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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO 5 TO
FORM N-8B-2
FILE NO. 811-4298
DATED September 21, 1995
REGISTRATION STATEMENT OF UNIT INVESTMENT TRUSTS
WHICH ARE CURRENTLY ISSUING SECURITIES
Pursuant to Section 8(b) of the Investment
Company Act of 1940
IDS Life Variable Life
Separate Account
Issuer of Periodic Payment Plan Certificates
C/O IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440-0010
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PAGE 2 I.
ORGANIZATION AND GENERAL INFORMATION
1. (a) Furnish name of the trust and Internal Revenue Service
Employer Identification Number.
IDS Life Variable Life Separate Account (Hereinafter
called "the Variable Account").
The Variable Account does not have an IRS Employer
Identification Number.
(b) Furnish title of each class or series of securities
issued by the trust.
Single Premium Variable Life Insurance Policy
Flexible Premium Variable Universal Life Insurance
Policy
Flexible Premium Survivorship Life Insurance Policy
2. Furnish name and principal business address and zip code and
the Internal Revenue Service Employer Identification Number
of each depositor of the trust.
IDS Life Insurance Company ("IDS Life)
IDS Tower 10
Minneapolis, MN 55440-0010
IRS Employer #41 082 3832
3. Furnish name and principal business address and zip code and
the Internal Revenue Service Employer Identification Number
of each custodian or trustee of the trust indicating for
which class or series of securities each custodian or trustee
is acting.
Not applicable.
4. Furnish name and principal business address and zip code and
the Internal Revenue Service Employer Identification Number
of each principal underwriter currently distributing
securities of the trust.
As of the date of the original registration statement, no
policies were being distributed. IDS Life is the exclusive
distributor of the policies currently being distributed and
may be deemed to be the principal underwriter thereof.
5. Furnish name of state or other sovereign power, the laws of
which govern with respect to the organization of the trust.
Minnesota
6. (a) Furnish the dates of execution and termination of any
indenture or agreement currently in effect under the terms of
which the trust was organized and issued or proposes to issue
securities.<PAGE>
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The Variable Account was established as a separate account of
IDS Life pursuant to a resolution of the Board of Directors
of IDS Life adopted on October 16, 1985.
The Variable Account will continue in existence until its
complete liquidation and the distribution of its assets to
the persons entitled to receive them.
(b) Furnish the dates of execution and termination of any
indenture or agreement currently in effect pursuant to
which the proceeds of payments on securities issued or
to be issued by the trust are held by the custodian or
trustee.
There is no separate Custodian Agreement. The assets
of the Variable Account will be held by IDS Life as a
separate account for the exclusive benefit of Owners
having an interest therein.
7. Furnish in chronological order the following information with
respect to each change of name of the trust since January 1,
1930. If the name has never been changed, so state.
The name of the Variable Account has never been changed.
However, the Variable Account is a Successor Issuer to IDS
Life Accounts P, Q, R, S, and T which previously filed this
Registration Statement with the Commission on May 10, 1985.
8. State the date on which the fiscal year of the trust ends.
The fiscal year of the Variable Account ends December 31.
Material Litigation
9. Furnish a description of any pending legal proceedings,
material with respect to the security holders of the trust by
reason of the nature of the claim or the amount thereof, to
which the trust, the depositor, or the principal underwriter
is a party or of which the assets of the trust are the
subject, including the substance of the claims involved in
such proceedings and the title of the proceeding. Furnish a
similar statement with respect to any pending administrative
proceeding commenced by a governmental authority or any such
proceeding or legal proceeding known to be contemplated by a
governmental authority. Include any proceeding which,
although immaterial itself, is representative of, or one of,
a group which in the aggregate is material.
The Variable Account is a not party to any legal or
administrative proceedings. IDS Life is engaged in
litigation of various kinds which is, in its judgment, not of
material importance.
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II.
GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
General Information Concerning the Securities of the Trust and the
Rights of Holders
10. Furnish a brief statement with respect to the following
matters for each class or series of securities issued by the
trust:
(a) Whether the securities are of the registered or bearer
type.
The Policies are of the registered type insofar as each
Policy is personal to the Owner, the records concerning
the Owner are maintained by IDS Life, and ownership
cannot be transferred except upon notice to IDS Life.
(b) Whether the securities are of the cumulative or
distributive type.
The Policies are of the cumulative type, providing for
no distribution of income, dividends or capital gain,
except in connection with surrender or payment of
proceeds upon the death of the Insured.
The Policy is non-participating.
(c) The rights of security holders with respect to
withdrawal or redemption.
Policy 1
The Owner may obtain a refund of the entire amount of
any premiums paid under the Policy without limitation
as to amount or payment of any fee or penalty, provided
that the Owner returns the Policy, with a written
request for cancellation, to the Company or its
representative by the latest of:
a) the 10th day after receipt of the Policy by the
Owner; or
b) within 10 days after IDS Life mails or personally
delivers a written notice of withdrawal right; or
c) the 45th day after the application is signed.
In such event, the Company will refund the premium that
was paid within seven days after receipt of the policy.
The Owner may surrender the Contract subject to the
following rules. A request for surrender must be made
in writing by the Owner to IDS Life at its Home Office.
IDS Life may require that the Policy be returned to it.
IDS Life will compute the Surrender Value as of the end<PAGE>
PAGE 5
of the Valuation Period during which the surrender
request is received at Its Home Office. The Surrender
Value of the Variable Account will be paid within seven
days after the Owner's written request is received by
IDS Life at its Home Office, however, IDS Life reserves
the right to defer any payment of Surrender Value of
the Variable Account (1) which derives from a Premium
Payment made by a check which has not cleared the
banking system (good payment has been collected), or
(2) if (a) the New York Stock Exchange is closed (other
than customary weekend and holiday closing), (b)
trading on the Exchange is restricted; (c) an emergency
exists such that it is not reasonably practical to
dispose of securities held in the Accounts or to
determine the value of the Accounts' net assets; or (d)
the Securities and Exchange Commission by order so
permits for the protection of security holders.
Conditions described in (b) and (c) will be decided by
or in accordance with rules of the Securities and
Exchange Commission.
No sales charge is deducted from the premium payments.
However, IDS Life will use a Surrender Charge to help
it recover certain expenses relating to the sale of the
Policy, including commissions paid to sales personnel,
other promotional and selling expenses, and
underwriting and issue expenses. The Surrender Charges
are shown on the Policy Data page of the Policy. They
apply for the first 8 years after the Policy is issued.
At the time of issue, a schedule of Surrender Charges
varying by policy duration is assigned to the Policy.
These Surrender Charges are a percentage of the Policy
Value at the time of Surrender. The charge will never
exceed 9% of the single premium paid by the Owner.
Policy 2
The Policy may be returned for a full refund of the
premiums paid, for any reason, if it is returned by the
Owner to IDS Life or its representative, with a written
request for cancellation, by the latest of: (a) the
10th day after it is received by the Owner; or b) the
10th day after IDS Life mails or personally delivers a
written notice of withdrawal right; or c) the 45th day
after the application is signed. Immediately on such
mailing or delivery, the Policy will be considered void
from the start.
The Policy may be totally surrendered for its Cash
Surrender Value. This is the Policy Value less
indebtedness and less any applicable Surrender Charges.
The Owner may surrender the policy in whole or in part
subject to the following rules. A request for
surrender may be made in writing by the owner to IDS
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Life at its home office. The Owner also may request a
partial surrender by calling IDS Life. Partial
surrenders by telephone are limited to $50,000. 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. IDS Life may require that
the Policy be returned to it. IDS Life will compute
the cash surrender value of the Variable Account as of
the end of the valuation period during which the
surrender request is received at its home office.
The cash surrender value will be paid within seven days
after the Owner's written request is received by IDS
Life at its home office, however IDS Life reserves the
right to defer any payment of cash surrender value (1)
which derives from a premium payment made by a check
which has not cleared the banking system (good payment
has been collected), or (2) if (a) the New York Stock
Exchange is closed (other than customary weekend and
holiday closings), (b) trading on the Exchange is
restricted; (c) an emergency exists such that it is not
reasonably practical to dispose of securities held in
the Variable Account or to determine the value of the
Variable Account's net assets; or (d) the SEC by order
so permits for the protection of security holders.
Conditions described in (b) and (c) will be decided by
or in accordance with rules of the SEC. Any excess of
the cash surrender value plus policy loans over the
premium paid, would, upon surrender, generally be
taxable to the Owner. Any surrenders of the Policy
Value 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.
During the first 10 policy years and during the first
10 years following any requested increase in Specified
Amount, IDS Life will make a Surrender Charge if the
Owner surrenders the Policy or the Policy lapses. The
Surrender Charge has two parts - the Contingent
Deferred Issue and Administrative Expense Charge.
The maximum Contingent Deferred Sales Charge and the
maximum Contingent Deferred Issue and Administrative
Expense Charge for the Initial Specified Amount or any
requested increase in Specified Amount will be
determined on the Policy Date or on the effective date
of any such requested increase, as the case may be. In
general, these maximum charges remain level for the
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PAGE 7
first five years in the relevant 10-year period, and
then reduce in equal monthly increments until they
become zero at the end of 10 years.
The Surrender Charge on the Initial Specified Amount is
the lesser of:
1. The amount shown in the Surrender Charge
Table on the policy data page of the
Policy, or
2. An amount equal to (a) plus (b) plus (c);
where (a) is 27.5% of premium payments up
to a maximum amount shown in -the policy,
(b) is 6.5% of all other premium payments,
and (c) is $4.00 in policy years 1-5, times
the number of thousands of dollars of
initial specified amount. After year 5,
amount (c) decreases monthly, and will be
zero at the end of year 10.
After 5 years, the maximum surrender charge decreases
on a monthly basis at a rate of 20% per year. For an
increase in specified amount, the new surrender charge
for the increase is the lesser of:
1. The amount shown in the table on the policy
data page of a policy that applies to the
increased specified amount, or
2. An amount equal to (a) plus (b); where (a)
is 6.5% of all premium payments
attributable to the increase and (b) is, in
the first five years following the
increase, $4.00 times the number of
thousands of dollars of the increase in the
specified amount. After the fifth year
following the increase amount (b) decreases
monthly and will be zero at the end of the
tenth year following the increase.
A charge of $25.00 (or 2 percent of the amount
surrendered, if less) will be imposed for each partial
surrender.
For an Owner and or beneficiary to receive the
favorable tax treatment accorded by Section 72, 101 and
7702 of the Internal Revenue Code, the policy must
initially qualify and continue to qualify as life
insurance under applicable tax law. To make sure that
the policy continues to qualify. IDS Life has reserved
in the policy the rights:
to decline to accept premium payments,
to decline to change death benefit options,
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PAGE 8
to decline to permit partial surrenders, and
to decline to decrease the Specified Amount,
that would cause the policy to fail to qualify as life
insurance under applicable tax law. IDS Life may also
make changes in the policy or its riders or make
payments from the policy to the extent it deems
necessary to continue to qualify the policy as life
insurance.
Policy 3
The Policy may be returned for any reason, and the
owner will receive a full refund of all premiums paid.
To do so, the owner must mail or deliver the policy to
IDS Life or their financial advisor, with a written
request for cancellation, by the latest of:
o the 10th day after they have received it (15th
day in Colorado, 20th day in North Dakota);
o the 10th day after IDS Life mails or personally
delivers a written notice of withdrawal right
(15th day in Colorado, 20th day in North Dakota);
or
o the 45th day after they sign the application.
On the date the request is postmarked or received, the
policy will immediately be considered void from the
start.
If the owner surrenders the policy or the policy lapses
during the first 15 policy years, a surrender charge
will be assessed. The surrender charge is a contingent
deferred issue and administration expense charge. It
reimburses IDS Life for costs if 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.
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 15 policy years.
If the owner surrenders part of the value of their
policy, they will be charged $25 (or 2% of the amount
surrendered, if less). This fee is guaranteed not to
increase for the duration of the policy. IDS Life does
not expect to make a profit on this fee.
The owner may surrender the policy in full or in part
by written or telephone request. 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. IDS Life
may require the owner return the policy.
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IDS Life will normally process the payment within seven
days; however, it reserves the right to defer payment.
IDS Life reserves 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 IDS Life postpones the payment of
surrender proceeds more than 30 days, it will pay the
owner interest on the amount surrendered at an annual
rate of 3% for the period of postponement.
Total surrenders: If the owner surrenders the policy
totally, they will receive its cash surrender value --
the policy value minus outstanding indebtedness and
applicable surrender charges. IDS Life will compute
the value of each subaccount as of the end of the
valuation period during which the owner's request is
received.
Partial surrenders: After the first policy year, the
owner may surrender any amount from $500 up to 85% of
the policy's cash surrender value. (Partial surrenders
by telephone are limited to $50,000.) The owner will
be charged a partial surrender fee of $25 (or 2% of the
amount surrendered if less).
Allocation of partial surrenders: Unless the owner
specifies 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, IDS Life first subtracts
the amount of any outstanding indebtedness from the
fixed account value.
(d) The rights of security holders with respect to
conversion, transfer, partial redemption and similar
matters.
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PAGE 10
Policy 1
The Owner may transfer all or a part of the Policy
Value held in one or more of the Subaccounts of the
Variable Account to another one or more of the
Subaccounts. Currently there are five Subaccounts of
the Variable Account. At the present time, IDS Life
limits the number of transfers between Subaccounts to
five per policy year. Each such transfer will be made,
without the imposition of any fee or charge, as of the
end of the Valuation Period during which IDS Life
receives a valid, complete transfer request. The
minimum transfer amount is $250 from a Subaccount or,
if less, the entire Policy Value in the Subaccount from
which the transfer is being made. The transfer
privileges may be suspended or modified by IDS Life at
any time, but no such modification will be made without
any necessary approval of the SEC. Transfers may be
made by the Owner instructing IDS Life in writing of
his/her request to transfer the Policy Value to another
Subaccount(s).
Telephone Transfers. The Owner may also request a
transfer by calling IDS Life if IDS Life has received
authorization to honor such requests by a completed
authorization form supplied by IDS Life. This
authorization form gives IDS Life the authority to
honor any telephone transfer request believed to be
authentic. IDS Life is not responsible for determining
the authenticity of such calls.
After the authorization is received by IDS Life, a
written statement will be sent to the Owner confirming
that the service is available. It will also provide
the Owner instructions on how to use the telephone
transfer service.
A transfer request received before 3:00 p.m.
Minneapolis time will be processed the same day. If
the call is received after 3:00 p.m., the request will
be processed the following business day.
During the first two years after the Policy has been
issued, the Owner has the right on one occasion to
exchange the Policy for a Single Premium Whole Life
Policy which provides for benefits that do not vary
with the investment return of the Variable Account.
The new policy's death benefit will be the same as the
initial death benefit of the variable life policy. It
will also have the same date of issue. IDS Life will
not require evidence of the insured's insurability
before an exchange. The new policy will be issued at
IDS Life's then standard insurance rates. IDS Life
will require that any policy loan plus accrued interest
be repaid before the exchange. There will be an
adjustment in the Policy Values upon exchange. If<PAGE>
PAGE 11
investment performance of the Variable Account has been
poor, the Owner may need to pay an additional premium.
If investment performance has been better than
expected, the Owner may receive a refund of some Policy
Value. There may be Federal Income Tax Consequences
from such a refund. The adjustment therefore will
reflect the investment performance of the variable life
policy. IDS Life has filed a description of the method
it uses to calculate the adjustment with the Securities
and Exchange Commission and the appropriate state
insurance officials.
Policy 2
By written request, or other requests acceptable to IDS
Life, the Owner may transfer all or part of the value
of a subaccount to one or more of the other subaccounts
or to the fixed account. The amount transferred,
however, must be at least 1) $250; or 2) the total
value in the subaccount, if less. Only five such
transfers may be made in a policy year. This
limitation does not include automatic reallocations of
Trust values. Except as discussed in the following
paragraph, each such transfer will be made without the
imposition of any fee or charge, as of the end of the
valuation period during which IDS Life receives a valid
complete transfer request. IDS Life may suspend or
modify this transfer privilege at any time with any
necessary approval of the Securities and Exchange
Commission. The Owner may also transfer from the fixed
account to the subaccounts once a year but only on the
policy anniversary or within 30 days after such policy
anniversary. If the Owner makes this transfer, he or
she cannot transfer from the subaccounts back into the
fixed account until the next policy anniversary. IDS
Life will waive this limitation once during the first
two policy years if the Owner exercises the policy's
Right to Exchange provision. If IDS Life receives a
written request within 30 days before the policy
anniversary date, the transfer from the Fixed Account
to the subaccounts will be effective on the anniversary
date. If IDS Life receives a written request within 30
days after the policy anniversary date, the transfer
from the Fixed Account to the subaccounts will be
effective on the date IDS Life receives the request.
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. This transfer privilege may be suspended
or modified by IDS Life at any time.
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.
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PAGE 12
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.
In addition to written and phone requests, the owner
can arrange to have policy value transferred from one
account to another automatically. The requirements
are:
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 The owner can start or stop this service by
written request. The owner must allow seven days
for IDS Life 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 the owner has made a transfer from the fixed
account to one or more subaccounts, the owner may
not make a transfer from any subaccount back to
the fixed account until the next policy
anniversary.
o If the 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.
After the first policy year, the Owner may also request
to surrender up to 85 percent of the Policy's Cash
surrender Value. A fee of $25.00 is assessed for each
partial surrender. However, the fee will not exceed 2
percent of the amount surrendered. This charge is
guaranteed not to increase for the duration of the<PAGE>
PAGE 13
Policy. The amount of any partial surrender must be at
least $500.00. Partial surrenders by telephone are
limited to $50,000.
Unless the Owner specifies a different allocation, IDS
Life will make partial surrenders from the Fixed
Account and the subaccounts of the Variable Account on
a proportionate basis based upon the policy value.
These proportions will be determined at the end of the
valuation period during which a request is received.
For purposes of determining these proportions, any
outstanding loan amount is first subtracted from the
Fixed account value.
The Policy Value will be reduced by the amount of any
partial surrender and partial surrender fee. The Death
Benefit will also be reduced by the amount of the
partial surrender and partial surrender 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.
If Option 1 is in effect, the Specified Amount will be
reduced by the amount of the partial surrender and
partial surrender fee. When increases in the Specified
Amount have occurred previously, IDS Life will reduce
the current Specified Amount by the amount of the
partial surrender in the following order:
(a) the Specified Amount provided by the most recent
increase;
(b) the next most recent increases successively; and
(c) the Specified Amount when the policy was issued.
Thus, partial surrenders may affect the way in which
the cost of insurance is calculated and the net amount
at risk under the Policy.
IDS Life does not allow a partial surrender if the
Specified Amount after a partial surrender would be
less than the Minimum Specified Amount.
If Option 2 is in effect, a partial surrender does not
affect the Specified Amount.
A partial surrender may also cause the termination of
the Death Benefit Guarantee because the amount of the
partial surrender is deducted from the total premiums
paid in calculating whether sufficient premiums have
been paid in order to maintain the Death Benefit
Guarantee.
During the first two years after the Policy has been
issued, the owner has the right on one occasion to
exchange the Policy for a Flexible Premium Adjustable<PAGE>
PAGE 14
Whole Life Policy which provides for benefits that do
not vary with the investment return of the Variable
Account. This will be accomplished by transferring all
of the Policy Value in the Variable Account to the
Fixed Account.
If at any time during the first two policy years the
Owner requests a transfer from the Variable Account to
the Fixed Account and indicates that the transfer is in
exercise of this conversion right, the transfer will
not count against the five-transfers-per-year limit.
Also, any restrictions which may exist on transfers
into the Fixed Account will be waived for this one
time, if the Owner is exercising the conversion right.
At the time of such transfer, there is no effect on the
Policy's Death Benefit, Specified Amount, net amount at
risk, Rate Class(es) or issue age - only the method of
funding the policy value under the Policy will be
affected.
If the Owner transfers all of the values in the
Variable Account to the Fixed Account and indicates
that this transfer is in exercise of this conversion
right, IDS Life will automatically credit all future
premium payments on the Policy to the Fixed Account
unless the Owner requests a different allocation.
Policy 3
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 to age 85 (DBG-85) or the Death
Benefit Guarantee to age 100 (DBG-100). The
surrender amount is deducted from total premiums
paid, which may reduce the total below the level
required to keep the DBG-85 or the DBG-100 in
effect.
o If Option 1 is in effect, the specified amount
will be reduced by the amount of the partial
surrender and fee.
Because the specified amount is reduced, partial
surrenders may affect the cost of insurance. IDS
Life will not allow a partial surrender if it<PAGE>
PAGE 15
would reduce the specified amount below the
required minimum.
o If Option 2 is in effect, a partial surrender
does not affect the specified amount.
Transfers between the fixed account and subaccounts
The owner may transfer policy values from one
subaccount to another or between subaccounts and the
fixed account. For most transfers, if IDS Life
receives the request before the close of business, it
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, the owner should consider
the risks involved in switching investments.
IDS Life 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 IDS Life receives the 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 IDS Life receives the request on or within 30
days after the policy anniversary, the transfer
will be effective on the day we receive it.
o IDS Life will not accept requests for transfers
from the fixed account at any other time.
o If the owner has made a transfer from the fixed
account to one or more subaccounts, they may not
make a transfer from any subaccount back to the
fixed account until the next policy anniversary.
IDS Life will waive this limitation once during
the first two policy years if the owner exercises
the policy's right to exchange provision.
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.
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PAGE 16
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
IDS Life reserves the right to limit mail and telephone
transfers to five per policy year. Twelve automated
transfers per policy year are allowed.
Two ways to request a transfer, loan or surrender
The owner should provide their name, policy number,
Social Security Number or Taxpayer Identification
Number then they request a transfer, loan or partial
surrender.
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 Ave.
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)
o IDS Life answers phone requests promptly, but the
owner may experience delays when call volume is
unusually high. If the owner is unable to get
through, use mail procedure as an alternative.
o IDS Life will honor any telephone transfer, loan
or partial surrender requests believed to be
authentic and will use reasonable procedures to<PAGE>
PAGE 17
confirm that they are. These include asking
identifying questions and tape recording calls.
As long as the procedures are followed, neither
IDS Life nor its affiliates will be liable for
any loss resulting from fraudulent requests.
o Telephone transfers, loans and partial surrenders
are automatically available. The owner may
request that telephone transfers, loans and
partial surrenders not be authorized from their
account by writing IDS Life.
Automated transfers
In addition to written and phone requests, the owner
can arrange to have policy value transferred from one
account to another automatically. Their financial
advisor can help them 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 The owner can start or stop this service by
written request. They 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 the owner has made a transfer from the fixed
account to one or more subaccounts, they may not
make a transfer from the subaccount back to the
fixed account until the next policy anniversary.
o If the owner's 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<PAGE>
PAGE 18
relating to the transfer of money between the
fixed account and the subaccounts.
Automated dollar-cost averaging
The owner can use automated transfers to take advantage
of dollar-cost averaging -- investing a fixed amount at
regular intervals. For example, the owner might have a
set amount transferred monthly from a relatively
conservative subaccount to a more aggressive one, or to
several others.
This systematic approach can help the owner benefit
from fluctuations in accumulation unit value, caused by
fluctuations in the market value(s) of the underlying
fund portfolio. Since the owner invests the same
amount each period, they automatically acquire more
units when the market value falls, fewer units when it
rises. The potential effect is to lower the average
cost per unit.
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 the owner can continue to invest regularly
throughout changing market conditions, it can be an
effective strategy to help meet long-term goals.
Exchange right
For two years after the policy is issued, the owner 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 the owner needs to do is transfer all of the policy
value in the subaccounts to the fixed account. IDS
Life will automatically credit all future premium
payments to the fixed account unless the owner requests
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, risk
classification(s) or issue age. Only the method of
funding the policy value will be affected.
(e) If the trust is the issuer of periodic payment plan
certificates, the substance of the provisions of any
indenture or agreement with respect to lapses or
defaults by security holders in making principal
payments, and with respect to reinstatement.
<PAGE>
PAGE 19
Policy 1
The Policy may lapse only if there is outstanding
Indebtedness on the Policy. The Policy will lapse if
the total Indebtedness exceeds the Policy Value less
Surrender Charges, of if the Surrender Value is
insufficient to cover the monthly deduction. If there
is no outstanding Indebtedness, the Policy cannot
lapse, even if the Policy Value equals $0. If the
Policy lapses, a grace period of 31 days shall be
allowed for the policyholder to repay the lesser of the
amount of the loan, the amount which leaves a
sufficient Surrender Value to cover the monthly
deduction, or the amount that the Indebtedness exceeds
the Policy Value less Surrender Charges. Notice of the
necessity to pay such amount will be mailed to the
Owner's last known address. If repayment is not made
prior to the expiration of the grace period, the policy
will lapse without value. If the Insured dies during
the grace period, any Indebtedness or overdue monthly
deduction will be deducted from the death benefit to
determine the proceeds payable.
Policy 2
If, on a monthly date, the Cash Surrender Value is less
than the monthly deduction for the next month, a grace
period of 61 days will begin. IDS Life will mail, to
the Owner's last known address, a notice as to the
premium needed, so that the estimated Cash Surrender
Value will be sufficient to cover the next three
monthly deductions. If IDS Life receives payment of
this amount before the end of the grace period, the
amount will be used 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 the premium is
not paid within the grace period and if the policy is
not being continued under the Death Benefit Guarantee
provision described below, all coverage under the
policy will terminate without value at the end of the
61-day grace period.
If a claim by death during the grace period becomes
payable under the policy, any overdue monthly
deductions will be deducted from the proceeds.
Until the insured's attained age 70, or five years from
the policy date, whichever is later, the policy will
not terminate even if the cash surrender value is
insufficient to 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
<PAGE>
PAGE 20
(b) is the minimum monthly premium, as shown under
Policy Date in the Policy, times the number of
months since the Policy Date, including the
current month.
Minimum monthly premiums may be paid on other than a
monthly basis as long as the sum of premiums paid is at
least equal to the total required Minimum Monthly
Premiums at all times.
If on a monthly date, sufficient premiums have not been
paid to maintain the Death Benefit Guarantee, an
additional period of 61 days will be allowed for the
payment of a premium sufficient to pay the required
minimum monthly premiums. Notice of such premium will
be mailed to the Owner's last known address. If the
premium is not paid within this period, the death
benefit guarantee provision will no longer be in effect
and cannot be reinstated.
The minimum monthly premium will change if the
specified amount is increased or decreased or if riders
are added, changed or terminated. The new minimum
monthly premium will apply from the date of the change.
A death benefit guarantee charge is included in the
monthly deduction in the first five policy years or
until the insured's attained age 70, whichever is
later. The charge will not be taken if, as described
above, the death benefit guarantee provision is no
longer in effect.
For any month that the monthly deduction is being paid
for by a Waiver of Monthly Deduction Rider attached to
the policy, the minimum monthly premium for that month
will be zero.
The policy may be reinstated within five years after
the end of the grace period, unless it was surrendered
for cash. To do this, IDS Life will require all of the
following:
1. a written request to reinstate the policy;
2. evidence of insurability of the insured
satisfactory to IDS Life;
3. payment of a premium that will keep the
policy in force for at least 3 months;
4. payment of the monthly deductions that were
not collected during the grace period;
5. payment or reinstatement of any
indebtedness.
<PAGE>
PAGE 21
Surrender charges will also be reinstated.
The effective date of a reinstated policy will be the
monthly date on or next following the day IDS Life
approves the application for reinstatement.
The suicide and incontestability periods will apply
from the effective date of reinstatement. 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 3
Keeping the policy in force
This section includes a description of the policy
provisions that determine if the policy will remain in
force or lapse (terminate). It is important that the
owner understands them so the appropriate premium
payments are made to ensure that insurance coverage
meets their objectives.
If the owner wishes to have a guarantee that the policy
will remain in force until the youngest insured's
attained insurance age 100 regardless of investment
performance, they should pay at least the DBG-100
premiums.
If the owner wishes to pay a lower premium and is
satisfied to have a guarantee that the policy will
remain in force until the youngest insured's attained
insurance age 85 (or 15 policy years, if later)
regardless of investment performance, they should pay
at least the DBG-85 premiums.
If the owner wishes to pay yet a lower premium and is
not concerned with a long-term guarantee that the
policy will remain in force regardless of investment
performance, they can pay premiums so that the cash
surrender value on each monthly date is sufficient to
pay the monthly deduction. However, during the minimum
initial premium period, they must pay at least the
minimum initial premium until the policy value is
greater than the surrender charge and the cash
surrender value is sufficient to pay the monthly
deduction. At that time they may be able to reduce
their premiums as long as the cash surrender value
continues to be sufficient to pay the monthly
deduction.
Death benefit guarantee to age 85
The DBG-85 provides that the owner's policy will remain
in force until the youngest insured reaches attained
insurance age 85 (or 15 policy years, if later) even if
the cash surrender value is insufficient to pay the<PAGE>
PAGE 22
monthly deduction. The DBG-85 will remain in effect,
as long as:
the sum of premiums paid - partial surrenders -
outstanding indebtedness
equals or exceeds
the DBG-85 premiums due since the policy date.
The DBG-85 premium is shown in the policy.
