SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO 7 TO FORM N-8B-2
FILE NO. 811-4298
DATED April 23, 1999
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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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.
Policy 1 - Single Premium Variable Life Insurance Policy
Policy 2 - Flexible Premium Variable Universal Life Insurance
Policy
Policy 3 - Flexible Premium Survivorship Life Insurance Policy
Policy 4 - Flexible Premium Variable Universal Life Insurance
Policy (VUL-3)
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.
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 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.
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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 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.
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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
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,
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.
<PAGE>
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.
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.
<PAGE>
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.
Policy 4
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 10th day after you receive it (15th day in Colorado, 20th
day in Idaho and North Dakota).
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 10 policy years and in the 10 years following an
increase in specified amount a surrender charge will be
assessed. It reimburses IDS Life for costs of issuing the
policy, such as processing the application (primarily
underwriting) and setting up computer records. Partially
compensates IDS advisors' commissions, advertising and
printing the prospectus and sales literature.
The surrender charge for the initial specified amount will be
shown in the policy. It is based on the insured's insurance
age, sex, risk classification and initial specified amount.
The surrender charge for the initial specified amount will
remain level during the first five policy years and then
decrease monthly until it is zero at the end of 10 policy
years. If the specified amount is increased, an additional
surrender charge will apply. The additional surrender charge
will be shown in a revised policy. It will be based on the
insured's attained insurance age, sex, risk classification and
the amount of the ncrease. The additional surrender charge
will remain level during the first five years following the
effective date of the increase and then decrease monthly until
it is zero at the end of the 10th year following the increase.
If the owner surrenders part of the value of the 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 your policy.
The owner may surrender the policy in full or in part by
written or telephone request. IDS Life will process your
surrender request at the end of the valuation period during
which your request is received. IDS Life may require that the
owner return your policy.
IDS Life will normally process your payment within seven days;
however, it reserves the right to defer payment.
If the owner surrenders the policy totally, they receive its
cash surrender value -- the policy value minus outstanding
indebtedness and applicable surrender charges. We will compute
the value of each subaccount as of the end of the valuation
period during which your request is received.
<PAGE>
After the first policy year, the owner may surrender any
amount from $500 up to 90% 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,
described under "Loads, fees and charges."
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.
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 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.
<PAGE>
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.
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.
<PAGE>
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 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.
<PAGE>
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
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 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.
<PAGE>
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.
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.
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.
<PAGE>
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 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.
<PAGE>
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 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.
<PAGE>
Policy 4
Effect 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 no lapse
guarantee. The surrender amount is deducted from
total premiums paid, which may reduce the total
below the level required to keep the no lapse
guarantee in effect.
o If Option 1 is in effect, the specified amount will
be reduced by the amount of the partial surrender
and fee. IDS Life will deduct this decrease from
the current specified amount in this order:
1. First from the specified amount provided by
the most recent increase;
2. Next from the next most recent increases
successively;
3. Then from the initial specified amount when
the policy was issued.
Because they reduce the specified amount, partial surrenders
may affect the cost of insurance. IDS Life will not allow a
partial surrender if it would reduce the specified amount
below the required minimum.
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, IDS Life will process the transfer request at the
end of the valuation period during which your request is
received. 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 with the necessary approval of the Securities and
Exchange Commission. 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
at any time for transfer periods the owner chooses
subject to certain minimums.
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 IDS Life receives it.
<PAGE>
o IDS Life will not accept requests for transfers from
the fixed account at any other time.
o If the owner have 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.
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 are allowed.
Two ways to request a transfer, loan or surrender
The owner must provide their name, policy number, Social
Security Number or Taxpayer Identification Number when they
request a transfer.
1 By letter
Regular mail:
IDS Life Insurance Company
P.O. Box 499
Minneapolis, MN 55440
Express mail:
IDS Life Insurance Company
733 Marquette Ave.
Minneapolis, MN 55402
<PAGE>
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
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 or
surrender request believed to be authentic and will
use reasonable procedures to confirm that they are.
These include asking identifying questions and tape
recording calls. As long as these procedures are
followed, neither IDS Life nor its affiliates will be
liable for any loss resulting from fraudulent
requests.
o Telephone transfers are automatically available. The
owner may request that telephone transfers 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 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 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, they 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.
<PAGE>
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.
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.
<PAGE>
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.
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.
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.
<PAGE>
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 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.
<PAGE>
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.
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.
<PAGE>
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.
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.
Policy 4
Keeping the policy in force
No lapse guarantee
The NLG provides that the policy will remain in force until
the insured's attained age 70 (or 5 policy years, if later)
(always five policy years if the policy is purchased in
Massachisetts or Texas) even if the cash surrender value is
insufficient to pay the monthly deduction. The NLG will stay
in effect as long as:
o the sum of premiums paid; minus
o partial surrenders; minus
o outstanding indebtedness; equals or exceeds
o the minimum monthly premiums due since the policy date
The minimum monthly premium is shown in the policy.
If, on a monthly date, the owner has not paid enough premiums
to keep the no lapse guarantee in effect, the no lapse
guarantee will terminate. In addition, the policy will lapse
(terminate) if the cash surrender value is less than the
amount needed to pay the monthly deduction.
The no lapse guarantee period may be reinstated within 2 years
of its termination if the policy is in force.
<PAGE>
Grace period
If on a monthly date the cash surrender value of the policy
is less than the amount needed to pay the next monthly
deduction and the NLG is not in effect the owner will have
61 days to pay the required premium amount. If the owner
does not pay the required premium, the policy will lapse.
IDS Life will mail a notice to their last known address,
requesting payment of a 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, it will use
the payment to cover all monthly deductions and any other
charges then due. IDS Life will add any balance 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 insured dies
during the grace period, any overdue monthly deductions will
be deducted from the death benefit.
Reinstatement
Your policy may be reinstated within five years after it
lapses, unless you surrendered it for cash. To reinstate, IDS
Life will require:
o a written request;
o evidence satisfactory to IDS Life that the insured
remains insurable;
o payment of the required reinstatement premium and
o payment or reinstatement of any indebtedness.
The reinstatement premium is the required premium to reinstate
the policy.
The effective date of a reinstated policy will be the monthly
date on or next following the day IDS Life accepts your
application for reinstatement. The suicide period will apply
from the effective date of reinstatement (except in Georgia,
Nebraska, Oklahoma, Pennsylvania, South Carolina, Tennessee,
Utah and Virginia). Surrender charges will also be reinstated.
