the
investment policy or investment adviser of one or more of the
fund's portfolios, if IDS Life reasonably disapproves such changes
in accordance with applicable federal regulations. If IDS Life
does disregard voting instructions, it will, in its next report to
owners, advise them of that action and the reasons for it.
Generally, ownership of units of a unit investment trust does not
involve the exercise of voting rights. However, unit holders in
the trusts may vote for removal of the trustee or for amendment or
termination of the trust indenture. In the event of such a vote,
IDS Life, as the owner of the units, would solicit voting
instructions from owners under the same procedures used for votes
affecting the fund.
<PAGE>
PAGE 56
Reports
At least once a year IDS Life will mail to you, at your last known
address of record, a report containing all information required by
law or regulation, including a statement showing the current policy
value.
Policy illustrations
The following tables illustrate how policy values, cash surrender
values and death benefits may change with the investment experience
of the subaccount. The tables show how these amounts might vary,
for a 35-year-old male nonsmoker, under Death Benefit Option 1, if:
o the annual rate of return of the fund is 0%, 6% or 12%.
o cost of insurance rates and policy fees are -- current rates
and fees for policies purchased on or after May 1, 1993
(October 1, 1993 for New Jersey) -- current rates and fees
for policies purchased before May 1, 1993 (October 1, 1993
for New Jersey) -- guaranteed rates and fees .
Any such illustration involves a number of detailed assumptions
(see chart, "Understanding the illustrations"). To the extent that
your own circumstances differ from those assumed in the
illustrations, your expected results would also differ.
Upon request, you will be furnished with comparable tables
illustrating death benefits, policy values, and cash surrender
values based on the actual age of the person you propose to insure
and on an initial specified amount and premium payment schedule.
In addition, after you have purchased a policy, you may request
illustrations based on policy values at the time of request.
Understanding the illustrations
Rates of return: assumed to be uniform, gross, after-tax, annual
rates of 0%, 6%, or 12% for the fund. Results would differ
depending on allocations among the subaccounts, if returns averaged
0%, 6% and 12% for the fund as a whole but differed across
portfolios.
Insured: assumed to be a male insurance age 35, in a standard rate
classification, qualifying for the non-smoker rate. Results would
be lower if the insured were in a substandard rate classification
or did not qualify for the non-smoker rate.
Premiums: A $900 premium is assumed to be paid in full at the
beginning of each policy year. Results would differ if premiums
were paid on a different schedule.
Policy loans and partial withdrawals: It is assumed that none have
been made. (Since indebtedness is assumed to be zero, the cash
surrender value in all cases equals the policy value minus the
surrender charge.)
<PAGE>
PAGE 57
Effect of expenses and charges: The net investment return of the
subaccounts, shown in the tables, is lower than the gross,
after-tax return of the fund because expenses paid by the fund and
charges made against the subaccounts have been deducted. These
include:
o the daily investment management fee paid by the fund, assumed to
be equivalent to an annual rate of 0.6% of the fund's aggregate
average daily net assets;
o the daily mortality and expense risk charge, equivalent to 0.9%
of the daily net asset value of the subaccounts annually; and
o an annual charge of 0.1% of the fund's aggregate average daily
net assets for direct expenses incurred by the fund.
The latter charge is capped by IDS Life at 0.1%, even though actual
expenses have been higher, ranging from 0.6% to 0.8% of the average
daily net assets of the different portfolios in the year ended
April 30, 1993. Although IDS Life reserves the right to
discontinue capping these expenses, our present intent is to
continue the cap indefinitely until actual expenses are less than
the cap. Should IDS Life discontinue the cap prior to that time,
the policy values and death benefits in the tables generally would
be less.
After deduction of the above expenses and charges, the illustrated
gross annual investment rates of return of 0%, 6%, and 12%
correspond to approximate net annual rates of -1.59%, 4.32%, and
10.22%, respectively.
Taxes: Results shown in the tables reflect the fact that IDS Life
does not currently charge the subaccounts for federal income tax.
If such a charge is taken in the future, the portfolios will have
to earn more than they do now in order to produce the death
benefits and policy values illustrated.
<PAGE>
PAGE 58
<TABLE><CAPTION>
Illustration Policies Purchased On or After May 1, 1993
_____________________________________________________________________________________________________________________________
Initial Specified Amount $100,000 Male Age 35 Current Costs Assumed
Death Benefit Option 1 Nonsmoker Annual Premium $900
_____________________________________________________________________________________________________________________________
Premium Death Benefit (1)(2) Policy Value (1)(2) Cash Surrender Value (1)(2)
Accumulated Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of With Annual Annual Investment Return Of Annual Investment Return Of Annual Investment Return Of
Policy Interest
Year at 5% 0% 6% 12% 0% 6% 12% 0% 6% 12%
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 605 $ 648 $ 691 $ 0 $ 1 $ 44
2 1,937 100,000 100,000 100,000 1,202 1,326 1,455 475 598 727
3 2,979 100,000 100,000 100,000 1,779 2,022 2,285 993 1,236 1,499
4 4,073 100,000 100,000 100,000 2,336 2,737 3,190 1,491 1,893 2,346
5 5,222 100,000 100,000 100,000 2,873 3,473 4,177 1,972 2,572 3,276
6 6,428 100,000 100,000 100,000 3,392 4,230 5,255 2,671 3,509 4,534
7 7,694 100,000 100,000 100,000 3,892 5,010 6,434 3,352 4,470 5,894
8 9,024 100,000 100,000 100,000 4,371 5,812 7,722 4,011 5,451 7,362
9 10,420 100,000 100,000 100,000 4,827 6,632 9,128 4,647 6,452 8,948
10 11,886 100,000 100,000 100,000 5,257 7,471 10,662 5,257 7,471 10,662
11 13,425 100,000 100,000 100,000 5,663 8,329 12,338 5,663 8,329 12,338
12 15,042 100,000 100,000 100,000 6,043 9,207 14,172 6,043 9,207 14,172
13 16,739 100,000 100,000 100,000 6,396 10,104 16,178 6,396 10,104 16,178
14 18,521 100,000 100,000 100,000 6,720 11,018 18,375 6,720 11,018 18,375
15 20,392 100,000 100,000 100,000 7,013 11,948 20,779 7,013 11,948 20,779
16 22,356 100,000 100,000 100,000 7,272 12,894 23,413 7,272 12,894 23,413
17 24,419 100,000 100,000 100,000 7,495 13,852 26,301 7,495 13,852 26,301
18 26,585 100,000 100,000 100,000 7,678 14,820 29,467 7,678 14,820 29,467
19 28,859 100,000 100,000 100,000 7,815 15,794 32,940 7,815 15,794 32,940
20 31,247 100,000 100,000 100,000 7,901 16,770 36,753 7,901 16,770 36,753
age 60 45,102 100,000 100,000 100,000 7,405 21,540 62,448 7,405 21,540 62,448
age 65 62,785 100,000 100,000 127,948 4,791 25,684 104,875 4,791 25,684 104,875
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $900 premium is paid at the beginning of each policy year. Values will be different if premiums are paid in
different amounts or with a different frequency.
The above hypothetical investment results are illustrative only and should not be deemed a representation of past or future
investment results. Actual investment results may be more or less than those shown. The death benefit, policy value and cash
surrender value would be different from those shown if returns averaged 0%, 6%, and 12% over a period of years, but fluctuated
above and below those averages for individual policy years. No representation can be made that these hypothetical rates of return
can be achieved for any one year or sustained over any period of time.
