As filed with the Securities and Exchange Commission on March 1, 1999
Registration No. 2-98410
811-4328
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Post-Effective Amendment No. 19 [ X ]
To
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF A UNIT INVESTMENT TRUST
REGISTERED ON FORM N-8B-2
PURSUANT TO THE INVESTMENT
COMPANY ACT OF 1940
FIRST INVESTORS LIFE LEVEL PREMIUM
VARIABLE LIFE INSURANCE
(SEPARATE ACCOUNT B)
(Name of Trust)
FIRST INVESTORS LIFE INSURANCE COMPANY
(Name of Depositor)
95 Wall Street, 22nd Floor
New York, New York 10005
(Complete address of depositor's principal
executive offices)
Richard H. Gaebler
President
First Investors Life Insurance Company
95 Wall Street, 22nd Floor
New York, New York 10005
(Name and complete address of agent for service)
Copies of all communications to:
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue
Washington, D.C. 20036-5366
Attn: Gary O. Cohen, Esq.
<PAGE>
It is proposed that this filing will become effective on (check the appropriate
box):
|_| immediately upon filing pursuant to paragraph (b)
|_| on (date) pursuant to paragraph (b)
|X| 60 days after filing pursuant to paragraph (a)(1)
|_| on (date) pursuant to paragraph (a)(1) of Rule 485
|_| this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
Title and Amount of Securities Being Registered: An indefinite amount of units
of interest in First Investors Life Level Premium Variable Life Insurance
(Separate Account B) under variable life insurance policies.
Approximate Date of Proposed Public Offering: Continuous
<PAGE>
FIRST INVESTORS
LIFE LEVEL PREMIUM
VARIABLE LIFE INSURANCE
Reconciliation and Tie
----------------------
N-8B-2
Item No. Location
-------- --------
1-8 Organization and General Front Cover; Overview, The
Information Policy, Who We Are; Other
Information, Relevance of
Financial Statements
Not Applicable
9 Material Litigation
10 General Information Concerning Overview, Who We Are; The
the Securities of the Trust Policy in Detail; Other
and the Rights of Holders Information
11-12 Information Concerning the Overview, Who We Are; The
Securities Underlying the Trust's Policy in Detail; Other
Securities Information
13 Information Concerning Loads, Overview, The Charges and
Fees, Charges and Expenses Expenses; The Policy in
Detail, Optional Insurance
Riders
14-24 Information Concerning the Overview, Who We Are; The
Operations of the Trust Policy in Detail, Allocation
of Your Net Premium to
Investment Options; Federal
Income Tax Information; Other
Information
25-27 Organization and Operations Overview, Who We Are; Our
of Depositor Officers and Directors;
Other Information
28 Officials and Affiliated Overview, Who We Are; Our
Persons of Depositor Officers and Directors
30 Controlling Persons Overview, Who We Are
31-34 Compensation of Officers Overview, Who We Are; Our
and Directors of Depositor Officers and Directors;
Other Information
<PAGE>
35-38 Distribution of Securities Overview, Who We Are; Other
Information, Distribution of
Policies
39-43 Information Concerning Principal Overview, Who We Are; Other
Underwriter Information, Distribution of
Policies
44-45 Offering Price or Acquisition Overview, The Charges and
Valuation of Securities of the Trust Expenses, Who We Are;
Pertinent Provisions of the
Prospectus of First Investors
Life Series Fund (File No.
2-98409) incorporated herein
by reference
46 Redemption Valuation of Securities Overview, The Charges and
of the Trust Expenses, Who We Are;
Pertinent Provisions of the
Prospectus of First Investors
Life Series Fund (File
No.2-98409) incorporated
herein by reference
47 Purchase and Sale of Interests Overview, The Charges and
in Underlying Securities from and Expenses, Who We Are; The
to Security Holders Policy in Detail; Other
Information
48-50 Information Concerning the Trustee Other Information
or Custodian
51 Information Concerning Insurance Overview; The Policy in
of Holders of Securities Detail
52 Policy of Registrant Overview; The Policy in
Detail; Other Information
53 Regulated Investment Company Federal Income Tax
Information
54-59 Financial and Statistical Information Overview, The Charges and
Expenses; The Policy in
Death Benefits, Cash Values
and Accumulated Premiums;
Other Information, Detail;
Illustrations of Relevance of
Financial Statements, Experts
<PAGE>
PART II
CONTENTS OF REGISTRATION STATEMENT
----------------------------------
(INFORMATION NOT REQUIRED TO BE FILED IN A PROSPECTUS)
Undertaking To File Reports
---------------------------
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
Undertaking Pursuant to Rule 484(b)(1)
--------------------------------------
under the Securities Act of 1933
--------------------------------
Article XIV of the By-Laws of First Investors Life Insurance Company
provides as follows:
"To the full extent authorized by law and by the Charter, the
Corporation shall and hereby does indemnify any person who shall at any
time be made, or threatened to be made, a party in any civil or
criminal action or proceeding by reason of the fact that he, his
testator or his intestate is or was a director or officer of the
Corporation or served another corporation in any capacity at the
request of the Corporation, provided, that the notice required by
Section 62-a of the Insurance Law of the State of New York, as now in
effect or as amended from time to time, be filed with the
Superintendent of Insurance."
Reference is hereby made to the New York Business Corporation Law,
Sections 721 through 725.
The general effect of this Indemnification will be to indemnify any
person made, or threatened to be made, a party to an action by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that
the person, or that person's testator or intestate, is or was a director or
officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of any other corporation of any type or
kind, domestic or foreign, of any partnership, joint venture, trust, employee
benefit plan or other enterprise, against amounts paid in settlement and
reasonable expenses, including attorney's fees, actually and necessarily
incurred in connection with the defense or settlement of such action, or in
connection with an appeal therein if such director or officer acted in good
faith, for a purpose reasonably believed by that person to be in, and not
opposed to, the best interests of the corporation and not otherwise knowingly
unlawful.
<PAGE>
A directors and officers liability policy in the amount of $3,000,000
covering First Investors Life's directors and officers has been issued by the
Great American Insurance Companies.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the First Investors Life Level Premium Variable Life Insurance (Separate Account
B) pursuant to the foregoing provisions, or otherwise, the First Investors Life
Level Premium Variable Life Insurance (Separate Account B) has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the First Investors Life Level Premium Variable Life
Insurance (Separate Account B) of expenses incurred or paid by a director,
officer or controlling person of the First Investors Life Level Premium Variable
Life Insurance (Separate Account B) in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the First Life Level Premium
Variable Life Insurance (Separate Account B) will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Representation Regarding Reasonableness of
Aggregate Policy Fees and Charges
Pursuant to Section 26(a)(e)(2)(A) of the
Investment Company Act of 1940
First Investors Life represents that the fees and charges deducted
under the Policies described in this Registration Statement, in the aggregate,
are reasonable in relation to the services rendered, the expenses expected to be
incurred, and the risks assumed by First Investors Life under the Policies.
First Investors Life bases its representation on its assessment of all of the
facts and circumstances, including such relevant factors as: the nature and
extent of such services, expenses and risks; the need for First Investors Life
to earn a profit; and the regulatory standards for exemptive relief under the
Investment Company Act of 1940 under prior to October 1996, including the range
of industry practice. This representation applies to all Policies sold pursuant
to this Registration Statement, including those sold on terms specifically
described in the prospectus contained herein, or any variations therein, based
on supplements, endorsements, or riders to any Policies or prospectus, or
otherwise.
<PAGE>
This Registration Statement for First Investors Life Level Premium Variable Life
Insurance comprises the following papers and documents.
The facing page.
Reconciliation and Tie.
Prospectus, consisting of 32 pages.
The undertaking to file reports.
Undertaking pursuant to Rule 484 (b)(1 ) under the Securities Act of
1933.
Representation Regarding Reasonableness of Fees and Charges.
The signatures.
Written consents of the following persons:
Tait, Weller & Baker. (To be filed.)
<PAGE>
THE INSURED SERIES PLAN
LEVEL PREMIUM VARIABLE LIFE INSURANCE POLICIES
ISSUED BY
FIRST INVESTORS LIFE INSURANCE COMPANY
95 Wall Street, New York, New York 10005/(212) 858-8200
PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. IT CONTAINS
IMPORTANT INFORMATION THAT YOU SHOULD KNOW BEFORE BUYING OR TAKING ACTION UNDER
A POLICY. THIS PROSPECTUS IS VALID ONLY WHEN ATTACHED TO THE CURRENT PROSPECTUS
FOR FIRST INVESTORS LIFE SERIES FUND.
THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is April ____, 1999
<PAGE>
OVERVIEW
THE POLICY
This Prospectus describes a Level Premium Variable Life Insurance Policy
(the "Policy") that is offered by First Investors Life Insurance Company
(referred to hereafter as "First Investors Life," "we," "us" or "our") through
our Separate Account B. The Policy provides you with life insurance coverage and
the opportunity to invest your net premiums (i.e., premiums less certain fees
and charges) in one or more investment options ("Subaccounts") of Separate
Account B. For marketing purposes, we call the Policy our Insured Series Plan.
You are required to pay premiums for only 12 years. After 12 years, you
never have to make another premium payment. The Policy stays in force for the
life of the insured unless you decide to surrender it. The premiums are level.
You decide how much you want to pay each year. Once this amount is set, you pay
the same amount each year. This amount can never be increased by us.
The Policy is "variable." This means that the amount of the insurance
coverage, the cash value and the loan value of your Policy may increase or
decrease depending on the investment performance of the Subaccount(s) that you
select. You bear the entire investment risk with respect to the Policy's cash
value, which could decline to zero. However, the death benefit will never be
less than the Guaranteed Insurance Amount (adjusted for loans and partial
surrenders), if you pay all your premiums.
We offer nine Subaccounts, from which you may select up to five. Each
Subaccount invests in shares of a corresponding "Fund" of First Investors Life
Series Fund ("Life Series Fund"), as shown below.
Separate Account Corresponding
B Subaccount Fund
------------ ----
Blue Chip Subaccount Blue Chip Fund
Cash Management Subaccount Cash Management Fund
Discovery Subaccount Discovery Fund
Government Subaccount Government Fund
Growth Subaccount Growth Fund
High Yield Subaccount High Yield Fund
International Securities Subaccount International Securities Fund
Investment Grade Subaccount Investment Grade Fund
Utilities Income Subaccount Utilities Income Fund
For information on the investment objectives, investment strategies, and
investment risks of each Fund, see the Life Series Fund prospectus, which is
attached at the end of this prospectus.
You may also choose to add riders your Policy to increase the death benefit
and protect against the risk that you will not be able to make the premium
payments due to your own death or disability. These optional riders are
described in the section called "Optional Insurance Riders."
To help you understand how the values of a hypothetical Policy would change
over time, we have included some illustrations based on certain assumptions we
have made. Because your circumstances may vary considerably from our
assumptions, your registered representative will also provide you with a similar
hypothetical illustration that is more tailored to your own circumstances and
wishes. You should keep in mind that replacing existing insurance with the
Policy may not benefit you because of, among other things, the cost of the
Policy during the first few years.
If you are not satisfied with your Policy, you may be able to cancel and
return it to us for a full refund of any premiums that you have paid. For more
details, see the section entitled "Cancellation Rights" in this prospectus
2
<PAGE>
THE CHARGES AND EXPENSES
We describe below the fees and charges that you may be required to pay to
purchase and maintain the Policy. Immediately thereafter, we describe the fees
and expenses of each of the underlying mutual funds that are available as
investment options. We guarantee that once you have purchased your policy, we
will not increase the amount of your premium payments, the charges that we
deduct from your premiums, or the charges that we deduct from your Subaccount(s)
for mortality and expense risks.
Deductions from Premium Payments
--------------------------------
We deduct from your premiums for the Policy the fees and charges listed below.
