SURVIVORSHIP
2000
Prospectus Dated July 15, 1998
- --------------------------------------------------------------------------------
Survivorship 2000 is a flexible premium joint survivorship variable life policy
issued by The Equitable Life Assurance Society of the United States (Equitable).
You may decide the amount of premiums to invest and when, within limits. Other
than the initial premium, there are no required premiums (however, under certain
conditions, additional premiums may be needed to keep the policy in effect). Net
premiums are deposited in a Policy Account.
Policy Account values increase or decrease with investment experience and
reflect certain deductions and charges. You may allocate your Policy Account
value to a guaranteed interest option and the following seventeen investment
portfolios:
INVESTMENT PORTFOLIOS
<TABLE>
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
o Alliance Money Market o BT Equity 500 Index o MFS Research
o Alliance High Yield o BT Small Company Index o MFS Emerging Growth Companies
o Alliance Common Stock o BT International Equity Index o Morgan Stanley Emerging Markets
o Alliance Aggressive Stock o JPM Core Bond Equity
o Alliance Small Cap Growth o Lazard Large Cap Value o EQ/Putnam Growth & Income Value
o Lazard Small Cap Value o EQ/Putnam Investors Growth
o EQ/Putnam International Equity
- ------------------------------------------------------------------------------------------------------
</TABLE>
We do not guarantee the investment performance of these investment portfolios,
which involve varying degrees of risk.
Survivorship 2000 provides life insurance coverage on two insureds, with a death
benefit payable when the last surviving insured person dies while the policy is
in effect. You may choose either a fixed benefit equal to the Face Amount of the
policy or a variable benefit equal to the Face Amount plus the Policy Account.
You can reduce the Face Amount and change the death benefit option, within
limits.
The policy may go into default if the Net Cash Surrender Value (Policy Account
value less any loan and accrued loan interest) is insufficient to pay the
policy's monthly deductions. When this condition exists, we guarantee that the
policy will remain in force under the death benefit guarantee provision (if
available) as long as the accumulated premiums you've paid, less withdrawals,
are at least equal to a guaranteed minimum death benefit premium fund and any
policy loan does not exceed the Cash Surrender Value (Policy Account value).
Otherwise, your policy will end without value unless you make a required
payment.
Ask your Equitable agent to determine if changing, or adding to, your existing
insurance coverage with Survivorship 2000 would be to your advantage. You may
examine the policy for a limited period after your initial payment and if you
are not satisfied for any reason, you may return the policy for a full refund of
premiums paid.
PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. THIS
PROSPECTUS CONTAINS INFORMATION THAT SHOULD BE KNOWN BEFORE INVESTING IN
SURVIVORSHIP 2000. THIS PROSPECTUS IS NOT VALID UNLESS IT IS ATTACHED TO CURRENT
PROSPECTUSES FOR BOTH THE HUDSON RIVER TRUST AND THE EQ ADVISORS TRUST.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Copyright 1998 The Equitable Life Assurance Society of the United States.
All rights reserved.
- --------------------------------------------------------------------------------
EVM-125 (EDI) Pros-6A (5/98)
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
SUMMARY OF SURVIVORSHIP 2000 FEATURES.......................1
PART 1 -- DETAILED INFORMATION ABOUT EQUITABLE AND
SURVIVORSHIP 2000 INVESTMENT CHOICES..............7
THE COMPANY THAT ISSUES SURVIVORSHIP 2000.........7
Equitable......................................7
THE SEPARATE ACCOUNT AND THE TRUSTS...............7
The Separate Account...........................7
The Trusts.....................................7
HRT's Manager And Investment Adviser...........8
EQAT's Manager.................................8
EQAT's Investment Advisers ....................8
Investment Policies and Objectives Of The
Trusts' Portfolios..........................9
THE GUARANTEED INTEREST ACCOUNT..................11
Amounts In The Guaranteed Interest Account....11
Adding Interest In The Guaranteed Interest
Account.....................................11
Transfers Out Of The Guaranteed Interest
Account.....................................12
PART 2 -- DETAILED INFORMATION ABOUT SURVIVORSHIP 2000.....12
FLEXIBLE PREMIUMS................................12
DEATH BENEFITS...................................13
CHANGES IN INSURANCE PROTECTION..................14
Reducing The Face Amount......................14
Changing The Death Benefit Option.............14
When Policy Changes Go Into Effect............14
MATURITY BENEFITS................................14
LIVING BENEFIT OPTION............................14