IDS Life will have two years from the effective date of
reinstatement to contest the truth of statements or
representations in the reinstatement application.
(f) 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 Subaccount 2004 fund
the Single Premium Variable Life policies issued by IDS Life.
Subaccounts U, V, W, X, Y, IL, FEI, FGI, FNO, FPH, FSC, FVL
and FIF as well as Subaccount 2004V fund the Flexible Premium
Variable Life policies issued by IDS Life. Subaccounts U, V,
W, X, Y, IL, FGI and FNO 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
<PAGE>
in units of the Smith Barney Inc. Stripped (Zero Coupon) U.S.
Treasury Securities Fund, Series A ("the Trust"). 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; Subaccount
IL invests exclusively in the shares of the International
Equity Portfolio; Subaccount FEI invests exclusively in Equity
Income Portfolio. All of the above seven portfolios make up
IDS Life Series Fund, Inc., a series mutual fund. Subaccount
FGI invests exclusively in AIM V.I. Growth and Income Fund;
Subaccount FNO invests exclusively in Putnam VT New
Opportunities Fund - Class IA shares; Subaccount FPH invests
exclusively in Putnam VT High Yield Fund - Class IB shares;
Subaccount FSC invests exclusively in Warburg Pincus
Trust/Small Company Growth Portfolio; Subaccount FVL invests
exclusively in American Century VP Value; and Subaccount FIF
invests exclusively in Templeton International Fund - Class 2.
Subaccount 2004V invests in units of the designated
unit investment trust, with a maturity date of 2004. The IDS
Life Series Funds, AIM V.I. Growth and Income Fund, Putnam VT
New Opportunities Fund - Class IA, Putnam VT High Yield -
Class IB , Warburg Pincus Trust/Small Company Growth
Portfolio, American Century VP Value and Templeton
International Fund - Class 2 are herein referred to
collectively as ("the Funds").
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 seven 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 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.
<PAGE>
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 the Owners
of that action and its reasons for such action in the next
report to the 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 the
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.
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 the 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, the 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.
<PAGE>
(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 the Owners is not required when changing the
underlying securities of any of the Subaccounts.
However, to change these securities, approval of the
Securities and 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 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.
<PAGE>
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 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.
<PAGE>
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 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.
<PAGE>
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.
Policy 4
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 first several policy years until the policy value
is sufficient to cover the surrender charge, IDS Life requires
that premiums sufficient to keep the no lapse guarantee in
effect be paid to keep the policy in force.
The owner may schedule payments annually, semiannually or
quarterly. (Payment at any other interval must be approved by
IDS Life.) IDS Life shows this premium schedule 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 the cash surrender value is sufficient
to pay the monthly deduction or if sufficient premiums have
been paid to keep the no lapse guarantee 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 payments will affect the policy
value, cash surrender value and length of time the policy will
remain in force, as well as affect whether the no lapse
guarantee remains in effect.
Premium limitations:
The owner may make unscheduled premium payments at any time
and in any amount of at least $25. 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 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 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.
<PAGE>
IDS Life converts any amount that the owner allocates to a
subaccount into accumulation units of that subaccount.
Similarly, when the owner transfers value between
subaccounts, IDS Life converts accumulation units in one
subaccount into a cash value, which IDS Life then converts
into accumulation units of the second subaccount.
Insurability: Before issuing your policy, IDS Life requires
satisfactory evidence of the insurability of the person
whose life the owner proposes to insure (the owner or
someone else) . IDS Life's underwriting department will
review the owner's application and any medical information
or other data required to determine whether the proposed
individual is insurable under IDS Life's underwriting rules.
The owner's application may be declined if IDS Life
determines the individual is not insurable and IDS will
return any premiums the owner has paid.
Age limit: IDS Life generally will not issue a policy where
the proposed insured is over the insurance age of 80. 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 insured dies.
If that death is prior to the 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 insured's death is on or after the 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 insured's
death; or
o the applicable percentage of the policy value on
the date of the insured's death, if that death
occurs on a valuation date, or an the next
valuation date following the date of death.
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 your policy to qualify
as life insurance.
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 insureds death, if that death occurs
on a valuation date, or on the next valuation date
following the date of death.
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).
<PAGE>
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).
AIM Variable Insurance Funds, Inc.
Putnam Variable Trust
Warburg Pincus Trust
American Century Variable Portfolios, Inc.
Templeton Variable Products Series Fund
(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
Investment manager of Putnam Variable Trust:
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
Investment adviser of AIM Variable Insurance Funds, Inc.:
AIM Advisors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046-1173
Investment adviser of Warburg Pincus Trust
Warburg Pincus Asset Management
466 Lexington Avenue
New York, New York 10017-3147
Investment manager of American Century Variable Portfolios,
Inc.
American Century Investment Management, Inc.
American Century Tower
4500 Main Street
Kansas City, MO 641111
Investment manager of Templeton Variable Products Series Fund
Templeton Investment Counsel, Inc.
100 Fountain Parkway
St. Petersburg, FL 33716
<PAGE>
(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
For Putnam Variable Trust:
Putnam Fiduciary Trust Company, a wholly-owned subsidiary of
Putnam Investments, Inc.
One Post Office Square
Boston, MA 02109
acts as custodian for Putnam VT New Opportunities - Class IA
and Putnam VT High Yield Fund - Class IB shares.
For A I M Variable Insurance Funds, Inc.:
State Street Bank & Trust Co.
225 Franklin Street
Boston, MA 02110
acts as custodian for A I M V.I. Growth and Income Fund.
For American Century Portfolios, Inc.:
P.O. Box 419385
Kansas City, MO 64141
acts as custodian for American Century VP Value
For Warburg Pincus Trust:
PNC Bank, National Association
1600 Market Street
Philadelphia, PA 19103
acts as custodian for Warburg Pincus Trust/Small Company
Growth Portfolio.
(d) Name and principal business address of principal underwriter.
Not Applicable.
<PAGE>
(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. The Equity Income Portfolio commenced
operations on May 3, 1999. A I M V.I. Growth and Income
Fund commenced operation in May 1994. Putnam VT New
Opportunities Fund - Class IA commenced operations in May
1994. Putnam VT High Yield Fund - Class IB commenced
operations in February 1988. Warburg Pincus Trust/Small
Company Growth Portfolio commenced operations in June 1995.
American Century VP Value commenced operations in May 1996.
Templeton International Fund - Class C commenced operations in
May 1992.