We allocate the balance of your premium payments to the Subaccount(s) that you
have selected.
Annual Administrative Charge. We impose a $30 charge on your premium
payment each Policy year. The charge is for our annual administrative expenses,
including expenses for (1) premium billing and collection, (2) recordkeeping,
(3) processing death benefit claims, (4) cash surrenders, (5) Policy changes,
and (6) reporting and other communications to Policyowners.
Additional First Year Charge. We impose an additional charge in the first
Policy year at the rate of $5 per $1,000 of initial face amount of insurance.
The charge is for our administrative expenses in issuing the Policy, including
expenses for (1) medical examinations, (2) insurance underwriting costs, and (3)
processing applications and establishing permanent Policy records.
Sales Load. We impose a sales charge in issuing a Policy. The charge in
any year does not specifically correspond to our sales expenses for that year.
The charge will not exceed the following percentages of the annual premium:
Years Maximum Percentages
----- -------------------
1..............................30%
2-4.............................10%
5 and later......................... 6%
Premiums For Optional Insurance Riders. We will deduct from your premiums any
premiums for any optional insurance riders that you have chosen.
State Premium Tax Charge. This charge varies from state to state. We expect
that the average state premium tax rate on premiums for the Policies will be 2%.
Risk Charge. We impose a maximum risk charge of 1.5% of the premium. The
charge insures that the death benefit will always at least equal the guaranteed
minimum death benefit.
Other Charges. We may also deduct two other charges from your premium: (1) an
extra premium if you are rated as having a high mortality risk, and (2) an
additional charge for premiums if you pay premiums on other than on an annual
basis.
We begin to accrue and deduct all of the above charges on a Policy's issue
date. For the fiscal year ended December 31, 1998, we received a total of
$____________ for these charges.
Deductions From the Value of Your Policy
----------------------------------------
Mortality And Expense Risks Charges. We deduct from the value of your Policy a
daily charge for the mortality and expense risks that we assume. We compute the
charge at an effective annual rate of .50% of the value of Subaccount assets
attributable to your Policy.
3
<PAGE>
The mortality risk that we assume is that the person named as the insured
under the Policy will live for a shorter time than we have estimated. In that
case, we will not receive enough premium to compensate us for the death benefit
we must pay. The expense risk we assume is that the expenses we incur in issuing
and administering the Policies will be greater than we have estimated.
Cost Of Insurance Protection. We deduct a charge for the cost of insurance
protection. This amount is determined by the insurance rates applicable to your
Policy based upon your age, sex, and other factors as well as the net amount of
insurance that is at risk (see "Cost of Insurance Protection").
Charges For Income Taxes. We do not currently charge for our corporate Federal
income taxes that may be attributable to Separate Account B. However, we may
impose such a charge in the future. We may also impose charges for other
applicable taxes attributable to Separate Account B (see "FEDERAL INCOME TAX
INFORMATION").
Expenses Paid by the Funds
--------------------------
The Funds of Life Series Fund (singularly, "Fund," and collectively, "Funds")
bear the cost of investment advisory and subadvisory fees, brokerage
commissions, transfer taxes and other fees related to securities transactions.
While you will not be required to pay any such expenses directly, they are
indirectly passed on to you. They are reflected in the net asset value of each
Fund's shares.
The following table shows the fees and expenses for each Fund that is available
to you:
FUND ANNUAL EXPENSES
(as a percentage of Fund average net assets)
TOTAL FUND
MANAGEMENT OTHER OPERATING FEE NET
FEES(1) EXPENSES(2) EXPENSES(3) WAIVERS EXPENSES
------- ------------------------------- --------
Blue Chip Fund [ ]% [ ]% [ ]% [ ]% [ ]%
Cash Management Fund
[ ] [ ] [ ] [ ] [ ]
Discovery Fund
[ ] [ ] [ ] [ ] [ ]
Government Fund
[ ] [ ] [ ] [ ] [ ]
Growth Fund
[ ] [ ] [ ] [ ] [ ]
High Yield Fund
[ ] [ ] [ ] [ ] [ ]
International Securities
Fund [ ] [ ] [ ] [ ] [ ]
Investment Grade Fund
[ ] [ ] [ ] [ ] [ ]
Utilities Income Fund
[ ] [ ] [ ] [ ] [ ]
(1) For the fiscal year ended December 31, 1998, the Adviser waived Management
Fees in excess of ____% for Cash Management Fund, ___% for Government
Fund, ___% for Investment Grade Fund, and ___% for Utilities Income Fund.
The Adviser has contractually agreed with the Funds to waive Management
Fees in excess of ___% for Cash Management Fund, ___% for Government Fund,
___% for Investment Grade Fund, and ___% for Utilities Income Fund for a
period of twelve months commencing on __________ __, 1999.
(2) For the fiscal year ended December 31, 1998, the Adviser assumed certain
Other Expenses in excess of ___% for Cash Management, ___% for Government
Fund, and ___% for Investment Grade Fund. The Adviser has contractually
agreed with the Funds to assume certain Other Expenses in excess of ___%
for Cash Management, ___% for Government Fund, and ___% for Investment
Grade Fund for a period of twelve months commencing on ___________.
(3) Each Fund, other than International Securities Fund, has an expense offset
arrangement that may reduce the Fund's custodian fee based on the amount
of cash maintained by the Fund with its custodian. Any such fee reductions
are not reflected under Total Fund Operating Expenses or Net Expenses.
4
<PAGE>
WHO WE ARE
First Investors Life Insurance Company
--------------------------------------
First Investors Life Insurance Company, 95 Wall Street, New York, New York
10005 , is a stock life insurance company incorporated under the laws of the
State of New York in 1962. We write life insurance, annuities, and accident and
health insurance. We assume all of the insurance risks under the Policy, and our
assets support the Policy's benefits. At December 31, 1998, we had over $_____
million of assets and over $_____ billion of life insurance in force. (See First
Investors Life's financial statements under "Financial Statements.")
First Investors Consolidated Corporation ("FICC") owns all of the voting
common stock of First Investors Management Company, Inc. ("FIMCO" or "Adviser")
and all of the outstanding stock of First Investors Life, First Investors
Corporation ("FIC" or "Underwriter") and Administrative Data Management Corp.,
the transfer agent for Life Series Fund ("Transfer Agent"). Mr. Glenn O. Head
controls FICC and, therefore, controls the Adviser and First Investors Life.
We segregate the assets of Separate Account B from our other assets. The
assets fall into two categories: (1) assets equal to our reserves and other
liabilities under the Policies and (2) additional assets derived from expenses
that we charge to Separate Account B. The assets equal to our Policy reserves
and liabilities support the Policy. We cannot use these assets to satisfy any of
our other liabilities. The assets derived from our charges do not support the
Policy, and we can transfer these assets in cash to our General Account. Before
making a transfer, we will consider any possible adverse impact that the
transfer may have on Separate Account B.
Separate Account B
------------------
We established Separate Account B on June 4, 1985 under the provisions of the
New York Insurance Law. Separate Account B is a separate investment account.
Separate Account B has registered with the SEC as a unit investment trust under
the 1940 Act.
We allocate assets to Separate Account B to support the benefits under the
Policy. The assets are in turn invested by each Subaccount of Separate Account B
into a corresponding Fund at net asset value. Each Subaccount reinvests any
distributions it receives from a Fund by purchasing additional shares of the
distributing Fund at net asset value. Accordingly, we do not expect to pay you
any capital distributions from the Policies. We value shares of the Funds that
the Subaccounts hold at their net asset value.
Life Series Fund
----------------
Life Series Fund is a diversified open-end management investment company
registered under the 1940 Act. Life Series Fund consists of 11 separate Funds,
nine of which are available to Policyowners of Separate Account B. Target
Maturity 2007 Fund and Target Maturity 2010 Fund are the two Funds of Life
Series Fund that are not available to Policyowners of Separate Account B. The
Life Series Fund offers its shares only through the purchase of a Policy or a
variable annuity contract. It does not offer its shares directly to the general
public.
First Investors Management Company, Inc. (the "Adviser") is the investment
adviser of each Fund. The Adviser is a New York Corporation located at 95 Wall
Street, New York, New York 10005. The Adviser and Life Series Fund have retained
Wellington Management Company, 75 State Street, Boston, Massachusetts 02109 to
serve as subadviser ("Subadviser") of the International Securities Fund and the
Growth Fund. See the Life Series Fund Prospectus for more information about the
Adviser and Subadviser.
5
<PAGE>
RISK AND REWARD CONSIDERATIONS
The Policy offers you not only insurance protection but also the
opportunity to accumulate assets on a tax deferred basis by investing in the
underlying investment options. However, there are several important factors that
you should consider before making a decision to purchase a Policy.
1. The Policy involves a long-term commitment on your part. Because most
of the fees and charges are paid during the early years, you will generally lose
money if you fail to make all premium payments required during the 12 year
period. This is illustrated in the hypotheticals that appear at the end of this
prospectus. Therefore, you should have the intention and financial ability to
complete the program.
2. With investment opportunity comes investment risk. Each Subaccount
will fluctuate in value on a daily basis. The investment objectives, primary
investment strategies, and primary risks of the underlying Funds are described
in the attached Life Series prospectus.
3. If you decide to take policy loans, you should be aware that they can
have adverse consequences. Among other things, they reduce the death benefit and
cash value of your Policy; they may undermine the growth potential of the cash
value of your Policy; and they may result in taxable distributions to you if
they exceed the cash values of a Policy as a result of a decline in the market
value of the underlying investments or for any other reason (see the discussion
on Policy Loans).
4. A surrender of your Policy prior to maturity may have tax
implications. You should carefully review the section on "FEDERAL INCOME TAX
INFORMATION."
5. The ability of FIL and its affiliates to process policy-related
requests, and render other services could be adversely affected if the computers
or other systems on which they rely are not properly programmed to operate after
January 1, 2000. (See "OTHER INFORMATION--Year 2000" for more information.) A
discussion on the investment risks of the Year 2000 may be found in the Life
Series Fund prospectus, which is attached at the end of this prospectus.
THE POLICY IN DETAIL
The following discussion summarizes important provisions of the Policy offered
by this Prospectus. The discussion generally assumes that premiums have been
duly paid and there have been no Policy loans. The death benefit and cash value
are affected if premiums are not duly paid or if a Policy loan is made.
YOUR PREMIUMS
The Amount of Your Premiums
---------------------------
Subject to our $600 minimum annual premium requirement (excluding premiums for
any riders other than Waiver of Premium), you decide how much you wish to pay in
premiums. Once you have decided how much you wish to pay, the premium remains
level for all 12 years that you are required to make premium payments. We can
never increase the amount. Paying a level annual premium acts as an averaging
device to cover (1) expenses, which are higher in the early Policy years, and
(2) the cost of the mortality risk, which increases in the later Policy years
and continues to increase beyond the premium paying period. We allocate assets
to our General Account to accumulate as a reserve for the contingency that the
insured will die when the Guaranteed Insurance Amount exceeds the death benefit
payable without such guarantee. In setting premium rates, we took into
consideration actuarial estimates of projected death and surrender benefit
payments, lapses, expenses, investment returns, and a contribution to our
surplus.
6
<PAGE>
The Frequency of Payment
- ------------------------
You pay premiums under the Policy for only 12 years. You may choose to pay
these premiums on an annual, semi-annual, quarterly or monthly due date measured
from the date of issue of the Policy. Premium payments are due on or before the
due dates at our Home Office. If you pay early, we will place your premium
payment in our General Account and on the day that it is due, we will allocate
the premium to the Subaccount(s) that you selected.
You will pay the lowest premium by paying annually. When you pay premiums on
other than an annual basis, the aggregate premium amounts for a Policy year are
higher, reflecting charges for loss of interest and additional billing and
collection expenses. The following table illustrates these premium amounts. We
deduct the additional charge from these premiums when we receive them.