If, on a monthly date, the owner has not paid enough
premiums to keep the DBG-85 in effect, an additional
period of 61 days will be allowed for the owner to pay
a premium sufficient to bring their total up to the
required minimum. If they do not pay this amount
within 61 days, the DBG-85 will terminate. Their
policy will also lapse (terminate) if the cash
surrender value is less than the amount needed to pay
the monthly deduction and the minimum initial premium
period is not in effect. Although the policy can be
reinstated as explained below, the DBG-85 cannot be
reinstated.
Death benefit guarantee to age 100
The DBG-100 provides that the owner's policy will
remain in force until the youngest insured's attained
insurance age 100 even if the cash surrender value is
insufficient to pay the monthly deduction. The DBG-100
will remain in effect, as long as:
the sum of premiums paid - partial surrenders -
outstanding indebtedness
equals or exceeds
the DBG-100 premiums due since the policy date.
The DBG-100 premium is shown in the policy.
If, on a monthly date, they have not paid enough
premiums to keep the DBG-100 in effect, an additional
period of 61 days will be allowed for the owner to pay
a premium sufficient to bring their total up to the
required minimum. If they do not pay this amount
within 61 days, the DBG-100 will terminate. If they
have paid sufficient premium, the DBG-85 will be in
effect. If the DBG-85 and DBG-100 are not in effect,
the policy will lapse (terminate) if the cash surrender
value is less than the amount needed to pay the monthly
deduction and the minimum initial premium period is not
in effect. Although the policy can be reinstated as
explained below, the DBG-100 cannot be reinstated.
<PAGE>
PAGE 23
Minimum initial premium period
To allow the owner the opportunity to increase their
policy value gradually so that the cash surrender value
is sufficient to pay the monthly deduction, the owner
may choose to pay only the minimum initial premium
during the minimum initial premium period as long as
the policy value minus indebtedness equals or exceeds
the monthly deduction. The policy will not enter the
grace period during the minimum initial premium period
as shown under Policy Date, if:
1. on a monthly date, the policy value minus
indebtedness equals or exceeds the monthly deduction
for the policy month following such monthly date; and
2. the sum of all premiums paid, minus any partial
surrenders, and minus any indebtedness equals or
exceeds the minimum initial premium, as shown under
Policy Date, times the number of months since the
Policy Date, including the current month.
The minimum initial period is
4 years if the youngest insured's insurance age
is 20-29
3 years if the youngest insured's insurance age
is 30-39
2 years if the youngest insured's insurance age
is 40-49
1 year if the youngest insured's insurance age is
50 and over
Grace period
If the cash surrender value of the policy becomes less
than that needed to pay the monthly deduction and
neither of the death benefit guarantees nor the minimum
initial premium period is in effect, the owner will
have 61 days to pay the required premium amount. If
the required premium is not paid, the policy will
lapse.
IDS Life will mail a notice to their last known
address, requesting payment of the premium needed so
that the next three monthly deductions can be made. If
IDS Life receives this premium before the end of the
61-day grace period, IDS Life will use the payment to
pay 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 a policy lapses with outstanding indebtedness, any
excess of the outstanding indebtedness over the premium
paid generally will be taxable to the owner. If the
last surviving insured dies during the grace period,<PAGE>
PAGE 24
any overdue monthly deductions will be deducted from
the death benefit.
Reinstatement
The owner's policy may be reinstated within five year
after it lapses, unless they surrendered it for cash.
To reinstate, IDS Life will require:
o a written request;
o evidence satisfactory to IDS Life that both
insureds remain insurable or evidence for the
last surviving insured and due proof that the
first death occurred before the date of lapse;
o payment of a premium that will keep the policy in
force for at least three months (one month in
Virginia);
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 the owner's application for reinstatement. The
suicide period will apply from the effective date of
reinstatement (except in Georgia, Oklahoma, Tennessee,
Utah and Virginia). Surrender charges will also be
reinstated.
IDS Life will have two years from the effective date of
reinstatement (except in Virginia) to contest the truth
of statements or representations in the reinstatement
application.
(f) The substance of any provisions of any indenture or
agreement with respect to voting rights, together with
the names of any persons other than security holders
given the right to exercise voting rights pertaining to
the trust's securities or the underlying securities and
the relationship of such persons to the trust.
The Variable Account is comprised of various
subaccounts. Subaccounts P,Q,R,S, and T, as well as
Subaccounts 1995 and 2004 fund the Single Premium
Variable Life policies issued by IDS Life. Subaccounts
U,V,W,X,Y, and IL, as well as Subaccounts 1995V and
2004V fund the Flexible Premium Variable Life policies
issued by IDS Life. Subaccounts U,V,W,X,Y and IL also
fund the Flexible Premium Survivorship Variable Life
Insurance Policy issued by IDS Life. Some Subaccounts
invest exclusively in the Portfolios of IDS Life Series
Fund (the Fund), while others invest in units of the
Smith Barney Inc. Stripped (Zero Coupon) U.S. Treasury<PAGE>
PAGE 25
Securities Fund, Series A ("the Trust" or "the
Trusts"). Subaccount P and U invest exclusively in the
shares of the Equity Portfolio; Subaccounts Q and V
invest exclusively in the shares of the Income
Portfolio; Subaccounts R and W invest exclusively in
the shares of Money Market Portfolio; Subaccounts S and
X invest exclusively in the shares of the Managed
Portfolio; Subaccounts T and Y invest exclusively in
the shares of the Government Securities Portfolio; and
Subaccount IL invests exclusively in the shares of the
International Equity Portfolio. All of the above six
portfolios make up IDS Life Series Fund, Inc., a series
mutual fund. Subaccounts 1995, 2004, 1995V and 2004V
invest in units of the designated unit investment
trust, with maturity dates of 1995 and 2004
respectively.
All shares issued by the Fund are the same class (kind)
capital stock. They have a par value of $.001 a share.
They are fully paid and nonassessable and can be
redeemed or transferred. All shares have equal voting
rights. They can be issued as full shares or
fractions. A fraction of a share has the same kind of
rights and privileges as a full share. The Fund
currently has six portfolios, each issuing 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 the election of directors, all shares
of the Fund vote together as one series. All shares
have cumulative voting when voting on the election of
directors. With cumulative voting, each shareholder is
entitled to a number of votes equal to the number of
shares which that shareholder holds multiplied by the
number of directors to be elected, and has the right to
divide votes among candidates in any way. On an issue
affecting a particular portfolio, its shares vote as a
separate series. An example of such an issue would be
a fundamental investment restriction pertaining to only
one portfolio. In voting on the Investment Management
and Services Agreement, approval of the Agreement by
the shareholders of a particular portfolio would make
the Agreement effective as to that portfolio, whether
or not it had been approved by the shareholders of the
other portfolios.
As previously stated, all of the assets held in the
subaccounts will be invested in shares of the
corresponding portfolio or in units of the Trust. With
regard to the Fund IDS Life is the Owner of those Fund
shares as such has the right to vote to elect the Board
of Directors of the Fund, to vote upon certain matters<PAGE>
PAGE 26
that are required by the 1940 Act to be approved or
ratified by the shareholders, and to vote upon any
other matter that may be voted upon at a shareholders'
meeting. However, IDS Life will vote the shares of
each Fund portfolio at regular and special meetings of
the shareholders of the Fund in accordance with
instructions received from the owners of the Policies.
Fund shares held in each subaccount for which no timely
instructions from Owners are received, and Fund shares
that are not otherwise attributable to Owners, will be
voted by IDS Life in the same proportion as those
shares in that subaccount for which instructions are
received. The number of Fund shares in each subaccount
for which instructions may be given by an Owner is
determined by applying the Owner's 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. Owners will receive
notice of each meeting of the shareholders together
with any proxy solicitation materials, and a statement
of the number of votes as to which they are entitled to
give directions at the meeting.
IDS Life may, if required by state insurance officials,
disregard voting instructions if such instructions
would require shares to be voted so as to cause a
change in the goals of one or more of the Funds'
portfolios, or to approve or disapprove an investment
advisory contract for the Fund. 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,
provided that IDS Life reasonably disapproves such
changes in accordance with applicable federal
regulations. If IDS Life does disregard voting
instructions, it will advise Owners of that action and
its reasons for such action in the next report to
Owners.
Generally, ownership of units of a unit investment
trust does not involve the exercise of voting rights.
However, with regard to the Trusts, unitholders may
vote for removal of the trustee or for the amendment or
the termination of the Trust indenture. In the event
of such vote, IDS Life, as the Owner of such units,
would solicit voting instructions from Owners under the
same procedures set forth above regarding the holders
of Fund shares.
(g) Whether security holders must be given notice of any
change in:
(1) the composition of the assets of the trust.
<PAGE>
PAGE 27
If shares of any Fund portfolio or Trust units
should not be available 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 in view of the
purposes of the subaccount, shares of another
registered, open-end management investment
company or unit investment trust may be
substituted for portfolio shares or Trust units
held in the subaccount. 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 such Act in the event such
registration is no longer required. In the event
of any such substitution or change, IDS Life may,
without the consent or approval of the 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. IDS Life will
notify Owners within five days of any
substitution or change.
(2) the terms and conditions of the securities issued
by the trust.
No change in the terms and conditions of an issued and
outstanding Policy can be made without the consent of
the Owner, other than as set forth in paragraph (1)
above.
(3) the provisions of any indenture or agreement of
the trust.
Not applicable.
(4) the identity of the depositor, trustee or
custodian.
There is no provision requiring notice to, or
consent of, Owners with respect to any change in
the identity of the Variable Account's depositor.
However, IDS Life's obligations under the Policy
cannot be transferred to any other entity without
the consent of the Owner.
(h) Whether the consent of security holder for action to be
taken concerning any change in:
(1) the composition of the assets of the trust.
Consent of Owners is not required when changing
the underlying securities of any of the
Subaccounts. However, to change these
securities, approval of the Securities and<PAGE>
PAGE 28
Exchange Commission is required in compliance
with Section 26(b) of the Investment Company Act
of 1940.
(2) the terms and conditions of the securities issued
by the trust.
No change in the terms and conditions of the Policy may
be made without the consent of the Owner, except as
provided in paragraph (1) above.
(3) the provisions of any indenture or agreement of
the trust.
Not applicable.
(4) the identity of the depositor, trustee or
custodian.
The answer to Item 10(g)(4) is incorporated by
reference.
(i) Any other principal feature of the securities issued by
the trust or any other principal right, privilege or
obligation not covered by subdivisions (a) to (g) or by
any other item in this form.
Policy 1
The minimum single premium must be at least $5000. The
maximum single premium is $500,000. The Policy
provides life insurance coverage on the lives of the
named insureds. The Policy allows the Owner to borrow
from its Policy Value, using that value as collateral
for the loan.
Policy 2
The Owner has flexibility concerning the amount and
frequency of premium payments. At the time of
application, the Owner will determine a Scheduled
Premium. The Scheduled Premium will be a level amount
at a fixed interval of time. However, the Owner need
not adhere to the Scheduled Premium. Instead, the Owner
may, subject to certain restrictions, make premium
payments in any amount and at any frequency.
Premium payments may be increased or decreased at any
time. The minimum payment which IDS Life will accept is
$25. There is no maximum, but IDS Life reserves the
right to limit any payment.
The failure to pay a scheduled premium will not itself
cause the Policy to lapse. However, the payment of
scheduled premiums or unscheduled premiums in any
amount or frequency will not guarantee that the Policy
will remain in force. Subject to the limitations<PAGE>
PAGE 29
contained in the Policy, payment the Minimum Monthly
Premium will keep the coverage in force until the later
of the insured's Age 70 Anniversary or five years from
the policy date.
The Policy contains two death benefit options. Under
Death Benefit Option 1, the death benefit is the
greater of the Specified Amount or a percentage of
policy value. Under Death Benefit Option 2, the death
benefit is the greater of the Specified Amount plus the
policy value, or a percentage of policy value.
Before issuing any policy, IDS Life requires evidence
of insurability satisfactory to it. IDS Life will
generally not issue a policy to persons over the age of
75. It may, however, at its sole discretion, issue a
policy to an applicant above age 75. The Initial
Minimum Specified Amount is $50,000, but this is
reduced to $40,000 in Policy Years 3 through 10, 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 10 and $275,000
thereafter.
The Owner may borrow up to 85 percent of the Policy
Value less Surrender Charges at a 6.1 percent interest
rate, payable in advance. For policies purchased on or
after May 1, 1993 (October 1, 1993 for New Jersey), IDS
Life expects to reduce the loan interest rate after a
policy's 10th anniversary to 4.3%. The borrowed
amounts are placed in IDS Life's fixed account. If the
Owner does not specify whether to borrow the money from
the Fixed Account and/or any specific subaccount, or if
the Fixed Account or the designated subaccounts do not
have sufficient values, the loan will be taken pro rata
from the Fixed Account and each subaccount. The Fixed
Account value attributable to indebtedness will earn
4.50 percent annual interest. The minimum loan which
can be requested $500.
Policy 3
Premiums
Payment of premiums:
In applying for the policy, the owner must decide how
much they intend to pay and how often they will make
payments. During the early policy years until the
policy value is sufficient to cover the surrender
charge, IDS Life requires that the owner pay the
premiums sufficient to keep the DBG-85 in effect.The
owner may schedule payments annually, semiannually, or
quarterly. (Payment at any other interval must be<PAGE>
PAGE 30
approved by IDS Life.) This premium schedule is shown
in the policy.
The scheduled premium serves only as an indication of
the owner's intent as to the frequency and amount of
future premium payments. The owner may skip scheduled
premium payments at any time if their cash surrender
value is sufficient to pay the monthly deduction, or if
they have paid sufficient premium to keep the DBG-85 or
the DBG-100 in effect.
The owner 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 the owner has flexibility in paying premiums,
the amount and frequency of their payments will affect
the policy value, cash surrender value and length of
time their policy will remain in force, as well as
affect whether the DBG-85 or DBG-100 remain in effect.
Premium limitations:
The owner may make unscheduled premium payments at any
time and in an amount of at least $50. IDS Life
reserves the right to limit the number and amount of
unscheduled premium payments.
No premium payments, scheduled or unscheduled, are
allowed on or after the youngest insured's attained
insurance age 100.
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 the policy date, IDS Life holds all premiums in
the fixed account, and IDS Life credits interest on the
net premiums (gross premiums minus premium expense
charge) at the current fixed account rate. As of the
policy date, IDS Life will allocate the net premiums
plus accrued interest to the account(s) the owner has
selected in their application. At that time, IDS Life
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. Similarly, when
transferring value between subaccounts, accumulation<PAGE>
PAGE 31
units in one subaccount are converted into a cash
value, which is then converted into accumulation units
of the second subaccount.
Insurability: Before issuing the policy, IDS Life
requires satisfactory evidence of the insurability of
the persons whose lives the owner proposes to insure.
IDS Life's underwriting department will review the
owner's application and any medical information or
other data required to determine whether the proposed
individuals are insurable under IDS Life's underwriting
rules. The owner's application may be declined if a
person fails to meet the underwriting requirements and
any premiums that were paid will be returned.
Age limit: IDS Life generally will not issue a policy
to persons over the insurance age of 85. It may,
however, do so at its sole discretion.
Proceeds payable upon death
IDS Life will pay a benefit to the beneficiary of the
policy when the last surviving insured dies. If that
death is prior to the youngest insured's attained
insurance age 100, the amount payable is based on the
specified amount and death benefit option the owner has
selected, as described below, less any indebtedness.
If the last surviving insured's death is on or after
the youngest insured's attained insurance age 100, the
amount payable is the cash surrender value.
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 last
surviving insured's death; or
o the applicable percentage of the policy value on
the date of the last surviving insured's death,
if that death occurs on a valuation date, or on
the next valuation date following the date of
death.
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 on
the date of the last surviving insured's death,
if that death occurs on a valuation date, or
on the next valuation date following the date of
death.
<PAGE>
PAGE 32
Information Concerning the Securities Underlying the Trust's
Securities
11. Describe briefly the kind or type of securities comprising
the unit of specified securities in which the security
holders have an interest.
The securities to be held in the Subaccounts will be shares
of the Fund or units of the Trust described in Item 12. This
fund is a registered, open-end diversified management
investment company. The Trust is a registered unit
investment trust (UIT).
12. If the trust is the issuer of periodic payment plan
certificates, and if any underlying securities were issued by
another investment company, furnish the following information
for each such company:
(a) Name of Company.
IDS Life Series Fund, Inc.
The Smith Barney Inc. Stripped ("Zero Coupon") U.S.
Treasury Securities Fund, Series A ("Zero Coupon Trust"
- a unit investment Trust).
(b) Name and principal address of depositor.
Investment manager of IDS Life Series Fund, Inc.
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 55440
(c) Name and principal business address of trustee or
custodian.
For IDS Life Series Fund, Inc.:
American Express Trust Company
P.O. Box 534
Minneapolis, Minnesota 55440-0534
acts as custodian for the Fund.
Sponsor of the Zero Coupon Trust:
Smith Barney Inc.
Two World Trade Center
New York, NY 10048
(d) Name and principal business address of principal
underwriter.
Not Applicable.
<PAGE>
PAGE 33
(e) The period during which the securities of such Company
have been the underlying securities.
IDS Life Series Fund, Inc. commenced operations on
January 20, 1986. The International Equity Portfolio
commenced operations on October 28, 1994.
Information Concerning Loads, Fees, Charges and Expenses
13. (a) Furnish the following information with respect to each
load, fee, expense or charge to which (1) principal
payments, (2) underlying securities, (3) distributions,
(4) cumulated or reinvested distributions or income,
and (5) redeemed or liquidated assets or the trust's
securities are subject:
(A) the nature of such load, fee, expense or
charge;
(B) the amount thereof;
(C) the name of the person to whom such amounts
are paid and his relationship to the trust;
(D) the nature of the services performed by
such person in consideration for such load,
fee, expense or charge.
(1) Principal Payments. (Gross Premium)
<TABLE><CAPTION>
Policy 1
Nature of Person to whom
Charge Amount Paid/Relationship Services
<S> <C> <C>
Monthly Cost Tabular charge per $1,000 at IDS Life Insurance
of insurance risk, varying by age, sex Protection
charges and insurance rating of the
insured
Policy Issue $150 at time of issue IDS Life Issue and
and Admin- Administrative
istrative Expenses
Expense
Surrender Percent of Amount IDS Life Sales Expenses
Charge Surrendered varying by
duration and guaranteed
not to exceed 9% of
Premium paid
Premium Tax 2.5% of Premium IDS Life State
Charge Premium
Taxes
Policy 2
Nature of Person to whom
Charge Amount Paid/Relationship Services
Sales 2.5% of Gross Premiums IDS Life Sales
Charge Expenses
Premium 2.5% of Gross Premiums IDS Life State
Tax Charge Premium
Taxes
<PAGE>
PAGE 34
Policy Currently $5 per policy IDS Life Adminis-
Fee month, never to exceed trative
$7.50 per policy month. Expenses
Waived for policies
purchased on or after
May 1, 1991 with an
initial specified amount
of $350,000 or more.
Cost of Tabular charge per $1000 IDS Life Insurance
Insurance net amount at risk each Protection
Charge policy month, determined by
age, sex and insurance
rating of the insured
Cost of Tabular charge each policy IDS Life Optional
Policy month determined by nature Insurance
Riders and amount of riders
attached to policy
Death $0.01 per $1000 of IDS Life Death
Benefit Specified Amount and Other Benefit
Guarantee Insured Rider Coverage each Guarantee
Charge policy month that the Death Risk
Benefit Guarantee is in
effect
Contingent $4 per $1000 Initial IDS Life Issue
Deferred Specified Amount of policy and
Issue and is surrendered within 5 Under-
Adminis- years of policy issue, writing
trative decreasing monthly Expenses
Expense thereafter at a rate of 20% at Issue
Charge per year
(Issue)
Contingent $4 per $1000 increase in IDS Life Issue
Deferred Specified Amount if policy and
Issue and is surrendered within 5 Under-
Adminis- policy years of increase, writing
trative decreasing monthly Expenses
Expense thereafter at a rate of 20% at
Charge per year Increase
(Increase)
Contingent 27.5% of Gross Premiums up IDS Life Sales
Deferred to amount shown in policy Expenses
Sales (conservative estimate of at Issue
Charge one Guideline Annual
(Issue) Premium) plus 6.5% of all
other Gross Premiums except
those attributable to an
Increase or, if less
Tabular amount per $1000
Initial Specified Amount -
determined by age, sex and
insurance rating of insured
- if policy is surrendered
within 5 policy years of
issue, decreasing monthly
thereafter at a rate of 20%
per year
Contingent 6.5% of Premiums attrib- IDS Life Sales
Deferred utable to the Increase Expenses
Sales or, if less Tabular at
Charge amount per $100 Increase
(Increase) increased in Specified
Amount - determined by age,
sex and insurance rating of
insured - if policy is
surrendered within 5 policy
years of Increase,
decreasing monthly
thereafter at a rate of 20%
per year<PAGE>
PAGE 35
Partial $25 or, if less, 2% of IDS Life Trans-
Surrender Policy Value surrendered action
Fee Costs
Policy 3
Nature of Person to whom
Charge Amount Paid/Relationship Services
Sales 7.25% of all premiums paid. IDS Life Sales
Charge Expenses
Premium 2.5% of premium payment. IDS Life State
Tax Charge Premium
Taxes
Federal 1.25% of each premium IDS Life Federal
Tax Charge payment. taxes
Policy Currently $30 per policy IDS Life Adminis-
Fee month, never to exceed trative
$30 per policy month. Expenses
Cost of The monthly cost of insurance IDS Life Insurance
Insurance times the total of the death Protection
benefit minus the policy value
plus any other flat extra
insurance charges.
Cost of Determined by nature and IDS Life Optional
Policy amount of riders attached Insurance
Riders to policy.
Contingent $4 per $1000 of the initial IDS Life Issue
Deferred specified amount of the and
Issue and policy, if it is surrendered Under-
Adminis- during the first policy writing
trative years, and then decreasing Expenses
Expense monthly until it is zero at at Issue
Charge the end of 15 policy years.
(Surrender
Charge)
Partial $25 (or 2% of the amount IDS Life Trans-
Surrender surrendered, if less). action
Fee Costs
(2) Underlying Security.
Investment The Money Market IDS Life Investment
Management Portfolio of IDS Life management
Fee Series Fund, Inc. and services
pays a fee on an described in
annual basis equal to Agreement
0.50% of its daily
aggregate average
net assets.
The Equity, Income
Managed and
Government Securities
Portfolios of IDS Life
Series Fund, Inc. each
pay a fee on an annual
basis equal to 0.70% of
their aggregate average
daily net assets.
The International Equity
Portfolio of IDS Life
Series Fund, Inc. pays a
fee on an annual basis
equal to 0.95% of its
aggregate average daily
net assets.
<PAGE>
PAGE 36
Non-Advisory IDS Life Series Fund, IDS Life Non-Advisory
Expense Inc. will reimburse Expenses
Charges IDS Life for non- described in
advisory expenses. Agreement
</TABLE>
(3) Distributions.
Not applicable. See paragraph (4) below.
(4) Cumulated or reinvested distributions or income.
All investment income and other distributions are
reinvested in Fund shares at net asset value.
(5) Redeemed or liquidated assets.
There are no charges for redeemed or liquidated
assets of the Trust's securities.
(b) For each installment payment type of periodic payment
plan certificate of the trust, furnish the following
information with respect to sales load and other
deductions from principal payments.
Policy 1
See Item 13(a)(1).
Policy 2
See Item 13(a)(1).
Policy 3
See Item 13(a)(1).
(c) State the amount of total deductions as a percentage of
the net amount invested for each type of security
issued by the trust. State each different sales charge
available as a percentage of the public offering price
and as a percentage of the net amount invested. List
any special purchase plans or methods established by
rule or exemptive order that reflect scheduled
variations in, or elimination of, the sales load and
identify each class of individuals or transactions to
which such plans apply.
Policy 1
(1) 0% However, this does not take into account the
Surrender Charge described in Item 13(a)(1). The
surrender charge will not exceed 9% of the Premium.
(2) 0% However, this does not take into account the
Surrender Charge or the other deductions described in
Item 13(a)(1).
<PAGE>
PAGE 37
Policy 2
(1) 2.5% However, this does not take into account
the Contingent Deferred Sales Charge described in
Item 13(a)(1). The Contingent Deferred Sales
Charge will not exceed 27.5% of payments up to
one Guideline Annual Premium plus 6.5% of
payments in excess of one Guideline Annual
Premium; and 6.5% of any other amounts
attributable as premiums after an Increase in
Specified Amount.
(2) 5.0% However, this does not take into account
the Contingent Deferred Sales Charge or
Contingent Deferred Issue and Administrative
Expense Charge or any of the other deductions
from Policy Value described in Item 13(a)(1).
Policy 3
(1),(2) Sales charge: 7.25% of all premiums paid.
However, this does not take into account
the Contingent Deferred Issue and
Administrative Expense Charge or any of the
other deductions from Policy Value
described in Item 13(a)(1).
Premium tax charge: 2.5% of each premium payment.
Federal tax charge: 1.25% of each premium payment.
(d) Explain the reasons for any difference in the price at
which securities are offered generally to the public,
and the price at which securities are offered for any
class of transactions to any class or group of
individuals, including officers, directors, or
employees of the depositor, trustee custodian or
principal underwriter.
Not Applicable.
(e) Furnish a brief description of any loads, fees,
expenses or charges not covered in Item 13(a) which may
be paid by security holders in connection with the
trust or its securities.
Policy 1
IDS Life deducts a charge which on an annual basis is
equal to 0.50% of the average assets of the Subaccounts
as a mortality and expense risk charge.
IDS Life deducts a charge which on an annual basis is
equal to 0.15% of the average assets of the Subaccounts
as a minimum death benefit guarantee risk charge.
<PAGE>
PAGE 38
IDS Life reserves the right to charge the Subaccounts
for any tax liability it may incur because of the
operations of the Accounts regardless of whether or not
tax is actually paid by IDS Life.
Policy 2
IDS Life deducts a Mortality and Expense Risk Charge,
which is equal on an annual basis to 0.90% of the
average assets of the Subaccounts. This charge is
needed to reimburse IDS Life for assuming certain
mortality and expense risks under the Policy.
IDS Life deducts a Transaction Charge, currently equal
on an annual basis to 0.25% of the average assets of
the Subaccounts investing in the Trusts. IDS Life may
increase this charge in the future but not to more than
0.50%. This is a cost-based charge needed to reimburse
IDS Life for amounts paid to Smith Barney, Inc. on the
sale of Trust units to the Variable Account.
IDS Life reserves the right to charge the Subaccounts
for any tax liability it may incur because of the
operations of the Subaccounts, regardless of whether or
not the tax is actually paid by IDS Life.
Policy 3
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:
oMortality risk -- the risk that the cost of
insurance charge will be insufficient to meet
actual claims.
oExpense risk -- the risk that the policy fee and
the contingent deferred issue and administration
expense charge may be insufficient to cover the
cost of administering the policy.
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.
(f) State whether the depositor, principal underwriter,
custodian or trustee, or any affiliated person of the
foregoing may receive profits or other benefits not
included in answer to Item 13(a) or 13(b) through the
sale or purchase of the trust's securities or interests<PAGE>
PAGE 39
in underlying securities, and described fully the
nature and extent of such profits or benefits.
Not as principal underwriter or depositor will IDS
Life, nor any affiliated person of IDS Life, receive
any profit or other benefit not included in the answer
to Item 13(a) or 13(b) through the sale or purchase of
the Policy or Fund shares, except that IDS Life will
pay to American Express Financial Corporation a fee
equal on an annual basis to 0.25% (0.50% for
International Equity Portfolio) of the Fund's average
net assets for investment advice relative to the Fund
under an Investment Advisory Agreement between American
Express Financial Corporation and IDS Life.
As custodian of the underlying securities, American
Express Trust Company will receive certain fees
indirectly from the Fund. The fees will be comparable
to the fees received by custodians which hold the
assets of other mutual funds.
(g) State the percentage that the aggregate annual charges
and deductions for maintenance and other expenses of
the trust, bear to the dividend and interest income
from the trust property during the period covered by
the financial statements filed herewith.
Not applicable.
(h) For life insurance company separate accounts registered
as unit investment trusts issuing variable life
insurance contracts:
If proceeds from explicit sales loads will not cover
the expected costs of distributing the contracts,
identify the source from which the shortfall, if any,
will be paid. If any shortfall is to be made up from
assets from the Insurance Company's general account,
disclose, if applicable, the extent to which any
amounts paid by the Insurance Company may consist,
among other things, of proceeds derived from mortality
and expense risk charges deducted from the account.
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:
oMortality risk -- the risk that the cost of
insurance charge will be insufficient to meet
actual claims.
<PAGE>
PAGE 40
oExpense risk -- the risk that the policy fee and
the contingent deferred issue and administration
expense charge 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
charges. Any further deficit will have to be made up
from IDS Life's general assets.
Information Concerning the Operations of the Trust
14. Describe the procedure with respect to applications (if any),
and the issuance and authentication of the trust's
securities, and state the substance of the provisions of any
indenture or agreement pertaining thereto.
A person desiring to purchase a Policy must complete an
application on a form provided by IDS Life and submit it to
the Home Office of IDS Life. If the applicant meets the
prescribed standards, a Policy will be issued.