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>
<S> <C> <C> <C> <C>
Policy 1
Nature of Charge Amount Person to whom Services
Paid/Relationship
Monthly cost of insurance Tabular charge per $1,000 at risk, IDS Life Insurance
charges varying by age, sex and insurance Protection
rating of the insured
Policy Issue and $150 at time of issue IDS Life Issue and
Administrative Expense Administrative
Expense
Surrender Charge Percent of Amount Surrendered varying IDS Life Sales Expenses
by duration and guaranteed not to
exceed 9% of Premium paid
Premium Tax Charge 2.5% of Premium IDS Life State Premium Taxes
<PAGE>
Policy 2
Nature of charge Amount Person to whom Services
Paid/Relationship
Sales Charge 2.5% of Gross Premiums IDS Life Sales Expenses
Premium Tax Charge 2.5% of Gross Premiums IDS Life State Premium Taxes
Policy Fee Currently $5 per policy month, never to IDS Life Administrative
exceed $7.50 per policy month. Waived Expenses
for policies purchased on or after May
1, 1991 with an initial specified
amount of $350,000 or more.
Cost of Insurance Charge Tabular charge per $1000 net amount at IDS Life Insurance
risk each policy month, determined by Protection
age, sex and insurance rating of the
insured
Cost of Policy Riders Tabular charge each policy month IDS Life Optional Insurance
determined by nature and amount of
riders attached to policy
Death Benefit Guarantee $0.01 per $1000 of Specified Amount and IDS Life Death Benefit
Charge Other Insured Rider Coverage each Guarantee Risk
policy month that the Death Benefit
Guarantee is in effect
Contingent Deferred Issue $4 per $1000 Initial Specified Amount IDS Life Issue and
and Administrative of policy is surrendered within 5 years Underwriting
Expense Charge (Issue) of policy issue, decreasing monthly Expenses at Issue
thereafter at a rate of 20% per year
Contingent Deferred Issue $4 per $1000 increase in Specified IDS Life Issue and
and Administrative Amount if policy is surrendered within Underwriting
Expense Charge (Increase) 5 policy years of increase, decreasing Expenses at
monthly thereafter at a rate of 20% per Increase
year
Contingent Deferred Sales 27.5% of Gross Premiums up to amount IDS Life Sales Expense at
Charge (Issue) shown in policy (conservative estimate Issue
of one Guideline Annual 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
<PAGE>
Contingent Deferred Sales 6.5% of Premiums attributable to the IDS Life Sales Expenses at
Charge (Increase) Increase or, if less Tabular amount per Increase
$100 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
Partial Surrender Fee $25 or, if less, 2% of Policy Value IDS Life Transaction Costs
surrendered
Policy 3 Nature of Charge Amount Person to whom Services
Paid/Relationship
Sales Charge 7.25% of all premiums paid. IDS Life Sales Expenses
Premium Tax Charge 2.5% of premium payment IDS Life State Premium Taxes
Federal Tax Charge 1.25% of each premium payment IDS Life Federal taxes
Policy Fee Currently $30 per policy month, never IDS Life Administrative
to exceed $30 per policy month. Expenses
Cost of Insurance The monthly cost of insurance times the IDS Life Insurance
total of the death benefit minus the Protection
policy value plus any other flat extra
insurance charges.
Cost of Policy Riders Determined by nature
and amount of IDS Life Optional
Insurance riders attached to policy.
Contingent Deferred Issue $4 per $1000 of the initial specified IDS Life Issue and
and Administrative amount of the policy, if it is Underwriting
Expense Charge (Surrender surrendered during the first policy Expenses at Issue
Charge) years, and then decreasing monthly
until it is zero at the end of 15
policy years.
Partial Surrender Fee $25 (or $2% of the amount surrendered, IDS Life Transaction Costs
if less).
<PAGE>
(2) Underlying Security.
Investment Management Fee The Money Market Portfolio of IDS Life IDS Life Investment
Series Fund, Inc. pays a fee on an management and
annual basis equal to 0.50% of its services described
daily aggregate average net assets. in Agreement
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.
Non-Advisory Expense IDS Life Series Fund, Inc. will IDS Life Non-Advisory
Charges reimburse IDS Life for non-advisory Expenses described
expenses. in Agreement
Policy 4 Nature of Charge Amount Person to whom Services
Paid/Relationship
Premium Expense Charge 5.0% of premium payment. IDS Life Distribution of
policy; State and
governmental taxes
Policy Fee $5 per month for amount below $250,000, IDS Life Administrative
and $0 per month or amounts above Expenses
$250,000, never to exceed $7.50 per
month.
Cost of Insurance The monthly cost of insurance times the IDS Life Insurance
total of the death benefit minus the Protection
policy value plus any other flat extra
insurance charges.
Cost of Policy Riders Determined by nature
and amount of IDS Life Optional
Insurance riders attached to policy.
Partial Surrender Fee $25 (or 2% of the amount surrendered, IDS Life Transactional Costs
if less).
Surrender Charge Determined based on the insureds age, IDS Life Sales, issue and
sex, risk classification and initial underwriting
specified amount. Remains level for 5 expense at issue
years and then decreases monthly until
it is zero at the end of 10 policy
years.
<PAGE>
(2) Underlying Security.
Investment Management Fee The Money Market Portfolio of IDS Life IDS Life Investment
Series Fund, Inc. pays a fee on an management and
annual basis equal to 0.50% of its services described
daily aggregate average net assets. in Agreement
The Equity, Equity Income, 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.
Putnam VT New Opportunities Fund Class
IA shares pays a fee on an annual
basis of 0.58% of its average daily
net assets.
Putnam VT High Yield Fund - Class IB
shares pays a fee on an annual basis of
0.66% of its average daily net assets.
AIM V.I. Growth and Income Fund pays a
fee on an annual basis of 0.63% of its
average daily net assets.
Warburg Pincus Trust/Small Company
Growth Portfolio pays a fee on an
annual basis of 0.90% of its average
daily net assets.
American Century VP Value pays a fee on
an annual basis of 1.00% of its average
daily net assets.
Templeton International Fund - Class 2
pays a fee on an annual basis 0.69% of
its average daily net assets.
Non-Advisory Expense IDS Life Series Fund, Inc. will IDS Life Non-Advisory
Charges reimburse IDS Life for non-advisory Expenses described
expenses. in Agreement
</TABLE>
<PAGE>
(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).
Policy 4
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>
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.
Policy 4
Not applicable
(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.
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.
<PAGE>
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:
o Mortality risk -- the risk that the cost of
insurance charge will be insufficient to meet
actual claims.
o Expense risk -- the risk that the policy fee and
the contingent deferred issue and 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.