PREMIUMS ON INSTALLMENT BASIS
(AS A PERCENTAGE OF AN ANNUAL PREMIUM)
Aggregate Premiums
Frequency Each Premium for Policy Year
--------- ------------ ---------------
Annual................ 100.00% 100.00%
Semiannual............ 51.00 102.00
Quarterly............. 26.00 104.00
Pre-authorized Monthly 8.83 105.96
Under the pre-authorized monthly plan ("Lifeline"), your bank automatically
makes an electronic funds transfer to us from your bank account to pay your
premiums.
Automatic Premium Loans to Pay Premiums
---------------------------------------
Under the Automatic Premium Loan provision, you pay any premium not paid
before the end of the grace period (see definition in "Other Provisions") by an
automatic loan against the Policy. The Automatic Premium Loan provision is
available only if:
o you elect the Automatic Premium Loan provision in your application
for the Policy, or in a writing that we receive at our Home Office at
any time when no premium is in default, and
o the resulting Policy loan and loan interest to the next premium due
date do not exceed the maximum loan value of your Policy (see "Policy
Loans").
You may revoke the Automatic Premium Loan Provision at any time by written
request that we receive at our Home Office.
ALLOCATION OF YOUR NET PREMIUM TO INVESTMENT OPTIONS
When you purchase a Policy, you select the allocation of the net premium
(premium less deductions) (see "The Charges And Expenses--Deductions from
Premium Payments") to not more than five of the Subaccounts of Separate Account
B to support the Policy's benefits. You must allocate at least 10% of the net
premium to each Subaccount you select. The actual allocation of net premium
occurs on the Policy's issue date and at the beginning of each Policy year after
that.
We offer nine Subaccounts, from which you may select up to five. Each
Subaccount in turn invests in the corresponding Fund of Life Series Fund. For
information on the investment objectives, investment strategies, and investment
risks of the Funds, see the Life Series Fund prospectus which is attached at the
end of this prospectus.
7
<PAGE>
While your premium will never increase, the net amount which is invested in
the subaccounts you select will increase over time, as charges and expenses
decline. Thus, as time goes by, more of your premium will be invested. As an
example, based on the Policies illustrated on page 27 through 29, we would
allocate to the selected Subaccount(s) the following amounts for each Policy
year:
MALE ISSUE MALE ISSUE MALE ISSUE
AGE 10 AGE 25 AGE 40
BEGINNING $600 ANNUAL $1,200 ANNUAL $1,800 ANNUAL
OF POLICY PREMIUM FOR PREMIUM FOR PREMIUM FOR
YEAR STANDARD RISK STANDARD RISK STANDARD RISK
- --------- ------------- ------------- -------------
1.......................$170.81 $ 508.46 $ 927.23
2-4..................... 489.00 1,008.00 1,527.00
5 and later............. 513.00 1,056.00 1,599.00
THE DEATH BENEFIT
The death benefit is the amount we pay to your named beneficiary at the death
of the person whom you name as the insured. It is the sum of the Guaranteed
Insurance Amount (face amount of the Policy) plus, if positive, the Variable
Insurance Amount for the Subaccounts that you have selected. We increase the
death benefit to reflect (1) any insurance on the life of the insured that you
may have added by rider and (2) any premium you have paid that applies to a
period of time after the Insured's death. We reduce the death benefit to reflect
(1) any Policy loan and loan interest and (2) any unpaid premium that applies to
a period before the insured's death.
Generally, we pay the death benefit within seven days after we receive all
claim requirements at our Home Office located at 95 Wall Street, New York, NY
10005. We pay interest on death benefit proceeds from the date of death until we
pay the death benefit. We pay this interest at the same annual rate that we pay
on death benefit proceeds you leave on deposit with us under a Settlement
Option. We may pay interest at a higher rate if the law requires.
The Guaranteed Insurance Amount
-------------------------------
We guarantee that the death benefit will never be less than the Policy's face
amount, which is the Guaranteed Insurance Amount. The Policy's face amount is
constant throughout the life of the Policy. During the first Policy year, the
death benefit is equal to the Guaranteed Insurance Amount. Thereafter, we
determine the death benefit on each Policy anniversary by adding the Variable
Insurance Amount, if positive, to the Guaranteed Insurance Amount. The death
benefit then remains level during the following Policy year. The death benefit
payable, therefore, depends on the Policy year in which the Insured dies.
The Variable Insurance Amount
-----------------------------
The Variable Insurance Amount reflects the investment results of the
Subaccounts that you have selected. During the first Policy year, the Variable
Insurance Amount is zero. On the first Policy anniversary, and on each
anniversary thereafter, we ascertain the Actual Rate of Return for each
Subaccount you have selected. The Actual Rate of Return reflects the investment
performance of each selected Subaccount from the first day of the Policy year
until the last day of the Policy year. It reflects investment income (net of
Fund expenses); plus realized and unrealized capital gains; minus realized and
unrealized capital losses; minus charges, if any, for taxes; minus a charge not
exceeding .50% per year for mortality and expense risks. The Actual Rate of
Return for a Policy year is not the same as the Actual Rate of Return for the
Subaccount(s) for a calendar year, unless a Policy's anniversary is the last day
of the calendar year.
The Variable Insurance Amount does not change if the Actual Rate of Return
on the Policy's total investment base of all of your Subaccounts is 4%. The
8
<PAGE>
Variable Insurance Amount increases, if the Actual Rate of Return is greater
than 4%. The Variable Insurance Amount decreases, if the Actual Rate of Return
is less than 4%. We set the Variable Insurance Amount on each Policy anniversary
and do not change it until the next Policy anniversary.
The amount by which the Variable Insurance Amount increases or decreases is
determined by the net single premium rate that applies to your Policy. Your
policy includes a table of the applicable net single premium rates per $1.00. As
indicated below, the net single premium increases as the Insured grows older.
The numbers do not depend upon the risk classification of a Policy or any
changes in the Insured's health after issue of a Policy. The net single premium
will be lower for a Policy that we issue to a female than for a Policy that we
issue to a male, as shown below:
VARIABLE INSURANCE
ADJUSTMENT AMOUNT
NET SINGLE PREMIUM PURCHASED OR CANCELED
MALE PER $1.00 OF VARIABLE BY $1.00 OF
ATTAINED AGE INSURANCE AMOUNT INVESTMENT RETURN
------------ ---------------- -----------------
5 $.09884 $10.12
15 .13693 7.30
25 .18452 5.42
35 .25593 3.91
45 .35291 2.83
55 .47352 2.11
65 .60986 1.64
VARIABLE INSURANCE
ADJUSTMENT AMOUNT
NET SINGLE PREMIUM PURCHASED OR CANCELED
FEMALE PER $1.00 OF VARIABLE BY $1.00 OF
ATTAINED AGE INSURANCE AMOUNT INVESTMENT RETURN
------------ ---------------- -----------------
5 $.08195 $12.20
15 .11326 8.83
25 .15684 6.38
35 .21872 4.57
45 .30185 3.31
55 .40746 2.45
65 .54017 1.85
The following example illustrates how we would calculate the change in the
Variable Insurance Amount on the 6th and 12th anniversaries of a hypothetical
policy. For this calculation, we use the Policy illustration for a male age 25
on Page 28, and assume an 8% hypothetical gross annual investment return:
9
<PAGE>
CALCULATION OF CHANGE IN
VARIABLE INSURANCE ADJUSTMENT
AMOUNT AT END OF POLICY YEAR
6 12
-------------------------------
(1) Cash Value at End of Prior Year..... $4,972.00 $14,529.00
(2) Net Premium......................... 1,056.00 1,056.00
(3) Total Investment Base at Beginning of
Current Policy Year: (1)+(2)........ 6,028.00 15,585.00
(4) Actual Rate of Return
(.064399) minus the Base
Rate of Return which is
the Assumed Rate (.04).............. .024399 .024399
(5) Investment Return (3)x(4)........... 147.08 380.25
(6) Net Single Premium at
End of Current Year................. 0.22416 0.27338
(7) Change in Variable Insurance Adjustment
Amounts (5) divided by (6).......... $ 656.14 $ 1,390.92
Figures are rounded.
The Variable Insurance Amount is cumulative. This means that the amount
reflects the accumulation of increases and decreases from past Policy years. The
amount may be positive or negative, depending on the investment performance,
while the Policy is in force, of the Subaccounts that you have selected. The
death benefit is the Guaranteed Insurance Amount if the Variable Insurance
Amount is negative or zero when the Insured dies.
The following example demonstrates how the Variable Insurance Amount can
increase the death benefit above the Guaranteed Insurance Amount based upon a
hypothetical policy (in this case the change in death benefit between the end of
policy years five and six). The example uses the policy illustration for a male
issue age 25 (see Page 28) and assumes an 8% hypothetical gross annual
investment return (equivalent to an Actual Rate of Return of approximately
6.4399%).
GUARANTEED VARIABLE
VARIABLE LIFE INSURANCE + INSURANCE = DEATH
POLICY AMOUNT AMOUNT BENEFIT
------ ------ ------ -------
End of Policy Year 5....$51,908 $1,489 $53,398
Increase................ -- 657 657 (1.2% Increase)
End of Policy Year 6....$51,908 $2,146 $54,054
If the hypothetical gross annual investment return in the year illustrated had
been 0% (equivalent to an Actual Rate of Return of approximately -1.445%), the
results in the calculation above would have been as follows: the death benefit
would have decreased by $1,464 (a 2.7% decrease), and the death benefit for the
end of Policy year 6 would have been $51,934.
The increase or decrease in the Variable Insurance Amount depends on the
Actual Rate of Return and the dollar amount of assets in the Subaccount(s).
Therefore, we expect that the change in the Variable Insurance Amount (which
affects the change in the death benefit) will be greater in the later Policy
years when we expect the value of the assets in the Subaccount(s) to be higher
in relation to the death benefit, than in the early Policy years when the value
of those assets is relatively low.
In the previous example above, the death benefit at the end of Policy year 6
is 1.2% higher than the death benefit at the end of Policy year 5. In
comparison, the death benefit for the same Policy, earning the same hypothetical
<PAGE>
gross 8% annual return, would be 2.4% higher at the end of the Policy year 12
than the death benefit at the end of Policy year 11, as follows:
GUARANTEED VARIABLE
VARIABLE LIFE INSURANCE + INSURANCE = DEATH
POLICY AMOUNT AMOUNT BENEFIT
------ ------ ------ -------
End of Policy Year 11...$51,908 $7,258 $59,166
Increase................ -- 1,391 1,391 (2.4% Increase)
End of Policy Year 12...$51,908 $8,649 $60,557
After the first Policy year, a Policy's death benefit for a Policy year would
equal the Guaranteed Insurance Amount if the Variable Insurance Amount were
negative. In that case, the death benefit would increase above the Guaranteed
Insurance Amount, on a subsequent Policy anniversary, only if the Actual Rate of
Return for the preceding Policy year were sufficiently greater than 4% to result
in a positive variable insurance amount. For example, assume that the Policy for
a male issue age 25 illustrated on Page 28 had a 0% hypothetical gross annual
rate of return for the first five Policy years, resulting in a negative variable
insurance amount. For the death benefit to increase above the Guaranteed
Insurance Amount for Policy year 7 (the amount shown for the end of Policy year
6), the Actual Rate of Return for Policy year 6 would have to be at least 17.5%.
YOUR CASH VALUE
Determining Your Cash Value
---------------------------
The cash value of the Policy on any date is the sum of the cash values you
have in all of the Subaccounts that you have selected. The cash value you have
in each Subaccount will vary daily depending on its investment experience. (See
"Valuation of Assets.") The cash value you have in each Subaccount at the end of
each Policy year is (1) the amount of the tabular cash value, which is the cash
value produced by an Actual Rate of Return of 4% each Policy year, attributable
to the Subaccount(s) on that date, (2) plus or minus the net single premium for
the current Variable Insurance Amount attributable to the Subaccount(s) on that
date.