</TABLE>
<PAGE>
PAGE 59
<TABLE><CAPTION>
Illustration Policies Purchased before May 1, 1993
_____________________________________________________________________________________________________________________________
Initial Specified Amount $100,000 Male Age 35 Current Costs Assumed
Death Benefit Option 1 Nonsmoker Annual Premium $900
_____________________________________________________________________________________________________________________________
Premium Death Benefit (1)(2) Policy Value (1)(2) Cash Surrender Value (1)(2)
Accumulated Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of With Annual Annual Investment Return Of Annual Investment Return Of Annual Investment Return Of
Policy Interest
Year at 5% 0% 6% 12% 0% 6% 12% 0% 6% 12%
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 605 $ 648 $ 691 $ 0 $ 1 $ 44
2 1,937 100,000 100,000 100,000 1,202 1,326 1,455 475 598 727
3 2,979 100,000 100,000 100,000 1,779 2,022 2,285 993 1,236 1,499
4 4,073 100,000 100,000 100,000 2,336 2,737 3,190 1,491 1,893 2,346
5 5,222 100,000 100,000 100,000 2,873 3,473 4,177 1,972 2,572 3,276
6 6,428 100,000 100,000 100,000 3,380 4,218 5,243 2,660 3,498 4,522
7 7,694 100,000 100,000 100,000 3,869 4,986 6,409 3,329 4,446 5,868
8 9,024 100,000 100,000 100,000 4,329 5,766 7,674 3,969 5,406 7,314
9 10,420 100,000 100,000 100,000 4,772 6,571 9,061 4,591 6,391 8,880
10 11,886 100,000 100,000 100,000 5,186 7,390 10,570 5,186 7,390 10,570
11 13,425 100,000 100,000 100,000 5,572 8,224 12,217 5,572 8,224 12,217
12 15,042 100,000 100,000 100,000 5,931 9,075 14,016 5,931 9,075 14,016
13 16,739 100,000 100,000 100,000 6,253 9,932 15,974 6,253 9,932 15,974
14 18,521 100,000 100,000 100,000 6,548 10,809 18,120 6,548 10,809 18,120
15 20,392 100,000 100,000 100,000 6,807 11,694 20,464 6,807 11,694 20,464
16 22,356 100,000 100,000 100,000 7,030 12,589 23,030 7,030 12,589 23,030
17 24,419 100,000 100,000 100,000 7,207 13,486 25,834 7,207 13,486 25,834
18 26,585 100,000 100,000 100,000 7,337 14,384 28,904 7,337 14,384 28,904
19 28,859 100,000 100,000 100,000 7,412 15,274 32,264 7,412 15,274 32,264
20 31,247 100,000 100,000 100,000 7,420 16,146 35,942 7,420 16,146 35,942
age 60 45,102 100,000 100,000 100,000 6,601 20,390 60,812 6,601 20,390 60,812
age 65 62,785 100,000 100,000 124,315 3,230 23,445 101,900 3,230 23,445 101,900
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $900 premium is paid at the beginning of each policy year. Values will be different if premiums are paid in
different amounts or with a different frequency.
The above hypothetical investment results are illustrative only and should not be deemed a representation of past or future
investment results. Actual investment results may be more or less than those shown. The death benefit, policy value and cash
surrender value would be different from those shown if returns averaged 0%, 6%, and 12% over a period of years, but fluctuated
above and below those averages for individual policy years. No representation can be made that these hypothetical rates of return
can be achieved for any one year or sustained over any period of time.
</TABLE>
<PAGE>
PAGE 60
<TABLE><CAPTION>
Illustration
_____________________________________________________________________________________________________________________________
Initial Specified Amount $100,000 Male Age 35 Current Costs Assumed
Death Benefit Option 1 Nonsmoker Annual Premium $900
_____________________________________________________________________________________________________________________________
Premium Death Benefit (1)(2) Policy Value (1)(2) Cash Surrender Value (1)(2)
Accumulated Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of With Annual Annual Investment Return Of Annual Investment Return Of Annual Investment Return Of
Policy Interest
Year at 5% 0% 6% 12% 0% 6% 12% 0% 6% 12%
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 605 $ 648 $ 660 $ 0 $ 1 $ 12
2 1,937 100,000 100,000 100,000 1,172 1,295 1,388 445 568 661
3 2,979 100,000 100,000 100,000 1,720 1,959 2,180 934 1,173 1,394
4 4,073 100,000 100,000 100,000 2,248 2,640 3,042 1,403 1,796 2,198
5 5,222 100,000 100,000 100,000 2,757 3,341 3,982 1,856 2,440 3,081
6 6,428 100,000 100,000 100,000 3,236 4,050 4,996 2,515 3,329 4,275
7 7,694 100,000 100,000 100,000 3,697 4,780 6,104 3,156 4,239 5,564
8 9,024 100,000 100,000 100,000 4,129 5,520 7,306 3,769 5,159 6,945
9 10,420 100,000 100,000 100,000 4,544 6,282 8,622 4,364 6,102 8,441
10 11,886 100,000 100,000 100,000 4,932 7,057 10,053 4,932 7,057 10,053
11 13,425 100,000 100,000 100,000 5,291 7,845 11,614 5,291 7,845 11,614
12 15,042 100,000 100,000 100,000 5,624 8,647 13,317 5,624 8,647 13,317
13 16,739 100,000 100,000 100,000 5,920 9,454 15,169 5,920 9,454 15,169
14 18,521 100,000 100,000 100,000 6,189 10,276 17,197 6,189 10,276 17,197
15 20,392 100,000 100,000 100,000 6,422 11,105 19,411 6,422 11,105 19,411
16 22,356 100,000 100,000 100,000 6,609 11,931 21,822 6,609 11,931 21,822
17 24,419 100,000 100,000 100,000 6,760 12,764 24,463 6,760 12,764 24,463
18 26,585 100,000 100,000 100,000 6,866 13,596 27,353 6,866 13,596 27,353
19 28,859 100,000 100,000 100,000 6,915 14,416 30,512 6,915 14,416 30,512
20 31,247 100,000 100,000 100,000 6,898 15,215 33,965 6,898 15,215 33,965
age 60 45,102 100,000 100,000 100,000 5,674 18,740 57,045 5,674 18,740 57,045
age 65 62,785 100,000 100,000 116,888 1,599 20,552 95,188 1,599 20,552 95,188
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $900 premium is paid at the beginning of each policy year. Values will be different if premiums are paid in
different amounts or with a different frequency.
The above hypothetical investment results are illustrative only and should not be deemed a representation of past or future
investment results. Actual investment results may be more or less than those shown. The death benefit, policy value and cash
surrender value would be different from those shown if returns averaged 0%, 6%, and 12% over a period of years, but fluctuated
above and below those averages for individual policy years. No representation can be made that these hypothetical rates of return
can be achieved for any one year or sustained over any period of time.
</TABLE>
<PAGE>
PAGE 61
(REG2)
PART II
UNDERTAKINGS 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
hereto or hereafter duly adopted pursuant to authority conferred in
that section.