Policy 4
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 average daily net asset value of the subaccounts for the
first 10 policy years and 0.45% thereafter. IDS Life
reserves the right to charge up to 0.9% for all policy
years. Computed daily, the charge compensates IDS Life for:
o Mortality risk -- the risk that the cost of
insurance charge will be insufficient to meet
actual claims.
o Expense risk -- the risk that the policy fee and
the surrender charge may be insufficient to cover
the cost of administering the policy.
Any profit from the mortality and expense risk charge 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
premium expense charge and surrender charges. IDS Life will
make up any further deficit from its general assets.
<PAGE>
(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 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.
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.
Policy 1, 2, and 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:
o Mortality risk -- the risk that the cost of
insurance charge will be insufficient to meet
actual claims.
o Expense risk -- the risk that the policy fee and
the contingent deferred issue and administration
expense charge may be insufficient to cover the
cost of administering the policy.
Any profit from the mortality and expense risk charge 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.
<PAGE>
Policy 4
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 for the first 10
policy years and 0.45% thereafter. IDS Life reserves the right
to charge up to 0.9% for all policy years. Computed daily, the
charge compensates IDS Life for:
o Mortality risk -- the risk that the cost of
insurance charge will be insufficient to meet
actual claims.
o Expense risk -- the risk that the policy fee and
the surrender charge may be insufficient to cover
the cost of administering the policy.
Any profit from the mortality and expense risk charge would be
available to IDS Life for any proper corporate purpose
including, among others, payment of sales and distribution
expenses, which IDS Life does not expect to be covered by the
premium expense charge and surrender 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>
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 and 4
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
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
<PAGE>
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 and 4
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.
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, Policy 3 and
Policy 4. 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.
<PAGE>
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 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.
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.
<PAGE>
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.
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.
<PAGE>
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 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>
Payment of loaned funds: Generally, IDS Life will pay loans
within seven days after IDS Life receives the owner's request.
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.
Policy 4
Policy loans
The Owner may borrow against the policy by written or
telephone request. IDS Life will process the loan request at
the end of the valuation period during which the request is
received. (Loans by telephone are limited to $50,000.)
Interest rate: The interest rate for policy loans is 6% per
year. After the 10th anniversary IDS Life expects to reduce
the loan interest 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 Alabama, 100% of the policy value minus surrender
charges.
o In all other states, 90% 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 it receives the loan
request. The amount available at any time for a new loan is
the maximum loan value less any existing indebtedness. When
IDS Life computes the amount available IDS Life reserves the
right to deduct from the loan value interest for the period
until the next policy anniversary and monthly deductions
that IDS Life will take until the next policy anniversary.
Payment of loaned funds: Generally, IDS Life will pay loans
within seven days after it receives the request.
<PAGE>
Allocation of loans to accounts: If the owner does not
specify whether the loan is to come from the fixed account
or the subaccounts, IDS Life will take it from the
subaccounts and the fixed account in proportion to their
values, minus indebtedness. When IDS Life makes a loan from
a subaccount, IDS Life redeems accumulation units and
tranfers the proceeds into the fixed account. IDS Life will
credit the loaned amount with 4.0% annual interest.
Repayments: IDS Life will allocate to subaccounts
and/or the fixed account using the premium allocation
percentages in effect unless the owner tells us otherwise.
Repayments must be in amounts of at least $25.
Deferral of payments:
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
(IDS Life has not collected good payment);
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.
IDS Life may delay the payment of any loans or surrenders
from the fixed account 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, it 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 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.
<PAGE>
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.
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.
Policy 4
Allocation of loans to accounts: If the owner does not
specify whether the loan is to come from the fixed account
or the subaccounts, IDS Life will take it from the
subaccounts and the fixed account in proportion to their
values, minus indebtedness. When IDS Life makes a loan from
a subaccount, IDS Life redeems accumulation units and the
proceeds transferred into the fixed account. IDS Life will
credit the loaned amount with 4.0% annual interest.
<PAGE>
Overdue interest: If the owner does not pay accrued interest
when it is 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 allocated interest IDS Life will take all of the interest
from all of the accounts in proportion to their value, minus
indebtedness.
Effects of policy loans: If the owner does not repay the loan,
it will reduce the death benefit and cash surrender value.
Even if the owner does repay it, the 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)
(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, 2, and 3 the outstanding loan balance for fiscal
year 1997 was $45,654,051 and the amount of interest collected
was $3,296,746.
No loans were in default for Policy 1, Policy 2, Policy 3 or
Policy 4.
For Policy 4 there was no outstanding loan balance.
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>
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>
Aggregate
Total purchase Amount of Amount of Amount of Amount of gross amount
payments by sales load administration management other fees of load, fees,
Year security holders received fees received fees received received etc. received.
Policy 1, 2 and 3
<S> <C> <C> <C> <C> <C> <C>
1995 $144,085,169 $10,125,762 $43,263,408 0 0 $197,474,339
1996 227,409,333 11,956,753 58,305,937 0 0 297,672,023
1997 303,291,329 14,502,145 78,172,136 0 0 395,965,610
</TABLE>
Policy 4
Not applicable
(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 1997, the aggregate amount of this management fee
was $7,667,720.
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.
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.
<PAGE>
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.
<TABLE>
<CAPTION>
Name and Address Principal Occupation
<S> <C>
David R. Hubers Director since September 1989; president and chief executive
IDS Tower 10 officer, American Express Financial Corporation (AEFC), since
Minneapolis, MN August 1993, and director, AEFC, since January 1984; senior vice
president, Finance and chief financial officer, AEFC, from
January 1984 to August 1993.
Richard W. Kling Director since February 1984; president since March 1994,
IDS Tower 10 executive vice president, Marketing and Products from
Minneapolis, MN January 1988 to March 1994, Vice president, AEFC, since
May 1994; director of IDS Life Series Fund, Inc. and
chairman of the board of managers of IDS Life Variable
Annuity Funds A and B.
Paul F. Kolkman Director since May 1984; executive vice president since
IDS Tower 10 March 1994; vice president, Finance from May 1984 to March
Minneapolis, MN 1994; vice president, AEFC, since January 1987.
James A. Mitchell Chairman of the board since March 1994; director since July
IDS Tower 10 1984; chief executive officer since November 1986; president
Minneapolis, MN 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.