15. Describe the procedure with respect to the receipt of
payments from purchasers of the trust's securities and the
handling of the proceeds thereof, and state the substance of
the provisions of any indenture or agreement pertaining
thereto.
Policy 1
The Owner determines in the application what portions, if
any, of the premium are to be allocated to each of the
Subaccounts. Until the date that a policy is mailed from IDS
Life's Home Office for delivery to the Owner, the premium
received by IDS Life is held in IDS Life's general account.
When a Policy is mailed, the Policy Value will reflect the
performance of Subaccount R, which invests in the Money
Market Portfolio of IDS Life Series Fund, from the date the
premium was received. On the date that a Policy is mailed
from IDS Life's Home Office for delivery to the Owner, the
Policy Value will be allocated to one or more of the
Subaccounts, in accordance with the allocation instructions
received from the Owner in the application. Each of the
Subaccounts invests exclusively in the shares of a different
Portfolio of the Fund or units of the Trust. The net
investment results of each Subaccount vary with the
investment experience of its underlying Fund Portfolio or
valuation of Trust units. For each of the Subaccounts, a
unit price will be calculated daily by adding all investment
earnings of the Subaccount and deducting specified charges.
Thus, the value of each Policy varies with the investment
performance of the underlying Fund Portfolio(s) or valuation
of the Trust unit(s).<PAGE>
PAGE 41
Policy 2
The Owner determines in the application what portions, if
any, of the premiums are to be allocated to each of the
Subaccounts of the Variable Account, the Fixed Account or
both. Until the date that an application is approved by IDS
Life's Home Office 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 (gross premium received minus the Premium
Expense Charge). As of the date that IDS Life's Home Office
underwriting department approves the application, the net
premiums plus interest accrued thereon will be allocated to
the Fixed Account and/or one or more of the subaccounts, in
accordance with the allocation instructions received from the
Owner in the application. At that time, the various loads,
fees, charges and expenses will begin to be assessed.
Policy 3
The Owner determines in the application what portions, if
any, of the premiums are to be allocated to each of the
Subaccounts of the Variable Account, the Fixed Account or
both. Until the date that an application is approved by IDS
Life's Home Office 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 (gross premium received minus the Premium
Expense Charge). As of the date that IDS Life's Home Office
underwriting department approves the application, the net
premiums plus interest accrued thereon will be allocated to
the Fixed Account and/or one or more of the subaccounts, in
accordance with the allocation instructions received from the
Owner in the application. At that time, the various loads,
fees, charges and expenses will begin to be assessed.
16. Describe the procedure with respect to the acquisition of
underlying securities and the disposition thereof, and state
the substance of the provisions of any indenture or agreement
pertaining thereto.
Policy 1
The Owner determines in the application what portions, if
any, of the premium are to be allocated to each of the
Subaccounts. Until the date that a policy is mailed from IDS
Life's Home Office for delivery to the Owner, the premium
received by IDS Life is held in IDS Life's general account.
When a Policy is mailed, the Policy Value will reflect the
performance of Subaccount R, which invests in the Money
Market Portfolio of IDS Life Series Fund, from the date the
premium was received. On the date that a Policy is mailed
from IDS Life's Home Office for delivery to the Owner, the
Policy Value will be allocated to one or more of the
Subaccounts in accordance with the allocation instructions
received from the Owner in the application. For amounts
allocated to the Subaccounts, IDS Life applies the Policy<PAGE>
PAGE 42
Value so allocated to the purchase of Fund shares or units of
the Trust at their net asset value determined as of the end
of the valuation period during which the written directions
to make the allocation are received by IDS Life at its Home
Office. Fund shares or units of the Trust may be redeemed by
IDS Life to permit the payment of insurance benefits, amounts
requested for surrender, loan payments, interest charges on
loans, surrender charges and fees and other purposes
contemplated by the Policy.
Policy 2
The Owner determines in the application what portions, if
any, of the premiums are to be allocated to each of the
Subaccounts of the Variable Account, the Fixed Account or
both. Until the date that an application is approved by IDS
Life's Home Office 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 (gross premium received minus the Premium
Expense Charge). As of the date that IDS Life's Home Office
underwriting department approves the application, the net
premiums plus interest accrued thereon will be allocated to
the Fixed Account and/or one or more of the Subaccounts, in
accordance with the allocation instructions received from the
Owner in the application. For amounts allocated to the
Subaccounts, IDS Life applies the Policy Value so allocated
to the purchase of Fund shares or units of the Trust at their
net asset value determined as of the end of the Valuation
Period during which the written directions to make the
allocation are received by IDS Life at its Home Office. Fund
shares or units of the Trust may be redeemed by IDS Life to
permit the payment of insurance benefits, amounts requested
for surrender, loan payments, interest charges on loans,
surrender charges and fees and other purposes contemplated by
the Policy.
Policy 3
The Owner determines in the application what portions, if
any, of the premiums are to be allocated to each of the
Subaccounts of the Variable Account, the Fixed Account or
both. Until the date that an application is approved by IDS
Life's Home Office 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 (gross premium received minus the Premium
Expense Charge). As of the date that IDS Life's Home Office
underwriting department approves the application, the net
premiums plus interest accrued thereon will be allocated to
the Fixed Account and/or one or more of the Subaccounts, in
accordance with the allocation instructions received from the
Owner in the application. For amounts allocated to the
Subaccounts, IDS Life applies the Policy Value so allocated
to the purchase of Fund shares or units of the Trust at their
net asset value determined as of the end of the Valuation
Period during which the written directions to make the<PAGE>
PAGE 43
allocation are received by IDS Life at its Home Office. Fund
shares or units of the Trust may be redeemed by IDS Life to
permit the payment of insurance benefits, amounts requested
for surrender, loan payments, interest charges on loans,
surrender charges and fees and other purposes contemplated by
the Policy.
17. (a) Describe the procedure with respect to withdrawal or
redemption by security holders.
Any surrender by an Owner may be made by a request in
writing to the Home Office of IDS Life. IDS Life will
determine the Surrender Value as of the end of the
Valuation Period during which the request is received.
See the response to item 13(a) for information
concerning surrender charges and fees. The Surrender
Value will be paid within seven days after the Owner's
written request is received by IDS Life at its Home
Office, however IDS Life reserves the right to defer
any payment of Surrender Value (1) which derives from a
Premium Payment made by a check which has not cleared
the banking system (good payment has been collected),
or (2) if (a) the New York Stock Exchange is closed
(other than customary weekend and holiday closings),
(b) trading on the Exchange is restricted; (c) an
emergency exists such that it is (b)not reasonably
practical to dispose of securities held in the Variable
Account or to determine the value of the Variable
Account's net assets; or (d) the Securities and
Exchange Commission by order so permits for the
protection of security holders. Conditions described
in (b) and (c) will be decided by or in accordance with
rules of the Securities and Exchange Commission.
Any surrenders of the Policy Value from the Fixed
Account may be postponed for up to 6 months, in Policy
2 and in Policy 3. If IDS Life postpones payment for
more than 30 days, interest at an annual rate of 3
percent will be paid on the amount surrendered for the
period of postponement.
(b) Furnish the names of any persons who may redeem or
repurchase, or are required to redeem or repurchase,
the trust's securities or underlying securities from
security holders, and the substance of the provisions
of any indenture or agreement pertaining thereto.
IDS Life is required to honor surrender requests as
described in Items 10(c) and 17(a).
The Fund is required to redeem Fund shares at net asset
value at the request of IDS Life, and to make payment
therefor to the Variable Account within seven days of
the receipt of the redemption request. The Trust is
required to redeem Trust units at net asset value at
the request of IDS Life, and to make payment therefor<PAGE>
PAGE 44
to the Variable Account within seven days of the
receipt of the redemption request.
(c) Indicate whether repurchased or redeemed securities
will be canceled or may be resold.
A totally surrendered Policy will be canceled.
18. (a) Describe the procedure with respect to the receipt,
custody and disposition of the income and other
distributable funds of the trust and state the
substance of the provisions of any indenture or
agreement pertaining thereto.
All income and other distributable funds of each
Subaccount investing in the Fund are reinvested in
shares of the appropriate Fund Portfolio and are added
to the assets of that Subaccount. For Trust units, all
investment income and other distributions, if any, are
held in the Trust.
(b) Describe the procedure, if any, with respect to the
reinvestment of distributions to security holders and
state the substance of the provisions of any indenture
or agreement pertaining thereto.
Not applicable.
(c) If any reserves or special funds are created out of
income or principal, state with respect to each such
reserve or fund the purpose and ultimate disposition
thereof, and describe the manner of handling the same.
At the present time, IDS Life does not intend to
establish any reserves for federal income taxes which
may be attributable to the Variable Account.
(d) Submit a schedule showing the periodic and special
distributions which have been made to security holders
during the three years covered by the financial
statements filed here with. State for each such
distribution the aggregate amount and amount per share.
If distributions from sources other than current income
have been made, identify each such other source and
indicate whether such distribution represents the
return of principal payments to security holders. If
payments other than cash were made, describe the nature
thereof.
Not applicable.
19. Describe the procedure with respect to keeping of records and
accounts of the trust, the making of reports and the
furnishing of information to security holders, and the
substance of the provisions of any indenture or agreement
pertaining thereto.
<PAGE>
PAGE 45
IDS Life has primary responsibility for all administration of
the Policy and will maintain the records and books of the
Variable Account.
Included in these records are the name, address, taxpayer
identification number and other pertinent information for
each Owner, and the number and Policy Value records of each
Policy. IDS Life will also keep, as custodian, the records
of all securities transactions entered into with the Fund and
the Trust for the purchase and sale of the Fund shares or
Trust units by the Variable Account.
20. State the substance of the provisions of any indenture or
agreement concerning the trust with respect to the following:
(a) Amendments to such indenture or agreement.
Not applicable.
(b) The extension or termination of such indenture or
agreement.
Not applicable.
(c) The removal or resignation of the trustee or custodian,
or the failure of the trustee or custodian, or the
failure of the trustee or custodian to perform its
duties, obligations and functions.
Not applicable.
(d) The appointment of a successor trustee and the
procedure if a successor trustee is not appointed.
Not applicable.
(e) The removal or resignation of the depositor, or the
failure of the depositor to perform its duties,
obligations and functions.
There are no provisions relating to the appointment of
a successor depositor.
(f) The appointment of a successor depositor and the
procedure if a successor depositor is not appointed.
There are no provisions regarding the removal or
resignation of IDS Life, nor its failure to perform its
duties, obligations, and functions as depositor.
21. (a) State the substance of the provisions of any indenture
or agreement with respect to loans to security holders.
Policy 1
After the first Policy Year, the Owner may obtain a
loan from the Company by sending a Written Request. <PAGE>
PAGE 46
The loan value of the Policy is the only security
required. The policy loan rate is 5.0% per annum
payable in advance. The Owner may borrow an amount up
to 90% of the total Policy Value less Surrender
Charges. Interest to pay for the loan until the next
policy anniversary will be included in determining the
maximum loan value. IDS Life will compute the Loan
Value as of the end of the Valuation Period during
which the loan request is received at its Home Office.
The Loan Value of the Variable Account will be paid
within seven days after the Owner's written request is
received by IDS Life at its Home Office, however IDS
Life reserves the right to defer any payment of Loan
Value (1) which derives from a Premium Payment made by
a check which has not cleared the banking system (good
payment has been collected), or (2) if (a) the New York
Stock Exchange is closed (other than customary weekend
and holiday closings), (b) trading on the Exchange is
restricted; (c) an emergency exists such that it is not
reasonably practical to dispose of securities held in
the Account or to determine the value of the Account's
net assets; or (d) the Securities and Exchange
Commission by order so permits for the protection of
security holders. Conditions described in (b) and (c)
will be decided by or in accordance with the rules of
the Securities and Exchange Commission.
Policy 2
The Owner may obtain a loan from the Company by sending
a Written Request. The loan value of the Policy is the
only security required. The policy loan rate is 6.1
percent per annum payable in advance. For policies
purchased on or after May 1, 1993 (October 1, 1993 for
New Jersey), IDS Life expects to reduce the loan
interest rate after a policy's 10th anniversary to 4.3%
payable in advance. The Owner may borrow an amount up
to 85 percent of the total Policy Value less Surrender
Charges. Interest to pay for the loan until the next
policy anniversary will be included in determining the
maximum loan value. IDS Life will compute the Loan
Value as of the end of the Valuation Period during
which the loan request is received at its Home Office.
The Owner also may request a loan by 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.
The Loan Value of the Variable Account will be paid
within seven days after the Owner's written request is
received by IDS Life at its Home Office, however IDS
Life reserves the right to defer any payment of Loan
Value (1) which derives from a Premium Payment made by<PAGE>
PAGE 47
a check which has not cleared the banking system (good
payment has been collected), or (2) if (a) the New York
Stock Exchange is closed (other than customary weekend
and holiday closings), (b) trading on the Exchange is
restricted; (c) an emergency exists such that it is not
reasonably practical to dispose of securities held in
the Account or to determine the value of the Account's
net assets; or (d) the Securities and Exchange
Commission by order so permits for the protection of
security holders. Conditions described in (b) and (c)
will be decided by or in accordance with rules of the
Securities and Exchange Commission. Any loans from the
Fixed Account may be delayed up to six months from the
date IDS Life receives the request.
Policy 3
Policy loans
The owner may borrow against their policy by written or
telephone request. 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. (Loans by
telephone are limited to $50,000).
Interest rate: The interest rate for policy loans is
6% per year. After the policy's 10th anniversary we
expect to reduce the loan interest rate to 4% per year.
Interest is charged daily and due at the end of the
policy year.
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 Alabama, 100% of the policy value minus
surrender charges.
o In all other states, 85% of the policy value
minus surrender charges.
IDS Life will compute the maximum loan value as of the
end of the valuation period during which we receive
your loan request. The amount available at any time
for a new loan is the maximum loan value less any
existing indebtedness. In doing so, IDS Life reserves
the right to deduct from the loan value interest for
the period until the next policy anniversary and
monthly deductions that will be taken until the next
policy anniversary.
<PAGE>
PAGE 48
Payment of loaned funds: Generally, IDS Life will pay
loans within seven days after IDS Life receives the
owner's request (with certain exceptions -- see
"Deferral of payments," under "Payment of policy
proceeds").
Repayments: Loan repayments will be allocated to
subaccounts and/or the fixed account using the premium
allocation percentages in effect unless the owner tells
IDS Life otherwise. Repayments must be in amounts of
at least $50.
Deferral of payments:
IDS Life reserves the right to defer payments of policy
loans 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 from the fixed account may be delayed up to
six months from the date IDS Life receives the request.
If IDS Life postpones the payment of surrender proceeds
more than 30 days, IDS Life will pay the owner interest
on the amount surrendered at an annual rate of 3% for
the period of postponement.
(b) Furnish a brief description of any procedure or
arrangement by which loans are made available to
security holders by the depositor, principal
underwriter, trustee or custodian, or any affiliated
person of the foregoing.
Policy 1
If it is not specified from which Subaccounts the loan
is to be made, the loan will be made from the
Subaccounts in the same proportion as the value in each
Subaccount bears to the total Policy Value, less
Indebtedness.
A loan from the Subaccounts will result in Accumulation
Units being redeemed and the Proceeds transferred from
the Subaccounts into IDS Life's General Account.
Repayments will be transferred into the Subaccounts.
Loan repayments must be in amounts of at least $50.
Loan repayments will be allocated to the Subaccounts<PAGE>
PAGE 49
using the premium allocation percentages in effect
unless the Owner tells IDS Life otherwise.
If additional interest accrues to the Policy loan and
is not paid when due, IDS Life will increase the amount
of Indebtedness in the General Account to cover the
amount of such additional interest. The interest added
to a Policy loan will be charged the same interest rate
as the loan. IDS Life will allocate the amount of the
additional interest among the Subaccounts, using the
monthly deduction allocation percentages. If the value
in any one of the Subaccounts is insufficient to pay
the additional interest so allocated, the entire
additional interest will be deducted from each of the
Subaccounts in the same proportion as the value in each
Subaccount bears to the total Policy Value less
Indebtedness.
IDS Life will credit the loaned amount with 4% annual
interest.
Policy 2
If it is not specified whether the loan is to be made
from the Fixed Account or the Subaccounts, the loan
will be made from the subaccounts and the Fixed Account
in the same proportion as the value in each subaccount
and the Fixed Account bears to the total policy value,
less indebtedness.
A loan from the subaccounts will result in accumulation
units being redeemed and the proceeds transferred from
the subaccounts into IDS Life's fixed account.
Repayments will be transferred into the Fixed Account
and/or the subaccounts. Loan repayments must be in
amounts of at least $25. Loan repayments will be
allocated to subaccounts and/or the Fixed Account using
the premium allocation percentages in effect unless the
Owner tells IDS Life otherwise.
If additional interest accrues to the Policy loan and
is not paid when due, IDS Life will increase the amount
of indebtedness in the fixed account to cover the
amount of such additional interest. The interest added
to a policy loan will be charged the same interest rate
as the loan. IDS Life will allocate the amount of the
additional interest among the Fixed Account and/or the
subaccounts, using the monthly deduction allocation
percentages. If the value in the Fixed Account or any
one of the subaccounts is insufficient to pay the
additional interest so allocated, the entire additional
interest will be deducted from the Fixed Account and
each of the subaccounts in the same proportion as the
value in the Fixed Account and each subaccount bears to
the total policy value, less indebtedness.
<PAGE>
PAGE 50
IDS Life will credit the loaned amount with 4.50
percent annual interest.
Policy 3
Allocation of loans to accounts: If the owner does 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. IDS
Life will credit the policy value loaned with 4% annual
interest. (See Repayments Section under 21(a) Policy
3).
Overdue interest: If accrued interest is not paid when
due, IDS Life 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. IDS Life 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 the owner does not repay
their loan, it will reduce the death benefit and policy
value. Even if the owner does repay it, their 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). A loan may terminate the DBG-85
or the DBG-100. The loan amount is deducted from the
total premiums paid, which may reduce the total below
the level required to keep the DBG-85 or the DBG-100 in
effect.
(c) If such loans are made, furnish the aggregate amounts
of loans outstanding at the end of the last fiscal
year, the amount of interest collected during the last
fiscal year allocated to the depositor, principal
underwriter, trustee or custodian or affiliated person
of the foregoing and the aggregate amount of loans in
default at the end of the last fiscal year covered by
financial statements filed herewith.
For Policy 1, the outstanding loan balance for fiscal
year 1994 was $3,958,124.51 and the amount of interest
collected was $152,783.38.
<PAGE>
PAGE 51
For Policy 2, the outstanding loan balance for fiscal
year 1994 was $17,676,895.43 and the amount of interest
collected was $1,064,190.32.
No loans were in default for Policy 1 or Policy 2.
22. State the substance of the provisions of any indenture or
agreement with respect to limitations on the liabilities of
the depositor, trustee or custodian, or any other party to
such indenture or agreement.
Not applicable.
23. Describe any bonding arrangement for officers, directors,
partners or employees of the depositor or principal
underwriter of the trust, including the amount of coverage
and the type of bond.
The officers, employees and sales force of IDS Life are
bonded in the amount of $100 million, by virtue of a blanket
fidelity bond issued by Saint Paul Fire and Marine to IDS
Life's parent, American Express Financial Corporation.
Saint Paul Fire and Marine provides the first $30 million.
An additional $15 million in fidelity coverage is extended by
a second policy issued by Vigilant Insurance Co. to the
directors, officers, and employees of IDS Life. An
additional $20 million in fidelity coverage is extended by a
third policy issued by National Union to the directors,
officers, and employees of IDS Life. An additional $4
million in fidelity coverage is extended by a fourth policy
issued by Saint Paul Fire and Marine to the directors,
officers, and employees of IDS Life. An additional $11.5
million in fidelity coverage is extended by a fifth policy
issued by Continental to the directors, officers, and
employees of IDS Life. An additional $12.5 million in
fidelity coverage is extended by a sixth policy issued by
Gulf Insurance Company to the directors, officers, and
employees of IDS Life. An additional $7 million in fidelity
coverage is extended by a final policy issued by Reliance
Insurance Company to the directors, officers and employees of
IDS Life.
24. State the substance of any other material provisions of any
indenture or agreement concerning the trust or its securities
and a description of any other material functions or duties
of the depositor, trustee or custodian not stated in Item 10
or Items 14 to 23 inclusive.
The Owner may assign the Policy at any time. No such
assignment is effective as to IDS Life, however, unless it is
filed with IDS Life at its Home Office for recording.
<PAGE>
PAGE 52
III.
ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
Organization and Operations of Depositor
25. State the form or organization of the depositor of the trust,
the name of the state or other sovereign power under the laws
of which the depositor was organized and the date of
organization.
IDS Life is a stock life insurance company organized under
Minnesota law on August 7, 1957. Prior to April 2, 1973, IDS
Life was called Investors Syndicate Life Insurance and
Annuity Company.
26. (a) Furnish the following information with respect to all
fees received by the depositor of the trust in
connection with the exercise of any functions or duties
concerning securities of the trust during the period
covered by the financial statements filed herewith.
<TABLE><CAPTION>
Total Aggregate gross
purchase Amount of Amount of amount of
payments Amount of administration management Amount of load, fees,
by security sales load fees fees other fees etc.
Year holders received received received received received
<S> <C> <C> <C> <C> <C> <C>
Policy 1 and 2
1992 $ 48,998,425 $3,649,836 $16,107,910 -- $59,055 $ 68,815,226
1993 69,454,041 4,408,562 22,722,261 -- 63,068 96,647,932
1994 117,787,027 6,969,493 34,835,904 -- 63,193 159,654,617
Policy 3
Not Applicable
</TABLE>
(b) Furnish the following information with respect to any
fee or any participation in fees received by the
depositor from any underlying investment company or any
affiliated person or investment adviser of such
company.
The underlying investment company, IDS Life Series
Fund, Inc., pays IDS Life for managing its portfolio,
providing administrative services, and serving as
transfer agent. For fiscal year 1994, the aggregate
amount of this management fee was $2,087,292.
27. Describe the general character of the business engaged in by
the depositor including a statement as to any business other
than that of depositor of the trust. If the depositor acts
or has acted in any capacity with respect to any investment
company or companies other than the trust, state the name or
names of such company or companies, their relationship, if
any, to the trust, and the nature of the depositor's
activities therewith. If the depositor has ceased to act in
such named capacity, state the date of and circumstances
surrounding cessation.
<PAGE>
PAGE 53
IDS Life conducts a conventional life insurance business in
addition to a variable annuity business. IDS Life conducts
this business in 49 states and the District of Columbia. A
wholly owned subsidiary of IDS Life, IDS Life Insurance
Company of New York, conducts a substantially identical
business in New York. A wholly owned subsidiary of IDS Life,
American Enterprise Life, conducts a substantially identical
business in District of Columbia and in all states except
Maine, New Hampshire, New York, Vermont and Wyoming.
IDS Life is investment manager and underwriter of IDS Life
Variable Annuity Fund A and IDS Life Variable Annuity Fund B,
both of which are registered management investment companies.
IDS Life is also the investment manager and underwriter of
IDS Life Investment Series, Inc. IDS Life Special Income
Fund, Inc., IDS Life Moneyshare Fund, Inc., and IDS Life
Managed Fund, Inc.
These funds support a number of unit investment trusts
sponsored by IDS Life and its affiliates.
Officials and Affiliated Persons of Depositor
28. (a) Furnish as at latest practicable date the following
information with respect to the depositor of the trust,
with respect to each officer, director, or partner of
the depositor, and with respect to each natural person
directly or indirectly owning, controlling or holding
with Power to vote 5% or more of the outstanding voting
securities of the depositor.
Not applicable.
(b) Furnish a brief statement of the business experience
during the last five years of each officer, director or
partner of the depositor.
Directors.
The directors of IDS Life, together with their principal occupation
during the last five years, are shown below.
Name and Address Principal Occupation
David R. Hubers Director since September 1989;
IDS Tower 10 president and chief executive
Minneapolis, MN officer, American Express
Financial Corporation (AEFC),
since January 1984. Senior
vice president, finance and
chief financial officer, AEFC,
from January 1984 to August 1993.
<PAGE>
PAGE 54
Richard W. Kling Director since February 1984;
IDS Tower 10 president since March 1994.
Minneapolis, MN Executive vice president,
Marketing and Products from
January 1988 to March 1994.
Vice president, AEFC, since
January 1988. Director of IDS
Life Series Fund, Inc. and
manager of IDS Life Variable
Annuity Funds A and B.
Paul F. Kolkman Director since May 1984;
IDS Tower 10 executive vice president since
Minneapolis, MN March 1994; vice president,
Finance from May 1984 to March
1994; vice president, AEFC,
since January 1987.
Peter A. Lefferts Director and executive vice
IDS Tower 10 president, Marketing since March
Minneapolis, MN 1994; senior vice president and
director, AEFC, since February
1986.
Janis E. Miller Director and executive vice
IDS Tower 10 president, Variable Assets since
Minneapolis, MN March 1994; vice president,
AEFC, since June 1990. Director,
Mutual Funds Product Development
and Marketing, AEFC, from May
1987 to May 1990. Director of
IDS Life Series Fund, Inc. and
manager of IDS Life Variable
Annuity Funds A and B.
James A. Mitchell Chairman of the board since March
IDS Tower 10 1994; director since July 1984;
Minneapolis, MN chief executive officer since
November 1986; president from
July 1984 to March 1994;
executive vice president, AEFC,
since March 1994; director, AEFC,
since July 1984; senior vice
president, AEFC, from July 1984
to March 1994.
Barry J. Murphy Director and executive vice
IDS Tower 10 president, Client Service, since
Minneapolis, MN March 1994; senior vice
president, Operations, Travel
Related Services (TRS), a
subsidiary of American Express
Company, since July 1992; vice
president, TRS, from November
1989 to July 1992; chief<PAGE>
PAGE 55
operating officer, TRS,
from March 1988 to November 1989.
Stuart A. Sedlacek Director and executive vice
IDS Tower 10 president, Assured Assets since
Minneapolis, MN March 1994; vice president, AEFC,
since September 1988.
Melinda S. Urion Director and controller since
September 1991; executive vice
president since March 1994; vice
president and treasurer from
September 1991 to March 1994;
vice president, AEFC, since
September 1991; chief
accounting officer, AEFC, from
July 1988 to September 1991.
Principal Officers.
The following are principal officers of IDS Life. Each officer
serves at the pleasure of the Board of Directors.
Morris Goodwin Jr.
Vice president and treasurer since March 1994; vice president and
corporate treasurer, AEFC, since July 1989; chief financial officer
and treasurer, IDS Bank & Trust, from January 1988 to July 1989.
William A. Stoltzmann
Vice President, General Counsel and Secretary since 1985.
Companies Owning Securities of Depositor
29. Furnish as at latest practicable date the following
information with respect to each Company which directly or
indirectly owns, controls or holds with power to vote 5% or
more of the outstanding voting securities of the depositor.
IDS Life, a Minnesota corporation, is a wholly owned
subsidiary of American Express Financial Corporation;
American Express Financial Corporation, a Delaware
corporation, is a wholly owned subsidiary of American Express
Company, American Express Tower, World Financial Center, New
York, New York 10285.
Controlling Persons
30. Furnish as at latest practicable date the following
information with respect to any person, other than those
covered by Items 28, 29 and 42 who directly or indirectly
controls the depositor.
None.
<PAGE>
PAGE 56
Compensation of Officers and Directors of Depositor Compensation of
Officers of Depositor
31. Furnish the following information with respect to the
remuneration for services paid by the depositor during the
last fiscal year covered by financial statements filed
herewith:
(a) directly to each of the officers or partners of the
depositor directly receiving the three highest amounts
of remuneration:
To be filed by amendment.
(b) directly to all officers or partners of the depositor
as a group exclusive of persons whose remuneration is
included under Item 31(a), stating separately the
aggregate amount paid by the depositor itself and the
aggregate amount paid by all the subsidiaries:
To be filed by amendment.
(c) indirectly or through subsidiaries to each of the
officers or partners of the depositor:
To be filed by amendment.
Compensation of Directors
32. Furnish the following information with respect to the
remuneration reported under Item 31, paid by the depositor
during the last fiscal year covered by financial statements
filed herewith:
(a) the aggregate direct remuneration to directors:
To be filed by amendment.
(b) indirectly or through subsidiaries to directors:
To be filed by amendment.
33. (a) Furnish the following information with respect to the
aggregate amount of remuneration for services of all
employees of the depositor (exclusive of persons whose
remuneration is reported in Items 31 and 32) who
received remuneration in excess of $10,000 during the
last fiscal year covered by financial statements filed
herewith from the depositor and any of its
subsidiaries.
Not applicable - see Item 31.
(b) Furnish the following information with respect to
remuneration for services paid directly during the last
fiscal year covered by financial statements filed
herewith to the following classes of persons (exclusive<PAGE>
PAGE 57
of those persons covered by Item 33(a)): (1) sales
managers, branch managers, district managers and other
persons supervising the sale of registrant's
securities; (2) salesmen, sales agents, canvassers and
other persons making solicitations but not ln
supervisory capacity; (3) administrative and clerical
employees; and (4) others (specify). If a person is
employed in more than one capacity, classify according
to the predominant type of work.
Not applicable - see Item 31.