RULE 484 UNDERTAKING
The By-Laws of IDS Life Insurance Company provide that:
The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party, by reason of the fact that he is
or was a director, officer, employee or agent of this Corporation,
or is or was serving at the direction of the Corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, to any
threatened, pending or completed action, suit or proceeding,
wherever brought, to the fullest extent permitted by the laws of
the State of Minnesota, as now existing or hereafter amended,
provided that this Article shall not indemnify or protect any such
director, officer, employee or agent against any liability to the
Corporation or its security holders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of his duties or by reason of his
reckless disregard of his obligations and duties.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant 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, the registrant 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.
<PAGE>
PAGE 62
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 11 TO
REGISTRATION STATEMENT NO. 33-11165
This Post-Effective Amendment No. 11 to Registration Statement
No. 33-11165 comprises the following papers and documents:
The facing sheet.
The prospectus consisting of 58 pages.
The undertaking to file reports.
The signatures.
The following exhibits:
1. A. Copies of all exhibits required by paragraph A of
instructions for Exhibits in Form N-8B-2 to the
Registration Statement.
(1) Incorporated by reference to Registrant's original
Registration Statement for the Variable Account on
Form N-8B-2 (File No. 811-4298; May 10, 1985).
(2) Not applicable.
(3) Incorporated by reference to Registrant's original
Registration Statement for the Variable Account on
Form N-8B-2 (File No. 811-4298; May 10, 1985).
(4) Not applicable.
(5) Flexible Premium Variable Life Insurance Policy
filed with the Original Registration Statement (File
No. 33-11165) on December 31, 1986 and incorporated
herein by reference.
(6) Incorporated by reference to Registrant's original
Registration Statement for the Variable Account on
Form N-8B-2 (File No. 811-4298; May 10, 1985).
(7) Not applicable.
(8) Incorporated by reference to Registrant's original
Registration Statement for the Variable Account on
Form N-8B-2 (File No. 811-4298; May 10, 1985).
(9) None.
(10) Application form for the Flexible Premium Variable
Life Insurance Policy is filed electronically
herewith.
<PAGE>
PAGE 63
(11) IDS Life Insurance Company's Description of Transfer
and Redemption Procedures and Method of Conversion
to Fixed Benefit Policies is filed electronically
herewith.
2. See Exhibit 1.A.(5).
3. Written consent of William A. Stoltzmann, dated June 5, 1987,
is filed electronically herewith.
4. No financial statement will be omitted from the prospectus
pursuant to Instruction 1(b) or (c) of Part I.
5. Not applicable.
6. Opinion of Actuary to be filed by amendment.
7. See Exhibit 3.
Written consent of experts to be filed by amendment.
<PAGE>
PAGE 64
POWER OF ATTORNEY
Each person whose signature appears in Post-Effective Amendment No.
11 to Registrant's Registration Statement No. 33-11165 thereby
constitutes and appoints William A. Stoltzmann, Colleen Curran and
Mary Ellyn Minenko, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution, for
him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done in connection therewith, as fully to all intents and purposes
as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them or their or his or her substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
<PAGE>
PAGE 65
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 IDS Life Insurance Company on behalf
of the Registrant, certifies that it meets requirements for
effectiveness of this Amendment to its Registration Statement
pursuant to Rule 486(a) under the Securities Act of 1933 and has
duly caused this Registration Statement to be signed on behalf of
the Registrant by the undersigned, thereunto duly authorized, in
this City of Minneapolis, and State of Minnesota on the 25th day of
February, 1994.
IDS Life Variable Life Separate Account
(Registrant)
By IDS Life Insurance Company
(Sponsor)
By/s/ James A. Mitchell*
James A. Mitchell, President
*Signed pursuant to Power of Attorney filed with the Original
Registration Statement (File No. 33-11165; December 31, 1986)
By: /s/ Mary Ellyn Minenko
Mary Ellyn Minenko
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following Officers
and Directors of IDS Life Insurance Company in the capacities
indicated on the 25th day of February, 1994:
Signature Title
/s/ James A. Mitchell* President, Chief Executive
James A. Mitchell Officer and Director
/s/ Paul Kolkman* Vice President, Finance
Paul Kolkman Products (Chief Financial
Officer) and Director
/s/ William A. Smith* Vice President - Controller
William A. Smith and Treasurer (Chief
Accounting Officer)
/s/ Jeffrey E. Stiefler** Chairman and Director
Jeffrey E. Stiefler
/s/ David R. Hubers* Director
David R. Hubers
<PAGE>
PAGE 66
/s/ Richard W. Kling* Director
Richard W. Kling
/s/ Christopher R. Kudrna* Director
Christopher R. Kudrna
/s/ Rebecca K. Roloff* Director
Rebecca K. Roloff
/s/ Melinda S. Urion** Director
Melinda S. Urion
*Signed pursuant to Power of Attorney filed with Post-Effective
Amendment No. 4 to Registrant's Registration Statement No. 33-
11165.
**Signed pursuant to Power of Attorney filed with Post-Effective
Amendment No. 10 to Registrant's Registration No. 33-11165.
By: ________________________________
Mary Ellyn Minenko
<PAGE>
IDS LIFE VARIABLE LIFE SEPARATE ACCOUNT
EXHIBIT INDEX
Exhibit 1(A)(10) Application form for the Flexible Premium
Variable Life Insurance Policy
Exhibit 1(A)(11) IDS Life Insurance Company's Description of
Transfer and Redemption Procedures and Method
of Conversion to Fixed Benefit Policies
Exhibit 3 Written consent of William A. Stoltzmann, dated
June 5, 1987
<PAGE>
PAGE 1
<TABLE><CAPTION>
IDS Life Insurance company
IDS Tower
Minneapolis, Minnesota 55474 Insurance
An American Express Company Application
A Clients
1 Insured (for all base plans)
Insured's name (first) (mi) (last) Maiden Name
Birth date / / Birthplace
a Male Female Marital Status Citizenship U.S. Other
2 Owner for all insurance applied for
a Will the insured own this insurance? (must be Yes if DI Applied for)
Yes (Complete if not on an attached Client Profile or Client Review Document)
Residence Address (Street, City, State, Zip)
No
If the Insured is not the Owner of this insurance, give:
Relationship to owner
o Owner's name(s)
(Complete if not on an attached Company Client Profile or Client Review Document)
o Owner's mailing address (street, city, state, zip)
o Owner's Social Security or Taxpayer Identification No.
If the owner elects to designate a successor owner,
give successor owner's name
and relationship to owner
o Type of ownership (check one)
Trustee Sole Proprietorship
Custodian Partnership
Individual Corporation (State of incorporation)
Other
o Trust or Custodial ownership basis (complete one if applicable)
Retirement Plan (name)
Trust (name)
Purchased under Uniform Gifts to Minors Act of (state)
B Purchase Basis (complete only one of the six responses in this Section)
See New Business Section of Reference Manual for required papers
Non-qualified individual purchase
Non-qualified 1035 exchange
Non-qualified Gift under Uniform Gifts to Minor's Act. (If Donor is not custodian, give
Donor's name, Soc. Sec. No., residence state and relationship to insured.)
Business Insurance (Non-qualified)(if check, complete Section L)
Other non-qualified
Tax-qualified Retirement Plan (if check, complete Section M)
457/Government
C Beneficiary Designation Instructions
These instructions and Standard Designations apply for all Beneficiary Designations.
Instructions: Either check "Standard Designation" (A or B) and give the spouse's name
or check "Other Designation" and give the complete wording of the designation, using the
examples supplied with this form, as a guide.