ADDITIONAL BENEFITS MAY BE AVAILABLE.............15
YOUR POLICY ACCOUNT VALUE........................15
Amounts In The Separate Account...............15
How We Determine The Unit Value...............15
Transfers Of Policy Account Value.............15
Automatic Transfer Service....................16
Telephone Transfers...........................16
Charge For Transfers..........................16
BORROWING FROM YOUR POLICY ACCOUNT...............16
How To Request A Loan.........................17
Policy Loan Interest..........................17
When Interest Is Due..........................17
Repaying The Loan.............................17
The Effects Of A Policy Loan..................17
PARTIAL WITHDRAWALS AND SURRENDER.................18
Partial Withdrawals...........................18
Allocation Of Partial Withdrawals And Charges.18
The Effects Of A Partial Withdrawal...........18
Surrender For Net Cash Surrender Value........18
DEDUCTIONS AND CHARGES............................18
Deductions From Your Premiums.................18
Deductions From Your Policy Account...........19
How Policy Account Charges Are Allocated......20
Charge Against The Separate Account...........20
Charges Of The Trusts.........................20
Purpose of Policy Charges.....................20
ADDITIONAL INFORMATION ABOUT SURVIVORSHIP 2000....21
Your Policy Can Terminate.....................21
You May Restore A Policy After It Terminates..21
Policy Periods, Anniversaries, Dates And Ages.21
TAX EFFECTS.......................................22
Policy Proceeds...............................22
Policy Terminations...........................24
Living Benefits...............................24
Diversification...............................24
Riders........................................24
Policy Changes................................24
Tax Changes...................................24
Estate And Generation Skipping Taxes..........24
Trade or Business Entity Owns Or Is Directly
Or Indirectly A Beneficiary Of The Policy...25
Our Taxes.....................................25
When We Withhold Income Taxes.................25
PART 3 -- ADDITIONAL INFORMATION...........................25
YOUR VOTING PRIVILEGES...........................25
Trust Voting Privileges........................25
How We Determine Your Voting Shares............25
Separate Account Voting Rights.................26
OUR RIGHT TO CHANGE HOW WE OPERATE...............26
OUR REPORTS TO POLICYOWNERS......................26
LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY......26
YOUR PAYMENT OPTIONS.............................27
YOUR BENEFICIARY.................................27
ASSIGNING YOUR POLICY............................27
WHEN WE PAY POLICY PROCEEDS......................27
DIVIDENDS........................................27
REGULATION.......................................28
SPECIAL CIRCUMSTANCES............................28
DISTRIBUTION.....................................28
LEGAL PROCEEDINGS................................28
ACCOUNTING AND ACTUARIAL EXPERTS.................28
ADDITIONAL INFORMATION...........................28
YEAR 2000 PROGRESS...............................29
MANAGEMENT.......................................29
PART 4 -- ILLUSTRATIONS OF POLICY BENEFITS.................33
INDIVIDUAL ILLUSTRATIONS.........................33
SEPARATE ACCOUNT FP FINANCIAL STATEMENTS................FSA-1
EQUITABLE FINANCIAL STATEMENTS............................F-1
APPENDIX A -- COMMUNICATING PERFORMANCE DATA..............A-1
LONG-TERM MARKET TRENDS.....................A-1
AVERAGE ANNUAL RATES OF RETURN..............A-2
- --------------------------------------------------------------------------------
In this prospectus "we," "our" and "us" mean Equitable, a New York stock life
insurance company. "You" and "your" mean the owner(s) of the policy. The term
"Equitable agent" or "agent," as used herein, means a Registered Representative
authorized to sell the policies on Equitable's behalf. We refer to the persons
who are covered by the policy as the "insured persons" because the insured
persons and the policyowner(s) may not be the same. Unless indicated otherwise,
the discussion in this prospectus assumes that there is no policy loan
outstanding and that the policy is not in a grace period.
THE POLICY IS NOT AVAILABLE IN ALL JURISDICTIONS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE. EQUITABLE DOES NOT AUTHORIZE ANY INFORMATION OR
REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS PROSPECTUS OTHER THAN
AS CONTAINED IN THIS PROSPECTUS OR ANY ATTACHED SUPPLEMENT THERETO OR IN ANY
SUPPLEMENTAL SALES MATERIAL AUTHORIZED BY EQUITABLE.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SUMMARY OF SURVIVORSHIP 2000 FEATURES
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE TERMS OF THE POLICY
WHEN ISSUED AND THE MORE DETAILED INFORMATION APPEARING ELSEWHERE IN THIS
PROSPECTUS (SEE TABLE OF CONTENTS ON OPPOSITE PAGE).