Compensation to Other Persons
34. Furnish the following information with respect to the
aggregate amount of compensation for services paid any
persons (exclusive of persons whose remuneration is reported
in Items 31, 32 and 33), whose aggregate compensation in
connection with services rendered with respect to the trust
in all capacities exceed $10,000 during the last fiscal year
covered by financial statements filed herewith from the
depositor and any of its subsidiaries.
Not applicable - see Item 31.
IV.
DISTRIBUTION AND REDEMPTION OF SECURITIES
Distribution of Securities
35. Furnish the names of the states in which sales of the trust's
securities (A) are currently being made, (B) are presently
proposed to be made, and (C) have been discontinued,
indicating by appropriate letter the status with respect to
each state.
IDS Life no longer sells Policy 1. IDS Life currently sells
Policy 2, and intends to sell Policy 3 in the District of
Columbia and all states except New York.
36. If sales of the trust's securities have at any time since
January 1, 1936 been suspended for more than a month,
describe briefly the reasons for such suspension.
Not applicable.
37. (a) Furnish the following information with respect to each
instance where subsequent to January 1, 1937, any
Federal or state governmental officer, agency or
regulatory body denied authority to distribute
securities of the trust, excluding a denial which was
merely a procedural step prior to any determination by
such officer, etc., and which denial was subsequently
rescinded.
<PAGE>
PAGE 58
(1) Name of officer, agency or body.
(2) Date of denial.
(3) Brief statement of reasons given for denial.
Not applicable.
(b) Furnish the following information with regard to each
instance where, subsequent to January 1, 1937, the
authority to distribute securities of the trust has
been revoked by any Federal or state governmental
officer, agency or regulatory body.
(1) Name of officer, agency or body.
(2) Date of revocation.
(3) Brief statement of reason given for revocation.
Not applicable.
38. (a) Furnish a general description of the method of
distribution of securities of the trust.
IDS Life may be deemed to be the principal underwriter
of the Policy and will perform all sales and
administrative duties. IDS Life will distribute the
Policy exclusively through a sales force it shares with
American Express Financial Advisors Inc. IDS Life is
itself a registered broker/dealer, and is a member of
the National Association of Securities Dealers, Inc.
(NASD). Members of the IDS Life sales force are
trained and licensed to sell both the conventional
insurance products of the Company, as well as its
variable life insurance and annuity contracts.
(b) State the substance of any current selling agreement
between each principal underwriter and the trust or the
depositor, including a statement as to the inception
and termination dates of the agreement, any renewal and
termination provisions, and any assignment provisions.
Not applicable.
(c) State the substance of any current agreement or
arrangements of each principal underwriter with
dealers, agents, salesmen, etc., with respect to
commissions, and overriding commissions, territories,
franchises, qualifications and revocations. If the
trust is the issuer of periodic payment plan
certificates, furnish schedules of commissions and the
bases thereof. In lieu of a statement concerning
schedules of commissions, such schedules of commissions
may be filed as Exhibit A(3)(c).
<PAGE>
PAGE 59
Policy 1
IDS Life will pay a commission not to exceed 3% of the
single premium in the first Policy Year, .10% of the
single premium in the Second Policy Year, .20% of the
single premium in the third Policy Year, .30% of the
single premium in the fourth Policy Year, and .05% of
the Policy Value in Policy Years 5 through 11, to its
sales representatives for sales of the Policy, if the
Policy is not lapsed, surrendered or terminated as a
result of the Insured's death. IDS Life will also pay
on an approximate basis a total of 27% of the selling
representative's commission to the Divisional and
District Sales Managers of the selling representative.
Policy 2
IDS Life will pay a commission of up to 50 percent of
the Initial Minimum Monthly Premium (annualized) when
the Policy is sold, plus up to 3 percent of all
premiums in excess of twelve times the Minimum Monthly
Premium. At the end of policy years 4 through 10, IDS
Life will pay .05 percent of the policy value, net of
indebtedness Additional commissions will be paid if an
increase in coverage occurs. IDS Life will also pay
approximately 27 percent of the total representative's
commission to the Division and District Sales Managers
of the selling representative.
Policy 3
IDS Life will pay a commission of up to 50 percent of
the Initial Target Premium (annualized) when the policy
is sold, plus 2 percent of all premiums in excess of
the target premium. Each calendar quarter the policy
is in force, IDS Life will pay .03125 percent of the
policy value, net of indebtedness. IDS Life will also
pay approximately 17 percent of the total
representative's commission to the Division and Sales
Managers of the selling representative.
Information Concerning Principal Underwriter
39. (a) State the form of organization of each principal
underwriter of securities of the trust, the name of the
state or other sovereign power under the laws of which
each underwriter was organized and the date of
organization.
See Item 25.
(b) State whether any principal underwriter currently
distributing securities of the trust is a member of the
National Association of Securities Dealers, Inc.
IDS Life is a member of the NASD.
<PAGE>
PAGE 60
40. (a) Furnish the following information with respect to all
fees received by each principal underwriter of the
trust from the sale of securities of the trust and any
other functions in connection therewith exercised by
such underwriter in such capacity or otherwise during
the period covered by the financial statement filed
herewith.
See Item 26(a).
(b) Furnish the following information with respect to any
fee or any participation in fees received by each
principal underwriter from any underlying investment
company or any affiliated person or investment adviser
of such company:
(1) The nature of such fee or participation.
(2) The name of the person making payment.
(3) The nature of the services rendered in
consideration for such fee or participation.
(4) The aggregate amount received during the last
financial year covered by the financial
statements filed herewith.
See Item 26(b).
41. (a) Describe the general character of the business engaged
in by each principal underwriter, including a statement
as to any business other than the distribution of
securities of the trust. If a principal underwriter
acts or has acted in any capacity with respect to any
investment company or companies, their relationship, if
any, to the trust and the nature of such activities.
If a principal underwriter has ceased to act in such
named capacity, state the date of and circumstances
surrounding such cessation.
See Item 27.
(b) Furnish as at latest practicable date the address of
each branch office of each principal underwriter
currently selling securities of the trust and furnish
the name and residence address of the person in charge
of such office.
Not applicable.
(c) Furnish the number of individual salesmen of each
principal underwriter through whom any of the
securities of the trust were distributed for the last
fiscal year of the trust covered by the financial
statements filed herewith by such salesmen in such
year.
<PAGE>
PAGE 61
Not applicable.
42. Furnish as at latest practicable date the following
information with respect to each principal underwriter
currently distributing securities of the trust and with
respect to each of the officers, directors or partners of
such underwriter.
Not Applicable.
43. Furnish, for the last fiscal year covered by the financial
statements filed herewith, the amount of brokerage
commissions received by any principal underwriter who is a
member of a national securities exchange and who is currently
distributing the securities of the trust or effecting
transactions for the trust in the portfolio securities of the
trust.
Not Applicable.
44. (a) Furnish information with respect to the method of
valuation used by the trust for purposes of determining
the offering price to the public of securities issued
by the trust or the valuation of shares or interests in
the underlying securities acquired by the holder of a
periodic payment plan certificate.
Policy 1
The Net Premium allocated to the Subaccounts will be
invested at net asset value in any one or more of the
Fund Portfolios in accordance with the selection made
by the Owner. Fund shares so purchased become assets
of the Variable Account.
Upon allocation to the appropriate Subaccount(s), the
policy value is converted into Accumulation Units of
the Subaccount. The number of Accumulation Units to be
credited to the Policy is determined by dividing the
policy value by the Accumulation Unit Value as of the
end of the Valuation Period during which the Policy
Value was allocated to the subaccount. The same
calculation will apply to amounts transferred from any
other Subaccount. The net investment results of each
Subaccount vary with the investment performance of the
Fund Portfolio or valuation of the units of the Trust
in which the Subaccount invests.
Policy Values for the Subaccounts are determined by
multiplying the number of Accumulation Units credited
to the Subaccounts by the appropriate current
Accumulation Unit Value(s). The value of the
Accumulation Unit for each of the Subaccounts was
arbitrarily set initially at $1.00. Units of each
Trust will be valued at the "Sponsor's Repurchase
Price" as defined in the prospectus for the Trust. The
value of an Accumulation Unit for any of the<PAGE>
PAGE 62
Subaccounts for any Valuation Period is determined by
multiplying that Subaccount's Accumulation Unit Value
for the immediately preceding Valuation Period by the
Net Investment Factor for the Valuation Period for
which the Accumulation Unit Value is being calculated.
The Net Investment Factor for any Subaccount for any
Valuation Period is determined by dividing (1) by (2)
and subtracting (3) from the result:
Where:
(1) is the net result of:
(a) the net asset value per share of the
Portfolio or value of units of the Trust
held in the Subaccount determined at the
end of the current Valuation Period, plus
(b) the per share amount of any dividend of
capital gain distribution made by the
Portfolio held in the Subaccount if the ex-
dividend date occurs during the current
Valuation Period, plus or minus
(c) a charge or credit for any taxes reserved
for, which is determined by IDS Life to
have resulted from the investment
operations of the Subaccount.
(2) is the net result of:
(a) the net asset value per share of the
Portfolio or value of units of the Trust
held in the Subaccount determined as of the
end of the immediately preceding Valuation
Period, plus or minus
(b) the charge or credit for any taxes reserved
for in the immediately preceding Valuation
Period.
(3) is the percentage factor representing the
mortality and expense risk charge and the minimum
death benefit guarantee risk charge. Such factor
is equal on an annual basis to .65% of the daily
net asset value of the Subaccount. In addition,
for subaccounts investing in one or more Trusts,
this factor will include a daily asset charge to
reimburse IDS Life for the transaction charge
which it has paid to Smith Barney, Inc. The
transaction charge is currently .25 percent and
is guaranteed to never exceed .50 percent.
<PAGE>
PAGE 63
Policy 2
The Owner determines in the application what portions,
if any, of the premiums are to be allocated to the
Fixed Account and/or to each of the subaccounts. Until
the date that an application is approved by IDS Life's
home office 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 (gross premium received
minus the Premium Expense Charge). As of the date that
IDS Life's home office underwriting department approves
the application, the net premiums plus interest accrued
thereon will be allocated to the Fixed Account and/or
one or more of the subaccounts, in accordance with the
allocation instructions received from the Owner in the
application. At that time, the various loads, fees,
charges and expenses will begin to be assessed.
Upon allocation to the appropriate subaccounts, the
policy value in the Subaccounts is converted into
accumulation units of the subaccount. The number of
accumulation\units to be credited to the Policy is
determined by dividing the policy value in the
Subaccount by the accumulation unit value of that
Subaccount as of the end of the valuation period during
which the policy value was allocated to the respective
subaccounts. When amounts are transferred between the
subaccounts, the accumulation units in the first
subaccount will be reconverted into a cash value by
multiplying the accumulation unit value by the number
of accumulation units necessary to equal the amount to
be transferred. The amount transferred will then be
converted into accumulation units of the second
subaccount.
The investment experience of a subaccount reflects
increases or decreases in the net asset value of the
underlying fund shares or in the value of units of the
Trust and any charges against the assets in each
subaccount. Policy values for the subaccounts are
determined by multiplying the number of accumulation
uits credited to the subaccounts by the appropriate
current accumulation unit value(s). The value of the
accumulation unit for each of the subaccounts was
arbitrarily set initially at $1. Units of each Trust
will be valued at the "Sponsor's Repurchase Price" as
defined in the prospectus for the Trust.
The value of an accumulation unit for any of the
subaccounts for any valuation period is determined by
multiplying that subaccount's accumulation unit value
for the immediately preceding valuation period by the
Net Investment Factor for the valuation period for
which the accumulation unit value is being calculated.
<PAGE>
PAGE 64
The Net Investment Factor for any subaccount investing
in any portfolio of the Fund or in any Trust for any
valuation period is determined by dividing (1) by (2)
and subtracting (3) from the result where:
(1) is the net result of:
(a) the net asset value per share of the
portfolio or the value of a unit of the
Trust held in the subaccount determined at
the end of the current valuation period,
plus
(b) the per share amount of any dividend or
capital gain distribution made by the
portfolio held in the subaccount if the ex-
dividend date occurs during the current
valuation period, plus or minus
(c) a charge or credit for any taxes reserved
for, which is determined by IDS Life to
have resulted from the investment
operations of the subaccount.
(2) is the net result of:
(a) the asset value per share of the portfolio
or the value of a unit of the Trust held in
the subaccount determined as of the end of
the immediately preceding valuation period,
plus or minus
(b) the charge or credit for any taxes reserved
for in the immediately preceding valuation
period.
(3) is the percentage factor representing the
mortality and expense risk charge. Such factor
is equal on an annual basis to .90 percent of the
daily net asset value of the subaccount. In
addition, for subaccounts investing in one or
more Trusts, this factor will include a daily
asset charge to reimburse IDS Life for the
transaction charge which it has paid to Shearson
Lehman. The transaction charge is currently .25
percent on an annual basis and is guaranteed to
never exceed .50 percent.
(b) Furnish a specimen schedule showing
the components of the offering price
of the trust's securities as at the
latest practicable date.
No Policy had been offered for sale
to the public as of the date of the
original registration statement.
<PAGE>
PAGE 65
(c) If there is any variation in the
offering price of the trust's
securities to any person or classes
of persons other than underwriters,
state the nature and amount of such
variation and indicate the person or
classes of persons to whom such
offering is made.
There is no variation in offering
price of interests in a Subaccount.
The cost of insurance for any given
Policy will vary with the age, sex
and health of the Insured.
Policy 3
Policy value
The value of the owner's 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 the initial
net premium that the owner has 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 the owner has 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
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<PAGE>
PAGE 66
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 in
which that subaccount invests and on other factors
detailed below. There is no guaranteed minimum
subaccount value. The owner bears the entire
investment risk.
Calculation of subaccount value: The value in each
subaccount on the policy date equals the portion of the
owner's initial net premium allocated to that
subaccount plus interest accrued before the policy
date, minus the portion of the monthly deduction for
the first policy month that you have allocated to that
subaccount. 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 the owner directs a premium payment or transfers
policy value into one of the subaccounts, a certain
number of accumulation units are credited to their
policy for that subaccount. Conversely, each time they
take a partial surrender or transfer value out of a
subaccount, a certain number of accumulation units are
subtracted.
<PAGE>
PAGE 67
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, and on
certain charges. Here's how unit values are
calculated:
Number of units: To calculate the number of units for a
particular subaccount, IDS Life divides the owner's
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; 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 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.
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:<PAGE>
PAGE 68
The number of accumulation units the owner owns may
fluctuate due to:
o additional purchase payments allocated to the
subaccounts;
o transfers into or out of the subaccount(s);
o partial surrenders and partial surrender fees;
o surrender charges; and/or
o monthly deductions
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.
45. Furnish the following information with respect to any
suspension of the redemption rights of the securities issued
by the trust during the three fiscal years covered by the
financial statements filed herewith:
(a) by whose action redemption rights were suspended.
(b) the number of days notice given to security holders
prior to suspension of redemption rights.
(c) reason for suspension.
(d) period during which suspension was in effect.
Not applicable.
Redemption Valuation of Securities of the Trust
46. (a) Furnish the following information with respect to the
method of determining the redemption or withdrawal
valuation of securities issued by the trust:
(1) The source of quotations used to determine the
value of portfolio securities.
Net asset values as provided by the Fund's
Portfolios or value of units of the Trust as
provided by the Evaluator.
(2) Whether opening, closing, bid, asked or any other
price is used.
Net asset value or unit value as of the end of
the appropriate Valuation Period is used.
(3) Whether price is as of the day of sale or as of
any other time.<PAGE>
PAGE 69
As of the end of the appropriate Valuation
Period.
(4) A brief description of the methods used by
registrant for determining other assets and
liabilities including accrual for expenses and
taxes (including taxes on unrealized
appreciation).
See Items 13(d), 17(a) and 18(c).
(5) Other items which registrant deducts from the net
asset value in computing redemption value of its
securities.
None, other than as set forth in (4) above.
(6) Whether adjustments are made for fractions.
Not applicable.
(b) Furnish a specimen schedule showing the components of
the redemption price to the holders of the trust's
securities as at the latest practicable date.
Not Applicable.
Purchase and Sale of Interests to Underlying Securities from and to
Security Holders
47. Furnish a statement as to the procedure with respect to the
maintenance of a position in the underlying securities or
interests in the underlying securities, the extent and nature
thereof and the person who maintains such a position.
Include a description of the procedure with respect to the
purchase of underlying securities or interests in the
underlying securities from security holders who exercise
redemption or withdrawal rights and the sale of such
underlying securities and interests in the underlying
securities to other security holders. State whether the
method of valuation of such underlying securities and
interests in the underlying securities differs from that set
forth in Items 44 and 46. If any item of expenditure
included in the determination of the valuation is not or may
not actually be incurred or expended, explain the nature of
such item and who may benefit from the transaction.
Policy 1
The Subaccounts will maintain positions in Fund shares
or Trust units by purchasing Fund shares or Trust units
at net asset value with policy value in accordance with
instructions from the Owner in the application. The
Subaccounts will redeem Fund shares or Trust units at
net asset value for the purpose of meeting Policy
obligations, or making adjustments in reserves held in
the Subaccounts. There is no procedure for the<PAGE>
PAGE 70
purchase of underlying securities or interests therein
from Owners who exercise surrender rights.
Policy 2 and Policy 3
The Subaccounts will maintain positions in Fund shares
or Trust units by purchasing Fund shares and/or Trust
units at net asset value with premiums in accordance
with instructions from the Owner in the application.
The Subaccounts will redeem Fund shares and/or Trust
units at net asset value for the purpose of meeting
Policy obligations or making adjustments in reserves
held in the Subaccounts. There is no procedure for the
purchase of underlying securities or interest therein
from Owners who exercise surrender rights.
V.
INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Furnish the following information as to each trustee or
custodian of the trust.
(a) Name and principal business address:
Not applicable as IDS Life will serve as custodian for
the Variable Account.
(b) Form of organization.
Not applicable as IDS Life will serve as custodian for
the Variable Account.
(c) State or other sovereign power under the laws of which
the trustee or custodian was organized.
Not applicable as IDS Life will serve as custodian for
the Variable Account.
(d) Name of governmental supervising or examining
authority.
Not applicable as IDS Life will serve as custodian for
the Variable Account.
49. State the basis for payment of fees or expenses of the
trustee or custodian for services rendered with respect to
the trust and its securities, and the aggregate amount
thereof for the last fiscal year. Indicate the person paying
such fees or expenses. If any fees or expenses are prepaid,
state the unearned amounts.
See Item 48.
50. State whether the trustee or custodian or any other person
has or may create a lien on the assets of the trust and, if
so, give full particulars, outlining the substance of the<PAGE>
PAGE 71
provisions of any indenture or agreement with respect
thereto.
Not applicable.
VI.
INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Furnish the following information with respect to the
insurance of holders of securities:
(a) The name and address of the insurance company.
All insurance elements of the Policy are provided by
IDS Life.
(b) The types of policies and whether individual or group
policies.
Policy 1
The Policy is a single premium variable life insurance
policy and is issued on an individual basis.
Policy 2
The Policy is a flexible premium variable life
insurance policy and is issued on an individual basis.
Policy 3
The policy is a flexible premium survivorship variable
life insurance policy and is issued on an individual
basis.
(c) The types of risks insured and excluded.
Under the Policies the Company assumes the risk that
insureds covered by the Policies may die before
anticipated and that the charge for this mortality risk
may prove insufficient. The Company assumes an expense
risk that deductions for expenses may not be adequate.
Under Policy 1, the Company assumes the risk in
guaranteeing that the death benefit will not fall below
the initial death benefit, regardless of the investment
performance of the Fund Portfolios or valuation of
units of the Trust. Under Policy 2, the company
assumes the risks under the death benefits guarantee if
the minimum monthly premiums are timely paid. Under
Policy 3, the company assumes the risks under the death
benefit guarantees if the minimum initial premium
and/or the death benefit guarantee premiums are timely
paid.
<PAGE>
PAGE 72
(d) The coverage of the policies.
See Paragraph (c) of this Item.
(e) The beneficiaries of such policies and the uses to
which the proceeds of policies must be put.
The recipient of the benefits of the insurance
undertakings described in Item 51(c) is either the
designated primary beneficiary, any contingent
beneficiaries, or the estate of the insured as stated
in the application for the Policy. There is no
limitation on the use of the proceeds.
(f) The terms and manner of cancellation and of
reinstatement.
The insurance undertakings described in Item 51(c) are
integral parts of the Policy and may not be canceled
while the Policy remains in effect. See Item 10(d)
with respect to lapse of the Policy.
(g) The method of determining the amount of premiums to be
paid by holders of securities.
Policy 1
The Owner may choose to purchase a policy based upon
the single premium which the Owner wishes to pay, or on
the initial death benefit which the Owner desires to
purchase. The amount of the initial death benefit
depends upon the Single Premium and the insured's age
and sex. The minimum Single Premium which can be
purchased is $5,000 and the maximum is $500,000.
Policy 2
The amount and frequency of premium payments will
affect the policy value, the Cash Surrender Value, and
how long the Policy will remain in force (including
affecting whether the Death Benefit Guarantee is in
effect). After the initial premium, the Owner may
determine the amount and timing of subsequent premium
payments, subject to certain limitations. In most
cases, payment of cumulative premiums sufficient to
maintain the Death Benefit Guarantee will be required
to keep the Policy in force during at least the first
several policy years.
The initial premium is the amount of money submitted by
the Owner with the application. It is the combination
of the Scheduled Premium and any unscheduled premium.
The scheduled premium is the premium shown on the
Policy Data page of the Policy. The scheduled premium
will serve only as an indication of the Owner's intent
as to the frequency and amount of future premium
payments.<PAGE>
PAGE 73
The Owner may change the amount and frequency of
scheduled premium payments by written request. The
Owner may also skip scheduled premium payments. Any
change in amount may be subject to applicable tax laws
and regulations.
Scheduled premiums may be paid annually, semi-annually,
or quarterly. Payment at any other interval must be
approved by IDS Life. The minimum scheduled premium
payment IDS Life will accept is $25. IDS Life also
reserves the right to limit the amount of any increase
in scheduled premiums.
An unscheduled premium is any premium paid that is not
included with a Scheduled Premium. There is no
maximum. However, the Company reserves the right to
limit the number and amount of unscheduled premiums.
In order to receive favorable tax treatment under
sections 72, 101 and 7702 of the Internal Revenue Code,
the premiums paid during the life of the Policy must
not exceed certain premium guideline limitations. In
order to comply with the law, IDS Life can either
refuse excess premiums as they are paid, or refund
premiums with interest no later than 60 days after the
Policy Anniversary in which they were paid.
Until the insured's attained age 70, or five years from
the policy date, whichever is later, the policy will
not terminate even if the cash surrender value is
insufficient to 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) is the minimum monthly premium, as shown under
Policy Date in the Policy, times the number of
months since the Policy Date, including the
current month.
Minimum monthly premiums may be paid on other than a
monthly basis as long as the sum of premiums paid is at
least equal to the total required Minimum Monthly
Premiums at all times.
If on a monthly date, sufficient premiums have not been
paid to maintain the Death Benefit Guarantee, an
additional period of 61 days will be allowed for the
payment of a premium sufficient to pay the required
minimum monthly premiums. Notice of such premium will
be mailed to the Owner's last known address. If the
premium is not paid within this period, the death
benefit guarantee provision will no longer be in effect
and cannot be reinstated.
<PAGE>
PAGE 74
The minimum monthly premium will change if the
specified amount is increased or decreased or if riders
are added, changed or terminated. The new minimum
monthly premium will apply from the date of the change.
A death benefit guarantee charge is included in the
monthly deduction in the first five policy years or
until the insured's attained age 70, whichever is
later. The charge will not be taken if, as described
above, the death benefit guarantee provision is no
longer in effect.
For any month that the monthly deduction is being paid
for by a Waiver of Monthly Deduction Rider attached to
the policy, the minimum monthly premium for that month
will be zero.
Policy 3
Payment of premiums:
In applying for the policy, the owner decides how much
they intend to pay and how often they will make
payments. During the early policy years until the
policy value is sufficient to cover the surrender
charge, IDS Life requires that the owner pay the
premiums sufficient to keep the DBG-85 in effect.
The owner may schedule payments annually, semiannually,
or quarterly. (Payment at any other interval must be
approved by IDS Life.) This premium schedule is shown
in the owner's policy.
The scheduled premium serves only as an indication of
the owner's intent as to the frequency and amount of
future premium payments. The owner may skip scheduled
premium payments at any time if the cash surrender
value is sufficient to pay the monthly deduction, or if
the owner has paid sufficient premium to keep the DBG-
85 or the DBG-100 in effect.
The owner 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 the owner has flexibility in paying premiums,
the amount and frequency of the owner's payments will
affect the policy value, cash surrender value and
length of time their policy will remain in force, as
well as affect whether the DBG-85 or DBG-100 remain in
effect.
<PAGE>
PAGE 75
Premium limitations:
The owner may make unscheduled premium payments at any
time and in an amount of at least $50. IDS Life
reserves the right to limit the number and amount of
unscheduled premium payments.
No premium payments, scheduled or unscheduled, are
allowed on or after the youngest insured's attained
insurance age 100.
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.
Keeping the policy in force
This section includes a description of the policy
provisions that determines if the policy will remain in
force or lapse (terminate). It is important that the
owner understands them so the appropriate premium
payments are made to ensure that insurance coverage
meets the owner's objectives.
If the owner wishes to have a guarantee that the policy
will remain in force until the youngest insured's
attained insurance age 100 regardless of investment
performance, they should pay at least the DBG-100
premiums.
If they wish to pay a lower premium and are satisfied
to have a guarantee that the policy will remain in
force until the youngest insured's attained insurance
age 85 (or 15 policy years, if later) regardless of
investment performance, they should pay at least the
DBG-85 premiums.
If they wish to pay yet a lower premium and are not
concerned with a long-term guarantee that the policy
will remain in force regardless of investment
performance, they can pay premiums so that the cash
surrender value on each monthly date is sufficient to
pay the monthly deduction. However, during the minimum
initial premium period, they must pay at least the
minimum initial premium until the policy value is
greater than the surrender charge and the cash
surrender value is sufficient to pay the monthly
deduction. At that time the owner may be able to
reduce their premiums as long as the cash surrender
value continues to be sufficient to pay the monthly
deduction.
<PAGE>
PAGE 76
Death benefit guarantee to age 85
The DBG-85 provides that the policy will remain in
force until the youngest insured reaches attained
insurance age 85 (or 15 policy years, if later) even if
the cash surrender value is insufficient to pay the
monthly deduction. The DBG-85 will remain in effect,
as long as:
the sum of premiums paid - partial surrenders -
outstanding indebtedness
equals or exceeds
the DBG-85 premiums due since the policy date.
The DBG-85 premium is shown in the policy.
If, on a monthly date, the owner has not paid enough
premiums to keep the DBG-85 in effect, an additional
period of 61 days will be allowed for the owner to pay
a premium sufficient to bring the total up to the
required minimum. If they do not pay this amount
within 61 days, the DBG-85 will terminate. The owner's
policy will also lapse (terminate) if the cash
surrender value is less than the amount needed to pay
the monthly deduction and the minimum initial premium
is not in effect. Although the policy can be
reinstated as explained below, the DBG-85 cannot be
reinstated.
Death benefit guarantee to age 100
The DBG-100 provides that the policy will remain in
force until the youngest insured's attained insurance
age 100 even if the cash surrender value is
insufficient to pay the monthly deduction. The DBG-100
will remain in effect, as long as:
the sum of premiums paid - partial surrenders -
outstanding indebtedness
equals or exceeds
the DBG-100 premiums due since the policy date.
The DBG-100 premium is shown in the policy.
If, on a monthly date, the owner has not paid enough
premiums to keep the DBG-100 in effect, an additional
period of 61 days will be allowed for the owner to pay
a premium sufficient to bring the total up to the
required minimum. If they do not pay this amount
within 61 days, the DBG-100 will terminate. If they
have paid sufficient premium, the DBG-85 will be in
effect. If the DBG-85 and DBG-100 are not in effect,
their policy will lapse (terminate) if the cash<PAGE>
PAGE 77
surrender value is less than the amount needed to pay
the monthly deduction and the minimum initial premium
period is not in effect. Although the policy can be
reinstated as explained below, the DBG-100 cannot be
reinstated.
Minimum initial premium period
To allow the owner the opportunity to increase their
policy value gradually so that the cash surrender value
is sufficient to pay the monthly deduction, they may
choose to pay only the minimum initial premium during
the minimum initial premium period as long as the
policy value minus indebtedness equals or exceeds the
monthly deduction. The policy will not enter the grace
period during the minimum initial premium period as
shown under Policy Date, if:
1. on a monthly date, the policy value minus
indebtedness equals or exceeds the monthly deduction
for the policy month following such monthly date; and
2. the sum of all premiums paid, minus any partial
surrenders, and minus any indebtedness equals or
exceeds the minimum initial premium, as shown under
Policy Date, times the number of months since the
Policy Date, including the current month.
The minimum initial period is
4 years if the youngest insured's insurance age is
20-29
3 years if the youngest insured's insurance age is
30-39
2 years if the youngest insured's insurance age is
40-49
1 year if the youngest insured's insurance age is 50
and over
Grace period
If the cash surrender value of the policy becomes less
than that needed to pay the monthly deduction and
neither of the death benefit guarantees nor the minimum
initial premium period is in effect, the owner will
have 61 days to pay the required premium amount. If
the required premium is not paid, the policy will
lapse.