Definitions of Standard Designations referenced in Sections D-E
A Beneficiary is: Insured's designated Spouse, if living, otherwise the beneficiaries are
the living lawful children of the Insured and they will receive equal shares of the proceeds.
B Beneficiary is: Insured's designated Spouse, if living, otherwise the beneficiaries are
the living lawful children of the Insured and they will receive equal shares of the proceeds;
provided, however, that if a child of the insured has died before the Insured, that share which
the child would have received if he/she survived the Insured will be paid to his or her
living lawful children in equal shares.
<PAGE>
PAGE 2
D Life Insurance Applied 1
1 Base Plan (complete Sections G & H for the insured)
a Plan title
b Universal Life Death Benefit Option 1 Option 2
c Term policy years
(No. of years)
d Whole Life Plan, Automatic Premium Loan Provision will not apply
e Nonsmoker Rates Requested Yes No
f Other Information
2 Beneficiary for all policy benefits except Other Insured Riders. See Section C for instructions.
A or B Standard designation for insured's spouse (name)
"Other designation"
Relationship to Insured
3 Variable Life Allocations:
Premium Monthly Premium Monthly
IDS Life Subaccounts Allocation Deductions IDS Life Subaccounts Allocation Deductions
Subaccount P (Equity) % % (1991) Trust % %
Subaccount Q (Income) % % (1995) Trust % %
Subaccount R (Money Market) % % (2004) Trust % %
Subaccount S (Managed) % % Fixed Account (if available) % %
Subaccount T (Gov't Securities) % % % %
100% 100%
4 Riders (complete Section K for FIR/CIR Insured's; Section I & J for each "Other Insured")
Bold type = UL only riders; Underlining = UL and regular riders
a Waiver of Premium of Waiver of Monthly Deduction
b Waiver of Premium + $ of Supplemental Monthly Income
c Accidental Death Benefit of $
d Annual Reducing Term $ for years
e Guaranteed Purchase $ per purchase
f Children's Insurance units
(Complete Section K)
g Family Insurance units
(Complete Section K)
h Nominator Insurance (Complete Section I & J)
i Other Insured Rider (Complete Section I & J)
o OIR Insured's name o Amount $
o Nonsmoker Rates Requested Yes No
o OIR Beneficiary
A or B Standard designation for "Other Insured's" spouse (name)
"Other designation"
Relationship to "Other Insured"
For more Other Insured Riders, attach page 2 from another application form and write the name of the Insured for
the Base Plan, on top of that page.
5 Life Premiums
a Gross Single or Annual premium (for UL, scheduled future annual premium). $
b Premium paid with this application for this insurance (give receipt). $
c Lump sum amount to be paid on delivery of this policy. $
d Frequency of premium payments M Q SA A (check one)
e Method of payment Existing BA New BA Existing PDS/Employer Bill
New PDS/Employer Bill Direct Billing Military Allotment
<PAGE>
PAGE 3
E Income Protection Insurance Applied For
1 Base Plan - (complete Section G & H for the Insured)
a Insured's occupational class
b Monthly benefit $
c Duration of benefit: To age 65 5 years 3 years 1 year Other
d Elimination period: 30 days 60 days 90 days 180 days 365 days
e Disability provision: Total (IPP-2, IPP-5)
Total and Gradual Recovery (IPP-GR)
Total and Gradual Recovery with Occupational Protection Option (IPP-GR + OPO)
Other
f Premium pattern: Level Step rate Other
g Nonsmoker Rates Requested Yes No
h Unisex Rates-Employer Plan coverage (2 participants and employer billing required) IPP-2 only
i Multiple case discount (3 participants from same business entity) IPP-GR, IPP-5 only
2 Riders
a Social benefits rider of $ per month with elimination period of days
b Supplemental DI $ per month for months and day elimination period
c Cost of living provision
d Future purchase option of $ per option with options
e Lifetime benefits
f Hospital Indemnity $ per month
g Other
h AD&D $
3 Beneficiary (AD&D Only. See Section C for instructions.)
A or B Standard designation for Insured's spouse (name)
"Other designation"
Relationship to Insured
4 Income Protection Premiums
a Gross annual premium for insurance requested in this Section $
b Premium paid with the application for this insurance (give receipt) $
c Frequency of premium payments M Q SA A (check one)
d Method of payment Existing BA New BA Existing PDS/Employer Bill
New PDS/Employer Bill Direct Billing Military Allotment
F Business Expense Protection Insurance Applied For (Submit Supplemental Form 34591)
1 Base Plan - (complete section G & H for the Insured)
a Insured's occupational class
b Monthly benefit $
c Benefit pattern: Level Increasing
d Elimination period: 30 days 60 days 90 days Other
<PAGE>
PAGE 4
2 Business Expense Protection Premiums
a Gross annual premium for insurance requested in this Section $
b Premium paid with this application for this insurance (give receipt) $
c Frequency of premium payments M Q SA A (check one)
d Method of payment Existing BA New BA Existing PDS/Employer Bill
New PDS/Employer Bill Direct Billing Military Allotment
<PAGE>
PAGE 5
G Underwriting Information BASE PLAN INSURANCE
1 Insured's personal physician (if none, please write "None")
Name
Address (street, city, state, zip)
Phone no. ( ) Date and reason last consulted / /
Treatment given or medication prescribed
2 If the Insured is under age 15 did the representative see this child? Yes No
3 Is there similar insurance in force or applied for on all brothers and sisters? Yes No
If no, explain
4 Give the amount of life insurance already in force on the person responsible for the child's
primary support $
5 Has the Insured smoked cigarettes in the past 12 months? Yes No
If no, has the insured ever smoked cigarettes? Yes No
6 Has the Insured used tobacco in any other form? Yes No
If yes, what is used? what amount per day?
7 Has life, disability, accident, or sickness insurance on the insured been declined,
postponed, modified, rated, canceled, or refused reinstatement of renewal? Yes No
If yes, Date Company
Reason
8 Does the Insured intend to travel outside the United States? Yes No
If yes, to where? For how long?
9 Has the Insured flown during the past 5 years, or does he/she intend to fly, Yes No
as a pilot, crew member or passenger on other than a scheduled airline?
(if yes, complete an Aviation Questionnaire)
10 Has the Insured participated during the past 5 years, or does he/she intend to Yes No
to participate, in motorcycle riding or racing, auto racing, scuba or sky
diving, hang gliding or other hazardous activities? (if yes, complete the
appropriate questionnaire)
11 If disability applied for: (if disabled, the Insured will be eligible for:)
a Benefits from a required state cash sickness disability program? Yes No
b Continuation of salary from employer at $ per month for months Yes No
c Is the employer's salary continuation plan integrated with Social Security? Yes No
d Will the Insured's employer pay for the insurance? Yes No
12 Current annual income (after business expense if self-employed)
a From current occupation $ Other (describe) $
13 Current primary occupation Years of Service
14 Occupational duties Employer
(if military, list pay grade and branch)
15 Any contemplated change in occupation Yes No If yes, explain
16 Previous occupation if changed in last 5 years
17 D.I. only, if self employed supervisory duties % non-supervisory duties % No. of employees
<PAGE>
PAGE 6
G Underwriting Information (continued) BASE PLAN INSURANCE
18 Life insurance, annuities, and disability insurance that the Insured currently has in force or has applied for:
(if none, check here )
Ins. Amt./ If D.I., yrs Will this If yes, termi-
Company Policy type Policy no. Policy Date Mo. Income payable ADB amt. be replaced?* nation date
/ / $ $ Yes No / /
/ / $ $ Yes No / /
/ / $ $ Yes No / /
/ / $ $ Yes No / /
*If the insurance being applied for will replace any existing insurance, see the Reference Manual for required papers.