INVESTMENT FEATURES
FLEXIBLE PREMIUMS
o Premiums may be invested whenever and in whatever amount you determine,
within limits. Other than the initial premium, there are no scheduled or
required premium payments (however, under certain conditions, additional
premiums may be needed to keep a policy in effect). See FLEXIBLE PREMIUMS in
Part 2 of this prospectus.
POLICY ACCOUNT
o After certain charges are deducted from your premium payment, the balance,
called your net premium, is put in your Policy Account. Net premiums can be
allocated to a Guaranteed Interest Account and to one or more funds of
Equitable's Separate Account FP (each a Fund, and together, the Funds or the
Separate Account). The Funds invest in corresponding portfolios of The Hudson
River Trust (HRT), or the EQ Advisors Trust (EQAT), each of which is a mutual
fund. Subject to certain conditions, you have access to the Policy Account
value through loans, partial withdrawals or by surrendering the policy. You
may also adjust your allocation to the various investment options by changing
your allocation percentages or by making transfers among the Funds and the
Guaranteed Interest Account. If the policy is owned by two or more persons,
we will require authorization from each owner before taking any action under
the policy.
o REQUESTS FOR TRANSFERS OUT OF THE GUARANTEED INTEREST ACCOUNT CAN ONLY BE
MADE ON OR WITHIN 30 DAYS OF A POLICY ANNIVERSARY. SUCH TRANSFERS WILL BE
EFFECTIVE AS OF THE DATE WE RECEIVE YOUR REQUEST, BUT NO EARLIER THAN THE
POLICY ANNIVERSARY. TRANSFERS INTO THE GUARANTEED INTEREST ACCOUNT AND AMONG
THE FUNDS MAY BE REQUESTED AT ANY TIME. Transfers are subject to the rules
discussed under TRANSFERS OUT OF THE GUARANTEED INTEREST ACCOUNT in Part 1 of
this prospectus and TRANSFERS OF POLICY ACCOUNT VALUE in Part 2 of this
prospectus.
o There is no minimum guaranteed cash value for amounts allocated to the Funds.
The value of amounts allocated to the Guaranteed Interest Account will depend
on deductions from that Account and on the interest rates declared each year
by Equitable (4% minimum, before deductions).
REDEMPTION
o Loans may be taken against 90% of a policy's Cash Surrender Value (equal to
the Policy Account value) subject to certain conditions. Loan interest
accrues daily at a rate determined annually. Currently, amounts set aside to
secure the loan earn interest at a rate 1% lower than the rate charged for
policy loan interest. See BORROWING FROM YOUR POLICY ACCOUNT in Part 2 of
this prospectus.
o Partial withdrawals of Net Cash Surrender Value may be taken after the first
policy year, subject to our approval and certain conditions. See PARTIAL
WITHDRAWALS AND SURRENDER in Part 2 of this prospectus.
o The policy may be surrendered for its Net Cash Surrender Value (Policy
Account value less any loan and accrued loan interest), less any lien
securing a Living Benefit payment, at which time insurance coverage will end.
INSURANCE PROTECTION FEATURES
DEATH BENEFITS
o Option A, a fixed benefit equal to the policy's Face Amount.
o Option B, a variable benefit that equals the Face Amount plus the Policy
Account.
o In some cases a higher death benefit may apply in order to meet Federal
income tax law requirements. See DEATH BENEFITS in Part 2 of this prospectus.
o After the first year, you may reduce the Face Amount or change the death
benefit option, within limits. The minimum Face Amount is $200,000. See
CHANGES IN INSURANCE PROTECTION in Part 2 of this prospectus.
o The death benefit is payable when the last surviving insured person dies
while the policy is in effect.
DEATH BENEFIT GUARANTEE
o The death benefit is guaranteed if the amount of premiums you've paid,
accumulated at 4% interest, less withdrawals, also accumulated at 4%
interest, is at least equal to a guaranteed minimum death benefit premium
fund and any policy loan does not exceed the Cash Surrender Value (Policy
Account value). The death benefit guarantee is not available in some
jurisdictions, including New York, New Jersey and Massachusetts. You should
check with your Equitable agent to determine whether the guaranteed minimum
death benefit is available in your state. See DEATH BENEFITS in Part 2 of
this prospectus.
- --------------------------------------------------------------------------------
1
<PAGE>
- --------------------------------------------------------------------------------
MATURITY BENEFITS
o A maturity benefit equal to the Net Cash Surrender Value, less any lien
securing a Living Benefit payment and accrued interest, is payable on the
policy anniversary nearest the younger insured person's 100th birthday, if
either or both of the insured persons are still living on that date. See
MATURITY BENEFITS in Part 2 of this prospectus.