<PAGE>
Barry J. Murphy Director and executive vice president, Client Service, since
IDS Tower 10 March 1994; senior vice president, Operations, Travel Related
Minneapolis, MN Services (TRS), a subsidiary of American Express Company, since
July 1992; vice president, TRS, from November 1989 to July 1992;
chief operating officer, TRS, from March 1988 to November 1989.
Stuart A. Sedlacek Director, vice president and chief financial officer of AEFC
IDS Tower 10 since January 1998; vice president - assured assets, AEFC from
Minneapolis, MN 1994 to 1997
</TABLE>
Principal Officers.
The following are principal officers of IDS Life. Each officer
serves at the pleasure of the Board of Directors.
Jeffrey S. Horton
Vice president and treasurer since December 1997; vice
President and corporate treasurer, AEFC, since December 1997;
controller, American Express Technologies Financial Services,
AEFC, from July 1997 to December 1997; Controller, Risk
Management Products, AEFC, from June 1990 to May 1994.
William A. Stoltzmann
Vice President, general counsel and secretary since 1985; vice
president and assistant general counsel, AEFC, since November
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>
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:
The three highest received in total $4,864,941. James A.
Mitchell, Barry Murphy and Stuart Sedlacek.
(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:
$5,073,153 in total excluding the amount in 31(a).
(c) indirectly or through subsidiaries to each of the officers or
partners of the depositor:
1998 - $9,938,094.
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:
$9,252,335
(b) indirectly or through subsidiaries to directors:
See Item 32(a).
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 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.
<PAGE>
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.
<PAGE>
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.
(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 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.
<PAGE>
(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).
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.
Policy 4
IDS Life will pay a commission of up to 50 percent of the
initial Target Premium (annualized) when the policy is sold,
plus up to 3 percent of all premiums in excess of the target
premium. Each calendar quarter the policy is in force, IDS
Life will pay .0125 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 Manager of the
selling representative.
<PAGE>
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.
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.
<PAGE>
(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.
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 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>
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.
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.
<PAGE>
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 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. 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.
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.
(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.
<PAGE>
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 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.
<PAGE>
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.
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.
<PAGE>
Factors that affect subaccount accumulation units:
Accumulation units may change in two ways; in number and in
value. Here are the factors that influence those changes:
The number of accumulation units 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.
Policy 4
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:
o the portion of the owner's initial net premium that the
owner has allocated to the fixed account; plus
o interest accrued before the policy date; minus
o 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 account if the
date of calculation is a monthly date.
<PAGE>
Subaccount values
The value in each subaccount changes daily, depending on the
investment performance of the funds 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 of each subaccount
on the policy date equals:
o the portion of your initial net premium allocated to
the subaccount; plus
o interest accrued before the policy date; minus
o the portion of the monthly deduction for the first
policy month that you have allocated to that
subaccount.
The value on each subaccount on each valuation date equals:
o the value of the subaccount on the preceding
valuation date, multiplied by the net investment fact
or 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: IDS Life converts the policy value
allocated to each subaccount into accumulation units. Each
time the owner directs a premium payment or transfer policy
value into one of the subaccounts, a certain number of
accumulation units are credited to the owner's policy for
that subaccount. Conversely, each time the owner takes a
partial surrender or transfer value out of a subaccount, IDS
Life subtracts a certain number of accumulation units.
Accumulation units are the true measure of investment value in
each subaccount. For subaccounts investing in the funds,
they're related to, but not the same as, the net asset value
of the corresponding funds. The dollar value of each
accumulation unit can rise or fall daily, depending on the
investment performance of the underlying funds, 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 your investment (net
premium or transfer amount) by the current accumulation unit
value.
Accumulation unit value: The current accumulation unit value
for each subaccount equals the last accumulation unit value
times the current net investment factor.
<PAGE>
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 fund; plus
o per-share amount of any dividend or capital gain
distribution made by the relevant fund 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 fund 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:
The number of accumulation units you own may fluctuate due to:
o additional purchase payments allocated to the
subaccounts;
o transfers into or out of the subaccount(s);
o partial surrenders and partial surrender fees;
o surrender charges; and/or
o monthly deductions
Accumulation unit values will fluctuate due to:
o changes in underlying funds net asset value;
o dividends distributed to the subaccount(s);
o capital gains or losses of underlying funds;
o fund 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.
<PAGE>
(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.
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.
<PAGE>
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 purchase of underlying securities or interests
therein from Owners who exercise surrender rights.
Policy 2, Policy 3 and Policy 4
The Subaccounts will maintain positions in the Fund(s) shares or Trust
units by purchasing Fund(s) 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(s) 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 the Owners who exercise surrender rights.
<PAGE>
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 provisions of any indenture
or agreement with respect thereto.
Not applicable.
<PAGE>
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 and 4
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. Under Policy 4, the company assumes the risks under the
no lapse guarantee if the minimum monthly premiums are timely
paid.
(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.
<PAGE>
(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.
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.
<PAGE>
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.
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.
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.
<PAGE>
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.
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.
<PAGE>
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 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.
<PAGE>
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.
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.
Policy 4
Payment of premiums:
In applying for the policy, the owner decides how much he/she
intends to pay and how often the owner will make payments.
During the first several policy years until the policy value
is sufficient to cover the surrender charge, IDS Life requires
that premiums sufficient to keep the no lapse guarantee in
effect be paid to keep the policy in force.
The owner may schedule payments annually, semiannually or
quarterly. (Payment at any other interval must be approved by
IDS Life.) IDS Life shows this premium schedule 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 the cash surrender value is sufficient
to pay the monthly deduction or if the owner has paid
sufficient premiums to keep the no lapse guarantee 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 have flexibility in paying premiums,
the amount and frequency of the payments will affect the
policy value, cash surrender value and length of time the
policy will remain in force, as well as affect whether the no
lapse guarantee remains in effect.
Keeping the policy in force
No lapse guarantee
The NLG provides that the policy will remain in force until
the insured's attained age 70 (or 5 policy years, if later)
(always five policy years if the policy is purchased in
Massachusetts or Texas) even if the cash surrender value is
insufficient to pay the monthly deduction. The NLG will stay
in effect as long as:
o the sum of premiums paid; minus
o partial surrenders; minus
o outstanding indebtedness; equals or exceeds
o the minimum monthly premiums due since the policy date
The minimum monthly premium is shown in the policy.
If, on a monthly date, the owner has not paid enough premiums
to keep the no lapse guarantee in effect, the no lapse
guarantee will terminate. In addition, the policy will lapse
(terminate) if the cash surrender value is less than the
amount needed to pay the monthly deduction.
The no lapse guarantee period may be reinstated within 2 years
of its termination if the policy is in force.