H Medical History Questionnaire BASE PLAN INSURANCE
Explain each question answered Yes. Include dates, reason for consultations, the patient or clinic number, and the
names and addresses of ally physicians, hospitals, etc., in the space to the right.
1 Height ft. in. Weight lbs.
Yes No Explanation
2 Are you now under observation or treatment?
3 Are you now pregnant or had difficulty in pregnancy?
4 Have you ever been treated for or been advised by a
physician of any disease of the:
a Heart, Blood, Blood vessels?
b Lungs, Respiratory system?
c Liver, Stomach, Intestines, Gall bladder, Rectum?
d Kidneys, Bladder, Genital organs, Urinary tract?
e Brain, Nervous system, Eyes, Ears?
f Back, Joints, Muscles, Skin?
5 Have you ever had or been told you had:
a Chest pain, High blood pressure, Heart murmur,
Rheumatic fever?
b Asthma, Shortness of breath, Allergies, Bronchitis
Tuberculosis?
c Stomach ulcers, Hemorrhoids, Hernia, Varicose veins?
d Nephritis, Kidney stone?
e Diabetes, Sugar, albumin or blood in urine?
f Fainting spells, Paralysis, Epilepsy, Nervous or mental
disorder?
g Deformity, Amputation, Arthritis?
h Cancer, Tumor, Goiter?
i Venereal disease?
j Immune deficiency disorder, AIDS, AIDS related complex
or test results indicating exposure to the AIDS virus?
k Other disease, disorder, physical or mental condition?
<PAGE>
PAGE 7
H Medical History Questionnaire (continued) BASE PLAN INSURANCE
6 Other than the above, have you within the last 5 years:
a Had a checkup, consultation, illness, injury, surgery?
b Had an electrocardiogram, x-ray, other diagnostic test?
c Been confined to a hospital, sanitarium or clinic?
d Been advised to have any diagnostic test, surgery, or
hospitalization which was not completed?
7 Have you ever:
a Received medical treatment for alcoholism or drug
addiction?
b Except as prescribed by a physician, used narcotics,
opiates, barbituates, hallucinogens or amphetamines on
a regular or habitual basis?
c Joined organization for alcoholism or drug addiction?
8 Do you have any family history (father, mother, brothers
or sisters) of:
Cancer, Diabetes, High blood pressure, Heart or
kidney disease, Mental illness or suicide?
(if yes, give relationship to the Insured and person's
age at occurrence.)
9 Have you ever requested or received a pension, benefits
or payment because of any injury, sickness or disability?
10 Have you ever been advised to change occupation,
residence or diet because of health?
I Underwriting Information OIR OR NOMINATOR
If more copies of Sections I & J are needed, take them from another application form, complete and attach to this form,
before mailing.
1 Insured's name (first) (mi) (last) Maiden name
2 Insured's role in this application (complete one)
"Other insured" under the Universal life insurance application.
Relationship to the insured under the base plan
Nominator
3 Birth date / / Birthplace
4 Male Female Marital status Citizenship U.S. Other
5 Insured's personal physician (if none, please write "None")
Name
Address (street, city, state, zip)
Phone ( ) Date and reason last consulted / /
6 If the insured is under 15, did the representative see this child?
7 Is there similar insurance in force or applied for on all brother
and sisters?
If no, explain
8 Give the amount of life insurance already in force on the person
responsible for the child's primary support $
<PAGE>
PAGE 8
I Underwriting Information OIR OR NOMINATOR
9 Has the Insured smoked cigarettes in the past 12 months? Yes No
If no, has the Insured ever smoked cigarettes? Yes No
date ceased smoking cigarettes
10 Has the Insured used tobacco in any other form? Yes No
If yes, what is used? what amount per day?
11 Has life, disability, accident, or sickness insurance on the Insured
been declined, postponed, modified, rated, canceled, or refused
reinstatement or renewal? Yes No
If yes, date Company
Reason
12 Does the Insured intend to travel outside the United States? Yes No
If yes, where? For how long? Yes No
13 Has the Insured flown during the past 5 years, or does he/she intend
to fly, as a pilot, crew member or passenger on other than a
scheduled airline? Yes No
(if yes, complete an Aviation Questionnaire)
14 Has the Insured participated during the past 5 years, or does
he/she intend to participate, in motorcycle riding or racing,
auto racing, scuba or sky diving, hang gliding or other hazardous
activities? (if yes, complete the appropriate questionnaire) Yes No
15 Current annual income (after business expense if self-employed)
a From current occupation $ Other (describe) $
16 Current primary occupation Years of Service
17 Occupational duties Employer
18 Life insurance, annuities, and disability insurance that the Insured currently has in force or has applied for:
(if none, check here )
Ins. Amt./ If D.I., yrs Will this If yes, termi-
Company Policy type Policy no. Policy Date Mo. Income payable ADB amt. be replaced?* nation date
/ / $ $ Yes No / /
/ / $ $ Yes No / /
/ / $ $ Yes No / /
/ / $ $ Yes No / /
*If the insurance being applied for will replace any existing insurance, see the Reference Manual for required papers.
<PAGE>
PAGE 9
J Medical History Questionnaire OIR OR NOMINATOR
Explain each question answered Yes. Include dates, reason for consultations, the patient or clinic number, and the
names and addresses of ally physicians, hospitals, etc., in the space to the right.
1 Height ft. in. Weight lbs.
Yes No Explanation
2 Are you now under observation or treatment?
3 Are you now pregnant or had difficulty in pregnancy?
4 Have you ever been treated for or been advised by a
physician of any disease of the:
a Heart, Blood, Blood vessels?
b Lungs, Respiratory system?
c Liver, Stomach, Intestines, Gall bladder, Rectum?
d Kidneys, Bladder, Genital organs, Urinary tract?
e Brain, Nervous system, Eyes, Ears?
f Back, Joints, Muscles, Skin?
5 Have you ever had or been told you had:
a Chest pain, High blood pressure, Heart murmur,
Rheumatic fever?
b Asthma, Shortness of breath, Allergies, Bronchitis
Tuberculosis?
c Stomach ulcers, Hemorrhoids, Hernia, Varicose veins?
d Nephritis, Kidney stone?
e Diabetes, Sugar, albumin or blood in urine?
f Fainting spells, Paralysis, Epilepsy, Nervous or mental
disorder?
g Deformity, Amputation, Arthritis?
h Cancer, Tumor, Goiter?
i Venereal disease?
j Immune deficiency disorder, AIDS, AIDS related complex
or test results indicating exposure to the AIDS virus?
k Other disease, disorder, physical or mental condition?
<PAGE>
PAGE 10
H Medical History Questionnaire (continued) BASE PLAN INSURANCE
6 Other than the above, have you within the last 5 years:
a Had a checkup, consultation, illness, injury, surgery?
b Had an electrocardiogram, x-ray, other diagnostic test?
c Been confined to a hospital, sanitarium or clinic?
d Been advised to have any diagnostic test, surgery, or
hospitalization which was not completed?