LIVING BENEFIT
o The Living Benefit rider enables the policyowner to receive a portion of the
policy's death benefit (excluding death benefits payable under certain
riders) if the sole surviving insured has a terminal illness. The Living
Benefit rider will be added to most policies at issue for no additional cost.
See LIVING BENEFIT OPTION in Part 2 of this prospectus.
ADDITIONAL BENEFITS
o Estate Protector, Option to Split Upon Divorce and Option to Split Upon
Federal Tax Law Change riders are available. See ADDITIONAL BENEFITS MAY BE
AVAILABLE in Part 2 of this prospectus.
DEDUCTIONS AND CHARGES
FROM PREMIUMS (See DEDUCTIONS FROM YOUR PREMIUMS in Part 2 of this prospectus.)
o Charge for taxes imposed by states and other jurisdictions. Such charges
currently range between .70% and 5% (Virgin Islands).
o Premium Sales Charge in the first policy year equal to 30% of premiums paid
up to one "target premium," plus 3% of premiums paid in excess of the target
premium in that year. If you paid at least one target premium in the first
policy year, the Premium Sales Charge in each subsequent year is equal to
7.5% (6% for certain age combinations of insured persons) of premiums paid up
to one target premium, plus 3% of premiums paid in excess of the target
premium in each year. However, if you paid less than one target premium in
the first policy year, the Premium Sales Charge in the second, third and
fourth policy years is equal to 7.5% (6% for certain combinations of insured
persons) of premiums paid up to the lesser of one target premium or the
highest amount of premiums paid in any prior year, plus 30% on premiums paid
in excess of this amount until premiums paid in that year equal the target
premium, plus 3% of premiums paid in excess of the target premium in that
year. The Premium Sales Charge in policy years five and later is equal to
7.5% (6% for certain age combinations of insured persons) of premiums paid up
to one target premium, plus 3% of premiums paid in excess of the target
premium in each year. Equitable currently intends to stop deducting the
Premium Sales Charge at the end of the twentieth policy year. See DEDUCTIONS
FROM YOUR PREMIUMS in Part 2 of this prospectus for a detailed discussion,
including an explanation of "target premium."
FROM THE POLICY ACCOUNT (See DEDUCTIONS FROM YOUR POLICY ACCOUNT in Part 2 of
this prospectus.)
o Monthly administrative charge of $0.07 per $1,000 of Face Amount during the
first policy year, plus a current monthly administrative charge of $6 during
each policy year. We may increase this latter charge, but we guarantee that
it will never exceed $8 per month.
o Current monthly cost of insurance rates for standard risk insureds range from
less than $0.01 per thousand of net amount at risk at the youngest ages to
$83.33 per thousand of net amount at risk at the oldest ages (age 99 of each
insured). The net amount at risk is the difference between the Policy Account
value and the current death benefit. Guaranteed cost of insurance rates for
standard risk insureds range from less than $0.01 (youngest ages) to $83.33
(oldest ages).
o Monthly charge for any additional insurance benefits.
o Certain policy transactions will result in the following charges:
o Transfers -- Currently, we charge $25 per transfer after the twelfth
transfer in a policy year. We reserve the right to charge $25 per
transfer.
o Partial Withdrawals -- An expense charge of $25 or 2% of the amount
requested, whichever is less, is made for each partial withdrawal.
o Monthly guaranteed minimum death benefit charge equal to $0.01 per $1,000 of
Face Amount for policies with a guaranteed minimum death benefit provision.
FROM THE SEPARATE ACCOUNT (See CHARGE AGAINST THE SEPARATE ACCOUNT in Part 2 of
this prospectus.)
o Charge for certain mortality and expense risks of .90% per annum of average
net assets in the Separate Account.
FROM THE TRUSTS
o The Separate Account Funds purchase Class IB shares of corresponding
portfolios of the HRT or EQAT at net asset value. That price reflects
investment management fees, Rule 12b-1 distribution fees, indirect expenses,
such as brokerage commissions, and certain other operating expenses.