If the end of the Policy year is other than the Policy anniversary date, we
increase or decrease the cash value depending on the investment results of each
Subaccount that you have selected for the time elapsed since the last Policy
anniversary. This description assumes that you have no premium due and unpaid.
In calculating the cash value, we make adjustments for (1) the net premium,
(2) the investment results, and (3) the cost of insurance protection. (See below
for an explanation of the cost of insurance protection.)
In the example below, we use the Policy illustration for a male issue age 25
on Page 28, and we assume an 8% hypothetical gross annual investment return
(equivalent to an Actual Rate of Return of approximately 6.4399%). In this case,
the cash value we show for the end of Policy year 5 increases to the amount we
show for the end of Policy year 6 for the Policy, as follows:
11
<PAGE>
(1) Cash Value at End of Prior Year....................... $4,972
(2) Net Premium........................................... 1,056
(3) Investment Base at Beginning of Current
Policy Year 6: (1)+(2).............................. 6,028
(4) Actual Rate of Return................................. .064399
(5) Investment Return (3)x(4)............................. 388
(6) Benefit Base at End of Policy Year 6: (3)+(5)......... 6,416
(7) Cost of Insurance Protection During Policy Year 6..... 84
(8) Cash Value at End of Policy Year 6: (6)-(7)........... 6,332
We do not guarantee that you will have any cash value in your Policy. The
Policy offers the possibility of increased cash value resulting from good
investment performance. However, there is no assurance that any increase will
occur. It is also possible, due to poor investment performance, for the cash
value to decline to the point of having no value or, in fact, a negative value.
In that case, we would credit subsequent net premium payments and investment
returns against the negative cash value.
The Policyowner bears all the investment risk as to the amount of the cash
value. It is unlikely that the Policy will have any cash value until the later
months of the first Policy year (see "Additional First Year Charge"). The cash
values that we illustrate on Pages 27 to 29 and Pages 30 to 32 are cash values
at the end of the Policy years shown. For each of the various hypothetical gross
annual investment returns shown in these tables, the end of year cash values are
equal to the sum of:
o the Cash Value at End of Prior Year (1),
o the Net Premium paid for the Current Policy Year (2),
o the Investment Return (5)
O less the Cost of Insurance Protection During the Current Policy Year
(7).
Deduction of Cost of Insurance Protection From Cash Value
---------------------------------------------------------
Your cash value is reduced by an annual charge for the cost of insurance
protection. We issue variable life insurance policies to (1) persons with
standard mortality risks and (2) persons with higher mortality risks, as our
underwriting rules permit. We charge a higher gross premium for the person with
the higher mortality risk.
We use the 1980 Commissioners' Standard Ordinary Mortality Table to compute
the cost of insurance protection for each Policy, with one exception. For
mortality rates for extended term insurance, we use the Commissioners' 1980
Extended Term Table.
In all cases, we base the cost of insurance protection on the net amount of
insurance at risk (the Policy's face amount, plus the Variable Insurance Amount,
minus the cash value) and the person's sex and attained age. The amount that we
deduct each year is different, because the probability of death generally
increases as a person's age increases. The net amount of insurance at risk may
decrease or increase each year depending on the investment experience of the
Subaccount(s) that you have selected.
12
<PAGE>
Accessing Your Cash Value
-------------------------
FULL OR PARTIAL SURRENDERS. You may surrender the Policy for its cash
value at any time while the Insured is living. The amount payable will be the
cash value that we next compute after we receive the surrender request at our
Home Office. Surrender will be effective on the date that we receive both the
Policy and a written request in a form acceptable to us.
On any Policy anniversary, you may also make a partial surrender of the Policy
by reducing the premium amount. We permit a partial surrender only if you (1)
have no outstanding policy loan and (2) have paid the new premium due on the
Policy anniversary.
We must receive all requirements for a partial surrender at our Home Office on
or before the Policy anniversary. The partial surrender will be effective on the
Policy anniversary. The amounts of the Guaranteed Insurance Amount (face amount
of the Policy), death benefit, and cash value for the reduced Policy will be the
same as they would have been had you paid the reduced premium from inception. We
will pay the portion of the cash value of the original Policy that exceeds the
cash value of the reduced Policy to you as a partial surrender. We will allocate
the cash value of the reduced Policy among the Subaccounts in the same
proportion as the allocation of the cash value of the original Policy.
We will usually pay the surrender value within seven days. However, we may
delay payment for the following reasons:
o a recent payment that you made by check has not yet cleared the bank,
o we are not able to determine the amount of the payment because the New
York Stock Exchange is closed for trading or the Commission determines
that a state of emergency exists, or
o for such other periods as the Commission may by order permit for the
protection of security holders.
We will pay interest if we delay payment of the surrender value beyond seven
days. Under Federal tax laws, we may deduct withholding taxes from the surrender
value.
POLICY LOANS. You may borrow up to 75% of the cash value during the first
three Policy years, or 90% of the cash value after the first three Policy years,
if you assign your Policy to us as sole security. We charge interest daily at an
effective annual rate of 6% compounded on each Policy anniversary. In general,
we send the loan amount within seven days of receipt of the request. We will not
permit a new loan unless it is at least $100, or unless you use it to pay
premiums. You may repay all or a portion of any loan and accrued interest while
the Insured is living and the Policy is in force.
When you take out a loan, we transfer a portion of the cash value equal to
the loan from the Subaccount(s) that you have selected to our General Account.
We charge the loan to each Subaccount in the proportion which the value of each
Subaccount bears to the cash value of the Policy as of the date of the loan. A
Policy loan does not affect the amount of the premiums due. A Policy loan does,
however, reduce the death benefit and cash value by the amount of the loan. A
Policy loan may also permanently affect the death benefit above the Guaranteed
Insurance Amount and the cash value, whether or not you repay the loan in whole
or in part. This occurs because we will not credit Net Investment Return that
the Subaccount(s) earn to the amount that we maintain in the General Account
during the period that the loan is outstanding. Instead, we credit the amount in
the General Account at the assumed interest rate of 4%, in accordance with the
tabular cash value calculations that we have filed with the state insurance
departments.
A Policy loan will have a negative impact on the growth of the cash value
during periods when the actual rates of return of the Subaccounts exceed the
13
<PAGE>
assumed rate of 4%. Recall that the death benefit is made up of two parts: the
Guaranteed Insurance Amount and, if positive, the Variable Insurance Amount (see
"The Guaranteed Insurance Amount" and "The Variable Insurance Amount"). The cash
value and the Variable Insurance Amount, if any, depend on the Actual Rate of
Return of the Subaccount(s). Thus, during periods of favorable investment return
(an Actual Rate of Return greater than 4%), an outstanding Policy loan results
in lower investment return than would have otherwise resulted in the absence of
any indebtedness.
For example, use the Policy for a male issue age 25 illustrated on Page 28,
and assume a hypothetical 8% gross annual investment return and that you made a
$3,000 Policy loan at the end of Policy year 9. For the end of Policy year 10,
the death benefit and cash value would be $57,612 and $12,612, respectively. The
differences between these amounts and the $57,898 death benefit and $12,685 cash
value that appear on Page 28 for Policy year 10 result because the portion of
the cash value equal to the indebtedness does not reflect the Subaccount(s)'
Actual Rate of Return of approximately 6.4399%.
Conversely, outstanding indebtedness will diminish the adverse effect on cash
value during a period of unfavorable investment return (an Actual Rate of Return
less than 4%). This is because the portion of the cash value that we transfer
from the Subaccount(s) to the General Account will grow at the assumed rate of
4% even if Actual Rates of Return are below 4%. Thus, a Policy loan will tend to
protect the cash value and Variable Insurance Amount from decreasing if the
Actual Rate of Return is less than 4%.
If you do not pay loan interest when it is due, we increase your loan by the
amount of any unpaid interest, and we transfer an equivalent amount of cash
value from the Subaccount(s) to the General Account. We credit loan repayments
to each Subaccount in proportion to your allocation to each Subaccount as of the
date of repayment.
We subtract the amount of any outstanding loan plus interest from any death
benefit or any surrender value that we pay. If your outstanding loan with
accrued interest ever equals or exceeds the cash value, we will mail notice of
such event to you and any assignee at the assignee's last known address. The
Policy terminates 31 days after we mail such notice. The Policy does not
terminate if you make a repayment within that 31-day period.
Generally, on a Policy's termination or surrender, you pay income tax on the
following:
o the surrender value, plus
o any outstanding Policy loan plus interest, if applicable, minus
o the total premiums that you paid on the Policy.
Consult with your representative or tax adviser before taking Policy loans.
Transferring Your Cash Value Among Investment Options
-----------------------------------------------------
Twice each Policy year, you may transfer part or all of your cash value from
each Subaccount that you have selected to any other Subaccount or Subaccounts.
You may make these transfers only if
o you allocate the cash value to no more than five of the Subaccounts,
and
o the allocation to any one Subaccount is not less than 10% of the cash
value.
14
<PAGE>
SETTLEMENT OPTIONS
You or your named beneficiary may receive a single sum payment of Policy
proceeds on the death of the Insured or surrender of the Policy. Alternately,
you or your beneficiary may elect to apply all or a portion of the proceeds
under any one of the fixed benefit settlement options that the Policy provides.
Tax consequences may vary depending on the settlement option that the recipient
chooses. The options are as follows:
PROCEEDS LEFT AT INTEREST - Proceeds left on deposit with us to accumulate,
with interest payable at a rate of 2 1/2% per year, which may be increased by
additional interest.
PAYMENT OF A DESIGNATED AMOUNT - Payments in installments until proceeds
applied under the option and interest on unpaid balance at a rate of 2 1/2% per
year and any additional interest are exhausted.
PAYMENT FOR A DESIGNATED NUMBER OF YEARS - Payments in installments for up to
25 years, including interest at a rate of 2 1/2% per year. Payments may increase
by additional interest, which we would pay at the end of each installment year.
LIFE INCOME, GUARANTEED PERIOD - Payments guaranteed for 10 or 20 years, as
you elect, and for life thereafter. During the guaranteed period of 10 or 20
years, the payments may be increased by additional interest, which we would pay
at the end of each installment year.
LIFE INCOME, GUARANTEED RETURN - The sum of the payments made and any payments
due at the death of the person on whom the payments are based, never to be less
than the proceeds applied.
LIFE INCOME ONLY - Payments made only while the person on whom the payments
are based is alive.
OPTIONAL INSURANCE RIDERS
The following optional provisions may be included in a Policy, in States where
available, subject to the payment of an additional premium, certain age and
insurance underwriting requirements, and the restrictions and limitations that
apply to the Policy, as described above.
Accidental Death Benefit
------------------------
You may elect to obtain an Accidental Death Benefit rider if the Insured's age
is 0 to 60. The rider provides for an additional fixed amount of death benefit
in the event the Insured dies from accidental bodily injury while the Policy is
in force and before the Policy anniversary when the Insured attains age 70. The
premium is $1.75 per $1,000 of benefit and is payable for 12 years. The amount
of the benefit is equal to the face amount of the Policy, but cannot exceed an
amount equal to $200,000 minus the sum of the Insured's Accidental Death Benefit
coverage in all companies.
12 Year Level Term Rider
------------------------
You may elect to obtain a 12 Year Level Term Insurance rider where the Insured
is age 18 to 58 for an amount equal to (1) the Policy face amount or (2) two
times the Policy face amount. The rider is convertible, without evidence of
insurability, to a new Policy or other permanent plan of insurance. The amount
of the insurance under the new Policy may be any amount up to the face amount of
the rider. The conversion may occur at any time during the 12 years of rider
coverage, but not later than the Policy anniversary when the Insured reaches age
65.