7 Have you ever:
a Received medical treatment for alcoholism or drug
addiction?
b Except as prescribed by a physician, used narcotics,
opiates, barbituates, hallucinogens or amphetamines on
a regular or habitual basis?
c Joined organization for alcoholism or drug addiction?
8 Do you have any family history (father, mother, brothers
or sisters) of:
Cancer, Diabetes, High blood pressure, Heart or
kidney disease, Mental illness or suicide?
(if yes, give relationship to the Insured and person's
age at occurrence.)
9 Have you ever requested or received a pension, benefits
or payment because of any injury, sickness or disability?
10 Have you ever been advised to change occupation,
residence or diet because of health?
K FIR/CIR Insureds (Spouse and children of the insured under the base plan)
1 Spouse proposed for insurance (complete only if FIR applied for)
a Name (first) (mi) (last) Maiden Name
b Birth date / / Birthplace Height Weight Amount of life insurance in force $
2 Unmarried children under age 19 (members of insured's household including natural, legally adopted and step children)
a Proposed for insurance Height Weight Physical/Mental
Name Birth date ft./in. lbs. abnormalities at birth? (if yes, explain here)
/ / / Yes No
/ / / Yes No
/ / / Yes No
/ / / Yes No
b Are there children not proposed for insurance listed above? (also under 19 and unmarried). Yes No
If yes, list names, birth dates and reason for exclusion.
3 Additional information about spouse and children proposed for insurance.
a Is anyone currently under treatment for any disease, physical or mental condition? Yes No
b Has anyone, in the last 5 years, consulted a physician or been confined to a hospital, sanitarium,
or clinic? Yes No
c Is this insurance intended to replace any existing insurance and/or annuity? Yes No
d If yes, to any of the above explain here:
<PAGE>
PAGE 11
L Business Insurance
1 Type: Buy/Sell Key Executive Business Debt Protection Business DI
Split-Dollar Executive Bonus Section 303 Redemption Deferred Compensation (non-government)
2 How was amount of application determined?
3 How will policy proceeds be used?
4 Business assets $ Liabilities $ Net worth $
Net after-tax profits in last 3 years (give year and amount) Insured's share of ownership
19 $ 19 $ 19 $ in the business
5 Insurance on other key individuals or owners
% Ownership
Name Applied for In force of the business
$ $
$ $
M Tax-qualified Retirement Plan
1 Type Profit Sharing (05) Assumed/Targed Benefit (04) 401(k) (02)
Money Purchase (06) Defined Benefit Pension (01) Other (10)
2 Plan Fiscal Year-end Mo. Day Plan Starting Date Mo. Yr.
3 Is the Plan an IDS Financial Services prototype? Yes No
4 Plan administrative assistance by IDS Financial Services? Yes No
5 If Custodial Plan, identify participant (Insured) as Employer/Sponsor Other participant
6 Source of employee contribution to Participant Account
Deductible Salary Reduction Non-deductible Voluntary Transfer/Rollover
7 Plan Entry Date for Participant (Insured) Mo. Yr.
N Remarks and Instructions to the Home Office
O Home Office Endorsements
For Home Office Use
Amount submitted IOM amount IOM date
<S> <C> <C>
$ $ / /
Purchase date Accepted by
/
</TABLE>
<PAGE>
PAGE 12
<TABLE><CAPTION>
IDS Life Insurance Company Insurance
IDS Tower Application
Minneapolis, Minnesota 55474
An American Express company
Agreement and Signature
Agreement
By signing this application, you acknowledge all of the following terms and conditions.
<S><C>
Adequate Information. You have received the Description of IDS Life's Information Practices, and you have read and
understood it.
When coverage begins. You agree that an insured for life or disability insurance will be covered prior to policy delivery
only when all of the following requirements have been met:
The owner has paid the full first premium, according to the mode of premium payment selected, for all insurance
applied for in this application (any check or draft for that payment must be honored by the bank); and
The Insured has submitted all medical and other information required by the company's written underwriting rules; and
The Insured is insurable on the Effective Date, as defined below, under the company's underwriting rules, for the
plan and amount of coverage at the rate applied for with no modification. "Effective Date" as used herein means the
later of: (a) the date of this application; or (b) the date of completion of all medical examinations and other
information required by the company's written underwriting rules.
In cases where the Insured is not insurable for the plan or the amount or at the rate applied for, coverage begins if
and when the company includes that person under a policy accepted by the owner.
For disability coverage, all disability policies specified to be discontinued in this application must also be
discontinued before coverage will begin. (This limitation is subject to the incontestability provision in the policy.)
Amount of coverage. Before the policies are delivered, the amount of coverage on each insured will be the total requested
for that person, up to a maximum of $150,000.
Company's responsibilities. You understand that:
Only the company has the authority to decide on insurability and risk classification and to bind the company to insure
the Insured;
If a policy does not go into effect, the company's sole liability will be to refund any premium paid, plus interest if
required by law;
Only statements made in writing will bind the company;
No change in or waiver of anything in this application or alteration of an insurance policy is binding unless it is in
writing and signed by an officer of the company; and
By accepting a policy, the owner ratifies any changes entered at any time in the Home Office Endorsements section of
this application. However, the owner must sign a separate written document for any change in type of plan, amount,
benefits or Insured's risk classification.
Any insurance provided by this agreement will be subject to the conditions and terms of the policy applied for.
Release of Information. It is our policy and practice to respect each individual's right to privacy. Releasing limited
client information occurs when there is a service we do not provide and believe could meet your specific financial
needs. If you object to such release, please indicate this on the application or by writing to us.
Virginia applications only. You agree that the completed application has been read by or to you and you understand that
any false statement or misrepresentation may result in loss of coverage under this policy.
Qualified Plans only. You certify that the plan stated in item B is qualified under Section 401(a) of the United States
Internal Revenue Code. This policy will be issued based on representations by you that the Plan is qualified.
Declaration
You declare that each of the answers made in this application is true and complete to the best of you knowledge and
belief and will be a basis for any policy issued. You also acknowledge that you have received a copy of this agreement
and receipt for any premium paid with this application.
<PAGE>
PAGE 13
Variable life/variable universal life. If you have applied for this type of insurance, check each of the following to
acknowledge that you have read and understood them:
Adequate information. You have received the current prospectuses for the policy applied for and any funds
involved.
Purpose. You agree that this variable type of insurance is in accord with your insurance and financial
objectives.
Variable values. The amount of Death Benefit and Policy Value can both increase and decrease, however the Death
Benefit will never be less than any Guaranteed Minimum Death Benefit.
Fees and charges. The fees and charges (including possible surrender charges) have been explained to you and
are also explained in detail in the policy.
Universal Life Insurance. If you have applied for this type of insurance, you acknowledge that you have been informed
that (1) the company may periodically change the current interest rate being credited on cash valueds, and (2) that
surrender charges may apply in certain circumstances.
Consolidated Statement
IDS periodically sends out information for each of its accounts, which are consolidated into one Statement covering all
owned by members of the same household. If you don't want this account reported that way, check here .
Authorization to Obtain Information - IDS Life Insurance Company
You authorize any physician, medical practitioner, hospital, other medical facility, the Medical Information Bureau
and other organization or person having medical and other information about you and your minor children to give that
information about you and your minor children to give that information to the company or its reinsurer. You understand
that the company will use this information to determine eligibility for insurance and benefits. The company will not
release the information except to a reinsurance company, the Medical Information Bureau, and any person or organization
providing business or legal services relating to your application or any claim. You know that your medical records,
including any alcohol or drug abuse information, may be protected by Federal Regulation 42 CFR Part 2.