<PAGE>
Grace period
If on a monthly date the cash surrender value of the policy is
less than the amount needed to pay the next monthly deduction
and the NLG is not in effect the owner will have 61 days to
pay the required premium amount. If the owner does not apy
required premium, the policy will lapse.
IDS Life will mail a notice to the owner's last known address,
requesting payment of a 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 cover all monthly deductions and any
other charges then due. IDS Life will add any balance to the
policy value and allocate 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 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.
<PAGE>
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 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>
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.
<PAGE>
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:
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.)
<PAGE>
Effect of expenses and charges: The net investment return of the
subaccounts, shown in the tables, is lower than the gross, after-tax
return of the fund because expenses paid by the fund and charges made
against the subaccounts have been deducted. These include:
o the daily investment management fee paid by the fund, assumed to
be equivalent to an annual rate of 0.6% of the fund's aggregate
average daily net assets;
o the daily mortality and expense risk charge, equivalent to 0.9%
of the daily net asset value of the subaccounts annually; and
o an annual charge of 0.1% of the fund's aggregate average daily net
assets for direct expenses incurred by the fund.
The latter charge is capped by IDS Life at 0.1%, even though actual
expenses have been higher, ranging from 0.6% to 0.8% of the average
daily net assets of the different portfolios in the year ended April
30, 1993. Although IDS Life reserves the right to discontinue capping
these expenses, our present intent is to continue the cap indefinitely
until actual expenses are less than the cap. Should IDS Life
discontinue the cap prior to that time, the policy values and death
benefits in the tables generally would be less.
After deduction of the above expenses and charges, the illustrated
gross annual investment rates of return of 0%, 6%, and 12% correspond
to approximate net annual rates of -1.59%, 4.32%, and 10.22%,
respectively.
Taxes: Results shown in the tables reflect the fact that IDS Life does
not currently charge the subaccounts for federal income tax. If such a
charge is taken in the future, the portfolios will have to earn more
than they do now in order to produce the death benefits and policy
values illustrated.
<PAGE>
<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
</TABLE>
<PAGE>
(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>
<TABLE>
<CAPTION>
Illustration Policies
purchased before May 1, 1993
- ------------------------------------------------------------------------------------------------------------------------
Initial specified amount $100,000 Male age 35 Current costs assumed
Death benefit Option 1 nonsmoker annual premium $900
- ------------------------------------------------------------------------------------------------------------------------
Premium Death benefit (1)(2) Policy value (1)(2) Cash surrender value (1)(2)
accumulated assuming hypothetical gross assuming hypothetical gross assuming hypothetical gross
End of with annual annual investment return of annual investment return of annual investment return of
policy interest
year at 5% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 605 $ 648 $ 691 $ 0 $ 1 $ 44
2 1,937 100,000 100,000 100,000 1,202 1,326 1,455 475 598 727
3 2,979 100,000 100,000 100,000 1,779 2,022 2,285 993 1,236 1,499
4 4,073 100,000 100,000 100,000 2,336 2,737 3,190 1,491 1,893 2,346
5 5,222 100,000 100,000 100,000 2,873 3,473 4,177 1,972 2,572 3,276
6 6,428 100,000 100,000 100,000 3,380 4,218 5,243 2,660 3,498 4,522
7 7,694 100,000 100,000 100,000 3,869 4,986 6,409 3,329 4,446 5,868
8 9,024 100,000 100,000 100,000 4,329 5,766 7,674 3,969 5,406 7,314
9 10,420 100,000 100,000 100,000 4,772 6,571 9,061 4,591 6,391 8,880
10 11,886 100,000 100,000 100,000 5,186 7,390 10,570 5,186 7,390 10,570
11 13,425 100,000 100,000 100,000 5,572 8,224 12,217 5,572 8,224 12,217
12 15,042 100,000 100,000 100,000 5,931 9,075 14,016 5,931 9,075 14,016
13 16,739 100,000 100,000 100,000 6,253 9,932 15,974 6,253 9,932 15,974
14 18,521 100,000 100,000 100,000 6,548 10,809 18,120 6,548 10,809 18,120
15 20,392 100,000 100,000 100,000 6,807 11,694 20,464 6,807 11,694 20,464
16 22,356 100,000 100,000 100,000 7,030 12,589 23,030 7,030 12,589 23,030
17 24,419 100,000 100,000 100,000 7,207 13,486 25,834 7,207 13,486 25,834
18 26,585 100,000 100,000 100,000 7,337 14,384 28,904 7,337 14,384 28,904
19 28,859 100,000 100,000 100,000 7,412 15,274 32,264 7,412 15,274 32,264
20 31,247 100,000 100,000 100,000 7,420 16,146 35,942 7,420 16,146 35,942
age 60 45,102 100,000 100,000 100,000 6,601 20,390 60,812 6,601 20,390 60,812
age 65 62,785 100,000 100,000 124,315 3,230 23,445 101,900 3,230 23,445 101,900
</TABLE>
<PAGE>
(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
orsustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
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%
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 605 $ 648 $ 660 $ 0 $ 1 $ 12
2 1,937 100,000 100,000 100,000 1,172 1,295 1,388 445 568 661
3 2,979 100,000 100,000 100,000 1,720 1,959 2,180 934 1,173 1,394
4 4,073 100,000 100,000 100,000 2,248 2,640 3,042 1,403 1,796 2,198
5 5,222 100,000 100,000 100,000 2,757 3,341 3,982 1,856 2,440 3,081
6 6,428 100,000 100,000 100,000 3,236 4,050 4,996 2,515 3,329 4,275
7 7,694 100,000 100,000 100,000 3,697 4,780 6,104 3,156 4,239 5,564
8 9,024 100,000 100,000 100,000 4,129 5,520 7,306 3,769 5,159 6,945
9 10,420 100,000 100,000 100,000 4,544 6,282 8,622 4,364 6,102 8,441
10 11,886 100,000 100,000 100,000 4,932 7,057 10,053 4,932 7,057 10,053
11 13,425 100,000 100,000 100,000 5,291 7,845 11,614 5,291 7,845 11,614
12 15,042 100,000 100,000 100,000 5,624 8,647 13,317 5,624 8,647 13,317
13 16,739 100,000 100,000 100,000 5,920 9,454 15,169 5,920 9,454 15,169
14 18,521 100,000 100,000 100,000 6,189 10,276 17,197 6,189 10,276 17,197
15 20,392 100,000 100,000 100,000 6,422 11,105 19,411 6,422 11,105 19,411
16 22,356 100,000 100,000 100,000 6,609 11,931 21,822 6,609 11,931 21,822
17 24,419 100,000 100,000 100,000 6,760 12,764 24,463 6,760 12,764 24,463
18 26,585 100,000 100,000 100,000 6,866 13,596 27,353 6,866 13,596 27,353
19 28,859 100,000 100,000 100,000 6,915 14,416 30,512 6,915 14,416 30,512
20 31,247 100,000 100,000 100,000 6,898 15,215 33,965 6,898 15,215 33,965
age 60 45,102 100,000 100,000 100,000 5,674 18,740 57,045 5,674 18,740 57,045
age 65 62,785 100,000 100,000 116,888 1,599 20,552 95,188 1,599 20,552 95,188
</TABLE>
<PAGE>
(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.