IDS Life will mail a notice to the owner's last known
address, requesting payment of the premium needed so
that the next three monthly deductions can be made. If
IDS Life receives this premium before the end of the
61-day grace period, IDS Life will use the payment to
pay 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.<PAGE>
PAGE 78
If a policy lapses with outstanding indebtedness, any
excess of the outstanding indebtedness over the premium
paid generally will be taxable to the owner. If the
last surviving insured dies during the grace period,
any overdue monthly deductions will be deducted from
the death benefit.
(h) The amount of aggregate premiums paid to the insurance
company during the fiscal year.
Not applicable.
(i) Whether any person other than the insurance company
receives any part of such premiums, the name of each
such person and the amount involved, and the nature of
the services rendered therefor.
No person other than IDS Life receives any part of the
premiums or the amounts deducted for the mortality and
expense risk charge or other applicable charges. IDS
Life may, from time to time, enter into reinsurance
treaties with other insurers whereby these insurers may
agree to reimburse IDS Life for mortality expenses.
However, any such arrangements do not affect the
Policy.
(j) The substance of any other material provisions of any
indenture or agreement of the trust relating to
insurance.
Not applicable.
VII.
POLICY OF REGISTRANT
52. (a) Furnish the substance of the provisions of any
indenture or agreement with respect to the conditions
upon which and the method of selection by which
particular portfolio securities must or may be
eliminated from the assets of the trust or must or may
be replaced by other portfolio securities. If an
investment adviser or other person is to be employed in
connection with such selection, elimination or
substitution, state the name of such person, the nature
of any affiliation to the depositor, trustee or
custodian, and any principal underwriter, and the
amount of remuneration to be received for such
services. If any particular person is not designated
in the indenture or agreement, describe briefly the
method of selection of such person.
If shares of any Fund Portfolio and/or units of the
Trust should not be available 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 in view of the purposes of the<PAGE>
PAGE 79
Subaccount, shares of another registered, open-end
management investment company and/or units of another
unit investment trust may be substituted for Fund
shares and/or Trust units, respectively, held, in the
subaccount. If deemed by IDS Life to be the best
interest of persons having voting rights under the
subaccount may be operated as a management company
under the Investment Company Act of 1940 or it may be
deregistered under such Act in the event such
registration is no longer required. In the event of
any such substitution or change, IDS Life may, without
the consent or approval of the 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 Securities and
Exchange Commission.
(b) Furnish Information with respect to each transaction
involving the elimination of any underlying security
during the period covered by the financial statements
filed herewith.
Not applicable.
(c) Describe the policy of the trust with respect to the
substitution and elimination of the underlying
securities of the trust with respect to:
(1) the grounds for elimination and substitution;
(2) the type of securities which may be substituted
for any underlying security;
(3) whether the acquisition of such substituted
security or securities would constitute the
concentration of investment in a particular
industry or group of industries or would conform
to a policy of concentration of investment in a
particular industry or group of industries;
(4) whether such substituted securities may be the
securities of any other investment company; and
(5) the substance of the provisions of any indenture
or agreement which authorize or restrict the
policy of the registrant in this regard.
See Item 52(a).
(d) Furnish a description of any policy (exclusive of
policies covered by Paragraphs (a) and (b) herein) of
the trust which is deemed a matter of fundamental
policy and which is elected to be treated as such.
None.
<PAGE>
PAGE 80
Regulated Investment Company
53. (a) State the taxable status of the trust.
The Policies are designed for use by individuals in
meeting their insurance and financial security needs.
The ultimate effect of the Federal income taxes on the
Policy Value, on benefit payments and on the economic
benefit to the Policy Owner or Beneficiary depends on
both IDS Life's tax status and upon the tax status of
the individual concerned.
IDS Life is taxed as a life insurance company under the
Code. Since the variable Account is not a separate
entity from IDS Life for tax purposes, and its
operations form a part of IDS Life, it will not be
taxed separately as a "regulated investment company"
under Subchapter M of the Code.
(b) State whether the trust qualified for the last taxable
year as a regulated investment company as defined in
Section 851 of the Internal Revenue Code of 1954, and
state its present intention with respect to such
qualification during the current taxable year.
Not applicable.
VIII.
FINANCIAL AND STATISTICAL INFORMATION
54. If the trust is not the issuer of periodic payment plan
certificates, furnish the following information with respect
to each class or series of its securities.
Not applicable.
55. If the trust is the issuer of periodic payment plan
certificates, a transcript of a hypothetical account shall be
filed in approximately the following form on the basis of the
certificate calling for the smallest amount of payments. The
schedule shall cover a certificate of the type currently
being sold assuming that such certificate had been sold at a
date approximately ten years prior to the date of
registration or at the approximate date of organization of
the trust.
Policy 2
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:
<PAGE>
PAGE 81
o the annual rate of return 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 "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
nonsmoker 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.)
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:
<PAGE>
PAGE 82
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 83
<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.
<PAGE>
PAGE 84
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%
_____________________________________________________________________________________________________________________________
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.
<PAGE>
PAGE 85
Illustration
_____________________________________________________________________________________________________________________________
Initial specified amount $100,000 Male age 35 Guaranteed 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%
_____________________________________________________________________________________________________________________________
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>
Policy 3
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 male insurance age 55 and a female insurance age 55, both
nonsmokers, if:
o the annual rate of return of the fund is 0%, 6% or 12%.
o the cost of insurance rates are current rates or guaranteed
rates.
Any such illustration involves a number of detailed assumptions
(see "Understanding the illustrations"). To the extent that your
own circumstances differ from those assumed in the illustrations,
your expected results would also differ.
<PAGE>
PAGE 86
Upon request, you will be furnished with comparable tables
illustrating death benefits, policy values, and cash surrender
values based on the actual ages of the persons 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.
Insureds: assumed to be a male insurance age 55 and a female
insurance age 55, in a standard risk classification, qualifying for
the nonsmoker rate. Results would be lower if one or both of the
insureds were in a substandard risk classification or did not
qualify for the non-smoker rate.
Premiums: A $15,000 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.)
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 0.7% 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, 1994. 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%<PAGE>
PAGE 87
correspond to approximate net annual rates of -1.69%, 4.21%, and
10.11%, 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.
<TABLE><CAPTION>
Illustration
Initial specified amount $1,000,000 Male - Insurance age 55 - Nonsmoker Current costs assumed
Death benefit Option 1 Female - Insurance age 55 - Nonsmoker annual premium $15,000
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 15750 1000000 1000000 1000000 12651 13424 14196 8651 9424 10196
2 32288 1000000 1000000 1000000 25091 27415 29830 21091 23415 25830
3 49652 1000000 1000000 1000000 37208 41880 46926 33208 37880 42926
4 67884 1000000 1000000 1000000 48899 56727 65520 44899 52727 61520
5 87029 1000000 1000000 1000000 60287 72093 85888 56287 68093 81888
6 107130 1000000 1000000 1000000 71159 87781 107990 67559 84181 104390
7 128237 1000000 1000000 1000000 81642 103927 132130 78442 100727 128930
8 150398 1000000 1000000 1000000 91530 120341 158315 88730 117541 155515
9 173668 1000000 1000000 1000000 100843 137053 186782 98443 134653 184382
10 198102 1000000 1000000 1000000 109597 154091 217796 107597 152091 215796
11 223757 1000000 1000000 1000000 117705 171386 251558 116105 169786 249958
12 250695 1000000 1000000 1000000 125288 189070 288490 124088 187870 287290
13 278979 1000000 1000000 1000000 132259 207081 328874 131459 206281 328074
14 308678 1000000 1000000 1000000 138531 225360 373048 138131 224960 372648
15 339862 1000000 1000000 1000000 144222 244042 421558 144222 224042 421558
20 520789 1000000 1000000 1000000 164007 345156 751285 164007 345156 751285
25 751702 1000000 1000000 1362530 151963 449820 1297647 151963 449820 1297647
30 1046412 1000000 1000000 2280735 46519 529397 2172129 46519 529397 2172129
35 1422545 0 1000000 3716419 0 526059 3539447 0 526059 3539447
40 1902596 0 1000000 5931790 0 341804 5649324 0 341804 5649324
45 2515277 0 0 9069560 0 0 8979762 0 0 8979762
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $15,000 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.
<PAGE>
PAGE 88
Illustration
_____________________________________________________________________________________________________________________________
Initial specified amount $1,000,000 Male - Insurance age 55 - Nonsmoker Guaranteed costs assumed
Death benefit Option 1 Female - Insurance age 55 - Nonsmoker annual premium $15,000
_____________________________________________________________________________________________________________________________
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%
_____________________________________________________________________________________________________________________________
1 15750 1000000 1000000 1000000 12651 13424 14196 8651 9424 10196
2 32288 1000000 1000000 1000000 25091 27415 29830 21091 23415 25830
3 49652 1000000 1000000 1000000 37208 41880 46926 33208 37880 42926
4 67884 1000000 1000000 1000000 48899 56727 65520 44899 52727 61520
5 87029 1000000 1000000 1000000 60287 72093 85888 56287 68093 81888
6 107130 1000000 1000000 1000000 71159 87781 107990 67559 84181 104390
7 128237 1000000 1000000 1000000 81642 103927 132130 78442 100727 128930
8 150398 1000000 1000000 1000000 91530 120341 158315 88730 117541 155515
9 173668 1000000 1000000 1000000 100843 137053 186782 98443 134653 184382
10 198102 1000000 1000000 1000000 109492 153988 217697 107492 151988 215697
11 223757 1000000 1000000 1000000 117288 170973 251160 115688 169373 249560
12 250695 1000000 1000000 1000000 124256 188039 287501 123056 186839 286301
13 278979 1000000 1000000 1000000 130212 205026 326914 129412 204226 326114
14 308678 1000000 1000000 1000000 135078 221870 369736 134678 221470 369336
15 339862 1000000 1000000 1000000 138775 238514 416371 138775 238514 416371
20 520789 1000000 1000000 1000000 129561 310821 724728 129561 310821 724728
25 751702 1000000 1000000 1302265 23194 325124 1240252 23194 325124 1240252
30 1046412 0 1000000 2163670 0 167003 2060638 0 167003 2060638
35 1422545 0 0 3476898 0 0 3311332 0 0 3311332
40 1902596 0 0 5409153 0 0 5151574 0 0 5151574
45 2515277 0 0 7983928 0 0 7904879 0 0 7904879
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $15,000 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.
<PAGE>
PAGE 89
Illustration
_____________________________________________________________________________________________________________________________
Initial specified amount $1,000,000 Male - Insurance age 55 - Nonsmoker Current costs assumed
Death benefit Option 2 Female - Insurance age 55 - Nonsmoker annual premium $15,000
_____________________________________________________________________________________________________________________________
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%
_____________________________________________________________________________________________________________________________
1 15750 1012650 1013422 1014195 12650 13422 14195 8650 9422 10195
2 32288 1025086 1027410 1029825 25086 27410 29825 21086 23410 25825
3 49652 1037195 1041864 1046909 37195 41864 46909 33195 37864 42909
4 67884 1048862 1056683 1065469 48862 56683 65469 44862 52683 61469
5 87029 1060214 1072004 1085780 60214 72004 85780 56214 68004 81780
6 107130 1071019 1087604 1107768 71019 87604 107768 67419 84004 104168
7 128237 1081406 1103617 1131726 81406 103617 131726 78206 100417 128526
8 150398 1091143 1119816 1157604 91143 119816 157604 88343 117016 154804
9 173668 1100242 1136207 1185594 100242 136207 185594 97842 133807 183194
10 198102 1108715 1152801 1215912 108715 152801 215912 106715 150801 213912
11 223757 1116452 1169483 1248666 116452 169483 248666 114852 167883 247066
12 250695 1123585 1186379 1284229 123585 186379 284229 122385 185179 283029
13 278979 1130005 1203375 1322758 130005 203375 322758 129205 202575 321958
14 308678 1135607 1220355 1364430 135607 220355 364430 135207 219955 364030
15 339862 1140521 1237439 1409686 140521 237439 409686 140521 237439 409686
20 520789 1154361 1323780 1703041 154361 323780 703041 154361 323780 703041
25 751702 1130471 1388619 2131448 130471 388619 1131448 130471 388619 1131448
30 1046412 1007126 1352982 2694292 7126 352982 1694292 7126 352982 1694292
35 1422545 0 1067303 3330814 0 67303 2330814 0 67303 2330814
40 1902596 0 0 4052478 0 0 3052478 0 0 3052478
45 2515277 0 0 4424523 0 0 3424523 0 0 3424523
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $15,000 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.
<PAGE>
PAGE 90
Illustration
_____________________________________________________________________________________________________________________________
Initial specified amount $1,000,000 Male - Insurance age 55 - Nonsmoker Guaranteed costs assumed
Death benefit Option 2 Female - Insurance age 55 - Nonsmoker annual premium $15,000
_____________________________________________________________________________________________________________________________
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%
_____________________________________________________________________________________________________________________________
1 15750 1012650 1013422 1014195 12650 13422 14195 8650 9422 10195
2 32288 1025086 1027410 1029825 25086 27410 29825 21086 23410 25825
3 49652 1037195 1041864 1046909 37195 41864 46909 33195 37864 42909
4 67884 1048862 1056683 1065469 48862 56683 65469 44862 52683 61469
5 87029 1060214 1072004 1085780 60214 72004 85780 56214 68004 81780
6 107130 1071019 1087604 1107768 71019 87604 107768 67419 84004 104168
7 128237 1081406 1103617 1131726 81406 103617 131726 78206 100417 128526
8 150398 1091143 1119816 1157604 91143 119816 157604 88343 117016 154804
9 173668 1100242 1136207 1185594 100242 136207 185594 97842 133807 183194
10 198102 1108596 1152679 1215786 108596 152679 215786 106596 150679 213786
11 223757 1115980 1168989 1248149 115980 168989 248149 114380 167389 246549
12 250695 1122410 1185130 1282904 122410 185130 282904 121210 183930 281704
13 278979 1127665 1200852 1320041 127665 200852 320041 126865 200052 319241
14 308678 1131648 1216014 1359674 131648 216014 359674 131248 215614 359274
15 339862 1134260 1230470 1401932 134260 230470 401932 134260 230470 401932
20 520789 1114956 1277423 1648090 114956 277423 648090 114956 277423 648090
25 751702 0 1217641 1912766 0 217641 912766 0 217641 912766
30 1046412 0 0 2085053 0 0 1085053 0 0 1085053
35 1422545 0 0 1925001 0 0 925001 0 0 925001
40 1902596 0 0 1056450 0 0 56450 0 0 56450
45 2515277 0 0 0 0 0 0 0 0 0
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $15,000 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>
56. If the trust is the issuer of periodic payment plan
certificates, furnish by years for the period covered by the
financial statements filed herewith in respect of
certificates sold during such period, the following
information for each fully paid type of each installment
payment type of periodic payment plan certificate currently
being issued by the trust.
Not applicable.
57. If the trust is the issuer of periodic payment plan
certificates, furnish by years for the period covered by the
financial statements filed herewith the following information
for each installment payment type of periodic payment plan
certificate currently being issued by the trust.
Not applicable.
<PAGE>
PAGE 91
58. If the trust is the issuer of periodic payment plan
certificates, furnish the following information for each
installment type of periodic payment plan certificate
outstanding as of the latest practicable date.
Not applicable.
59. Financial Statements:
Financial Statements of the Trusts
Financial Statements of the Accounts
The unaudited financial statements of IDS Life Variable Life
Separate Account (comprising, respectively, the U, V, W, X, Y
and IL subaccounts) for the six month period ended June 30,
1995. The unaudited financial statements together with the
auditied financial statements for the fiscal year ended
December 31, 1994 are included with Amendment No. 1 to the
Registration Statement on Form S-6 (File No. 33-62457) filed
by the Registrant pursuant to the Securities Act of 1933 on
the same date as the filing of Amendment No. 5 to this
Registration Statement. Upon such filing, these financial
statements together with the opinion of Ernst & Young, LLP,
independent public accountants, will be incorporated herein
by reference.
Financial Statements of the Depositor
The following financial statements of IDS Life Insurance
Company, together with the opinion of Ernst & Young, LLP,
independent public accountants, are included in the Amendment
No. 1 to the Registration Statement on Form S-6 (File No. 33-
62457) filed by the Registrant pursuant to the Securities Act
of 1933 on the same date as the filing of Amendment No. 5 to
this Registration Statement and upon such filing, such
statements will be incorporated herein by reference:
Consolidated Balance Sheet - as of December 31, 1994.*
Consolidated Statement of Income - as of December 31, 1994.*
Consolidated Statements of Cash Flows - as of December 31,
1994.*
Notes to Consolidated Financial Statements*
*Includes unaudited financial statements and notes for six-
month period ended June 30, 1995.
EXHIBITS -
A. (1) Resolution of Board of Directors of IDS Life authorizing the
Trust.*
(2) Not applicable.
(3) (a) Not applicable.
(b) Form of
(1) Division Vice President's Employment
Agreement**<PAGE>
PAGE 92
(2) District Sales Manager's Rider to IDS Life Insurance
Company, Personal Financial Planner's Agreement**
(3) Personal Financial Planner's Agreement**
(c) Schedules of Sales Commissions are filed electronically
herewith.
(4) Not applicable.
(5) (a) Single Premium Variable Life Insurance Policy*
(b) Flexible Premium Variable Life Insurance Policy*
(c) Flexible Premium Survivorship Variable Life Insurance
Policy is filed electronically herewith.
(6) (a) Certificate of Incorporation of IDS Life**
(b) Amended Bylaws of IDS Life**
(7) Not applicable.
(8) (a) Form of Investment Management and Services
Agreement between IDS Life and IDS Life Series
Fund, Inc.**
(b) Form of Investment Advisory Agreement between IDS
Life and IDS Financial Services, Inc. relating to
the Variable Account**
(c) Addendum to Investment Management and Services
Agreement is filed electronically herewith.
(d) Addendum to Investment Advisory Agreement is filed
electronically herewith.
(9) None.
(10) (a) Application form for the Single Premium Variable
Life Insurance Policy.*
(b) Application form for the Flexible Premium
Variable Life Insurance Policy.*
(c) Application form for the Flexible Premium Survivorship
Variable Life Insurance Policy is filed electronically
herewith.
(11) Memorandum on Transfer and Redemption Procedures, and
Method of Computing Adjustments on Conversions filed
electronically herewith.
(12) Power of attorney dated February 28, 1995.**
B. (1) Not applicable.
(2) Not applicable.
C. Not applicable.
*Filed as an Exhibit to the original Registration
Statement and/or Amendments No. 1 or 2 thereto
(Form 811-4298)
**Filed as an Exhibit to Amendment No. 4 of the original
Registration Statement to form N-8B-2 File No. 811-4298.
<PAGE>
PAGE 93
Pursuant to the requirements of the Investment Company Act of 1940,
the depositor of the Registrant has cause this Amendment No. 5 to
the Registration Statement to be duly signed on behalf of the
Registrant in Minneapolis, Minnesota on September 21, 1995.
IDS Life VARIABLE LIFE SEPARATE ACCOUNT
BY IDS Life INSURANCE COMPANY
(Depositor)
By /s/ Richard W. Kling*
Richard W. Kling
By___________________________
Mary Ellyn Minenko
Attest:______________________
(name)
______________________
(title)
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 21st day of September, 1995:
Signature Title
/s/ James A. Mitchell* Chairman of the Board
James A. Mitchell and Chief Executive
Officer
/s/ Richard W. Kling* Director and President
Richard W. Kling
/s/ Louis C. Fornetti* Director
Louis C. Fornetti
/s/ David R. Hubers* Director
David R. Hubers
/s/ Paul F. Kolkman* Director and Executive Vice
Paul F. Kolkman President
/s/ Peter A. Lefferts* Director and Executive Vice
Peter A. Lefferts President, Marketing
/s/ Janis E. Miller* Director and Executive Vice
Janis E. Miller President, Variable Assets
/s/ Barry J. Murphy* Director and Executive Vice
Barry J. Murphy President, Client Service<PAGE>
PAGE 94
Signature Title
/s/ Stuart A. Sedlacek* Director and Executive Vice
Stuart A. Sedlacek President, Assured Assets
/s/ Melinda S. Urion* Director, Executive Vice
Melinda S. Urion President and Controller
*Signed pursuant to Power of Attorney dated February 28, 1995,
filed electronically as Exhibit No. 12 to Registration Statement
Amendment No. 4 to form N-8B-2 file No. 811-4298.
By:
Mary Ellyn Minenko
IDS LIFE VARIABLE LIFE SEPARATE ACCOUNT
Registration Number 811-4298
EXHIBIT INDEX
Exhibit A3(c) Schedules of Sales Commissions.
Exhibit A5(c) Flexble Premium Survivorship Variable Life
Insurance Policy.
Exhibit A8(c) Addendum to Investment Management and Services
Agreement.
Exhibit A8(d) Addendum to Investment Advisory Agreement.
Exhibit A10(c)Application form for Flexible Premium
Survivorship Variable Life Insurance Policy.
Exhibit 11 IDS Life Insurance Company's Description of
Transfer and Redemption Procedures and Method of
Conversion to Fixed Benefit Policies.
<PAGE>
PAGE 1
Commission and production schedules
Life Insurance
Variable Second-to-Die Life Insurance (V2D)
Star Quest X
Persistency Standard 87%
<TABLE><CAPTION>
Variable(s) Commission Production
Percent of Percent of Premiums paid
premium up to premium paid in in excess of
Category Target excess of Target Target X factor Target X factor
<S> <C> <C> <C> <C>
All ages 50% 2.0% 28 1.1
Variable(s) Client Service Commissions
Year Commission per $1,000 market value of the
average quarterly cash value** (less loans)
1+ $1.25*
* Paid quarterly (i.e., $.3125 per $1,000 each quarter). Quarterly service fee is paid when the
quarterly client consolidated statement is printed.
**Average quarterly cash value (less loans) is calculated by taking the market value of the cash
value from the previous and current quarter's consolidated statement and dividing by two.
</TABLE>
New Business Commissions
Credited to the selling advisor(s) with weighted production up to
the target premium. Credited to the servicing advisor(s) on
payments made in excess of the target premium.
Client Service Commissions
Client Service Commissions are credited to the servicing advisor(s)
on the market value of the cash value.
Example(s):
a. If the target premium is $8,000 and the entire amount has
been paid, commissions and weighted production would be
calculated as follows:
Commissions Production
$8,000 x 50% = $4,000 $8,000 x 28 = 224,000
<PAGE>
PAGE 2
b. If the target premium is $8,000 and a $10,000 premium is
applied, commissions and weighted production would be
calculated as follows:
Commissions Production
Target: $8,000 x 50% = $4,000 $8,000 x 28 = 224,000
Excess: $2,000 x 2% = 40 $2,000 x 1.1 = 2,200
$4,040 $226,200
c. If the selling advisor in Examples a. and b. is a second-year
advisor in his or her 45th service period, Supplemental
Commissions would be calculated as follows (assumes the
advisor is meeting PVS and FPR):
<TABLE><CAPTION>
Supplemental Commissions
<S> <C>
$4,040 (commissions earned) x 15% (Supplemental rate) = $606
Total commissions earned
$4,040 (commissions earned) x $606 (Supplemental Commissions) = $4,646
</TABLE>
V2D Life Insurance Guidelines
1. Annualization
a. What are the criteria for annualization?
Commissions will annualize if accounts are submitted
with money and set up with a bank authorization (BA),
group billing, special payment option (SPO) from Cash
Management or Tax-Free Money Fund, military allotment
(MA) or payroll deduction. Annualized commissions are
not credited on payroll deductions for American Express
financial advisors or corporate office employees.
b. How is the compensation base determined?
Annualized commissions are based on the lesser of the
target premium or the systematic payment times
frequency up to a maximum of $1,500. (Exception: If a
group bill is set up as a percent of the client's total
group bill, annualized commissions will be calculated
based on the lesser of the target premium or $1,500.)
c. When does it annualize?
Annualized commissions will be credited when the policy
is submitted with money and the systematic billing is
set up. (Exceptions: MAs will annualize without
submitted money. SPOs are set up when the policy is
issued; therefore, annualized commissions are not
credited until the policy is issued.) Commissions will
also annualize up to the target premium if the
systematic billing is set up in the first contract year
before the target premium is met.
<PAGE>
PAGE 3
d. What is the maximum annualized compensation?
Annualized commissions are limited to $1,500 per
account.
e. What causes adjustments?
If payments decrease, the annualized commissions will
be adjusted. If payments increase, the time required
to reduce the amount of unearned annualized commissions
will decrease. If the systematic payment is stopped,
all unearned annualized commissions will be reversed.
If the policy lapses or is surrendered, the advisor
will lose all unearned annualized commissions and
weighted production.
2. Compensation timing
Compensation is credited after business is processed.
<TABLE><CAPTION>
<S> <C>
New business:Up to two business days for new business entries
Two to 60 business days for underwriting, depending on underwriting requirements
Up to five business days after underwriting to issue the policy
1035 exchanges:60 business days or until the money is received from the other company
Policy changes:Fourteen calendar days or up to 60 calendar days, depending on underwriting requirements. IDS
Life credits compensation only after the policy change is completed and money is applied to the
account.
Surrenders:Four business days
Death claims:Seven calendar days
</TABLE>
IDS Life will pay a maximum of $1,500 in commissions on
submitted business. If additional commissions are due, they
will be credited once the policy is in force. The maximum
annualized commission of $1,500 still applies. If additional
commissions are due, they will be credited once the $1,500 in
annualized commissions is earned and then subsequent
commissions are credited as each premium is applied to the
account. (Exception: Submitted business commissions will
not be paid on personal purchases and sales to relatives;
however, full compensation will be credited once the policy
is in force.)
IDS Life credits compensation on permanent ratings only after
the policy is in force. The company does not credit
compensation on temporary ratings or aviation riders.
If the client is 76 years old or older, the face amount of
policy is more than $1 million, or if it is COD business,
commissions, and weighted production will not be credited
until the policy is issued. The weighted production is
effective on the date the policy is received in the corporate
office.
Weighted production on the initial sale is effective on the
date the policy is received in the corporate office. For<PAGE>
PAGE 4
payments in excess of the target premium, weighted production
is effective on the accounting date of the increase or older
addition, it is not backdated to the date the corporate
office received the policy change.
3. Exit/purchase transactions
Exit/purchase transaction rules apply only when an IDS Life
or IDS Life of New York traditional life, LP+ or Universal
Life policy is surrendered or lapses and another Universal
Life policy(ies) is purchased. When this occurs and the
final premium due date of the lapsed or surrendered policy is
six months before or one year after the corporate office
receipt date of the new policy, compensation will be
adjusted. If a new policy replaces an existing policy(ies)
that was in force less than nine years, the adjustment will
consist of deducting earned GAP, MFYAP or target premium
compensation previously paid on the old policy(ies) from
compensation payable on the new policy. The amount of first-
year compensation recovered will be based on the table below.
Full compensation will be given on the new policy in Year 2
and after.
Age of old policy Percent of first-year commission
(years) of old policy to be recovered
1-4 100%
5 80
6 60
7 40
8 20
9+ 0
A $50 conservation fee is credited on changes to V2D Life
from V2D Life, Universal Life, Whole Life, Term Life, Single
Pay Life and LP+ when the adjusted commissions are less than
$50.
Cash-value rollovers from life insurance policies to UL or
LP+ policies pay compensation on the rollover premium dollars
up to the target premium. Compensation is not credited on
loans or partial surrenders used to pay premiums on another
policy. No Excess Commissions are paid on Cash-value
rollovers.
For example, assume that the old policy had an issue date of
Jan. 1, 1987, and produced $100 in commissions. The new
policy has an issue date of June 1, 1994, and also produces
$100 in commissions. Since the old policy was in its eighth
year when it was replaced, commissions paid would equal $80
($100 - [$100 x .20%]) and weighted production would be
credited in the same proportions.
4. License(s) required
An advisor must have a life insurance license for the state
in which the application was signed for new business<PAGE>
PAGE 5
compensation. For Variable Second-to-Die Life, an advisor
must also have a Series 6 or 7 license. In addition, some,
but not all states require a Variable Life Insurance license
and either a Variable Annuity license or a Variable Contracts
license. After the account is open, the advisor must hold
the appropriate license(s) in the client's resident state to
receive compensation.
5. Persistency
Only weighted production generated on the client's target
premium will be measured for Star Quest persistency. The
persistency standard for Variable Second-to-Die Life products
sold is 87%. If the persistency ratio falls below this
standard (see Section 3, Incentive and award programs), all
Variable Second-to-Die Life production for the previous year
will be subtracted from the current year's production when
calculating allocations to Star Quest.
6. Advisor/relative purchases
No special rates are available for advisors or their
relatives on these products; therefore, full compensation is
credited on these sales only after the policy is in force.
Annualized commissions will be credited when the policy is
issued if the account is set up on a systematic payment
arrangement, except for payroll deductions for American
Express financial advisors and corporate office employees.