You authorize the company to obtain investigative consumer reports on you and your minor children. You understand
that you have the right to request a personal interview if an investigative consumer report is obtained.
You agree that a photographic copy of this authorization will be as valid as the original.
You agree that this authorization will be valid for two and on-half years from the date shown below.
Signatures (Insureds under age 15 need not sign.)
Insured (base plan) X OIR Insured X
FIR Spouse X OIR Insured X
Nominator X OIR Insured X
Owner's signature X (omit if owner already signed as in Insured)
Signed at (city) (state) on (date)
Receipt
All checks must be completed in full and made payable to the company (not to the representative).
Received from the sum of $ with this application.
No money paid with this application.
Representative's Report
a Is Insured related to representative? Yes, give relationship No, how long acquainted?
b If the Insured must be called, give best time to call, between
8 a.m.-4:30 p.m. CST, M-F: and phone:( )
c Medical requirements (check one)
Medical examination not required. Insured must complete the medical history questionnaire
Insured must have medical exam Examiner Date of exam appointment / / Type A B C D E
(circle one)
OIR must have medical exam Examiner Date of exam appointment / / Type A B C D E
(circle one)<PAGE>
PAGE 14
You certify that you personally requested the information in this application and witnessed its signing and received any
money that was paid. You are not aware of anything detrimental to the risk that is not recorded in this application.
To the best of your knowledge and belief this application does does not involve replacement of existing
insurance annuities.
Virginia applications only: You certify that the paragraph marked "Virginia applications only," in the Agreement
above, was discussed with the client and its terms were satisfied.
Representative's signature No. DSO
Representative's name (print) Phone ( )
Junior Trainer name (print) No.
33886B (10/86)
/TABLE
<PAGE>
<PAGE>
PAGE 1
IDS LIFE INSURANCE COMPANY'S
DESCRIPTION OF TRANSFER AND REDEMPTION PROCEDURES AND
METHOD OF CONVERSION TO FIXED BENEFIT POLICIES
This document sets forth, as required by Rule
6e-3(T)(b)(12)(ii), the administrative procedures that will be
followed by IDS Life Insurance Company ("IDS Life") in connection
with the issuance of its flexible premium variable life insurance
policy ("Policy"), the transfer of assets held thereunder, and the
redemption by Policyowners of their interests in said policies.
The document also describes the method that IDS Life will use when
a Policy is exchanged for a fixed benefit insurance policy pursuant
to Rule 6e-3(T)(b)(13)(v)(B).
TRANSFER AND REDEMPTION PROCEDURES
I. Purchase and Related Transactions
A. Premium Schedules and Underwriting Standards
This policy is a flexible premium policy. The Policyowner has
flexibility, subject to certain restrictions, in determining the
amount and frequency of premium payments. At the time of
application, the Policyowner will determine a Scheduled Premium.
The Scheduled Premium is a level amount at a fixed interval of
time. however, the Policyowner can change the Scheduled Premium,
skip premium payments or make additional premium payments.
Generally, the Policyowner may, subject to certain restrictions,
make premium payments in any amount and at any frequency.
Failure to pay a Scheduled Premium will not itself cause a
Policy to lapse. Payment of Scheduled Premiums, however, will not
guarantee that it will remain in force. (For further information
about when a Policy will lapse, see page 7.)
Each month, a deduction is made from the Policy Value for the
cost of insurance and the cost of any riders. This deduction is
based on the age, sex and rate classification of the Insured.
The Policies will be offered and sold pursuant to established
underwriting standards, and in accordance with state insurance
laws, which prohibit unfair discrimination among Policyowners, but
recognize that insurance costs must be based upon factors such as
age, sex, health or occupation.
B. Application and Initial Premium Processing
Upon receipt of a completed application, IDS Life will follow
certain insurance underwriting (i.e., evaluation of risks)
procedures designed to determine whether the proposed Insured is
insurable. This process may involve such verification procedures
as medical examinations and may require that further information be
provided by the proposed Insured before a determination can be
made. A Policy will not be issued and consequently a Policy Date
established, until this underwriting procedure has been completed.
<PAGE>
PAGE 2
If a premium is submitted with the Policy application,
insurance coverage will begin immediately if the Insured is
insurable under a temporary insurance agreement. Otherwise,
insurance coverage will not begin until coverage is approved by IDS
Life.
If a premium is not paid with the application, insurance
coverage will begin on the date the premium is received, if the
Insured is insurable under a temporary insurance agreement, or on
the later of the date the premium is received or the date IDS Life
approves coverage if the Insured is not insurable under a temporary
insurance agreement.
C. Premium Allocation
In the application for a Policy, the Policyowner can allocate
premiums to the Fixed Account and/or the subaccounts. Until the
date that an application is approved by IDS Life's underwriting
department, the premiums received by IDS Life are held in IDS
Life's Fixed Account and interest at the current Fixed Account rate
is credited on the net premiums. As of the date IDS Life's
underwriting department approves the application, the net premiums
plus interest accrued thereon will be allocated to the Fixed
Account and/or the subaccounts in accordance with the allocation
instructions received from the Policyowner in the application.
Future net premiums will be allocated to the Fixed Account and/or
the subaccounts, in accordance with the application allocation
instructions unless the Policyowner changes the allocation
instructions by written request. Net premiums received after the
date IDS Life receives the new instructions, will be allocated to
the Fixed Account and/or the subaccounts, based on the new
allocation instructions.
D. Repayment of Loan
A loan made under the policy will be subject to an interest
rate of 6.1% per year payable in advance. The Policyowner can at
any time make a loan repayment which must be at least $25 or 100%
of the amount of the outstanding loan, if less.
When a loan is made, any loan taken from the subaccounts will
be transferred to the Fixed Account. The portion of the Fixed
Account Value which equals indebtedness will be credited with
interest at a rate of 4.5%.
All loan repayments will be allocated to the Fixed Account
and/or the subaccounts, using the premium allocation percentages in
effect at the time of payment unless the Policyowner specifies that
the loan repayment is to be allocated in a different manner.
II. Transfer Among the Subaccounts and the Fixed Account
The Policy currently has a Fixed Account and eight
subaccounts. Five of the subaccounts invest in portfolios of IDS
Life Series Fund, Inc. Three of the subaccounts invest in units of
the Shearson lehman Brothers ("Zero Coupon") U.S. Treasury
Securities Fund, Series A.<PAGE>
PAGE 3
Except as noted in the next paragraph, the Policyowner may
transfer at any time all or part of the value of a subaccount to
other subaccounts, or to the Fixed Account by written request or
other requests acceptable to IDS Life. Each transfer must be for a
minimum of $250 or, if the value of the subaccount is less than
$250, the value of the subaccount. The transfer will take effect
on the date the request is received by IDS Life. Five transfers
may be made each policy year.
The Policyowner may also transfer from the Fixed Account to
the subaccounts once a year but only on a policy anniversary or
within 30 days after such policy anniversary. If such a transfer
is made, the Policyowner cannot transfer from the subaccounts back
to the Fixed Account until the next policy anniversary. If IDS
Life receives a request within 30 days before a policy anniversary
date, the transfer will be effective on the anniversary date. If
IDS Life receives a request within 30 days after a policy
anniversary date, the transfer will be effective on the date the
request is received by IDS Life. The minimum transfer amount is
$250 or the Fixed Account Value less indebtedness, if less. The
maximum transfer amount is the Fixed Account Value less
indebtedness.