Waiver of Premium
-----------------
You can choose to obtain a Waiver of Premium rider where the Insured is age 15
to 55. Under the rider, the Company will waive all premiums falling due after
the date of commencement of the disability and for as long as the disability
15
<PAGE>
continues. Disability, for this purpose, means the Insured's total disability
(1) commencing before the Policy anniversary when the Insured reaches age 60 and
(2) continuing for six months.
Payor Benefit
-------------
You can also choose to obtain a Payor Benefit rider where the Insured is age 0
to 14 and you are age 18 to 55. It provides insurance on the life of the person
who is responsible for paying the premiums. If you die or become disabled before
reaching age 60 and before the Insured is age 21, the Company waives all
premiums that become due before the Insured's age 21.
OTHER PROVISIONS
Age and Sex
-----------
If you have misstated the age or sex of the Insured, the benefits available
under the Policy are those that the premiums paid would have purchased for the
correct age and sex.
Assignment
----------
You may transfer ownership of your Policy from yourself to someone else.
However, the assignment is not binding on us, unless it is in writing and filed
with us at our Home Office. We assume no responsibility for the validity or
sufficiency of any assignment. Unless otherwise provided in the assignment, the
interest of any revocable beneficiary is subordinate to the interest of any
assignee, regardless of when you made the assignment. The assignee receives any
sum payable to the extent of his or her interest.
Beneficiary
-----------
This is the person you designate in the Policy to receive death benefits upon
the death of the Insured. You may change this designation, during the Insured's
lifetime, by filing a written request with our Home Office in a form acceptable
to us.
Cancellation Rights
-------------------
You have a limited right to cancel and return the Policy to us, or our
representative through whom you bought the Policy. You must submit a written
request for cancellation. You may examine and return the Policy within ten days
after you receive the Policy or notice of right of withdrawal. You may also
return the Policy within 45 days after completion of Part I of the application
for the Policy. In either case, you obtain a full refund of the premiums that
you paid.
Default and Options On Lapse
----------------------------
A premium is in default if you do not pay it on or before its due date. The
insurance continues in force during the 31-day grace period (see "Grace Period"
below). However, if the Insured dies during the grace period, we deduct from the
death benefit the portion of the premium applicable to the period from the
premium due date to the end of the Policy month in which death occurs.
We apply the Policy's cash value minus any loan and interest to purchase
continued insurance, if you do not surrender a Policy within 60 days after the
date of default. You may choose either reduced paid-up whole life insurance or
extended term insurance for the continued insurance. Under the Policy, you
automatically have the extended term insurance if you make no choice. However,
that option is available only in standard risk cases. If we rated the Policy for
extra mortality risks, the paid-up insurance is the automatic option. Both
options are for fixed life insurance, and neither option requires the further
payment of premiums.
16
<PAGE>
The reduced paid-up whole life insurance option provides a fixed and level
amount of paid-up whole life insurance. The amount of coverage is the amount
that the surrender value purchases on the date the option becomes effective. The
extended term insurance option provides a fixed and level amount of term
insurance equal to the death benefit (minus any indebtedness) as of the date the
option becomes effective. The insurance coverage under this option continues for
as long a period as the surrender value on such date purchases.
For example, use the Policy for a male issue age 25 illustrated on Page 22 and
assume the 0% and 8% hypothetical gross annual investment returns. If an option
became effective at the end of Policy year 5, the fixed insurance coverage under
these Policies would be as follows:
0% 8%
-------- --------
Cash Value...........................$ 3,992 $ 4,972
Reduced Paid-up Insurance............ 18,406 22,925
for life for life
Extended Term Insurance.............. 51,908 53,398
for 25 years for 28 years
You may surrender a Policy continued under either option for its cash value
while the Insured is living. You may make a loan under the reduced paid-up whole
life insurance option, but not under the extended term insurance option.
Exchange Privilege
------------------
The exchange privilege allows you to exchange the Policy for a permanent fixed
life insurance policy on the Insured's life. The exchange privilege is
available:
o within the first 24 months after the issue Policy's date, if you have
duly paid all premiums, or
o if any Fund changes its investment adviser or makes a material change
in its investment objectives or restrictions.
You do not need to provide evidence of insurability to exercise this
privilege. The new policy has a level face amount equal to the face amount of
the Policy. It also has the same benefit riders, issue dates, and risk
classification for the Insured as the Policy does. We base premiums for the new
policy on the premium rates for the new policy that were in effect on the Policy
date. You may elect either a continuous-premium policy or a limited-payment
policy for your exchanged policy.
In some cases, we may adjust the cash on exchange. The adjustment equals the
Policy's surrender value minus the new policy's tabular cash value. If the
result is positive, we pay that amount to you. If the result is negative, you
pay that amount to us. We will determine the amount of a cash adjustment as of
the date we receive the Policy and written request at our Home Office.
If we do not issue a Policy for any reason, we refund to the applicant the
amount of the premium without interest.
Grace Period
------------
With the exception of the first premium, we allow a Grace Period of 31 days
for payment of each premium after it is due. The Policy continues in force
during the Grace Period unless you surrender it.
17
<PAGE>
Incontestability
----------------
Except for nonpayment of premiums, we do not contest the validity of the
Policy and its riders after it has been in force during the lifetime of the
Insured for two years from the Date of Issue.
Payment and Deferment
---------------------
We will usually pay the death benefit, surrender value, or loan proceeds
within seven days after we receive all documents required for such payments.
However, we may delay payment if (1) a recent payment by check has not yet
cleared the bank, (2) we cannot determine the amount because the New York Stock
Exchange is closed for trading, or (3) the Commission determines that a state of
emergency exists.
Under a Policy continued as paid-up or extended term insurance, we may defer
the payment of the surrender value or loan proceeds for up to six months. If we
postpone the payment more than 30 days, we will pay interest at a rate of not
less than 3% per year on the Surrender Value. We will pay the interest from the
date of surrender to the date we make payment.
Payment of Dividends
--------------------
The Policies do not provide for dividend payments. Therefore, they are
"non-participating" in the earnings of First Investors Life.
Policy Years and Anniversaries
------------------------------
We measure Policy years and anniversaries from the Date of Issue of the Policy
which will generally be the date on which we approve the application. The Date
of Issue may be backdated on your request to save age. However, the Date of
Issue cannot be earlier than either (1) the date you sign the application or (2)
a date 15 days before the date on which we approve the application. Each Policy
year will commence on the anniversary of the Date of Issue.
Reinstatement
-------------
You may reinstate a Policy that you did not surrender for its cash value
within five years from the date of default, in accordance with the Policy. To
reinstate, you must present evidence of insurability acceptable to us, and you
must pay to us the greater of:
(1) (a) all premiums from the date of default with interest to the date of
reinstatement, plus (b) any Policy debt (plus interest to the date of
reinstatement) in effect when you continued the Policy as paid up insurance
or extended term insurance; or
(2) 110% of the increase in cash value resulting from reinstatement.
To reinstate, you must also pay us any Policy debt that arose after the
continuation of the Policy as paid up insurance. We calculate interest on any
such debt at the rate of 6% per year compounded annually.
Suicide
-------
If the Insured commits suicide within two years from the Policy's date of
issue, our liability under the Policy is limited to all premiums paid less any
indebtedness.
18
<PAGE>
Valuation of Assets
-------------------
We determine the value of the assets of each Subaccount as of the close of
business on each business day. We value shares of the underlying Fund at the net
asset value per share as determined by the Fund. The Fund determines the net
asset value of a Fund's share as described in Life Series Fund's Prospectus.
FEDERAL INCOME TAX INFORMATION
We base this discussion on current federal income tax law and interpretations.
It assumes that the policyowner is a natural person who is a U.S. citizen and
U.S. resident. The tax effect on a corporate taxpayers, non-U.S. citizens, and
non-U.S. residents may be different. The law and interpretations could change,
possibly retroactively. The discussion is general in nature. We do not intend it
as tax advice, for which you should consult a qualified tax adviser.
We believe that the Policy qualifies as a life insurance contract for federal
income tax purposes because the Policy meets the definition of life insurance in
Section 7702(a) of the Internal Revenue Code of 1986, as amended (the "Code")
and the investments of the Subaccounts satisfy the investment diversification
requirements under of 817(h) of the Code. Consequently:
o the death benefit will not be subject to federal income tax;
o you will generally not be taxed on the growth of the cash value of the
Policy, if any, that is attributable to the investments in the
underlying investment portfolios (this is known as the "inside
build-up"), unless or until there is a full or partial surrender of
the Policy; and
o transfers among the investment subaccounts will not be subject to
federal income tax, unless or until there is a full or partial
surrender of the Policy.
Qualification as a life insurance contract for Federal income tax purposes
depends, in part, upon the satisfaction by the Subaccounts of Separate Account B
of certain investment diversification requirements in Section 817(h) of the
Code. We expect that the Adviser will continue to manage the assets of the Funds
in a manner that complies with these diversification requirements. A Policy that
invests in a Fund that fails to meet diversification requirements will not
receive tax treatment as a life insurance contract for the period of such
diversification failure, and any subsequent period.
The Treasury Department has stated that it may issue guidelines that limit a
Policyowner's control of investments underlying a variable life insurance
policy. If a Policy failed to meet those guidelines, you would be taxed on the
Policy's current income. The Treasury Department has said informally that those
guidelines may limit the number of investment funds and the frequency of
transfers among those funds. The issuance of such guidelines may require us to
limit your right to control the investment. The guidelines may apply only
prospectively, although they could apply retroactively if they do not reflect a
new Treasury Department position.
We do not believe that any Policy will be a "modified endowment contract" at
issuance, within the meaning of Section 7702A of the Code. A modified endowment
contract is a life insurance policy under which the total premiums paid, at any
time during the first seven years of the policy, exceed the premiums that would
have been paid by that time under a similar fixed-benefit life insurance policy
designed to provide for paid-up future benefits after the payment of seven equal
annual premiums. This is called the "seven-pay" test.
Whenever there is a "material change" under a Policy, the Policy is generally
subject to a new seven-pay test during the next seven years to determine whether
it is a modified endowment contract. A material change for these purposes could
occur because of a change in death benefit, and because of certain other
changes.
19
<PAGE>
If your Policy's benefits are reduced during its first seven years (or within
seven years after issuance or a material change), we will redetermine the
seven-pay test based on the reduced level of benefits and apply the new test to
all prior premium payments. Such a reduction in benefits could include a
decrease in face amount, a partial surrender, or a termination of additional
benefits under a rider. If the premiums that you previously paid are at any time
greater than the recalculated limit under the seven-pay test, we will treat the
Policy as a modified endowment contract from that time forward.
A Policy that you receive in exchange for a modified endowment contract will
also be a modified endowment contract.
Any distribution from a Policy that is a modified endowment contract will be
taxed on an "income-first" basis. A distribution, for this purpose, includes a
loan or surrender. "Income first" means that the distribution is taxed to the
extent that your cash value exceeds your basis in the Policy (premiums paid less
previous distributions that were not taxable). Premiums paid, for this purpose,
include loans that have been taxable as income because of the Policy's modified
endowment contract status. An additional 10% tax will also be imposed on any
amount so taxed, subject to certain exceptions for distributions:
o before you reach age 59-1/2,
o in case of disability as defined in the Code, or
o received as part of a series of substantially equal periodic payments
for the life (or life expectancy) of the taxpayer or the joint lives
(or joint life expectancies) of the taxpayer and his or her
beneficiary.
All modified endowment contracts that we (or our affiliates) issue to you
during any calendar year generally will be treated as one Policy under the
modified endowment contract rules. You should consult your tax adviser if you
have questions regarding the possible impact of the modified endowment contract
rules on your Policy.