7. Reversals
On applications that are withdrawn, declined or not taken, or
if all requirements are not received in the corporate office
within the allotted time, commissions and weighted production
will be reversed. IDS Life does not credit further
compensation until the policy is re-opened, all requirements
are received in the corporate office and the policy is placed
in force. If the policy lapses or is surrendered, the
advisor will lose any unearned commissions, all target
premium production up to 26 months from the sale date, and
all add-on production for the previous 14 months. Ten-day
free looks and cancellations will result in a full reversal
of both commissions and weighted production. In the case of
a death claim, the advisor will lose all unearned annualized
commissions. Weighted production will be reversed as of the
sale effective date.
8. Supplemental Commissions
For first-, second- and third-year advisors, Supplemental
Commissions will be credited at the following rates:<PAGE>
PAGE 6
<TABLE><CAPTION>
Service year Service period Highly fronted, some deferred*
<S> <C> <C>
1 1 - 26 35%
2 27 - 39 25
2 40 - 52 15
3 53 - 78 10
*These rates are a percentage of New Business Commissions.
</TABLE>
Supplemental Commissions are credited based on the rate in
effect at the time the business was submitted and the first
payment was received. For instance, if you submit business
while you are a first-year advisor but it is not issued until
you reach your second year, you will receive Supplemental
Commissions at the first-year rate.
Supplemental Commissions are credited when the policy is in
force; they are not credited on submitted business. For more
information about Supplemental Commissions, refer to Section
2, Compensation plan descriptions.
<PAGE>
PAGE 1
AMERICAN EXPRESS
FINANCIAL ADVISORS
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
Flexible Premium Survivorship Variable Life Insurance Policy
- Death benefit payable at last surviving insured's death.
- Flexible premiums payable as provided herein.
- Death Benefit Guarantees as described herein.
- This policy is nonparticipating. Dividends are not payable.
Insureds: (John Doe) (Jane Doe)
Policy Date: (January 15, 1995)
Policy Number: (9090-1234,567)
Initial Specified Amount: $(250,000)
This is a life insurance policy. It is a legal contract between
you, as the owner, and us, IDS Life Insurance Company, A Stock
Company. Please read your policy carefully.
In consideration of your application and payment of the initial
premium, we issue this policy and we promise to pay the proceeds
described in this policy to the beneficiary if we receive proof
satisfactory to us that the last surviving insured died while this
policy was in force. (See "Death Benefits" on page 11.)
The owner and beneficiary are as named in the application unless
they are changed as provided in this policy.
The amount and duration of the death benefit of this policy may
increase or decrease as described herein depending on the
investment experience of the subaccounts.
The policy value of this policy may increase or decrease daily
depending on the investment experience of the subaccounts. There
is no guaranteed minimum policy value.
Notice of your right to examine this policy. If for any reason you
are not satisfied with thls policy, return it to us or our
representative by the latest of the:
a) 10th day after you receive it; or
b) 10th day after we mail or personally deliver to you a written
Notice of Withdrawal Right; or
c) 45th day after the application is signed.
We will then cancel this policy and refund all premiums that you
have paid. This policy will then be considered void from its start.
<PAGE>
PAGE 2
Signed for and issued by IDS Life Insurance Company in Minneapolis,
Minnesota, as of the policy date shown above.
President:
/s/ Richard W. Kling
Secretary:
/s/ William A. Stoltzmann<PAGE>
PAGE 3
Guide to Policy Provisions
<TABLE><CAPTION>
<S> <C>
Policy Data Important Policy Data
Information/Page 3
Definitions Important words and meanings/Page 4
Insurance Contract Entire contract; Incontestability;
Suicide provision; Policy exchange;
Misstatement of age or sex;
Termination/Page 5
Owner and Beneficiary Owner's rights; Change of ownership;
Beneficiary designation; Change of
beneficiary; Assignment/Page 7
Premiums Payment of premiums; Premium
allocations; Grace period; Death
benefit guarantees;
Reinstatement/Page 8
Death Benefits Death benefit options 1 and 2/Page 11
Policy Change Changes to the specified amount or
death benefit options/Page 12
Policy Values The policy's value and how it is
determined; Monthly deduction; Cost
of insurance; Continuation of
insurance; Basis of policy
values/Page 13
Policy Loans How to request a loan; Interest rate;
Amount of loan; Loan repayment/Page
15
Policy Surrender Cash surrender value; Full and
partial surrenders/Page 17
Subaccounts The subaccounts; Net investment
factor; Deductions from the
subaccounts; Transfer of values/Page
18
Payment of Policy Proceeds How the proceeds are paid; Payment
options/Page 20
/TABLE
<PAGE>
PAGE 4
Policy Data
<TABLE><CAPTION>
Insureds Issue Age Risk Classifications
<S> <C> <C>
John Doe 35 (Male Standard Nonsmoker)
Jane Doe 35 (Female Standard Nonsmoker)
Policy Number: 9090-(1234,567)
Type of Policy: Flexible Premium Survivorship
Variable Life
Initial Specified Amount: $(250,000)
Minimum Specified Amount: $(250,000)
Initial Death Benefit Option: (Option 1)
Guaranteed Interest Rate: 4% per year
Guaranteed Interest Rate Factor: 1.0032737
Current Loan Interest Rate:
First policy year: 6% per year
All other policy years: 4% per year
Guaranteed Loan Interest Rate: 6% per year
Policy Date: (January 15, 1995)
Monthly Date: (15)
Initial Premium: $(2413.60)
Scheduled Premium: $(2413.60 per year payable
annually)
Minimum Initial Premium: $(88.01) per month
Minimum Initial Premium Period: (3) years
Death Benefit Guarantee
to age 85 premium: $(120.68 per month)
Death Benefit Guarantee
to age 100 premium: $(181.02 per month)
Premium Expense Charge: 11% of all premium payments
Policy Fee: $30 per month for first 15
policy years
Partial Surrender Fee: ($25.00 or 2% of amount
surrendered, whichever is less)
/TABLE
<PAGE>
PAGE 5
<TABLE><CAPTION>
Table of Surrender Charges
Policy Year Beginning of year End of year
<S> <C> <C>
1 - 5 $1000.00 $1000.00
6 1000.00 900.00
7 900.00 800.00
8 800.00 700.00
9 700.00 600.00
10 600.00 500.00
11 500.00 400.00
12 400.00 300.00
13 300.00 200.00
14 200.00 100.00
15 100.00 0.00
</TABLE>
This table applies to the initial specified amount for the first 15
policy years. After year 5, surrender charges decrease monthly.
Coverage will expire when the policy values are insufficient to pay
the charges assessed on a monthly anniversary. Because the policy
values may be based on the investment results of the subaccounts,
the payment of scheduled premiums or unscheduled premiums in any
amount or frequency will not guarantee that the policy will remain
in force unless the premiums needed to keep the Death Benefit
Guarantee to age 85 or the Death Benefit Guarantee to age 100 in
effect have been paid.
Investment Options Initial Premium Allocations
IDS Life Fixed Account 0.000%
IDS Life Variable Life Separate Account
Subaccounts that invest in portfolios
("the Portfolios") of the
IDS Life Series Fund, Inc.:
U Equity Portfolio 70.000%
V Income Portfolio 15.000%
W Money Market Portfolio 0.000%
X Managed Portfolio 15.000%
Y Government Securities Portfolio 0.000%
IL International Equity Portfolio 0.000%
<TABLE><CAPTION>
Schedule of Benefits and Riders
Annual
Effective Date Expiration Date Cost of Insurance
<S> <C> <C> <C>
Flexible Premium
Survivorship Variable Life (January 15, 1995) See policy form See policy form
Four-Year Term (January 15, 1995) (January 15, 1999) See rider form
Insurance Rider
Amount of
Insurance: ($305,000)
<PAGE>
PAGE 6
Policy Split (January 15, 1995) (January 15, 2046) ($180.00)
Option Rider
</TABLE>
Guarantees Maximum Annual Cost of Insurance Rates per $1,000
Policy Annual Policy Annual
Year Rate Year Rate
1 $ .12 36 $ 11.76
2 .12 37 13.92
3 .12 38 16.56
4 .12 39 19.68
5 .12 40 23.40
6 .12 41 27.72
7 .12 42 32.52
8 .12 43 38.04
9 .12 44 44.04
10 .12 45 50.88
11 .12 46 58.68
12 .12 47 67.56
13 .12 48 77.88
14 .24 49 89.52
15 .24 50 102.48
16 .36 51 116.52
17 .36 52 131.52
18 .48 53 147.24
19 .60 54 163.68
20 .72 55 180.96
21 .84 56 199.08
22 1.08 57 218.52
23 1.32 58 239.76
24 1.56 59 264.48
25 1.80 60 296.16
26 2.16 61 341.64
27 2.52 62 414.12
28 3.00 63 537.24
29 3.60 64 743.88
30 4.32 65 999.96
31 5.16
32 6.12
33 7.32
34 8.52
35 10.08<PAGE>
PAGE 7
Definitions
The following words are used often in this policy. When we use
these words, this is what we mean:
accumulation unit
An accounting unit used to calculate the policy value of the
subaccounts. It is a measure of the net investment results of each
of the subaccounts.
attained insurance age
Each 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
The policy proceeds if the policy is surrendered in full, or the
amount payable if the last surviving insured's death occurs on or
after the youngest insured's attained insurance age 100. It is the
policy value minus indebtedness, minus surrender charges as shown
under Policy Data.
death benefit guarantee to age 85
A guarantee that the policy will not lapse before the youngest
insured's attained insurance age 85, or 15 policy years, if later.
death benefit guarantee to age 85 premium
The premium required to keep the death benefit guarantee to age 85
in effect. The death benefit guarantee to age 85 premium is shown
under Policy Data.
death benefit guarantee to age 100
A guarantee that the policy will not lapse before the youngest
insured's attained insurance age 100.
death benefit guarantee to age 100 premium
The premium required to keep the death benefit guarantee to age 100
in effect. The death benefit guarantee to age 100 premium is shown
under Policy Data.
fixed account
Our general investment account. It is made up of our 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.
in force
The insureds' lives remain insured under the terms of this policy.
indebtedness
All existing loans on this policy plus policy loan interest that
has been accrued or added to the policy loan.
<PAGE>
PAGE 8
insurance age
The issue age shown under Policy Data for each insured as
determined by us from the birthdates stated in the application.
insureds
The persons whose lives are insured by this policy.
last surviving insured
The second to die of the insureds.
monthly date
The same day each month as the policy date. If there is no monthly
date in a calendar month, the monthly date will be the first day of
the next calendar month.
net premium
The portion of a premium paid that is credited to the policy as
described in the Policy Values section. It is the premium paid
minus the premium expense charge shown under Policy Data.
policy anniversary
The same day and month as the policy date each year that the policy
remains in force.
policy date
The date from which policy anniversaries, policy years, and policy
months are determined. Your policy date is shown under Policy
Data.
policy value
The sum of the fixed account value and the variable account value.
premium expense charge
The premium expense charge of 11% of all premiums paid consists of
three parts. The parts are: 7.25% sales charge; 2.5% premium tax
charge; and 1.25% federal tax charge. We reserve the right to
change the federal tax charge part if applicable federal law
changes our federal tax burden.
proceeds
The amount payable by this policy as follows:
1. upon death of the last surviving insured prior to the
youngest insured's attained insurance age 100, proceeds will
be the death benefit under the option in effect as of the
date of that insured's death, minus any indebtedness;
2. upon the death of the last surviving insured on or after the
youngest insured's attained insurance age 100, proceeds will
be the cash surrender value.
3. upon surrender of the policy, the proceeds will be the cash
surrender value.
<PAGE>
PAGE 9
pro-rata basis
Allocation to the fixed account and each of the subaccounts. It is
proportionate to the value (minus any indebtedness in the fixed
account) that each bears to the policy value, minus indebtedness.
specified amount
An amount used to determine the death benefit and the proceeds
payable upon death of the last surviving insured prior to the
youngest insured's attained insurance age 100. The initial
specified amount is shown under Policy Data.
subaccounts
The subaccounts named under Policy Data. Each is an investment
division of the variable account and invests in a particular
portfolio.
terminate
This policy is no longer in force. All insurance coverage under
this policy has stopped.
valuation date
Each day on which the New York Stock Exchange is open for trading,
or any other day on which there is a sufficient degree of trading
in the investments of the subaccounts such that the current value
might be materially affected.
valuation period
The interval of time commencing at the close of business on each
valuation date and ending at the close of business on the next
valuation date.
variable account value
The sum of the values of the subaccounts under this policy.
we, our, us
IDS Life Insurance Company.
written request
A request in writing signed by you.
youngest insured
The insured with the youngest issue age as shown under Policy Data.
you, your
The owner of this policy. The owner may be someone other than an
insured. The owner is shown in the application unless the owner
has been changed as provided in this policy.
The Insurance Contract
What is the entire contract of insurance?
This policy and the copy of the application attached to it and any
endorsements or riders added to the policy are the entire contract
between you and us.
<PAGE>
PAGE 10
No one except one of our corporate officers (President, Vice
President, Secretary, or Assistant Secretary) can change or waive
any of our rights or requirements under this policy. That person
must do so in writing. None of our representatives or other
persons have the authority to change or waive any of our rights or
requirements under this policy.
In issuing this policy, we have relied upon the application. The
statements contained in the application are considered, in the
absence of fraud, representations and not warranties. No statement
made in connection with the application will be used by us to void
the policy or to deny a claim unless that statement is part of the
application.
When will the policy become incontestable?
After this policy has been in force during the lifetime of both
insureds for two years from the policy date, we cannot contest the
policy except for nonpayment of premiums.
Is there a suicide exclusion?
If either of the insureds die by suicide while sane or insane
within two years from the policy date, the only amount payable by
us will be the premium paid, minus any indebtedness and partial
surrenders. The policy will terminate as of the date of the first
death by suicide. We will pay any amount payable to you, if
living, otherwise to your estate.
Can you exchange this policy?
Yes. Once during the first two policy years, you have the right to
exchange this policy for a flexible premium life insurance policy
that provides for benefits that do not vary with the investment
return of the subaccounts. This is done by transferring, without
charge, the entire policy value to the fixed account.
Do you have voting rights?
All policy owners with variable account values will have voting
rights. So long as federal law requires, you may have the right to
vote at the meetings of the Variable Policy Owners. If you have
voting rights, we will send you a notice of the time and place of
any such meetings. The notice will also explain matters to be
voted on and how many votes you will have.
Do state laws apply?
Yes. This policy is governed by the law of the state in which it
is delivered. The values and benefits of this policy are at least
equal to those required by such state.
What if an insured's age or sex has been misstated?
If an insured's age or sex has been misstated, the proceeds payable
upon the last surviving insured's death will be:
<PAGE>
PAGE 11
1. the policy value on the date of death; plus
2. the amount of insurance that would have been purchased by the
cost of insurance deducted for the policy month during which the
last surviving insured's death occurred, if that cost had been
calculated using the cost of insurance rates for the correct age
and sex; minus
3. any indebtedness on the date of death.
When does this policy terminate?
This policy will terminate on the earliest of the following:
1. the date you request that coverage ends; or
2. the date you surrender the policy in full; or
3. the end of the grace period; or
4. the date of death of the last surviving insured.
Does this policy qualify for favorable tax treatment?
This policy is intended to qualify for treatment as a life
insurance policy under Sections 72, 101, and 7702 of the Internal
Revenue Code as they now exist or may later be amended.
We reserve the right to endorse this policy to comply with:
1. future changes in the Internal Revenue Code;
2. any regulations or rulings issued under the Code; and
3. any other requirements imposed by the Internal Revenue Service;
with respect to remaining qualified for treatment as a life
insurance policy under these Code sections.
We will provide the owner with a copy of any such endorsement.<PAGE>
PAGE 12
Owner and Beneficiary
What are your rights as owner of this policy?
As owner, you are entitled to exercise all the rights and
privileges of this policy while either or both of the insureds are
living.
How can you change ownership of this policy?
You can change the ownership of this policy by written request on a
form approved by us. The change must be made while an insured is
living. Once the change is recorded by us, it will take effect as
of the date of your request, subject to any action taken or payment
made by us before the recording.
To whom are the proceeds paid on the last surviving insured's
death?
We will pay the proceeds to the beneficiary or beneficiaries whom
you have named in the application unless you have since changed the
beneficiary as provided below. If the beneficiary has been
changed, we will pay the proceeds in accordance with your last
change of beneficiary request.
How do you change the beneficiary?
By making a satisfactory written request to us, you may change the
beneficiary anytime while an insured is living. Once we record the
change, it will take effect as of the date of your request, subject
to any action taken or payment made by us before the recording.
If one or all of the beneficiaries die before the last surviving
insured's death, to whom are the proceeds payable?
Only those beneficiaries who are living at the last surviving
insured's death may share in the proceeds. If no beneficiary
survives the last surviving insured, we will pay the proceeds to
you, if living; otherwise to your estate.
Can you assign this policy as collateral?
Yes. While an insured is living, you can assign this policy or any
interest in it. Your interest and the interest of any beneficiary
are subject to the interest of the assignee. An assignment is not
a change of ownership and an assignee is not an owner as these
terms are used in this policy. We will pay any policy proceeds
payable to the assignee in a single sum.
You must give us a copy of any assignment. Any assignment is
subject to any action taken or payment made by us before the
assignment was recorded at our home office. We are not responsible
for the validity of any assignment.<PAGE>
PAGE 13
Premiums
What are the premium payments for this policy?
Three types of premium payments apply to this policy. We call
these:
1. the initial premium;
2. scheduled premiums; and
3. unscheduled premiums.
What is the initial premium?
The initial premium is the premium due on the policy date of this
policy.
What is the scheduled premium? Can it be changed?
The scheduled premium is the premium shown under Policy Data. It
is payable at the stated interval that you selected in the
application. However, no scheduled premium may be paid on or after
the youngest insured's attained insurance age 100.
The scheduled premium will serve only as an indication of your
intent as to the frequency and amount of future premium payments.
You may change the amount or interval at any time by written
request. You may also skip scheduled premium payments. Any change
in amount may be subject to applicable tax laws and regulations.
Scheduled premiums may be paid annually, semi-annually, or
quarterly. Payment at any other interval must be approved by us.
Scheduled premium payments must be at least $50. We reserve the
right to limit the amount of any increase in scheduled premiums.
Can you make unscheduled premium payments?
Yes. You can make additional premium payments of at least $50 at
any time prior to the youngest insured's attained insurance age
100. We reserve the right to limit the number and amount of these
unscheduled premiums. This includes our right to refuse such
premiums if there is indebtedness on this policy.
Where are premiums payable?
Premiums must be paid or mailed to us at our home ofice or to an
authorized agent. We will give you a receipt if you request one.
A check or draft given for all or part of a premium, unless paid
upon its presentation to the bank or person drawn on, will not be
considered payment.
How are premium payments allocated?
Premium payments applied to the fixed account and the subaccounts
will be allocated as specified in your application for this policy.
You may choose any whole percentage for each account from 0% to<PAGE>
PAGE 14
100%. By written request, you may change this allocation. The
change will be effective for all premiums received after our
receipt of the change. Premiums received before the policy date
will be allocated initially to the fixed account. On the policy
date, the policy value in the fixed account will be transferred to
the subaccounts or remain in the fixed account in accordance with
your premium allocation percentages. For any premium received on
or after the policy date, the premium will be allocated in
accordance with your premium allocation percentages.
Can we restrict premium payments?
We reserve the right to refuse premiums and to return premiums with
interest if such premiums would disqualify your policy from:
1. treatment as a life insurance policy under Code Sections 72,
101, and 7702; or
2. favorable tax treatment under Code Sections 72 and 101.
Is there a grace period for paying premiums?
Yes. If, on a monthly date, the cash surrender value is less than
the monthly deduction for the policy month following such monthly
date, a grace period of 61 days will begin.
The grace period will give you time to pay a premium sufficient to
continue your coverage. We will mail, to your last known address,
a notice as to the premium needed so that the next three monthly
deductions can be made.
If the premium is not paid within the grace period, all coverage
under this policy will terminate without value at the end of the
61-day grace period.
If the last surviving insured's death occurs during the grace
period and benefits become payable under the policy, any overdue
monthly deductions will be deducted from the proceeds.
If a death benefit guarantee is in effect as described in the
provisions below, the policy will not enter the grace period. In
addition, to allow you the opportunity to increase your policy
value gradually so that the cash surrender value is sufficient to
pay the monthly deduction, you may choose to pay only the minimum
initial premium during the minimum initial premium period as long
as the policy value minus indebtedness equals or exceeds the
monthly deduction. The policy will not enter the grace period
during the minimum initial premium period as shown under Policy
Data, if:
1. on a monthly date, the policy value minus indebtedness equals
or exceeds the monthly deduction for the policy month
following such monthly date; and
2. the sum of all premiums paid, minus any partial surrenders,
and minus any indebtedness equals or exceeds the minimum<PAGE>
PAGE 15
initial premium, as shown under Policy Data, times the number
of months since the Policy Data, including the current month.
What are the death benefit guarantees?
The death benefit guarantees described below will protect the
policy from lapsing even if the cash surrender value is
insufficient to pay the monthly deduction on a monthly date.
Sufficient premiums as described in the provision must be paid to
keep the death benefit guarantees in effect.
What is the death benefit guarantee to age 85?
Until the youngest insured's attained insurance age 85, or 15 years
from the policy date, whichever is later, this policy will not
terminate even if the cash surrender value is insufficient to pay
the monthly deduction on a monthly date if the death benefit
guarantee to age 85 is in effect.
The death benefit guarantee to age 85 will remain in effect if, on
each monthly date, (a) equals or exceeds (b) where:
(a) is the sum of all premiums paid, minus any partial
surrenders, and minus any indebtedness; and
(b) is the death benefit guarantee to age 85 premium, as shown
under Policy Data, times the number of months since the
Policy Date, including the current month.
Premiums may be paid on other than a monthly basis as long as the
sum of premiums paid is at least equal to the total required death
benefit guarantee to age 85 premiums at all times.
If on a monthly date, sufficient premiums have not been paid to
maintain the death benefit guarantee to age 85, an additional
period of 61 days will be allowed for the payment of a premium
sufficient to keep the death benefit guarantee to age 85 in effect.
If the premium is not paid within this period, the death benefit
guarantee to age 85 provision will no longer be in effect, and
cannot be reinstated. Your policy will also lapse, as described in
the "Is there a grace period for paying premiums" provision, if the
cash surrender value is insufficient to pay the monthly deduction
on a monthly date.
The death benefit guarantee to age 85 premium will change if: 1)
the specified amount is decreased; 2) the death benefit option is
changed; or 3) riders are changed or terminated. The new death
benefit guarantee to age 85 premium will apply from the date of the
change.
What is the death benefit guarantee to age 100?
Until the youngest insured's attained insurance age 100, this
policy will not terminate even if the cash surrender value is
insufficient to pay the monthly deduction on a monthly date if the
death benefit guarantee to age 100 is in effect.
<PAGE>
PAGE 16
The death benefit guarantee to age 100 will remain in effect if, on
each monthly date, (a) equals or exceeds (b) where:
(a) is the sum of all premiums paid, minus any partial
surrenders, and minus any indebtedness; and
(b) is the death benefit guarantee to age 100 premium, as shown
under Policy Data, times the number of months since the
Policy Date, including the current month.
Premiums may be paid on other than a monthly basis as long as the
sum of premiums paid is at least equal to the total required death
benefit guarantee to age 100 premiums at all times.
If on a monthly date, sufficient premiums have not been paid to
maintain the death benefit guarantee to age 100, an additional
period of 61 days will be allowed for the payment of a premium
sufficient to keep the death benefit guarantee to age 100 in
effect. If the premium is not paid within this period, the death
benefit guarantee to age 100 provision will no longer be in effect,
and cannot be reinstated. Your policy will also lapse if, as
described in the "Is there a grace period for paying premiums"
provision, the death benefit guarantee to age 85 is not in effect
and the cash surrender value is insufficient to pay the monthly
deduction on a monthly date.
The death benefit guarantee to age 100 premium will change if: 1)
the specified amount is decreased; 2) the death benefit option is
changed; or 3) riders are changed or terminated. The new death
benefit guarantee to age 100 premium will apply from the date of
the change.
Can you ever reinstate this policy?
This policy may be reinstated within 5 years after the end of the
grace period, unless it was surrendered for cash. To do this, we
will require all of the following:
1. your written request to reinstate the policy;
2. evidence that both insureds remain insurable, or evidence for
the last surviving insured and due proof that the first death
occurred before the date of lapse;
3. payment of a premium that will keep the policy in force for
at least 3 months;
4. payment of the monthly deductions that were not collected
during the grace period; and
5. payment or reinstatement of any indebtedness.
Surrender charges will also be reinstated.
The effective date of a reinstated policy will be the monthly date
on or next following the date on which we approve the application
for reinstatement.<PAGE>
PAGE 17
The suicide and incontestability periods will apply from the
effective date of reinstatement. We will have two years from the
effective date of reinstatement to contest the truth of statements
or representations in the reinstatement application.
The death benefit guarantees will not be reinstated. <PAGE>
PAGE 18
Death Benefits
What are the proceeds payable upon death of the last surviving
insured prior to the youngest insured's attained insurance age 100?
The proceeds payable upon the death of the last surviving insured
will be the death benefit in effect on the date of that insured's
death, minus any indebtedness. The death benefit will be
calculated based on the death benefit option and specified amount
in effect as of the last surviving insured's death. One of two
options will apply: Option 1 or 2. Both options are described
below.
What is Option 1?
The death benefit under this option will be the greater of:
1. the specified amount; or
2. the percentage of policy value from the table below on the
date of the last surviving insured's death if death occurs on
a valuation date, or on the next valuation date following the
date of death.
The initial specified amount is shown under Policy Data. Such
amount may be changed as explained in the Policy Change section. A
partial surrender will reduce the specified amount.
What is Option 2?
The death benefit under this option will be the greater of:
1. the policy value of this policy, plus the specified amount;
or
2. the percentage of policy value from the table below on the
date of the last surviving insured's death if death occurs on
a valuation date, or on the next valuation date following the
date of death.
The initial specified amount is shown under Policy Data. Such
amount may be changed as explained in the Policy Change section.
The youngest insured's attained insurance age in the table below
refers to the youngest life insured or the age such person would
have reached.
<PAGE>
PAGE 19
<TABLE><CAPTION>
Youngest Youngest Youngest
Insured's Applicable Insured's Applicable Insured's Applicable
Attained Percentage Attained Percentage Attained Percentage
Insurance of Policy Insurance of Policy Insurance of Policy
Age Value Age Value Age Value
<S> <C> <C> <C> <C> <C>
40 or less 250 53 164 67 118
41 243 54 157 68 117
42 236 55 150 69 116
43 229 56 146 70 115
44 222 57 142 71 113
45 215 58 138 72 111
46 209 59 134 73 109
47 203 60 130 74 107
48 197 61 128 75-95 105
49 191 62 126 96 104
50 185 63 124 97 103
51 178 64 122 98 102
52 171 65 120 99 101
66 119 100 100
</TABLE>
The percentage is designed to ensure that the policy meets the
provisions of Federal tax law which require a minimum death benefit
in relation to policy value for the policy to qualify as life
insurance.
What are the proceeds payable upon death of the last surviving
insured on or after the youngest insured's attained insurance age
100?
The proceeds payable upon the death of the last surviving insured
will be the cash surrender value.
<PAGE>
PAGE 20
Policy Change
Can you request to change the benefits of this policy?
Yes. While this policy is in force, you may request to decrease
the specified amount. You may also change the death benefit option
from 1 to 2 or from 2 to 1. All such changes may be made only
prior to the last surviving insured's attained insurance age 100
and will be subject to the rules below.
What are the rules for decreasing the specified amount?
You may decrease the specified amount once per policy year by
written request. Such request may only be made after the first
policy year. The rules are as follows:
1. The specified amount that remains in force after a requested
decrease may not be less than the minimum specified amount
shown under Policy Data.
2. We reserve the right to decline to make any specified amount
decrease that we determine would cause this policy to fail to
qualify as life insurance under applicable tax laws.
How do you change the death benefit option?
You may change the death benefit option once per policy year by
written request. The change in option will be effective on the
monthly date on or next following the date we approve your request.
If the death benefit is Option 2, it may be changed to Option 1.
The new specified amount will be the Option 2 death benefit as of
the effective date of change.
If the death benefit is Option 1, it may be changed to Option 2.
The new specified amount will be the Option 1 death benefit, minus
the policy value as of the effective date of change.
The specified amount after a change may not be less than the
minimum specified amount shown under Policy Data.
We reserve the right to decline to make any death benefit option
change that we determine would cause this policy to fail to qualify
as life insurance under applicable tax laws.
<PAGE>
PAGE 21
Policy Values
What is the policy's value?
On a given date, the policy value is equal to the fixed account
value plus the variable account value.
What is the fixed account value?
On the policy date, the fixed account value equals: 1) the portion
of the initial net premium allocated to the fixed account, plus any
interest credited on such portion before the policy date; minus 2)
the portion of the monthly deduction allocated to the fixed account
for the first policy month.