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.
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.
<PAGE>
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% 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.
<PAGE>
<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
</TABLE>
<PAGE>
(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>
<TABLE>
<CAPTION>
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%
- ----------------------------------------------------------------------------------------------------------------
<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 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
</TABLE>
<PAGE>
(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>
<TABLE>
<CAPTION>
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%
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
(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>
<TABLE>
<CAPTION>
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%
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
(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.
Policy 4
Policy illustrations
The following tables illustrate how policy values, cash surrender values and
death benefits may change with the investment experience of the subaccount. The
tables show how these amounts might vary, for a 35-year-old male nonsmoker,
under Death Benefit Option 1, if:
o the annual rate of return of the fund is 0%, 6% or 12%.
o the cost of insurance rates and policy fees are current rates or
guaranteed rates and fees.
This type of illustration involves a number of detailed assumptions. To the
extent that the owner's own circumstances differ from those assumed in the
illustrations, the owner's expected results also would differ.
Upon request, IDS Life will furnish the owner with comparable tables
illustrating death benefits, policy values and cash surrender values based on
the actual age of the person the owner proposes to insure and on an initial
specified amount and premium payment schedule. In addition, after the owner has
purchased a policy, the owner may request illustrations based on policy values
at the time of request.
Understanding the illustrations:
Rates of return: assumes 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: assumes a male insurance age 35, in a standard risk classification,
qualifying for the nonsmoker rate. Results would be lower if the insured
were in a substandard risk classification or did not qualify for the
non-smoker rate.
Premiums: assumes a $900 premium is 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: assumes that none have been made. (Since
IDS Life assumes indebtedness is zero, the cash surrender value in all cases
equals the policy value minus the surrender charge.)
<PAGE>
Effect of expenses and charges:
The death benefit, policy value and cash surrender value reflect the following
charges:
o Premium expense charge: 5% of each premium payment.
o Cost of insurance charge for the sex, age and rate classification for the
assumed insured.
o Policy fee: $5 per month ($7.50 per month guaranteed maximum).
o The expenses paid by the fund and charges made against the subaccount as
described below:
The net investment return of the subaccounts shown in the tables is lower than
the gross, after-tax return of the fund because IDS Life deducted the 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 average daily net
assets; the assumed investment management fee is approximately equal to a
simple average of the investment management fees of the funds available
under the policy. The actual charges you incur will depend on how you
choose to allocate policy value.
o the daily mortality and expense risk charge, equivalent to 0.9% of the
average daily net asset value of the subaccounts annually for the first 10
policy years and 0.45% thereafter, IDS Life reserves the right to charge up
to 0.9% for all policy years.
o a nonadvisory expense charge, assumed to be 0.1% of each fund's average
daily net assets for direct expenses incurred by the fund; currently, this
is the maximum direct expenses the funds will incur after IDS Life limits
the direct expenses of some funds. The actual charges the owner incurs will
depend on how the owner chooses to allocate the policy.
After deduction of the expenses and charges described above, the illustrated
gross annual investment rates of return correspond to the following approximate
net annual rates of return:
<TABLE>
<CAPTION>
Net annual rate of Net annual rate of Net annual rate of
return for "Guaranteed return for "Current return for "Current
Gross annual investment costs assumed" costs assumed" costs assumed"
rate illustration illustration, years illustration, years
of return 1-10 11 and after
<S> <C> <C> <C>
0% -1.69% -1.69% -1.24%
6 4.21 4.21 4.68
12 10.11 10.11 10.61
</TABLE>
Taxes: Results shown in the tables reflect the fact that IDS Life does not
currently charge the subaccounts for federal income tax. If we take such a
charge 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>
<TABLE>
<CAPTION>
Illustration
- ---------------------------------------------------------------------------------------------------------
Initial specified amount $100,000 Male age 35 Current costs assumed
Death benefit Option 1 nonsmoker Annual premium $900
- ---------------------------------------------------------------------------------------------------------
Premium Death benefit (1)(2) Policy value (1)(2) Cash surrender value (1)(2)
accumulated assuming hypothetical gross assuming hypothetical gross assuming hypothetical gross
End of with annual annual investment return of annual investment return of annual investment return of
policy interest
year at 5% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 614 657 700 0 0 0
2 1,937 $100,000 $100,000 $100,000 1,209 1,333 1,463 308 432 562
3 2,979 $100,000 $100,000 $100,000 1,784 2,027 2,292 883 1,126 1,391
4 4,073 $100,000 $100,000 $100,000 2,335 2,737 3,191 1,434 1,836 2,290
5 5,222 $100,000 $100,000 $100,000 2,868 3,467 4,172 1,967 2,566 3,271
6 6,428 $100,000 $100,000 $100,000 3,375 4,212 5,236 2,654 3,491 4,515
7 7,694 $100,000 $100,000 $100,000 3,857 4,972 6,392 3,317 4,431 5,851
8 9,024 $100,000 $100,000 $100,000 4,316 5,749 7,651 3,956 5,389 7,291
9 10,420 $100,000 $100,000 $100,000 4,749 6,541 9,021 4,568 6,361 8,841