If a Policy is not a modified endowment contract, Policy loans will be treated
as indebtedness, and no part of such loans will be subject to current federal
income tax. In addition, the interest on such loans generally will not be
deductible. If you surrender you Policy while a loan is outstanding, the amount
of the loan will be treated as a partial surrender. You should be aware that if
the cash value of your Policy falls below the aggregate amount of loans
outstanding, as the result of the fluctuation in the value of the underlying
portfolios or otherwise, the entire Policy may terminate. In that case, all
loans will be taxable to the extent they exceed premiums paid.
If you make a partial surrender after the first 15 Policy years, the
distribution will not be subject to federal income tax except to the extent that
it exceeds your basis in the Policy. During the first 15 Policy years, however,
the proceeds from a partial withdrawal could be subject to federal income tax,
under a complex formula, to the extent that your cash value exceeds your basis.
Upon surrender of a Policy, taxation of the Surrender Value depends on the
Payment Option that you have selected. If payment is in one sum, you are taxed
on the income in the Policy at the time payment is made. If payment is in
installments, you may be taxed:
o on all or a portion of each installment until the income in the Policy
has been paid,
o only after all your basis in the Policy has been paid, or
o on a portion of each payment.
20
<PAGE>
You should consult your tax adviser if you have questions about the taxation
of a Policy surrender.
Under the Code, we must generally withhold income tax from the taxable portion
of the distribution that we pay upon surrender of a Policy. We will not
withhold, if you so request in writing, before the payment date. Failure to
withhold or withholding of an insufficient amount may subject the you to
taxation. In addition, insufficient withholding and insufficient estimated tax
payments may subject you to penalties.
The Life Series Fund sells its shares to more than one separate account
funding variable annuity contracts or variable life insurance policies.
Consequently, violation of the Federal tax laws by another separate account
investing in Life Series Fund could cause the Policies funded through Separate
Account B to lose their tax-deferred status. Such a result might cause us to
take remedial action.
We are taxed as a "life insurance company" under Subchapter L of the Code.
Under the applicable provisions of the Code, we include our variable life
insurance operations in our Federal income tax return. Currently, we do not make
any charge against the Subaccount(s) for our Federal income taxes attributable
to the Subaccount(s). However, we may make such charges in the future. Any such
charges against a Subaccount would reduce its Net Investment Return.
Under current laws, we may incur state and local taxes (in addition to premium
taxes) in several states. At present, these taxes are not significant.
If we make any tax charges in the future, we will accumulate them daily and
transfer them from the Subaccount(s) to our General Account. We will retain any
investment earnings on tax charges accumulated in the Subaccount(s).
OUR OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
<S> <C> <C>
NAME OFFICE PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
- ---- ------ ----------------------------------------
Dori Allen Associate Counsel and Staff Associate Counsel, First Investors Life since May 1998;
Attorney Staff Attorney since February 1997; Supervisor, Toxic
Tort Unit, Claims Administration Corporation, New York,
prior thereto.
Jay G. Baris Director Partner, Kramer, Levin, Naftalis & Frankel, LLP,
New York, Attorneys; Secretary and Counsel, First
Financial Savings Bank, S.L.A., New Jersey.
Glenn T. Dallas Director Retired since April 1996; Division President and Senior
Vice President, ADT Security Systems, Parsippany, New
Jersey, prior thereto.
William H. Drinkwater First Vice President and Chief First Vice President and Chief Actuary, First Investors
Actuary Life.
Lawrence M. Falcon Senior Senior Vice President and Comptroller, First Investors
Vice President and Comptroller Life.
21
<PAGE>
NAME OFFICE PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
- ---- ------ ----------------------------------------
Richard H. Gaebler President President, First Investors Life.
and Director
George V. Ganter Director Vice President, First Investors Asset Management
Company, Inc., Portfolio Manager, FIMCO.
Robert J. Grosso Director Director of Compliance, FIC Since April 1997, Assistant
Counsel since January 1995,; Business Consultant from
August 1994 to January 1995; Assistant Vice President
and Assistant General Counsel, Alliance Fund
Distributors, Inc. from September 1993 to August 1994.
Glenn O. Head Chairman and Director Chairman and Director, FICC, FIMCO and FIC.
Kathryn S. Head Director President and Director, FICC and FIMCO; Vice President
and Director, FIC; Chairman, President and Director,
First Financial Savings Bank, S.L.A.
Scott Hodes Director Partner, Ross & Hardies, Chicago, Illinois, Attorneys.
Carol Lerner Brown Secretary Assistant Secretary, FIC; Secretary, FIMCO and FICC.
William M. Lipkus Vice President Chief Financial Officer, FIC since December 1997, FICC
and Chief Financial Officer since June 1997; Vice President, First Investors Life
since May 1996; Chief Financial Officer since May 1998;
Chief Accounting Officer since June 1992.
Jackson Ream Director Retired since January 1999; Senior Vice President,
NationsBank, NA , Dallas, Texas prior hereto.
Nelson Schaenen Jr. Director Partner, Weiss, Peck & Greer, New York, Investment
Managers.
Martin A. Smith Vice President Vice President, First Investors
Life since February 1998; Vice President, The United
States Life Insurance Company, New York, prior thereto.
Ada M. Suchow Vice President Vice President, First Investors Life.
John T. Sullivan Director Director, FIMCO and FIC; Of Counsel to Hawkins,
Delafield & Wood, New York, Attorneys.
</TABLE>
Gulf Insurance Company has issued a fidelity bond for $5,000,000 covering our
officers and employees. Great American Insurance Companies has issued a
22
<PAGE>
directors and officers liability policy for $3,000,000 covering our directors
and officers.
In addition to Separate Account B, First Investors Life also maintains First
Investors Life Variable Annuity Fund A, First Investors Life Variable Annuity
Fund C and First Investors Life Variable Annuity Fund D. We offer variable
annuity contracts supported by Variable Annuity Fund A through its own
prospectus and by Variable Annuity Funds C and D through a combined prospectus.
OTHER INFORMATION
VOTING RIGHTS
Because the Life Series Fund is not required to have annual shareholder
meetings, policyowners generally will not have an occasion to vote on matters
that pertain to the Life Series Fund. In certain circumstances, the Fund may be
required to hold a shareholders meeting or may choose to hold one voluntarily.
For example, a Fund may not change fundamental investment objectives or
investment policies without the approval of a majority vote of that Fund's
shareholders in accordance with the 1940 Act. Thus, if the Fund sought to change
a fundamental investment objective or policy, policyowners would have an
opportunity to provide voting instructions for shares of a Fund held by a
Subaccount in which their Policy invests.
We will vote the shares of any Fund held in a corresponding Subaccount or
directly, at any Fund shareholders meeting as follows:
o shares attributable to Policyowners for which we have received
instructions, in accordance with the instructions;
o shares attributable to Policyowners for which we have not received
instructions, in the same proportion that we voted shares held in the
Subaccount for which we received instructions; and
o shares not attributable to Policyowners, in the same proportion that
we have voted shares held in the Subaccount attributable to
Policyowners for which we have received instructions.
We will vote Fund shares that we hold directly in the same proportion that we
vote shares held in any corresponding Subaccounts that are attributable to
Policyowners and for which we receive instructions. However, we will vote our
own shares as we deem appropriate where there are no shares held in any
Subaccount. We will present all the shares of any Fund that we hold through a
Subaccount or directly at any Fund shareholders meeting for purposes of
determining a quorum.
We will determine the number of Fund shares held in a corresponding Subaccount
that is attributable to each Policyowner by dividing the value of the Subaccount
by the net asset value of one Fund share. We will determine the number of votes
that a Policyowner has the right to cast as of the record date established by
Life Series Fund.
We will solicit instructions by written communication before the date of the
meeting at which votes will be cast. We will send meeting and other materials
relating to the Fund to each Policyowner having a voting interest in a
Subaccount.
The voting rights that we describe in this Prospectus are created under
applicable laws. If the laws eliminate the necessity to submit such matters for
approval by persons having voting rights in separate accounts of insurance
companies or restrict such voting rights, we reserve the right to proceed in
accordance with any such changed laws or regulations. We specifically reserve
the right to vote shares of any Fund in our own right, to the extent permitted
by law.
23
<PAGE>
RESERVATION OF RIGHTS
We also reserve the following rights, subject to compliance with applicable
law, including any required approval of Policyowners:
o to invest the assets of Separate Account B in the shares of any
investment company or series thereof or any investment permitted by
law;
o to transfer assets from Separate Account B to another separate
account, with appropriate adjustments to avoid odd lots and fractions;
o to operate Separate Account B as a "management company" under the 1940
Act, or in any other form permitted by law (we or our affiliate would
serve as investment adviser);
o to deregister Separate Account B under the 1940 Act; and
o to operate Separate Account B under the general supervision of a
committee any or all of whose members may be interested persons (as
defined in the 1940 Act) of First Investors Life or an affiliate, or
to discharge the committee.
DISTRIBUTION OF POLICIES
First Investors Life and Separate Account B have entered into an Underwriting
Agreement with their affiliate, FIC, 95 Wall Street, New York, New York 10005 to
sell the policies through FIC's agents. For the fiscal years ended December 31,
1996, 1997, and 1998, FIC received fees of $5,207,230, $4,360,945, and
$__________, respectively, in connection with the distribution of Policies in a
continuous offering. First Investors Life has reserved the right in the
Underwriting Agreement to sell the Policies directly. Insurance agents licensed
to sell variable life insurance policies sell the Policies. These agents are
registered representatives of the Underwriter or of the broker-dealers who have
sales agreements with the Underwriter. We pay these agents a commission of
28.55% of the first year premium payment and 1% of the premium payments for
years 2 through 12.
We offer the Policies for sale in Alabama, Arizona, Arkansas, California,
Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Iowa,
Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Maryland, Michigan,
Minnesota, Missouri, Mississippi, North Carolina, Nebraska, New Jersey, New
Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South
Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin
and Wyoming.
CUSTODIAN
Subject to applicable laws and regulations, we are the custodian of the
securities of the Subaccounts. We maintain the records and accounts of Separate
Account B.
REPORTS
At least once each Policy year, we mail a report to the Policyowner within 31
days after the Policy anniversary. We mail the report to the last address known
to us. The report shows (1) the death benefit, (2) the cash value, (3) the
policy debt on the anniversary and (4) any loan interest for the prior year. The
report also shows your allocation among the Subaccounts on that anniversary. We
will not send a report if the Policy is continued as reduced paid-up or extended
term insurance.
24
<PAGE>
STATE REGULATION
We are subject to the laws of the State of New York governing insurance
companies and to regulations of the New York State Insurance Department. We file
an annual statement in a prescribed form with the Department of Insurance each
year covering our operations for the preceding year and our financial condition
as of the end of such year.
Our books and accounts are subject to review by the Insurance Department at
any time. The Department conducts a full examination of our operations
periodically. Such regulation does not, however, involve any supervision of
management or investment practices or policies except to determine compliance
with the requirements of the New York Insurance Law. In addition, we are subject
to regulation under the insurance laws of other jurisdictions in which we may
operate.
EXPERTS
Tait, Weller & Baker, independent certified public accountants have examined
the financial statements included in this Prospectus. We include the financial
statements in reliance upon the authority of said firm as experts in accounting
and auditing.
RELEVANCE OF FINANCIAL STATEMENTS
You should consider our financial statements, which appear in this Prospectus,
only as bearing on our ability to meet our obligations to Policyowners under the
Policies. You should not consider our financial statements as bearing on the
investment performance of the Subaccount(s). Only the investment results of the
Subaccount(s) affect the values of Policyowner interests under the Policies.