On any subsequent date, the fixed account value will be calculated
as:
a + b + c-d-e
where:
(a) is the fixed account value on the preceding monthly date plus
interest thereon from the preceding monthly date to the date
of calculation;
(b) is the portion of net premiums allocated to the fixed account
and received since the preceding monthly date, plus interest
on such portions from the date such net premiums were
received to the date of calculation;
(c) is the amount of any transfers from the subaccounts,
including loan transfers, to the fixed account since the
preceding monthly date, plus interest on such transferred
amounts from the effective dates of such transfers to the
date of calculation;
(d) is the amount of any transfers from the fixed account,
including loan repayment transfers, to the subaccounts since
the preceding monthly date, plus interest on such transferred
amounts from the effective dates of such transfers to the
date of calculation; and
(e) is the amount of any partial surrenders and partial surrender
fees allocated to the fixed account since the preceding
monthly date, plus interest on such surrendered amounts from
the effective date of such partial surrenders to the date of
calculation.
If the date of calculation is a monthly date, the fixed account
value will also be reduced by the portion of the monthly deduction
allocated to the fixed account for the policy month following the
monthly date.
What is the variable account value?
The variable account value is the sum of the values of the
subaccounts under this policy as shown under Policy Data.<PAGE>
PAGE 22
On the policy date, the value of each subaccount equals: 1) the
portion of the initial net premium allocated to the subaccount,
plus any interest credited on such portion before the policy date;
minus 2) the portion of the monthly deduction allocated to the
subaccount for the first policy month.
On any subsequent date the value of each subaccount will be
calculated as described below if that subsequent date is a
valuation date. If that subsequent date is not a valuation date,
the value of each subaccount will be calculated on the next
valuation date.
On any valuation date, the value of each subaccount will be
calculated as:
a + b + c - d - e - f
where:
(a) is the value of the subaccount on the preceding valuation
date, multiplied by the net investment factor for the current
valuation period;
(b) is the net premiums received and allocated to the subaccount
during the current valuation period;
(c) is the amount of any transfers from other subaccounts or the
fixed account, including loan repayment transfers, to the
subaccount during the current valuation period;
(d) is the amount of any transfers to other subaccounts or the
fixed account, including loan transfers, from the subaccount
during the current valuation period;
(e) is the amount of partial surrender and partial surrender fee
allocated to the subaccount during the current valuation
period;
(f) is the portion of any monthly deduction during the current
valuation period allocated to the subaccount for the policy
month following the monthly date.
What is the monthly deduction?
A deduction will be made each monthly date prior to the youngest
insured's attained insurance age 100 for the cost of insurance,
policy fee, and the cost of any riders for the policy month
following such monthly date. The monthly deduction for a policy
month will be calculated as:
(a) + (b) + (c)
<PAGE>
PAGE 23
where:
(a) is the cost of insurance for the policy month;
(b) is the policy fee shown under Policy Data. We reserve the
right to change the policy fee, but it will never exceed $30
per month for the first 15 policy years; and
(c) is the cost of any policy riders for the policy month.
The monthly deduction will be taken from the fixed account and the
subaccounts according to the monthly deduction allocation
percentages specified in your application for this policy. You
may choose any whole percentage for each account from 0% to 100%.
By written request, you may change the percentages. Any change will
be effective for monthly deductions taken thereafter.
The monthly deduction will be taken from the fixed account and the
subaccounts on a pro-rata basis if: 1) the value in the fixed
account or in any subaccount is insufficient to pay the portion of
the monthly deduction so allocated; or 2) you do not specify the
account or subaccounts from which the monthly deduction is to be
taken.
How is the cost of insurance calculated?
The cost of insurance for a policy month is calculated as:
{a x (b - c)} + d
where:
(a) is the cost of insurance rate described below;
(b) is the death benefit on the monthly date divided by the
guaranteed interest rate factor shown under Policy Data;
(c) is the policy value at the beginning of the policy month. At
this point, the policy value has been reduced by the monthly
deduction except for the part of the monthly deduction that
pays for the cost of insurance; and
(d) is the amount of any flat extra insurance charges as shown
under Policy Data.
If the policy value is included in the specified amount and there
have been changes in the specified amount, the policy value is
considered a pro-rata part of each specified amount.
What is the cost of insurance rate?
The cost of insurance rate is the rate applied to the insurance
under this policy to determine the monthly deduction. The cost of
insurance rate used to determine the monthly deduction is the
annual cost of insurance rate divided by 12. Cost of insurance
rates are based on each insured's sex, insurance age, risk<PAGE>
PAGE 24
classification and the number of years the policy has been in
force.
We may change the cost of insurance rates from time to time. Any
change in the cost of insurance rate will apply to all individuals
of the same risk class as each of the insureds. We will determine
cost of insurance rates based on our expectations as to future
mortality experience. The cost of insurance rates will not exceed
the Guaranteed Maximum Annual Cost of Insurance Rates shown under
Policy Data. These rates are based on the 1980 Commissioners
Standard Ordinary Smoker or Non-smoker Mortality Tables, Age Last
Birthday.
What interest rate is used to determine the fixed account value?
The guaranteed interest rate applied in the calculation of the
fixed account value is the guaranteed interest rate shown under
Policy Data. Interest in excess of the guaranteed interest rate
may be applied in the calculation of the fixed account value at
such increased rates and in such manner as we may determine.
Interest in excess of the guaranteed interest rate shown under
Policy Data will not be applied to the portion of the policy value
that equals any indebtedness due us.
For how long will the policy value continue your insurance?
Insurance coverage under this policy and any benefits provided by
riders will be continued until the cash surrender value is
insufficient to pay the monthly deduction. See the "Is there a
grace period for paying premiums" provision and "What are the death
benefit guarantees" provision.
What is the basis used for policy values?
Values and reserves are equal to or greater than those required by
law. Where required, a detailed statement of the method of
computation of values and reserves has been filed with the
insurance department of the state where this policy was delivered.
Will you receive information about the values of this policy?
Yes. At least once a year, we will send you a report that shows:
1. the current policy value;
2. premiums paid since the last report;
3. all charges since the last report;
4. indebtedness on this policy;
5. the current cash surrender value;
6. the current death benefit; and
7. partial surrenders since the last report.
At any time, upon written request by you, we will provide a
projection of future death benefits and policy values. The
projection will be based on (1) assumptions as to specified
amount(s), type of coverage option and future premium payments as<PAGE>
PAGE 25
may be specified by you, and (2) such other assumptions as are
necessary and specified by us and/or you.
Policy Loans
Can you borrow money on this policy? How?
By written request or other requests acceptable to us, you may
obtain a loan from us whenever this policy has a loan value. The
loan value of this policy is the only security required for your
loan. A loan must be for at least $500. We will pay interest on
the policy value loaned at the guaranteed interest rate shown under
Policy Data.
If you do not specify the accounts from which the loan is to be
made, the loan will be made from the fixed account and the
subaccounts on a pro-rata basis.
The amount of any loan and any loan interest from the subaccounts
will be transferred from the subaccounts to the fixed account.
Can we delay or suspend payment of a loan?
We will normally pay the portion of any loan from the subaccounts
within 7 days after we receive your written request in our home
office. We have the right, however, to suspend or delay the date
of any loan from the subaccounts for any period:
1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchange is restricted; or
3. when an emergency exists, and as a result:
(a) disposal of securities held in the subaccounts is not
reasonably practicable; or
(b) it is not reasonably practicable to fairly determine
the value of the assets of the subaccounts; or
4. during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of
security holders.
Rules and regulations of the Securities and Exchange Commission
will govern as to whether the conditions set forth in the above
items 2 and 3 exist.
For any loans from the fixed account, we have the right to postpone
the loan for up to 6 months unless the loan is used to pay premiums
on any policies you have with us.
What is the interest rate charged for a policy loan?
The current interest rate for policy loans is shown under Policy
Data. We reserve the right to increase this interest rate charge,<PAGE>
PAGE 26
but it will never exceed the guaranteed loan interest rate shown
under Policy Data.
Interest is charged daily and payable at the end of the policy
year. If interest is not paid when it is due, it will be added to
your indebtedness and charged the same interest as your loan. The
additional interest will be taken from the fixed account and the
subaccounts using the monthly deduction allocation percentages. If
the value in the fixed account or any subaccount is insufficient to
pay the additional interest, the entire additional interest will be
taken from the fixed account and the subaccounts on a pro-rata
basis.
What is the maximum loan value of this policy?
You can borrow an amount up to 85% of the policy value minus
surrender charges. We calculate the policy value as of the date of
the loan. We reserve the right to include monthly deductions and
interest to pay for the loan until the next policy anniversary in
determining the maximum loan value.
When can you repay your loan?
Your loan can be repaid in full or in part at any time before the
last surviving insured's death and while this policy is in force.
A loan that exists at the end of the grace period may not be repaid
unless this policy is reinstated.
Repayments should be clearly marked as "loan repayments";
otherwise, they will be credited as premiums. They must be in
amounts of at least $50. They will be allocated to the fixed
account and the subaccounts according to the premium allocation
percentages in effect unless you tell us otherwise.
What if your loan is not repaid?
Failure to repay a loan or to pay loan interest will not terminate
this policy unless the cash surrender value is insufficient to pay
the monthly deduction, as provided in the Grace Period provision.
This would happen if indebtedness exceeded the policy value, minus
surrender charges.
Failure to repay a loan or to pay loan interest will reduce the
proceeds payable upon the death of the last surviving insured and,
the cash surrender value.<PAGE>
PAGE 27
Policy Surrender
Can you surrender this policy?
Yes. You may surrender this policy for its cash surrender value at
any time. Your request must be in writing. Upon surrender for the
cash surrender value, this policy will terminate.
The cash surrender value of this policy is:
1. the policy value at the time of surrender; minus
2. any indebtedness on this policy; minus
3. any applicable surrender charges as shown under Policy Data.
Surrender charges are shown under Policy Data. They apply in the
first 15 policy years.
Is a partial surrender possible?
Yes. By written request or other requests acceptable to us, you may
partially surrender this policy for an amount less than the cash
surrender value. Partial surrenders are subject to the rules below
and payment of the partial surrender fee shown under Policy Data.
We reserve the right to limit the frequency of partial surrenders
you may request.
If death benefit Option 1 is in effect, both the specified amount
and the policy value will be reduced by the amount of surrender and
partial surrender fee. If death benefit Option 2 is in effect, the
policy value will be reduced by the amount of surrender and the
partial surrender fee.
What are the rules for a partial surrender?
The following rules will apply to any partial surrender:
1. partial surrenders may not be made in the first policy year;
2. the minimum amount that may be surrendered is $500;
3. the partial surrender amount cannot exceed 85% of the full
cash surrender value;
4. the specified amount that remains in force may not be less
than the minimum specified amount shown under Policy Data;
5. the surrender amount and partial surrender fee will be
deducted from the policy value at the time of each partial
surrender; and
6. we reserve the right to decline a request for a partial
surrender that we determine would cause this policy to fail
to qualify as life insurance under applicable tax laws.
If you do not specify the accounts from which the surrender is to
be made, the surrender will be made from the fixed account and the
subaccounts on a pro-rata basis.<PAGE>
PAGE 28
Can we delay or suspend payment of a surrender?
We will normally pay the portion of any surrendered amount from the
subaccounts within 7 days after we receive your written request in
our home office. We have the right, however, to suspend or delay
the date of any surrender payment from the subaccounts for any
period:
1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchange is restricted, or
3. when an emergency exists, and as a result:
(a) disposal of securities held in the subaccounts is not
reasonably practicable; or
(b) it is not reasonably practicable to fairly determine
the value of the assets of the subaccounts; or
4. during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of
security holders.
Rules and regulations of the Securities and Exchange Commission
will govern as to whether the conditions set forth in items 2 and 3
exist.
For any surrender request from the fixed account, we have the right
to postpone the payment for up to 6 months. If we postpone payment
more than 30 days, we will also pay you interest. The interest
will be paid at the rate of 3% per year based on the amount
surrendered for the period of postponement.<PAGE>
PAGE 29
Subaccounts
What are the subaccounts?
The subaccounts are separate investment accounts of ours. They are
named under Policy Data. We have allocated a part of our assets
for this and certain other policies to the subaccounts. Such
assets remain our property. They cannot be charged, however, with
liabilities from any other business in which we may take part.
What are the investments of the subaccounts?
Net premiums and transfers will be allocated as you specify. Each
subaccount will buy the investment shown for that subaccount under
Policy Data or as later added or changed.
How do we value the subaccounts?
The subaccount value is determined by multiplying the number of
accumulation units credited to the subaccount by the appropriate
accumulation unit values.
What are subaccount accumulation units?
The number of accumulation units for each of the subaccounts is
found by dividing: (1) the amount allocated to the subaccount; by
(2) the subaccount's accumulation unit value for the valuation
period in which we received the premium payment, transfer request,
or partial surrender request.
What is the subaccount accumulation unit value?
The value of an accumulation unit for each of the subaccounts was
arbitrarily set at $1 when the first investments were bought. The
value for any later valuation period is found as follows:
The accumulation unit value for a subaccount for the last
prior valuation period is multiplied by such subaccount's net
investment factor for the following valuation period. The
result is the accumulation unit value. The value of an
accumulation unit may increase or decrease from one valuation
period to the next.
What is the net investment factor? How is it determined?
The net investment factor is an index applied to measure the
investment performance of a subaccount from one valuation period to
the next. The net investment factor may be greater or less than
one; therefore, the value of an accumulation unit may increase or
decrease.
To find the net investment factor of any such subaccount for any
valuation period, we divide (1) by (2), and subtract (3) from the
result, where:
<PAGE>
PAGE 30
(1) is the net result of:
a. the net asset value per share of the portfolio in which
the subaccount invests determined at the end of the
current valuation period; plus
b. the per-share amount of any dividend or capital gain
distributions made by the investment held in the
subaccount, if the "ex-dividend" date occurs during the
current valuation period; plus or minus
c. a per-share charge or credit for any taxes reserved for
the current valuation period that we determine to have
resulted from the investment operations of the
subaccount;
(2) is the net result of:
a. the net asset value per share of the portfolio in which
the subaccount invests determined at the end of the
last prior valuation period; plus or minus
b. the per-share charge or credit for any taxes reserved
for the last prior valuation period; and
(3) is a factor representing the Mortality and Expense Risk Charge.
What deductions are made from the subaccounts?
The Mortality and Expense Risk Charge compensates us for assuming
the mortality and expense risks under this policy. It is equal, on
an annual basis, to .9% of the daily value of the subaccounts. The
deduction will be (1) made from each subaccount; and (2) computed
on a daily basis.
Can the investments of the subaccounts be changed?
This would happen if laws or regulations changed, the investment
became unavailable, or, in our judgement, the investment were no
longer suitable for the subaccounts. If any of these situations
occurred, we would have the right to substitute investments other
than those shown under Policy Data. Where required, we would first
seek the approval of the Securities and Exchange Commission and the
insurance regulator of the state where this policy is delivered.
Can transfers be made among the subaccounts and the fixed account?
By written request or other requests acceptable to us, you may
transfer all or part of the value of a subaccount to one or more of
the other subaccounts or to the fixed account. The amount
transferred, however, must be at least: 1) $250; or 2) the total
value in the subaccount, if less. We reserve the right to limit
such transfers to 5 per policy year. We may suspend or modify this
transfer privilege at any time with the necessary approval of the
Securities and Exchange Commission.
You may also transfer from the fixed account to the subaccounts
once a year, but only on the policy anniversary or within 30 days<PAGE>
PAGE 31
after such policy anniversary. If you make this transfer, you
cannot transfer from the subaccounts back into the fixed account
until the next policy anniversary. If we receive your written
request within 30 days before the policy anniversary date, the
transfer from the fixed account to the subaccounts will be
effective on the anniversary date. If we receive your written
request within 30 days after the policy anniversary date, the
transfer from the fixed account to the subaccounts will be
effective on the date we receive the request. The minimum transfer
amount is $250 or the fixed account value minus indebtedness, if
less. The maximum transfer amount is the fixed account value,
minus indebtedness. We may suspend or modify this transfer
privilege at any time.<PAGE>
PAGE 32
Payment of Policy Proceeds
How are the proceeds paid?
We will pay the proceeds in a single sum unless a payment option
has been selected. The date on which the proceeds are paid in a
lump sum or first placed under a payment option is the settlement
date. All proceeds are payable at our home office. We will pay
interest at a rate not less than 4% per year on single sum death
proceeds from the date of the last surviving insured's death to the
settlement date.
What are the payment options other than a single sum?
During an insured's lifetime, you may request in writing that we
pay the proceeds under one or more of the payment options shown
below, or that we change a prior election. You may elect other
payment options not shown if we agree.
Unless we agree otherwise, however, a payment option may be
selected only if the payments are to be made to a natural person in
that person's own right. Also, the amount of proceeds placed under
a payment option must be at least $5,000.
Option A - Interest Payments
We will pay interest on proceeds placed under this option at the
rate of 3% per year compounded annually. We will make regular
interest payments at intervals and for a period that is agreeable
to both you and us. At the end of any payment interval, a
withdrawal of proceeds may be made in the amount of at least $100.
At any time, all of the proceeds that remain may be withdrawn or
placed under a different payment option approved by us.
Option B - Payments for a Specified Period
We will make monthly payments for a specified number of years. The
amount of each monthly payment for each $1,000 placed under this
option is shown in the table below. Monthly payment amounts for
years not shown will be furnished upon request.
Option B Table
Number Monthly
of Years Payment/$1000
10 9.61
15 6.87
20 5.51
25 4.71
30 4.18
Option C - Lifetime Income
We will make monthly payments for the life of the person (the
payee) who is to receive the income. Payment will be guaranteed
for either 10, 15, or 20 years. The amount of each monthly payment
for each $1,000 placed under this option will be based on our Table
of Settlement Rates in effect at the time of the first payment. The<PAGE>
PAGE 33
amounts will not be less than those shown in the table below for
the sex and Adjusted Age of the payee on the due date of the first
payment. (See Adjusted Age Table.)
Monthly income amounts for any Adjusted Age not shown in the
following table will be furnished upon request.
Option C Table M = Male F = Female
Adjusted Age Life Income per $1,000 with
Payee Payments Guaranteed for
10 years 15 years 20 years
M F M F M F
50 4.22 3.89 4.17 3.86 4.08 3.82
55 4.62 4.22 4.53 4.18 4.39 4.11
60 5.14 4.66 4.96 4.57 4.71 4.44
65 5.81 5.22 5.46 5.05 5.02 4.79
70 6.61 5.96 5.96 5.60 5.27 5.12
75 7.49 6.89 6.38 6.14 5.42 5.35
Adjusted Age Table
The Adjusted Age is the age on the payee's nearest birthday, minus
an "adjustment" based on the year of birth of the payee as follows:
Calendar Calendar
Year of Year of
Payee's Birth Adjustment Payee's Birth Adjustment
Prior to 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
Will a supplemental contract be prepared if proceeds are placed
under a payment option?
If a payment option is requested, we will prepare an agreement
stating the terms under which payments will be made. The agreement
will include statements about withdrawal value, if any, and to whom
remaining proceeds will be paid if the payee dies.
Can a beneficiary request a payment option?
After the last surviving insured's death but before any proceeds
are paid, the beneficiary may select a payment option by written
request to us. You may provide, however, that the beneficiary will
not be permitted to change the payment option you have selected.
<PAGE>
PAGE 34
Are excess interest earnings payable by us?
On each anniversary of the settlement date, we will determine
excess interest, if any, on payment option deposits. Any such
excess interest will be paid under Option A or B.<PAGE>
PAGE 35
Four Year Term Insurance Rider
In consideration of the application for this rider and the payment
of the cost of insurance, this rider is made a part of the policy.
This rider is subject to all policy terms and provisions unless
this rider changes them.
What is the definition of insureds?
The persons whose lives are insured by the policy.
What is the amount of insurance?
The amount of insurance provided by this rider as shown under
Policy Data.
What benefit does this rider provide?
If we receive proof satisfactory to us that the last surviving
insured died during the first four policy years and while this
rider is in force, we will pay the amount of insurance as shown
under Policy Data for this rider to the beneficiary.
The beneficiary is named in the application for the policy.
Subject to the terms of the policy, the amount of insurance payable
by this rider to the beneficiary may be applied under one of the
payment options shown in the policy.
Is there a monthly deduction for the cost of this rider?
Yes. While this rider is in force, a monthly deduction for the
cost of the rider is taken from the policy's value. The amount of
the deduction is this rider's amount of insurance, as shown under
Policy Data, divided by 1,000 times the monthly cost of insurance
rate.
The monthly cost of insurance rate is the annual cost of insurance
rate described below divided by 12.
What is the cost of insurance rate?
The cost of insurance rate is the rate applied to this rider's
amount of insurance to determine the monthly deduction. It is
based on each insured's sex, insurance age, risk classification and
the number of years the policy has been in force.
We may change the cost of insurance rates from time to time. Any
change in the cost of insurance rate will apply to all individuals
of the same risk class as each of the insureds. We will determine
cost of insurance rates based on our expectations as to future
mortality experience. The cost of insurance rates will not exceed
the Guaranteed Maximum Annual Cost of Insurance Rates shown under
Policy Data. These rates are based on the 1980 Commissioner's
Standard Ordinary Smoker or Non-smoker Mortality Tables, Age Last
Birthday.
<PAGE>
PAGE 36
Can you change the amount of insurance of this rider?
Yes. While this rider is in force you may decrease this rider's
amount of insurance once per policy year by written request. Such
request may only be made after the first policy year and is subject
to the following:
The decrease in face amount will be effective on the monthly date
on or next following our receipt of your written request. The
amount of insurance that remains in force after a requested
decrease may not be less than $50,000.
Do policy changes affect this rider?
If the policy's specified amount is reduced for any reason, we will
reduce this rider's amount of insurance so that it does not exceed
the policy's new specified amount multiplied by 1.22.
If this rider's amount of insurance is reduced, the monthly
deduction for the cost of this rider will also be reduced.
When will coverage under this rider terminate?
This rider will terminate on the earliest of the following:
1. the monthly date on or next following receipt of your written
request for coverage to end; or
2. the Expiration Date as shown under Policy Data; or
3. the date the policy terminates.
Can this rider be reinstated if the policy has lapsed?
If the policy and this rider lapsed as provided in the policy's
grace period provision, this rider may be reinstated prior to the
Expiration Date if:
1. this rider was in effect when the policy lapsed; and
2. the policy is reinstated; and
3. the requirements stated below are met.
In order to reinstate coverage for this rider, you must:
1. provide evidence that both insureds remain insurable, or
evidence for the last surviving insured and due proof that
the first death occurred before the date of lapse; and
2. pay a premium sufficient to keep this rider in force for 3
months; and
3. pay the monthly deductions that were not collected during the
grace period.
<PAGE>
PAGE 37
The effective date of reinstatement will be the monthly date on or
next following the date we approve the application for
reinstatement.
What if the age or sex of an insured has been misstated?
If an insured's age or sex has been misstated, the amount payable
under this rider upon the last surviving insured's death will be
the amount of insurance, if any, that the rider cost for the policy
month during which the last surviving insured's death occurred,
would have purchased had the cost of the benefits provided under
the rider been calculated using the rider cost of insurance rates
for the correct age or sex.
When will this rider become incontestable?
The incontestable provision of the policy also applies to this
rider.
Is there a suicide exclusion?
The suicide exclusion provision of the policy also applies to this
rider.
What is the effective date of this rider?
The effective date of this rider is the policy date of the policy
unless a different date is shown under Policy Data.
IDS Life Insurance Company
/s/ William A. Stoltzmann
Secretary<PAGE>
PAGE 38
Policy Split Option Rider
This rider was issued in consideration of your application and
payment of its monthly deduction. This rider is made a part of the
policy. This rider is subject to all policy terms and provisions
unless this rider changes them.
What benefit does this rider provide?
While this rider is in effect, this policy may be exchanged without
evidence of insurability for two individual permanent plans of life
insurance we are then issuing, one on each of the insureds, upon
the occurrence of one of the following:
1. a final divorce decree with respect to the marriage of the
insureds is issued by a court of competent jurisdiction in
the United States;
2. the Federal Estate Tax law is changed resulting in removal of
the unlimited marital deduction or reduced by at least 50%
the level of the estate taxes payable on death.
What are the conditions for exchange?
The following conditions must be met in order to make the exchange:
1. Both insureds must be living on the exchange date;
2. You must request the exchange in writing within one year of
the first enactment date of the Federal Estate Tax law change
described above, if applicable;
3. You must request the exchange in writing no sooner than six
months after and no later than one year after the final
divorce decree, if applicable. You must provide us with a
copy of the final divorce decree within this same time
period.
4. The owner of each new policy will be the owner of this policy
unless otherwise specified in the applications and must have
an insurable interest in the insured. If this policy is
assigned, the assignee must consent to the exchange;
5. This policy must be in force on the exchange date;
6. We must receive payment of the first premium for each new
policy on or before the Policy Date of each new policy.
When will the new policies become effective?
The new policies will become effective on the date we receive your
written request at our Home Office.
The New Policy
The initial death benefit of each new policy will be equal to one
half of the death benefit of this policy less one half of any
indebtedness on this policy on the date of the exchange. One half<PAGE>
PAGE 39
of the policy value of this policy minus one half of any
indebtedness on this policy on the date of the exchange will be
applied as premium to each new policy. Each new policy must be an
individual permanent plan of life insurance we are then issuing.
The new policy will be issued using the rates then in effect, the
insured's attained insurance age, and the same risk classification
as this policy.
What if the new policies are cancelled under the free-look
provision?
If you return either of the new policies under a free-look or right
to examine this policy provision, we will refund for each policy
returned an amount equal to one half of the cash surrender value of
this policy plus all additional premuums paid for the new policy.
Can riders attached to this policy be added to the new policies?
No. Riders attached to this policy will terminate on the effective
date of the split.
Is there a monthly deduction for the cost of this rider?
Yes. While this rider is in force, a monthly deduction for the
cost of this rider is taken from the policy's value. The amount of
the monthly deduction is the annual cost of insurance for this
rider, shown under Policy Data, divided by 12.
Do policy changes affect this rider?
If the policy's specified amount is changed for any reason, this
rider's monthly deduction will also be changed.
Is there a suicide exclusion and incontestable period?
Yes. The suicide exclusion and incontestability provision of this
policy also apply to this rider.
When will this rider terminate?
This rider will terminate on the earliest of the following:
1. the monthly date on or next following receipt of your written
request for coverage to end; or
2. the Expiration Date as shown under Policy Data; or
3. the date the policy terminates.
<PAGE>
PAGE 40
What is the effective date of this rider?
The effective date of this rider is the policy date of the policy
unless a different date is shown under Policy Data.
IDS Life Insurance Company
/s/ William A. Stoltzmann
Secretary
Flexible Premium Survivorship
Variable Life Insurance Policy
- Death benefit payable at last surviving insured's death.
- Flexible premiums payable as provided herein.
- Death Benefit Guarantees as described herein.
- This policy is nonparticipating. Dividends are not payable.
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
<PAGE>
PAGE 1
ADDENDUM TO INVESTMENT MANAGEMENT AND SERVICES AGREEMENT
"Part Two: COMPENSATION TO INVESTMENT MANAGER" paragraph (1) of
the Investment Management and Services Agreement between IDS Life
Series Fund, Inc. (the Fund) and IDS Life Insurance Company (IDS
Life) dated December 17, 1985, has been modified as follows. All
other provisions of this Investment Management and Services
Agreement remain in full force and effect.
(1) The Fund agrees to pay IDS Life, and IDS Life covenants and
agrees to accept from the Fund in full payment for all the services
furnished, and for the use of all facilities and equipment, and for
all expenses paid or reimbursed by IDS Life hereunder, a fee for
each calendar day of each year equal to the total of 1/365th
(1/366th in each leap year) of:
.70 percent for the Equity Portfolio
.70 percent for the Income Portfolio
.70 percent for the Managed Portfolio
.70 percent for the Government Securities Portfolio
.95 percent for the International Equity Portfolio and
.50 percent for the Money Market Portfolio
to be computed for each day on the basis of net assets as of the
close of business of the full business day two (2) business days
prior to the day for which the computation is being made. In the
case of the suspension of the computation of net asset value, the
said fee for each day during such suspension shall be computed as
of the close of business on the last full business day on which the
net assets were computed. As used herein, "net assets" as of the
close of a full business day shall include all transactions in
shares of the Fund recorded on the books of the Fund for that day.
IN WITNESS WHEREOF, the parties have executed the Addendum as of
the 28th day of October, 1994.
IDS LIFE SERIES FUND, INC.
Attest: /s/ Colleen Curran By: /s/ Richard W. Kling
Colleen Curran Richard W. Kling
Title: Secretary Title: President
IDS LIFE INSURANCE COMPANY
Attest: /s/ Nancy Careaga By: /s/ William A. Stoltzmann
Nancy Careaga William A. Stoltzmann
Title: Assistant Secretary Title: Vice President
<PAGE>
PAGE 1
ADDENDUM TO INVESTMENT ADVISORY AGREEMENT
The following provision is added to Section 6, Compensation to IDS,
of the Investment Advisory Agreement between IDS Life Insurance
Company (IDS Life) and IDS/American Express, Inc. (IDS) [now known
as IDS Financial Corporation] dated July 11, 1984. All other
provisions of this Investment Advisory Agreement remain in full
force and effect.
6. Compensation to IDS. In addition to the fee for services
provided under the Investment Advisory Agreement described above,
IDS Life Series Fund, Inc. for the International Equity Portfolio
shall pay IDS life a fee for each calendar day of each year equal
to the total of 1/365th (1/366th in each leap year) of 0.25% of the
total net assets of the International Equity Portfolio for a total
of 0.50% of the net assets of the International Equity Portfolio.