10 11,886 $100,000 $100,000 $100,000 5,153 7,346 10,512 5,153 7,346 10,512
11 13,425 $100,000 $100,000 $100,000 5,552 8,200 12,189 5,552 8,200 12,189
12 15,042 $100,000 $100,000 $100,000 5,922 9,072 14,025 5,922 9,072 14,025
13 16,739 $100,000 $100,000 $100,000 6,264 9,963 16,040 6,264 9,963 16,040
14 18,521 $100,000 $100,000 $100,000 6,576 10,873 18,252 6,576 10,873 18,252
15 20,392 $100,000 $100,000 $100,000 6,854 11,799 20,681 6,854 11,799 20,681
16 22,356 $100,000 $100,000 $100,000 7,095 12,739 23,348 7,095 12,739 23,348
17 24,419 $100,000 $100,000 $100,000 7,295 13,690 26,279 7,295 13,690 26,279
18 26,585 $100,000 $100,000 $100,000 7,447 14,646 29,501 7,447 14,646 29,501
19 28,859 $100,000 $100,000 $100,000 7,552 15,609 33,048 7,552 15,609 33,048
20 31,247 $100,000 $100,000 $100,000 7,598 16,570 36,955 7,598 16,570 36,955
age 60 45,102 $100,000 $100,000 $100,000 6,784 21,209 63,603 6,784 21,209 63,603
age 65 62,785 $100,000 $100,000 $132,317 3,559 25,064 108,456 3,559 25,064 108,456
</TABLE>
<PAGE>
(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 the owner
should not consider them to be 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. IDS Life
cannot represent that these hypothetical rates of return can be achieved for any
one year or sustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
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%
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 584 626 668 0 0 0
2 1,937 $100,000 $100,000 $100,000 1,150 1,270 1,396 249 369 495
3 2,979 $100,000 $100,000 $100,000 1,696 1,931 2,187 795 1,030 1,286
4 4,073 $100,000 $100,000 $100,000 2,219 2,606 3,044 1,318 1,705 2,143
5 5,222 $100,000 $100,000 $100,000 2,723 3,299 3,977 1,822 2,398 3,076
6 6,428 $100,000 $100,000 $100,000 3,203 4,006 4,989 2,482 3,285 4,268
7 7,694 $100,000 $100,000 $100,000 3,658 4,726 6,088 3,117 4,185 5,548
8 9,024 $100,000 $100,000 $100,000 4,090 5,461 7,284 3,729 5,101 6,924
9 10,420 $100,000 $100,000 $100,000 4,496 6,209 8,584 4,315 6,029 8,404
10 11,886 $100,000 $100,000 $100,000 4,873 6,969 9,998 4,873 6,969 9,998
11 13,425 $100,000 $100,000 $100,000 5,221 7,737 11,533 5,221 7,737 11,533
12 15,042 $100,000 $100,000 $100,000 5,538 8,515 13,205 5,538 8,515 13,205
13 16,739 $100,000 $100,000 $100,000 5,823 9,302 15,026 5,823 9,302 15,026
14 18,521 $100,000 $100,000 $100,000 6,075 10,094 17,011 6,075 10,094 17,011
15 20,392 $100,000 $100,000 $100,000 6,289 10,891 19,174 6,289 10,891 19,174
16 22,356 $100,000 $100,000 $100,000 6,463 11,688 21,533 6,463 11,688 21,533
17 24,419 $100,000 $100,000 $100,000 6,590 12,479 24,104 6,590 12,479 24,104
18 26,585 $100,000 $100,000 $100,000 6,666 13,260 26,910 6,666 13,260 26,910
19 28,859 $100,000 $100,000 $100,000 6,683 14,024 29,971 6,683 14,024 29,971
20 31,247 $100,000 $100,000 $100,000 6,637 14,766 33,315 6,637 14,766 33,315
age 60 45,102 $100,000 $100,000 $100,000 5,216 17,893 55,543 5,216 17,893 55,543
age 65 62,785 $100,000 $100,000 $112,343 764 18,976 92,085 764 18,976 92,085
</TABLE>
<PAGE>
(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 the owner
should not consider them to be 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. IDS Life
cannot represent that these hypothetical rates of return can be achieved for any
one year or sustained over any period of time.
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.
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
Filed electronically as Part I to the Pre-Effective Amendment No. 1 on Form
S-6 (Form No. 333-69777) to the original Registration Statement and herein
is incorporated by reference.
Financial Statements of the Depositor
Filed electronically as Part I to the Pre-Effective Amendment No. 1 on Form
S-6 (Form No. 333-69777) to the original Registration Statement and herein
is incorporated by reference.
<PAGE>
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**
(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 as Exhibit 1.A.3(c) to
Pre-Effective Amendment No. 1 to the Registration Statement on
Form S-6, File No. 333-69777 and is herein incorporated by
reference.
(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***
(d) Flexible Premium Variable Life Insurance Policy (VUL-3) filed as
Exhibit 1.A.5(b) to Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-6, File No. 333-69777 and is
herein incorporated by reference.
(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*****
(d) Addendum to Investment Advisory Agreement*****
(9) None.
(10)(a) Application form for the Single Premium VariableLife 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*****
(d) Application form for the Flexible Premium Variable Life Insurance
Policy (VUL-3) filed as Exhibit 1.A.10 to Pre-Effective
Amendment No. 1 to the Registration Statement on Form S-6, File
No. 333-69777 and is herein incorporated by reference.
(11) Memorandum on Transfer and Redemption Procedures, and Method of
Computing Adjustments on Conversions filed as Exhibit 1.A.11 to
Pre-Effective Amendment No. 1 to the Registration Statement on
Form S-6, File No. 333-69777 and is herein incorporated by reference.
(12)(a) Power of attorney dated August 19, 1997****
(b) Power of Attorney dated April 9, 1998****
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.
***Filed as an Exhibit to Amendment No. 5 of the original Registration to Form
N-8B-2 File No. 811-4298
****Filed as an Exhibit to Post-Effective Amendment No. 3 to the Registration
Statement on Form S-6 File No. 33-62457 and herein incorporated by reference.
*****Filed as an Exhibit to Amendment No. 6 of the original Registration to Form
N-8B-2 File No. 811-4298.
<PAGE>
Pursuant to the requirements of the Investment Company Act of 1940, the
depositor of the Registrant has cause this Amendment No. 7 to the Registration
Statement to be duly signed on behalf of the Registrant in Minneapolis,
Minnesota on April 23, 1999.
IDS Life VARIABLE LIFE SEPARATE ACCOUNT
BY IDS Life INSURANCE COMPANY
(Depositor)
By /s/ Richard W. Kling*
Richard W. Kling
By /s/ Mary Ellyn Minenko
Mary Ellyn Minenko
Attest: /s/ William A. Stoltzmann
William A. Stoltzmann
Vice President, General Counsel and Secretary
IDS Life Insurance Company
*Signed pursuant to Power of Attorney dated April 14, 1999 filed electronically
as an exhibit to Pre-Effective Amendment No. 1 of the original Registration
Statement to Form S-6, File No. 333-69777 and is herein incorporated by
reference.