The owner also may request a transfer by calling IDS Life.
IDS Life has the authority to honor any telephone transfer request
believed to be authentic. IDS Life is not responsible for
determining the authenticity of such calls. A transfer request
received before 3 p.m. Central time (which is 4 p.m. New York time)
will be processed the same day. If a call or written request is
received after 3 p.m. Central time, the request will be processed
the following business day.
III. "Redemption" Procedures: Surrender and Related Transactions
A. Surrender for Cash Value
At any time before the death of the Insured, the Policyowner
may completely Surrender the Policy by written request. Any
Surrender payment from the subaccounts will be made within seven
days after IDS Life receives the Written request, unless payment is
postponed pursuant to the relevant provisions of the Investment
Company Act of 1940. Any surrender payment from the Fixed Account
may be postponed for up to 6 months. If IDS Life postpones payment
more than 30 days, interest at an annual rate of 3 percent will be
paid on the amount surrendered for the period of postponement. The
Surrender payment will equal the Policyowner's Policy Value minus
Indebtedness and, during the first ten Policy Years, or during the
ten years after a requested increase in Specified Amount, the
Surrender Charge.
<PAGE>
PAGE 4
After the first policy year, the Policyowner may also request
a partial surrender up to 85 percent of the Policy's Cash Surrender
Value by written request or by calling IDS Life. IDS Life has the
authority to honor any telephone surrender request believed to be
authentic. IDS Life is not responsible for determining the
authenticity of such calls. A surrender request received before
3 p.m. Central time (which is 4 p.m. New York time) will be
processed the same day. If the call or written request is received
after 3 p.m., the request will be processed the following business
day. A fee of $25, but not exceeding 2 percent of the amount
surrendered is assessed for each partial surrender. The amount of
any partial surrender must be at least $500.
B. Benefit Claims
As long as the Policy remains in force, IDS Life will pay a
death benefit to the named beneficiary after receipt of due proof
of death of the Insured unless the Policy is contested. The amount
of the death benefit will be determined as of the date of death of
the Insured. The death benefit proceeds will include interest form
the date of death until the date of payment. The death benefit
proceeds payable will be reduced by any Loan Balance.
The Policy provides two Death Benefit Options - Option 1 (a
level amount option) and Option 2 (a variable amount option). The
Policyowner chooses which option applies.
Under Option 1, the death benefit is the greater of
1) the Specified Amount; or
2) the applicable percentage of the Policy Value.
Under Option 2, the death benefit is the greater of
1) the Policy Value plus the Specified Amount; or
2) the applicable percentage of the Policy Value.
In lieu of payment of the death benefit in a single sum, an
election may be made to apply all or a portion of the proceeds
under one of the fixed benefit settlement options described in the
Policy. The election may be made by the Policyowner during the
Insured's lifetime. The beneficiary may make an election unless
the Policyowner has already done so. The fixed benefit settlement
options are subject to the restrictions and limitations set forth
in the policy.
C. Policy Lapsation
A lapse will occur if, on a monthly date, the Cash Surrender
Value is less than the monthly deduction for the policy month
following such monthly date, and the policy is not being continued
under the Death Benefit Guarantee provision. If lapse is going to
occur, IDS Life will notify the Policyowner, and the Policyowner
will have a 61 day grace period to make a premium payment so that
the estimated Cash Surrender Value will be sufficient to cover the
next three monthly deductions.<PAGE>
PAGE 5
The Death Benefit Guarantee provision provides that, until the
insured's attained age 70, or five years from the Policy Date,
whichever is later, the policy will not lapse even if the Cash
Surrender Value cannot cover the monthly deduction on a monthly
date if (a) equals or exceeds (b) where:
(a) is the sum of all premiums paid minus any partial
surrenders and minus any indebtedness, and
(b) in the minimum monthly premiums show in the Policy
times the number of months since the Policy Date,
including the current month.
D. Loans
The Policyowner may take loans under the Policy at any time as
long as the resulting Indebtedness (including any existing
indebtedness) does not exceed 85% of the Policy Value, less
surrender charges. The Policy is the only security for the loan.
The requested loan amount will be taken from the Fixed Account and
the subaccounts in proportion to their respective Values on the
date of the loan, unless the Policyowner requests a different
allocation. Any loan taken from the subaccount will be transferred
to the Fixed Account. The minimum loan amount is $500. (For
further information about the loan provisions, see page 3.)
The owner may obtain a loan by sending a written request or
calling IDS Life. IDS Life has the authority to honor any
telephone loan request believed to be authentic. IDS Life is not
responsible for determining the authenticity of such calls. A loan
request received before 3 p.m. Central time (which is 4 p.m. New
York time) will be processed the same day. If the call or written
request is received after 3 p.m., the request will be processed the
following business day.
CASH ADJUSTMENT UPON EXCHANGE OF CONTRACT
At any time within 24 months of the Policy's Policy Date, the
Policyowner may exchange the Policy for a Flexible Premium
Adjustable Whole Life Policy which provides for benefits that do
not vary with the investment return of the Variable Account. The
exchange is accomplished by transferring all of the Policy Value in
the subaccounts to the Fixed Account.
<PAGE>
<PAGE>
PAGE 1
June 5, 1987
Board of Directors
IDS Life insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
Gentlemen:
As Counsel of IDS Life Insurance Company ("Company"), I am familiar
with the establishment of the IDS Life Variable Life Separate
Account which is a separate account of the Company established by
the Company's Board of Directors pursuant to Section 61A.14 of the
Minnesota statutes. I am also familiar with the Registration
Statement Form S-6 and Pre-Effective Amendments Nos. 1 and 2
thereto (File No. 33-11165), filed by the Company on behalf of the
Account with the Securities and Exchange Commission with respect to
an indefinite amount of securities entitled Flexible Premium
Variable Life Insurance Policy ("Policy").
I have made such examination of law and examined such documents and
records as in my judgement are necessary and appropriate to enable
me to opine as follows:
1. IDS Life Variable Life Separate Account is a separate account
of the Company, duly established and validly existing pursuant
to Minnesota law, and is registered as a unit investment trust
under the Investment Company Act of 1940.
2. The Policy, when issued, offered and sold in accordance with
the Prospectus contained in the aforesaid Registration
Statement and, upon compliance with local law, will be a legal
and binding obligation of the Company in accordance with its
terms.
3. There is no limitation as to the number of units of the
Account that may be issued.
4. Assets allocated to and held in the Account pursuant to
Minnesota statutes in accordance with the Policy are not
chargeable with liabilities arising out of any other business
the Company may conduct.
There are no material pending or threatened litigation, claims or
assessments (including any unasserted claims or assessments)
against the Account.
<PAGE>
PAGE 2
June 5, 1987
Page Two
Please be advised you are correct in your understanding that I will
advise and consult with you concerning questions of disclosure and
the applicable requirements of Statements of Financial Accounting
Standards No. 5 if, and when, in the respect to a matter recognized
by me to involve an unasserted claim or assessment that may require
financial statement disclosure, I have formed a professional
conclusion that you must disclose or consider disclosure of any
such possible claim or assessment in your financial statements.
You may furnish a copy of this letter to your independent
accountants.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
William A. Stoltzmann
Associate General Counsel
WAS/plp
<PAGE>