This additional 0.25% fee shall be paid on a monthly basis in cash
by IDS Life to IDS within five (5) business days after the last day
of each month.
(IN WITNESS WHEREOF, the parties have executed the Addendum as of
the 28th day of October, 1994.)
IDS LIFE INSURANCE COMPANY
Attest:/s/ Nancy Careaga By: /s/ Richard W. Kling
Nancy Careaga Richard W. Kling
Title: Assistant Secretary Title: President
IDS FINANCIAL CORPORATION
Attest:/s/ Colleen Curran By: /s/ William A. Stoltzmann
Colleen Curran William A. Stoltzmann
Title: Secretary Title: Vice President
<PAGE>
PAGE 1
<TABLE><CAPTION>
<S> <C>
IDS Life Insurance Company Life and Disability
P.O. Box 499 Income Insurance
Minneapolis, Minnesota 55440-0499 Application
-----------------------------------------------------------------------------------------------------------------------------------
Insured Other Insured Rider (OIR)/2nd Insured
Please provide both day and evening telephone numbers Please provide both day and evening telephone numbers
Day (____) ____________ Evening (____) _____________ Day (____) ____________ Evening (____) _____________
Best time to call ___________ Day ___________ Evening Best time to call ___________ Day ___________ Evening
-----------------------------------------------------------------------------------------------------------------------------------
Section A Insured and Owner Information
1. Insured: Is insured the owner? __ Yes __ No Other Insured Rider (OIR)__ or 2nd Insured __ ?
Is OIR/2nd Insured the owner? __ Yes __ No
----------------------------------------------------- ----------------------------------------------------------------------
__ Mr. __ Mrs. __ Miss __ Ms. __ Mr. __ Mrs. __ Miss __ Ms.
----------------------------------------------------- ----------------------------------------------------------------------
Insured's name (first) (full middle) (last) OIR/2nd Insured's name (first) (full middle) (last)
----------------------------------------------------- ----------------------------------------------------------------------
Home address (street) Home address (street)
----------------------------------------------------- ----------------------------------------------------------------------
City, State, Zip City, State, Zip
----------------------------------------------------- ----------------------------------------------------------------------
Social Security No. Social Security No.
----------------------------------------------------- ----------------------------------------------------------------------
Birthdate Marital status State of birth __ Male Birthdate Marital status State of birth __ Male
__ Female __ Female
----------------------------------------------------- ----------------------------------------------------------------------
Citizenship Citizenship
__ U.S. __ Other ___________________________________ __ U.S. __ Other _____________________________________
----------------------------------------------------- ----------------------------------------------------------------------
Occupation Self-Employed Occupation Self-Employed
__ Yes __ No __ Yes __ No
----------------------------------------------------- ----------------------------------------------------------------------
Individual occ. income Net worth Household income Individual income from occupation Relationship to insured
$ $ $ $
----------------------------------------------------- ----------------------------------------------------------------------
Employer name Employer name
----------------------------------------------------- ----------------------------------------------------------------------
Address (street) Address (street)
----------------------------------------------------- ----------------------------------------------------------------------
City, State, Zip City, State, Zip
----------------------------------------------------- ----------------------------------------------------------------------
2. Owner (Complete if owner is different from Insured/OIR/2nd Insured)
--------------------------------------------------------------------------------------------------------------------------------
__ Mr. __ Mrs. Owner's name (first) (full middle) (last) Birthdate __ Male
__ Miss __ Ms. __ Female
--------------------------------------------------------------------------------------------------------------------------------
Individual occ. income Net worth Household income Bus. Tax ID, Taxpr. ID or Social Security No. Relationship to insured
$ $ $
--------------------------------------------------------------------------------------------------------------------------------
Home address (street) (city) (state) (zip)
--------------------------------------------------------------------------------------------------------------------------------
Employer name Address (street) (city) (state) (zip)
--------------------------------------------------------------------------------------------------------------------------------
3. Ownerships
--------------------------------------------------------------------------------------------------------------------------------
__ Individual
__ Business: __ Sole Proprietorship (03) __ S Corporation (01) __ Partnership (02) __ C Corporation (01)
Type of Business Insurance: __ Buy/Sell __ Business Debt Protection __ Split Dollar __ Key Person
__ Other ____________________ __ Executive Bonus __ Deferred Compensation
(nongovernmental)
__ Trust: __ Revocable __Irrevocable Name of Trust ____________________________________________________________________
Date of Trust ________________ Trustee taxpayer identification number ______________________________________________
Name and address of Trustee _________________________________________________________________________________________
__ Other ______________________________________________________________________________________________________________________
<PAGE>
PAGE 2
Section B Life Insurance
1. Life Insurance Plan
--------------------------------------------------------------------------------------------------------------------------------
Insured Amount $ OIR Amount $
--------------------------------------------------------------------------------------------------------------------------------
(You must select either Option 1 or Option 2 for these plans)
__ Life Protection Plus
__ Variable Universal Life II __ Death Benefit Option 1: Initial death benefit is insured amount.
__ Variable Universal Life II 350 __ Death Benefit Option 2: Initial death benefit is insured amount plus
__ Survivorship Variable Life (V2D) accumulated cash value. Cost of insurance is greater than Option 1.
__ 1-Year Term __ 10-Year Term
__ Whole Life
__ Other ____________________________________________________________________________________________________________________
--------------------------------------------------------------------------------------------------------------------------------
Variable Universal Life & Survivorship Variable Life Allocations (complete financial suitability statement on signature page).
--------------------------------------------------------------------------------------------------------------------------------
Premium allocation: (premium amount to be directed to specific investment options within policy)
Monthly deductions: (investment options within the policy from which the cost of insurance will be deducted)
Owner's tax bracket _____________% (required for VUL & V2D policies)
Investment Premium Monthly Investment Premium Monthly Investment Premium Monthly
options allocation deductions options allocation deductions options allocation deductions
Fixed _________% _________% Equity __________% _________% 2004 Trust _________% _________%
Income _________% _________% Money Market __________% _________% Other _________ _________% _________%
Managed _________% _________% Gov't securities __________% _________% Other _________ _________% _________%
Int'l Equity _________% _________% 100% 100%
--------------------------------------------------------------------------------------------------------------------------------
2. Life Insurance Riders
--------------------------------------------------------------------------------------------------------------------------------
__ Other Insured Rider (OIR). Complete OIR in Section A and OIR Amount $ and Beneficiary in Section B.
__ Accelerated Benefit Rider for Terminal Illness
__ Waiver of Premium or Waiver of Monthly Deduction
__ Accidental Death Benefit of $_____________________________
__ Four Term of $_______________ (V2D Only)
__ Policy Split Option (V2D Only)
__ Other ____________________________________________________________________________________________________________________
--------------------------------------------------------------------------------------------------------------------------------
__ Children's Insurance (CIR) __________ Units
Complete FIR/CIR information below.
__ Family Insurance (FIR) __________ Units
Children's Insurance Rider and Family Insurance Rider Information:
A. __ Mr. __ Mrs. Spouse information (first, middle and last name) Birthdate State of birth Height Weight
__ Miss __ Ms. __________________________________________________ _____________ __________________ __________ __________
B. Name(s) of children to be covered by rider (must be under age 19 and unmarried) Physical/mental abnormalities at birth?
Name (first) (full middle) (last) Birthdate Sex (if yes, explain here)
______________________________________________________________________________ __ Yes __ No __________________________
______________________________________________________________________________ __ Yes __ No __________________________
______________________________________________________________________________ __ Yes __ No __________________________
C. Has anyone listed above received treatment for any disease, physical or mental condition in the past five years?
__ Yes __ No
D. Is this insurance intended to replace any existing insurance and/or annuity? __ Yes __ No
E. If yes to C or D above, explain here ______________________________________________________________________________________
___________________________________________________________________________________________________________________________
F. Are there any children under the age of 19 and unmarried not listed above __ Yes __ No
If yes, list name, birthdate and reason for exclusion _____________________________________________________________________
___________________________________________________________________________________________________________________________
<PAGE>
PAGE 3
Section B Life Insurance (continued)
3. Life Insurance Premiums
--------------------------------------------------------------------------------------------------------------------------------
Amount of scheduled/ Amount paid with Lump-sum amount to be Premium Payment Frequency
annual premiums application paid on delivery of policy __ Monthly __ Quarterly
$________________________ $________________________ $_____________________________ __ Semiannually __ Annually
--------------------------------------------------------------------------------------------------------------------------------
Method of Payment: __ New Bank Authorization __ Add to Existing Bank Authorization account no. ___________________________
(BA can be set up for monthly or quarterly frequencies only. Complete attached BA form.)
__ Direct Billing __ Other ____________________________________________________________________________
--------------------------------------------------------------------------------------------------------------------------------
4. Life Insurance Beneficiary (for Survivorship Variable Life, complete b. below)
--------------------------------------------------------------------------------------------------------------------------------
a. Option 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.
Option 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, the share which the child would have received if he/she survived the Insured will be
paid to his/her living lawful children in equal shares.
Option C. Other designation.
Insured: OIR:
__ Option A __ Option B __ Option C __ Option A __ Option B __ Option C
For Option A or B: For Option A or B:
Insured's spouse's full name ______________________________________ OIR's spouse's full name ________________________________
Option C: Other designation _______________________________________ Option C: Other designation _____________________________
___________________________________________________________________ _________________________________________________________
___________________________________________________________________ _________________________________________________________
Relationship to Insured ___________________________________________ Relationship to OIR ____________________________________
b. Survivorship Variable Life Beneficiary designation ___________________________________________________________________________
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
Relationship to Insureds _____________________________________________________________________________________________________
--------------------------------------------------------------------------------------------------------------------------------
5. Juvenile Insurance
--------------------------------------------------------------------------------------------------------------------------------
COMPLETE IF INSURED IS UNDER AGE 15
--------------------------------------------------------------------------------------------------------------------------------
Did the representative see this child? Is there similar insurance in force or applied for on all brothers and sisters?
__ Yes __ No __ Yes __ No If not, why? _____________________________________________________
Amount of life insurance already in force on the person responsible for child's primary support $_____________________________
X _______________________________________________ X ____________________________________________ ________________________
Signature of Parent or Legal Guardian Signature of Witness Date
--------------------------------------------------------------------------------------------------------------------------------
<PAGE>
PAGE 4
Section C Disability Income and Business Expense Protection Insurance
1. Disability Income Insurance Plan
--------------------------------------------------------------------------------------------------------------------------------
Monthly Benefit Insured's Occupation Class Waiting Period
$ __ 1A __ 2A __ 3A __ 30 days __ 60 days __ 90 days
__ 4A __ 5A __ 180 days __ 365 days
--------------------------------------------------------------------------------------------------------------------------------
Duration of Benefit Multiple Case Discount Premium Pattern
__ 1 yr __ 3 yrs __ 5 yrs __ to age 65 __ Yes __ No __ Level __ Step Rate
--------------------------------------------------------------------------------------------------------------------------------
Employer Plan Coverage Unisex Rates (Two participants and employer billing required) __ Yes __ No
--------------------------------------------------------------------------------------------------------------------------------
Disability Provision Occupation Classes 1A, 2A & 3A: __ 2 Years Occupation Protection
Occupation Classes 4A & 5A: __ 5 Years Occupation Protection __ Gradual Recovery Benefits
__ Gradual Recovery Benefits and Occupation Protection Option
--------------------------------------------------------------------------------------------------------------------------------
2. Disability Underwriting Information
--------------------------------------------------------------------------------------------------------------------------------
A. Complete description of job duties. Years of service __________ Number of hours worked per week __________
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
If self-employed: 1. Date business began ___________________________ Number of employees ______________
2. What % of duties are supervisory? ____________________________
B. Any contemplated change in occupation? __ Yes __ No If yes, explain ____________________________________________________
C. Previous occupation if changed in the past five years _____________________________________________________________________
___________________________________________________________________________________________________________________________
D. Amount of unearned income $_______________________________ Source _______________________________________________________
E. Is the Insured a member of a State, Public, or Federal Retirement System? __ Yes __ No
If yes, which one? _____________________________________________________
F. Does the insured have any Disability Income Insurance through his/her employer?
__ Yes __ No If yes, complete questions a-c below:
a. Short-term at $_____________ per month for ______ months and ______ day waiting period
b. Long-term at $_____________ per month for ______ years and ______ day waiting period
c. Is the group disability integrated with Social Security __ Yes __ No
G. Will the Insured's employer be paying the premiums for the IDS Life Disability Insurance? __ Yes __ No
H. Is the Insured eligible for benefits from a required state Cash Sickness disability program? __ Yes __ No
--------------------------------------------------------------------------------------------------------------------------------
<PAGE>
PAGE 5
Section C Disability Income and Business Expense Protection Insurance (continued)
3. Disability Income Insurance Riders
--------------------------------------------------------------------------------------------------------------------------------
__ Other ___________________________________________________________________________________________________________________
__ Social Benefits Rider $____________ per month with waiting period of ______ days.
__ Supplemental DI $____________ per month for ______ months and ______ day waiting period
__ Cost-of-Living Maximum ____________% (classes 2A, 3A, 4A and 5A)
__ Future Purchase Option $____________ Pool Amount
__ Hospital Indemnity $____________ per month
--------------------------------------------------------------------------------------------------------------------------------
__ Accidental Death and Dismemberment (AD&D) $_______________ Complete AD&D Beneficiary information below
AD&D Beneficiary
__ Option A __ Option B Insured's spouse's full name _________________________________________________________________
__ Option C Other designation _____________________________________________________________________________________________
_________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________
Relationship to Insured __________________________________________________________________________________________________
--------------------------------------------------------------------------------------------------------------------------------
4. Disability Income Insurance Premiums
Annual premiums Amount paid with Amount to be paid on Premium payment Frequency
application delivery of policy __ Monthly __ Quarterly
$_________________________ $__________________________ $_____________________________ __ Semiannually __ Annually
Method of Payment: __ New Bank Authorization __ Add to Existing Bank Authorization account no. _____________________________
(BA can be set up for monthly or quarterly frequencies only. Complete attached BA form.)
__ Direct Billing __ Other ______________________________________________________________________________
--------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Business Expense Protection Insurance
-----------------------------------------------------------------------------------------------------------------------------------
1. Business Expense Protection Insurance Plan
(Cannot be applied for without personal Disability Income Protection in force or applied for.)
Complete Disability Underwriting Information Section
--------------------------------------------------------------------------------------------------------------------------------
Monthly Benefit Insured's Occupation Class Waiting Period Benefit Pattern
$___________________________________ __ 3A __ 4A __ 5A __ 30 days __ 60 days __ Level
Submit Form 34591 __ 90 days __ Increasing
(Available on DI Proposal System)
Multiple Case Discount __ Yes __ No
--------------------------------------------------------------------------------------------------------------------------------
2. Business Expense Protection Insurance Premiums
--------------------------------------------------------------------------------------------------------------------------------
Annual premiums Amount paid with Amount to be paid on Premium Payment Frequency
application delivery of policy __ Monthly __ Quarterly
$___________________________ $_____________________________ $_________________________________ __ Semiannually __ Annually
Method of Payment: __ New Bank Authorization __ Add to Existing Bank Authorization account no. _____________________________
(BA can be set up for monthly or quarterly frequencies only. Complete attached BA form.)
__ Direct Billing __ Other ______________________________________________________________________________
<PAGE>
PAGE 6
Section D Medical History
----------------------------------------------------------- -------------------------------------------------------------------
Insured: Other Insured Rider (OIR)/2nd Insured:
----------------------------------------------------------- -------------------------------------------------------------------
Doctor or Clinic Doctor or Clinic
1. 1.
----------------------------------------------------------- -------------------------------------------------------------------
Patient number Phone number Patient number Phone number
----------------------------------------------------------- -------------------------------------------------------------------
Address City State Zip Address City State Zip
----------------------------------------------------------- -------------------------------------------------------------------
Date last seen Reason last seen Date last seen Reason last seen
----------------------------------------------------------- -------------------------------------------------------------------
2. Height __________ Weight _________________ 2. Height __________ Weight _________________
3. Have you ever had, or been told you had, consulted 3. Have you ever had, or been told you had, consulted
with, been tested for or treated by a doctor or medical with, been tested for or treated by a doctor or medical
practitioner for the following: (circle disorder for practitioner for the following: (circle disorder for
"Yes" answers) "Yes" answers)
A. Cancer or tumor, unusual fatigue, disorder of the A. Cancer or tumor, unusual fatigue, disorder of the
muscles, bones, neck, back, joints, skin, liver, kidneys, muscles, bones, neck, back, joints, skin, liver, kidneys,
urinary tract, digestive, or reproductive system? urinary tract, digestive, or reproductive system?
__ Yes __ No __ Yes __ No
Date of last consultation, test or treatment ___________ Date of last consultation, test or treatment ___________
B. Chest pain, disorder of the heart, circulation, high B. Chest pain, disorder of the heart, circulation, high
blood pressure, lung or breathing disorder, diabetes, blood pressure, lung or breathing disorder, diabetes,
epilepsy, stroke, loss of consciousness, paralysis, epilepsy, stroke, loss of consciousness, paralysis,
brain or nervous system? __ Yes __ No brain or nervous system? __ Yes __ No
Date of last consultation, test or treatment ___________ Date of last consultation, test or treatment ___________
C. Mental illness, depression, emotional disorder, alcohol C. Mental illness, depression, emotional disorder, alcohol
or drug/substance abuse? __ Yes __ No or drug/substance abuse? __ Yes __ No
Date of last consultation, test or treatment ___________ Date of last consultation, test or treatment ___________
4. Have you ever been diagnosed or received treatment by 4. Have you ever been diagnosed or received treatment by
a member of the medical profession for AIDS (Acquired a member of the medical profession for AIDS (Acquired
Immune Deficiency Syndrome) or ARC (AIDS-Related Immune Deficiency Syndrome) or ARC (AIDS-Related
Complex?) __ Yes __ No Complex?) __ Yes __ No
Date of last consultation, test or treatment ______________ Date of last consultation, test or treatment ___________
5. Within the past five years have you stayed overnight in a 5. Within the past five years have you stayed overnight in a
hospital or gone to an emergency room for any illness, hospital or gone to an emergency room for any illness,
or injury, been to a medical clinic, therapist or doctor, or injury, been to a medical clinic, therapist or doctor,
or presently have a physical impairment or illness not or presently have a physical impairment or illness not
listed above? __ Yes __ No listed above? __ Yes __ No
Date of last consultation, test or treatment Date of last consultation, test or treatment
If yes, give reason: If yes, give reason:
_________________________________________________________ _________________________________________________________
_________________________________________________________ _________________________________________________________
_________________________________________________________ _________________________________________________________
6. Have you smoked cigarettes in the past 12 months? 6. Have you smoked cigarettes in the past 12 months?
__ Yes __ No __ Yes __ No
Have you ever smoked cigarettes? __ Yes __ No Have you ever smoked cigarettes? __ Yes __ No
Date ceased smoking cigarettes __________________________ Date ceased smoking cigarettes __________________________
Have you used tobacco in any other form? __ Yes __ No Have you used tobacco in any other form? __ Yes __ No
If yes, what is used? ___________________________________ If yes, what is used? ___________________________________
What amount? ____________________________________________ What amount? ____________________________________________
Date last used? _________________________________________ Date last used? _________________________________________<PAGE>
PAGE 7
Section E Underwriting Information
------------------------------------------------------------- -----------------------------------------------------------------
Insured Other Insured Rider (OIR)/2nd Insured:
1. Do you have any current plans to travel outside of the Do you have ny current plans to travel outside the
United States?: __ Yes __ No United States?: __ Yes __ No
If yes, where ____________________________________________ If yes, where __________________________________________
For how long ______________________ Reason _______________ For how long ______________________ Reason _____________
__________________________________________________________ ________________________________________________________
__________________________________________________________ ________________________________________________________
2. During the past five years have you: During the past five years have you?
A. Flown, or do you contemplate flying as a pilot, student A. Flown, or do you contemplate flying as a pilot, student
pilot or crew member? __ Yes __ No pilot or crew member? __ Yes __ No
B. Participated in or do you contemplate participating in B. Participated in or do you contemplate participating in
motorcycle riding, racing (automobile, snowmobile, motorcycle riding, racing (automobile, snowmobile,
motorcycle, boat), skin/scuba diving, skydiving, hang- motorcycle, boat), skin/scuba diving, skydiving, hang-
gliding, or other similar activities? gliding, or other similar activities?
__ Yes __ No __ Yes __ No
If yes, what activity? ________________________________ If yes, what activity? ________________________________
------------------------------------------------------------- -----------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Insured:
3. Have you ever had an application for insurance declined, postponed or modified in any way? __ Yes __ No
If yes, provide date ___________________ Company name _________________________________________________________________________
Reason ________________________________________________________________________________________________________________________
4. Will this insurance replace any existing insurance or annuity policies? __ Yes __ No
If replacing an existing IDS Life policy, the cash value should be: __ rolled to the new IDS Life policy __ returned to the client
5. List any annuities, or life or disability income insurance currently in force or applied for:
Plan Policy Ins. amount/ D.I. yrs ADB Will this
Company name type Policy number date mo. income payable amount be replaced?*
_________________ ______ _____________________ ___________ $_________________ _____________ $___________ __ Yes __ No
_________________ ______ _____________________ ___________ $_________________ _____________ $___________ __ Yes __ No
_________________ ______ _____________________ ___________ $_________________ _____________ $___________ __ Yes __ No
*If the insurance applied for will replace any existing insurance, Submit replacement form(s) if required.
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Other Insured Rider (OIR)/2nd Insured:
3. Have you ever had an application for insurance declined, postponed or modified in any way? __ Yes __ No
If yes, provide date ____________ Company name ______________________________________________________________________________
Reason _______________________________________________________________________________________________________________________
4. Will this insurance replace any existing insurance or annuity policies? __ Yes __ No
If replacing an existing IDS Life policy, the cash value should be: __ rolled to the new IDS Life policy __ returned to the
client
5. List any annuities, or life or disability income insurance currently in force or applied for:
Plan Policy Ins. amount/ D.I. yrs ADB Will this
Company name type Policy number date mo. income payable amount be replaced?*
_________________ ______ _____________________ ___________ $_________________ _____________ $___________ __ Yes __ No
_________________ ______ _____________________ ___________ $_________________ _____________ $___________ __ Yes __ No
_________________ ______ _____________________ ___________ $_________________ _____________ $___________ __ Yes __ No
*If the insurance applied for will replace any existing insurance, Submit replacement form(s) if required.
<PAGE>
PAGE 8
IDS Life Insurance Company Life and Disability
P.O. Box 499 Income Insurance
Minneapolis, Minnesota 55440-0499 Application
Agreement and Signature
-----------------------------------------------------------------------------------------------------------------------------------
Agreement
By signing this application, you acknowledge all the following terms and conditions.
Adequate information. You have received the IDS Life's Client 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 officers of the company have the authority to decide on insurability and risk classification and to bind the
company to insure a proposed Insured. The officers of the company are the President, Vice President, Secretary and
Assistant Secretary;
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;
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 on the Home Office Endorsement form
attached to the policy. However, the owner must sign a separate written document for any change in type of plan,
amount, benefits or Insured's risk classification. (Not applicable in New Jersey and West Virginia.)
Any insurance provided by this agreement will be subject to the conditions and terms of the policy applied for.
Release of Information. You understand and agree that the company will use and release information about you as
described in the attached IDS Life's Client Information Practices. You may inform us not to use information for certain
marketing purposes described in IDS Life's Client Information Practices.
Qualified Plans only. You certify that the plan under Ownership of the insurance application 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 your 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.
Certification
You certify, under the penalties of perjury as required by Form W-9 of the Internal Revenue Service, that the names,
addresses and Social Security (taxpayer ID) numbers provided in this application are true, correct and complete.
<PAGE>
PAGE 9
Client Copy
------------
Financial Suitability Statement
Variable Universal Life/Survivorship Variable Life. If you have applied for this type of insurance, check each of the
following to acknowledge that you have received and read 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.
__ You understand that there can be no assurance that such objectives will be achieved.
__ Your risk tolerance for investment is: __ Low __ Medium __ High
__ Your specific long-term goals and objectives are:
__ Protection __ Tax Deferral __ Capital Appreciation __ Stability of Principal
__ 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.
Life Protection Plus/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 values,
and (2) that surrender charges may apply in certain circumstances.
Authorization to Obtain Information -- IDS Life Insurance Company
You authorize any physician, medical practitioner, hospital, other medical facility, the Medical Information Bureau,
employer, and consumer reporting agency having medical and other 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. You acknowledge that your medical records, including any alcohol or drug
abuse information, may be protected by the Federal Alcohol and Drug Abuse 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 one-half years from the date shown below.
You acknowledge that you have received a copy of this authorization.
Signatures (Insureds under age 15 need not sign.)
Insured (base plan) X____________________________________ OIR/2nd Insured X_________________________________________________
FIR Spouse X____________________________________ OIR Insured X_____________________________________________________
Owner's signature (omit if owner already signed as an insured) X_____________________________________________________________
Signed on (date) ____ - ____ - ____, (state) __________, at (city), X___________________________________________________________
Receipt
-----------------------------------------------------------------------------------------------------------------------------------
All checks must be completed in full and be 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
-----------------------------------------------------------------------------------------------------------------------------------
Is Insured related to representative? __ Yes __ No If yes, give relationship ________________________________________________
You certify that you personally requested the information in this application and witnessed its signing and received any
money that was paid. You also certify that you truly and accurately recorded on this application the information supplied by
the applicant. 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
or annuities.
Representative's signature X___________________________________________________________ No. _______________ DO _______________
Compensation _____________________________% Phone (________) ________ - ________________________ Team ID ______________________
Representative's name (print) ____________________________________________________________________________
Joint Representative's signature X___________________________________________________ No. _______________
Compensation _____________________________% Phone (________) ________ - ________________________ Team ID ______________________
Compensation percentages must equal 100%.
Indicate Fax No. (________) ________ - ________________________ If you want to receive status information via FAX
instead of Telememo.
31445 A
</TABLE>
<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)(iii), the administrative procedures that will be
followed by IDS Life Insurance Company ("IDS Life") in connection
with the issuance of its flexible premium survivorship 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 5.)
Each month, a deduction is made from the Policy Value for the
cost of insurance, policy fee and optional benefits. This
deduction is based on the age, sex and risk classification of each
Insured and the duration of the Policy.
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 Insureds are
insurable. This process may involve such verification procedures
as medical examinations and may require that further information be
provided by the proposed Insureds 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.
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If a premium is submitted with the Policy application,
insurance coverage will begin immediately if the Insureds are
insurable under a conditional 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
Insureds are insurable under a conditional insurance agreement, or
on the later of the date the premium is received or the date IDS
Life approves coverage if the Insureds are not insurable under a
conditional 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
policy date, 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 policy date, 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% per year. IDS Life expects to reduce the loan interest
rate after the 10th policy anniversary to 4% per year. The
Policyowner can at any time make a loan repayment which must be at
least $50 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%.
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 six subaccounts.
The subaccounts invest in portfolios of IDS Life Series Fund, Inc.
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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. IDS Life reserves
the right to limit transfers to five each policy year.
The Policyowner may 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 Policyowner 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.
Automated transfers are also available. Automated transfers
of at least $50 may be requested monthly, quarterly, semiannually
or annually. Only one automated transfer arrangement may 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. Automated transfers from the Fixed Account may
not exceed an amount that, if continued, would deplete the Fixed
Account within 12 months. If transfers from the Fixed Account to
one or more of the subaccounts are made, transfers from the
subaccounts back to the Fixed Account will not be allowed until the
next policy anniversary.
III. "Redemption" Procedures: Surrender and Related Transactions
A. Surrender for Cash Value
At any time before the death of the last surviving 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 <PAGE>
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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 fifteen
policy years, the Surrender Charge.
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 last surviving Insured unless the Policy is
contested. The amount of the death benefit will be determined as
of the date of death of the last surviving Insured. The death
benefit proceeds will include interest from that date of death
until the date of payment. The death benefit proceeds payable will
be reduced by any Loan Balance.
Prior to the youngest Insured's attained insurance age 100,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.
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On or after the youngest Insured's attained insurance age 100,
the proceeds payable upon the death of the last surviving Insured
will be the Policy's Cash Surrender Value.
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. 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 next three
monthly deductions can be made.
The Death Benefit Guarantee to Age 85 provision provides that,
until the youngest Insured's attained insurance age 85 (or 15
policy years, if 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) is the Death Benefit Guarantee to Age 85 premiums shown
in the Policy that have been due since the Policy Date,
including the current month.
The Death Benefit Guarantee to Age 100 provision provides
that, until the youngest Insured's attained insurance age 100, 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) is the Death Benefit Guarantee to Age 100 premiums shown
in the Policy that have been due 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 2.)
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The Policyowner 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
Survivorship Life Insurance 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.
POLICY SPLIT OPTION RIDER
The Policy can be split on a 50/50 basis into two individual
permanent plans of life insurance then offered by IDS Life for
exchange, one on the life of each Insured, upon the occurrence of a
divorce of the Insureds or certain changes in federal estate tax
laws. Evidence of insurability will not be required by IDS Life.
The Specified Amount and Policy Value minus policy loans and
accrued loan interest will be divided evenly between the two
policies.