YEAR 2000
On and after January 1, 2000, computer date-related errors could adversely
affect Separate Account B, as they could other separate accounts. These errors
could occur in the computer and other information processing systems used by
First Investors Life, the underlying Funds, the Adviser, Subadviser, Transfer
Agent and other service providers. Typically, these systems use a two-digit
number to represent the year for any date. Consequently, computer systems could
incorrectly identify "00" as 1900, rather than 2000, and make related mistakes
when performing operations. First Investors Life, the Funds, the Adviser,
Subadviser, and Transfer Agent are taking steps that they believe are reasonable
to address the Year 2000 problem for computer and other systems used by them.
They are also obtaining assurances from other service providers that the service
providers are taking comparable steps. However, there can be no assurance that
these steps will avoid any adverse impact on Separate Account B. Nor can
Separate Account B estimate the extent of any adverse impact.
ILLUSTRATIONS OF DEATH BENEFITS,
CASH VALUES AND ACCUMULATED PREMIUMS
The tables on Pages 26 to 31 illustrate the way the Policy operates. They show
how the death benefit and the cash value may vary over an extended period of
years. The tables are based on assumed annual premiums of $600 for a 10 year old
male, $1,200 for a 25 year old make, and $1,800 for a 40 years old male paid.
The tables assume that premiums are paid in one lump sun promptly at the
beginning of each year. The tables assume a standard risk classification. There
are two sets of illustrations for each age. The first set of tables assumes that
each Subaccount will experience hypothetical rates of investment return (I.E.,
investment income and capital gains and losses, realized or unrealized)
equivalent to constant hypothetical gross annual investment returns of 0%, 4%
and 8%. The second set of tables assumes constant hypothetical gross annual
investment returns of 0%, 6% and 12%. The cash value on any day within a Policy
year equals the cash value as of the end of the preceding Policy year, adjusted
to reflect:
25
<PAGE>
o the Subaccount(s)' Actual Rate of Return,
o the cost of the insurance protection, and
o premiums that you paid since the Policy's last anniversary.
The death benefit and cash value for the Policy would be different from those
shown:
o if you spread the payment of premiums over the year, or
o if the Actual Rates of Return applicable to the Policy average 0%, 4%,
6%, 8% and 12% over a period of years, but nevertheless fluctuate
above or below that average for individual Policy years.
We reduce the constant hypothetical gross annual investment returns of 0%, 4%,
6%, 8%, and 12% by the following:
o a daily charge to the Subaccount(s) for mortality and expense risks
equivalent to an annual charge of .50% at the beginning of each year,
o an investment advisory fee of 0.75% of each Fund's average daily net
assets, and
o assumed other expenses of 0.20% of each Fund's average daily net
assets.
When we take all of these charges into account, the hypothetical gross annual
investment returns of 0%, 4%, 6%, 8%, and 12% correspond to Actual Rates of
Return of approximately -1.445%, 2.4975%, 4.4687%, 6.4399%, and 10.3823%,
respectively. The assumed other expenses of .20% exceed the arithmetic average
of the actual other expenses of all of the Funds. Certain of the Funds had
actual expenses greater than .20%. As of December 31, 1998, International
Securities Fund had other expenses of _______%. Absent reimbursement of a
portion of the other expenses by the Adviser, Cash Management Fund would have
had other expenses of _____%. There is no assurance that the Adviser will
continue to reimburse other expenses for Cash Management Fund, or any other
Fund, in the future. Without these reimbursements, the corresponding Actual
Rates of Return would be lower. The tables also reflect that we currently make
no charge to the Subaccount(s) for our corporate Federal income taxes. However,
we may make such charges in the future. If we do, a Policy would need higher
hypothetical gross annual investment returns greater than 0%, 4%, 6%, 8% and 12%
to produce, on an after tax basis, the results shown.
We have included a column captioned "Total Premiums Paid Plus Interest at 5%"
in each table to show you the amount that would accumulate if the annual premium
(gross amount) that you allocated to the Subaccounts earned interest, after
taxes, at 5% compounded annually.
_______________
We will furnish, upon request, a comparable illustration using the proposed
Insured's age and the face amount or premium amount that you request. The
illustration will assume that you pay premiums on an annual basis and that the
proposed Insured is a standard risk. In addition, we will include a comparable
illustration, reflecting the Insured's risk classification if other than
standard, at the delivery of the Policy, if you make a purchase.
26
<PAGE>
MALE ISSUE AGE 10
$600 ANNUAL PREMIUM FOR STANDARD RISK (1)
$39,638 FACE AMOUNT (GUARANTEED INSURANCE AMOUNT)
<TABLE>
<CAPTION>
Total Death Benefit (2) Cash Values (2)
End of Premiums Assuming Hypothetical Gross (After Assuming Hypothetical Gross (After
Policy Premium Paid Plus Tax) Annual Rate of Return of Tax) Annual Rate of Return of
Year Due Interest at 5% 0% 4% 8% 0% 4% 8%
- ------ -------- -------------- ----------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $600 $ 630 $39,638 $39,638 $ 39,673 $ 138 $ 145 $ 152
2 600 1,291 39,638 39,638 39,798 586 617 650
3 600 1,986 39,638 39,638 40,014 1,023 1,098 1,176
4 600 2,715 39,638 39,638 40,321 1,450 1,585 1,730
5 600 3,481 39,638 39,638 40,720 1,889 2,104 2,339
6 600 4,285 39,638 39,638 41,213 2,316 2,629 2,981
7 600 5,129 39,638 39,638 41,799 2,734 3,163 3,658
8 600 6,016 39,638 39,638 42,479 3,143 3,707 4,374
9 600 6,947 39,638 39,638 43,253 3,547 4,263 5,132
10 600 7,924 39,638 39,638 44,120 3,946 4,832 5,936
15 0 11,608 39,638 39,638 49,496 4,473 6,382 9,133
20 0 14,816 39,638 39,638 55,625 4,010 6,971 12,064
25 0 18,909 39,638 39,638 62,507 3,610 7,646 15,998
30 0 24,133 39,638 39,638 70,244 3,244 8,369 21,173
Attained Age
65 0 81,723 39,638 39,638 126,226 1,685 11,721 76,980
(1) Corresponds to $306.00 semiannually, $156.00 quarterly, or $52.98 monthly.
(2) Assumes no policy loan.
Hypothetical rates of interest are illustrative only and are not a
representation of past or future rates of return. These h ypothetical rates take
into account premium tax charges but not any other expense s charged against
Life Series Fund or Separate Account B. Actual rates may b e higher or lower
than hypothetical rates. Neither Life Series Fund nor First Inv estors Life
represents that it can achieve hypothetical rates for any one year o r over any
period. See Prospectus for details of the calculations.
</TABLE>
27
<PAGE>
MALE ISSUE AGE 25
$1,200 ANNUAL PREMIUM FOR STANDARD RISK (1)
$51,908 FACE AMOUNT (GUARANTEED INSURANCE AMOUNT)
<TABLE>
<CAPTION>
Total Death Benefit (2) Cash Values (2)
End of Premiums Assuming Hypothetical Gross (After Assuming Hypothetical Gross (After
Policy Premium Paid Plus Tax) Annual Rate of Return of Tax) Annual Rate of Return of
Year Due Interest at 5% 0% 4% 8% 0% 4% 8%
- ------ -------- -------------- ----------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1,200 $ 1,260 $51,908 $51,908 $ 51,973 $ 409 $ 429 $ 449
2 1,200 2,583 51,908 51,908 52,154 1,308 1,385 1,462
3 1,200 3,972 51,908 51,908 52,451 2,197 2,366 2,543
4 1,200 5,431 51,908 51,908 52,864 3,076 3,375 3,695
5 1,200 6,962 51,908 51,908 53,398 3,992 4,459 4,972
6 1,200 8,570 51,908 51,908 54,054 4,897 5,572 6,332
7 1,200 10,259 51,908 51,908 54,832 5,791 6,713 7,778
8 1,200 12,032 51,908 51,908 55,732 6,673 7,882 9,315
9 1,200 13,893 51,908 51,908 56,754 7,544 9,080 10,949
10 1,200 15,848 51,908 51,908 57,898 8,404 10,308 12,685
15 0 23,217 51,908 51,908 64,950 9,524 13,635 19,577
20 0 29,631 51,908 51,908 72,999 8,504 14,836 25,762
25 0 37,818 51,908 51,908 82,058 7,539 16,033 33,680
30 0 48,266 51,908 51,908 92,259 6,628 17,185 43,687
Attained Age
65 0 78,620 51,908 51,908 116,712 4,947 19,096 71,178
(1) Corresponds to $612.00 semiannually, $312.00 quarterly, or $105.96 monthly.
(2) Assumes no policy loan.
Hypothetical rates of interest are illustrat ive only and are not a
representation of past or future rates of return . These hypothetical rates take
into account premium tax charges but not a ny other expenses charged against
Life Series Fund or Separate Account B. Actu al rates may be higher or lower
than hypothetical rates. Neither Life Series Fund nor First Investors Life
represents that it can achieve hypothetical rates for any one year or over any
period. See Prospectus for details of the calculati ons.
</TABLE>
28
<PAGE>
MALE ISSUE AGE 40
$1,800 ANNUAL PREMIUM FOR STANDARD RISK (1)
$47,954 FACE AMOUNT (GUARANTEED INSURANCE AMOUNT)
<TABLE>
<CAPTION>
Total Death Benefit (2) Cash Values (2)
End of Premiums Assuming Hypothetical Gross (After Assuming Hypothetical Gross (After
Policy Premium Paid Plus Tax) Annual Rate of Return of Tax) Annual Rate of Return of
Year Due Interest at 5% 0% 4% 8% 0% 4% 8%
- ------ -------- -------------- ----------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1,800 $ 1,890 $47,954 $47,954 $48,027 $ 762 $ 799 $ 835
2 1,800 3,874 47,954 47,954 48,206 2,097 2,225 2,355
3 1,800 5,958 47,954 47,954 48,492 3,406 3,678 3,964
4 1,800 8,146 47,954 47,954 48,883 4,689 5,161 5,667
5 1,800 10,443 47,954 47,954 49,386 6,020 6,747 7,549
6 1,800 12,856 47,954 47,954 49,999 7,328 8,367 9,543
7 1,800 15,388 47,954 47,954 50,724 8,615 10,023 11,656
8 1,800 18,048 47,954 47,954 51,560 9,884 11,717 13,898
9 1,800 20,840 47,954 47,954 52,509 11,137 13,450 16,276
10 1,800 23,772 47,954 47,954 53,571 12,375 15,225 18,798
15 0 34,825 47,954 47,954 60,126 13,764 19,765 28,471
20 0 44,447 47,954 47,954 67,618 11,963 20,956 36,545
25 0 56,727 47,954 47,954 76,062 10,274 21,963 46,387
30 0 72,399 47,954 47,954 85,589 8,695 22,699 58,095
Attained Age
65 0 56,727 47,954 47,954 76,062 10,274 21,963 46,387
(1) Corresponds to $918.00 semi annually; $468.00 quarterly, or $158.94 monthly.
(2) Assumes no policy loan.
Hypothetical rates of interest are illustrativ e only and are not a
representation of past or future rates of return. These hypothetical rates take
into account premium tax charges but not any other expenses charged against Life
Series Fund or Separate Account B. Actual rates may be higher or lower than
hypothetical rates. Neither Life Series Fund nor First Investors Life represents
that it can achieve hypothetical rates for any one year or over any period. See
Prospectus for details of the calculations.
</TABLE>
29
<PAGE>
MALE ISSUE AGE 10
$600 ANNUAL PREMIUM FOR STANDARD RISK (1)
$39,638 FACE AMOUNT (GUARANTEED INSURANCE AMOUNT)
<TABLE>
<CAPTION>
Total Death Benefit (2) Cash Values (2)
End of Premiums Assuming Hypothetical Gross (After Assuming Hypothetical Gross (After
Policy Premium Paid Plus Tax) Annual Rates of Return of Tax) Annual Rates of Return of
Year Due Interest at 5% 0% 6% 12% 0% 6% 12%
- ------ -------- -------------- ----------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $600 $ 630 $39,638 $39,645 $ 39,729 $ 138 $ 148 $ 158
2 600 1,291 39,638 39,669 40,061 586 633 682
3 600 1,986 39,638 39,710 40,642 1,023 1,136 1,256
4 600 2,715 39,638 39,767 41,482 1,450 1,656 1,884
5 600 3,481 39,638 39,841 42,599 1,889 2,219 2,597
6 600 4,285 39,638 39,932 44,005 2,316 2,800 3,375
7 600 5,129 39,638 40,039 45,711 2,734 3,402 4,227
8 600 6,016 39,638 40,161 47,732 3,143 4,026 5,160
9 600 6,947 39,638 40,299 50,081 3,547 4,676 6,184
10 600 7,924 39,638 40,453 52,774 3,946 5,354 7,309
15 0 11,608 39,638 41,363 70,965 4,473 7,632 13,094
20 0 14,816 39,638 42,310 95,773 4,010 9,176 20,771
25 0 18,909 39,638 43,278 129,224 3,610 11,076 33,073
30 0 24,133 39,638 44,269 174,378 3,244 13,343 52,561
Attained Age
65 0 81,723 39,638 49,597 785,431 1,685 30,247 479,001
(1) Corresponds to $306.00 semiannually; $156.00 quarterly, or $52.98 monthly.
(2) Assumes no policy loan.
Hypothetical rates of interest are illustrative only and are not a
representation of past or future rates of return. These hypothetical rates take
into account premium tax charges but not any other expenses charged against Life
Series Fund or Separate Account B. Actual rates may be higher or lower than
hypothetical rates. Neither Life Series Fund nor First Investors Life represents
that it can achieve hypothetical rates for any one year or over any period. See
Prospectus for details of the calculations.
</TABLE>
30
<PAGE>
MALE ISSUE AGE 25
$1,200 ANNUAL PREMIUM FOR STANDARD RISK (1)
$51,908 FACE AMOUNT (GUARANTEED INSURANCE AMOUNT)
<TABLE>
<CAPTION>
Total Death Benefit (2) Cash Values (2)
End of Premiums Assuming Hypothetical Gross (After Assuming Hypothetical Gross (After
Policy Premium Paid Plus Tax) Annual Rates of Return of Tax) Annual Rates of Return of
Year Due Interest at 5% 0% 6% 12% 0% 6% 12%
- ------ -------- -------------- ----------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1,200 $ 1,260 $51,908 $51,921 $ 52,078 $ 409 $ 439 $ 469
2 1,200 2,583 51,908 51,955 52,558 1,308 1,423 1,542
3 1,200 3,972 51,908 52,011 53,359 2,197 2,454 2,727
4 1,200 5,431 51,908 52,088 54,495 3,076 3,532 4,037
5 1,200 6,962 51,908 52,188 55,994 3,992 4,710 5,535
6 1,200 8,570 51,908 52,308 57,870 4,897 5,941 7,187
7 1,200 10,259 51,908 52,450 60,141 5,791 7,226 9,008
8 1,200 12,032 51,908 52,612 62,823 6,673 8,568 11,014
9 1,200 13,893 51,908 52,794 65,934 7,544 9,969 13,222
10 1,200 15,848 51,908 52,996 69,495 8,404 11,430 15,653
15 0 23,217 51,908 54,188 93,429 9,524 16,333 28,161
20 0 29,631 51,908 55,430 126,119 8,504 19,562 44,508
25 0 37,818 51,908 56,702 170,313 7,539 23,273 69,903
30 0 48,266 51,908 58,005 230,101 6,628 27,467 108,958
Attained Age
65 0 78,620 51,908 60,711 420,822 4,947 37,025 256,641
(1) Corresponds to $612.00 semi annually; $312.00 quarterly, or $105.96 monthly.
(2) Assumes no policy loan.
Hypothetical rates of interest are illustrative only and are not a
representation of past or future rates of return. These hypothetical rates take
into account tax premium charges but not any other expenses charged against Life
Series Fund or Separate Account B. Actual rates may be higher or lower than
hypothetical rates. Neither Life Series Fund nor First Investors Life represents
that it can achieve hypothetical rates for any one year or over any period. See
Prospectus for details of the calculations.
</TABLE>
31
<PAGE>
MALE ISSUE AGE 40
$1,800 ANNUAL PREMIUM FOR STANDARD RISK (1)
$47,954 FACE AMOUNT (GUARANTEED INSURANCE AMOUNT)
<TABLE>
<CAPTION>
Total Death Benefit (2) Cash Values (2)
End of Premiums Assuming Hypothetical Gross (After Assuming Hypothetical Gross (After
Policy Premium Paid Plus Tax) Annual Rates of Return of Tax) Annual Rates of Return of
Year Due Interest at 5% 0% 6% 12% 0% 6% 12%
- ------ -------- -------------- ----------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1,800 $ 1,890 $47,954 $47,968 $ 48,144 $ 762 $ 817 $ 872
2 1,800 3,874 47,954 48,002 48,621 2,097 2,289 2,488
3 1,800 5,958 47,954 48,056 49,393 3,406 3,819 4,263
4 1,800 8,146 47,954 48,129 50,473 4,689 5,409 6,211
5 1,800 10,443 47,954 48,222 51,886 6,020 7,138 8,431
6 1,800 12,856 47,954 48,335 53,645 7,328 8,937 10,869
7 1,800 15,388 47,954 48,467 55,766 8,615 10,809 13,548
8 1,800 18,048 47,954 48,617 58,266 9,884 12,760 16,491
9 1,800 20,840 47,954 48,786 61,164 11,137 14,792 19,724
10 1,800 23,772 47,954 48,973 64,480 12,375 16,911 23,276
15 0 34,825 47,954 50,080 86,798 13,764 23,714 41,101
20 0 44,447 47,954 51,233 117,342 11,963 27,690 63,419
25 0 56,727 47,954 52,416 158,741 10,274 31,966 96,809
30 0 72,399 47,954 53,630 214,919 8,695 36,402 145,879
Attained Age
65 0 56,727 47,954 52,416 158,741 10,274 31,966 96,809
</TABLE>
(1) Corresponds to $918.00 semiannually; $468.00 quarterly, or $158.94 monthly.
(2) Assumes no policy loan.
Hypothetical rates of interest are illustrative only and are not a
representation of past or future rates of return. These hypothetical rates take
into account tax charges but not any other expenses charged against Life Series
Fund or Separate Account B. Actual rates may be higher or lower than
hypothetical rates. Neither Life Series Fund nor First Investors Life represents
that it can achieve hypothetical rates for any one year or over any period. See
Prospectus for details of the calculations.
32
<PAGE>
[FIRST INVESTORS LOGO]
95 Wall Street
New York, New York 10005
(212) 858-8200
INSURED SERIES PLAN
April ____, 1999
This booklet contains two prospectuses. The first prospectus is for our Level
Premium Variable Life Insurance Policy, which we call our Insured Series Plan
("ISP"). The second prospectus is for the First Investors Life Series Fund,
which serves as the underlying investment options for our variable life
insurance policy.
<PAGE>
TABLE OF CONTENTS*
LEVEL PREMIUM VARIABLE LIFE INSURANCE POLICIES PROSPECTUS
Item Page
---- ----
OVERVIEW........................................................
The Policy...................................................
The Charges and Expenses.....................................
Who We Are...................................................
Risk and Reward Considerations...............................
THE POLICY IN DETAIL............................................
Your Premiums...............................................
Allocation of Your Net Premium to Investment Options........
The Death Benefit...........................................
Your Cash Value.............................................
Settlement Options..........................................
Optional Insurance Riders...................................
Other Provisions............................................
FEDERAL INCOME TAX INFORMATION.................................
OUR OFFICERS AND DIRECTORS.....................................
OTHER INFORMATION..............................................
Voting Rights...............................................
Reservation of Rights.......................................
Distribution of Policies....................................
Custodian...................................................
Reports.....................................................
State Regulation............................................
Experts.....................................................
Relevance of Financial Statements...........................
Year 2000...................................................
ILLUSTRATIONS OF DEATH BENEFITS,
CASH VALUES AND ACCUMULATED PREMIUMS........................
- -----------------------------
*A Table of Contents for the Life Series Fund prospectus can be found on page
___ of that prospectus.
<PAGE>
The following Exhibits:
1. (A - Form N-8B-2)
1. Resolution of Board of Directors Creating Separate
Account./1/
2. Not Applicable.
3(a). Underwriting Agreement./1/
3(b). Specimen Associate's Agreement./1/
3(c). Commission schedule./1/
4. Not Applicable.
5. Specimen Variable Life Insurance Policy./1/
6. Certificate of Incorporation, as
amended, and By-Laws, as amended, of
First Investors Life Insurance
Company./1/
7. See (5) above.
8. Not Applicable.
9. Not Applicable.
10. Specimen form of application used with Variable
Life Insurance Policy provided in response to 5
above. /2/
<PAGE>
2. Opinion of Counsel. (To be filed.)
Opinion of Actuary. /2/
3. Not Applicable.
4. Not Applicable.
5. Financial Data Schedule. (see Exhibit 27 below.)
6. Consent of Independent Public Accountants. (To be filed.)
7. Powers of Attorney. /1/
27. Financial Data Schedule. (Inapplicable, because, notwithstanding
Instruction 5 as to Exhibits, the Commission staff has advised that no
such Schedule is required.)
- ---------------
/1/ Previously filed in Post-Effective Amendment No. 17 to
Registrant's Registration Statement (File No.2-98410) filed on May
19, 1997.
/2/ Previously filed in Post-Effective Amendment No. 18 to
Registrant's Registration Statement (File No.2-98410) filed on
April 28, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, First Investors Life Level Premium Variable Life Insurance (Separate
Account B), has duly caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized, and its seal to be hereinafter affixed
and attested, all in the City of New York, and State of New York, on the 22nd
day of February, 1999.
FIRST INVESTORS LIFE LEVEL PREMIUM
VARIABLE LIFE INSURANCE
(SEPARATE ACCOUNT B)
(Registrant)
[Corporate Seal Affixed]
BY: FIRST INVESTORS LIFE
INSURANCE COMPANY
(Depositor)
(On behalf of the Registrant
ATTEST: and itself)
/s/ Ada M Suchow By /s/ Richard H. Gaebler
- -------------------------- ------------------------
Ada M Suchow, Richard H. Gaebler, President
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registrant's Registration Statement has been signed below by the following
officers and directors of the Depositor in the capacities and on the dates
indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Richard H. Gaebler President February 22, 1999
- ----------------------
Richard H. Gaebler
/s/ William M. Lipkus Vice President and February 22, 1999
- --------------------- Chief Financial
William M. Lipkus Officer
/s/ Richard H. Gaebler Director February 22, 1999
- ----------------------
Richard H. Gaebler
<PAGE>
Glenn O. Head* Chairman and Director February 22, 1999
Jay G. Baris* Director February 22, 1999
George V. Ganter* Director February 22, 1999
Robert J. Grosso* Director February 22, 1999
Scott Hodes* Director February 22, 1999
Jackson Ream* Director February 22, 1999
Nelson Schaenen Jr.* Director February 22, 1999
John T. Sullivan* Director February 22, 1999
Kathryn S. Head* Director February 22, 1999
Glenn T. Dallas* Director February 22, 1999
* By:/s/ Richard H. Gaebler
---------------------------
Richard H. Gaebler
Attorney-In-Fact
Pursuant to Powers of
Attorney previously filed