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
The Hudson River Trust. Effective May 1, 1997, a new investment advisory
agreement relating to each of the HRT portfolios was entered into between HRT
and Alliance, HRT's Investment Adviser. The table below, reflecting the HRT's
estimated expenses, is based on information for Class IB shares for the year
ended December 31, 1997 and has been restated to reflect (i) the fees that
would have been paid to Alliance if the present advisory agreement had been
in effect as of January 1, 1997 and (ii) estimated accounting expenses for
the year ended December 31, 1997. Investment management fees may increase or
decrease based on the level of portfolio net assets. These fees are subject
to maximum rates, as described in the attached HRT prospectus. Other expenses
are also likely to fluctuate from year to year. Both investment management
fees and other expenses are expressed in the table below as an annual
percentage of each portfolio's daily average net assets:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
1997 RESTATED FEES AND EXPENSES
-----------------------------------------------------------------------
MANAGEMENT 12B-1 OTHER TOTAL ANNUAL
HRT PORTFOLIO FEE FEE EXPENSES EXPENSES
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Money Market..................................... 0.35% 0.25% 0.04% 0.64%
Alliance High Yield....................................... 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock..................................... 0.37% 0.25% 0.03% 0.65%
Alliance Aggressive Stock................................. 0.54% 0.25% 0.03% 0.82%
Alliance Small Cap Growth*................................ 0.90% 0.25% 0.05% 1.20%
</TABLE>
- -------------------
* Estimated expenses. The portfolio commenced operations on May 1, 1997.
- --------------------------------------------------------------------------------
EQ Advisors Trust. The table below shows the annual rates payable for
management fees, Rule 12b-1 distribution fees, and other estimated expenses
to be deducted from EQAT assets in 1998. Other expenses are likely to
fluctuate from year to year. The management fees are not subject to any
reduction based on the level of portfolio net assets. The management fees,
Rule 12b-1 distribution fees and other expenses are expressed in the table
below as an annual percentage of each portfolio's daily average net assets:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
ESTIMATED 1998 FEES AND EXPENSES
--------------------------------------------------------------------
MANAGEMENT 12B-1 OTHER TOTAL ANNUAL
EQAT PORTFOLIO* FEE FEES EXPENSES EXPENSES
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BT Equity 500 Index....................................... 0.25% 0.25% 0.05% 0.55%
BT Small Company Index.................................... 0.25% 0.25% 0.10% 0.60%
BT International Equity Index............................. 0.35% 0.25% 0.20% 0.80%
JPM Core Bond............................................. 0.45% 0.25% 0.10% 0.80%
Lazard Large Cap Value.................................... 0.55% 0.25% 0.10% 0.90%
Lazard Small Cap Value.................................... 0.80% 0.25% 0.15% 1.20%
MFS Research.............................................. 0.55% 0.25% 0.05% 0.85%
MFS Emerging Growth Companies............................. 0.55% 0.25% 0.05% 0.85%
Morgan Stanley Emerging Markets Equity.................... 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Growth & Income Value........................... 0.55% 0.25% 0.05% 0.85%
EQ/Putnam Investors Growth................................ 0.55% 0.25% 0.05% 0.85%
EQ/Putnam International Equity............................ 0.70% 0.25% 0.25% 1.20%
</TABLE>
- -------------------
* The EQAT had no operations prior to May 1, 1997. The MFS Research, MFS
Emerging Growth Companies, EQ/Putnam Growth & Income Value, EQ/Putnam
Investors Growth, and EQ/Putnam International Equity Portfolios of EQAT
commenced operations on May 1, 1997. The Morgan Stanley Emerging Markets
Equity Portfolio commenced operations on August 20, 1997. The BT Equity 500
Index, BT Small Company Index, BT International Equity Index, JPM Core Bond,
Lazard Large Cap Value and Lazard Small Cap Value Portfolios commenced
operations on December 31, 1997. The amounts shown as "Other Expenses" will
fluctuate from year to year depending on actual expenses, but pursuant to
agreement, cannot together with other fees exceed total annual expense
limitations. See the attached EQAT prospectus.
-----------------------------------------------------------------------------
VARIATIONS
o Equitable is subject to the insurance laws and regulations in every
jurisdiction in which Survivorship 2000 is sold. As a result, the terms of
Survivorship 2000 may vary from jurisdiction to jurisdiction. The terms of
Survivorship 2000 may also vary where special circumstances result in a
reduction in our costs.
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
CANCELLATION RIGHT
o You have the right to examine the policy. If for any reason you are not
satisfied with it, you may cancel the policy within the time limit described
below. You may cancel the policy by sending it to our Administrative Office
with a written request to cancel. Insurance coverage ends when you send your
request.
o Your request to cancel the policy must be postmarked no later than 10 days
after you receive the policy.
o If you cancel the policy, we will refund the premiums you paid. In certain
cases where the policy was purchased as a result of an exchange of an
existing life insurance policy, we may reinstate the prior policy. The
cancellation right may vary in certain states. There may be income tax and
withholding implications associated with cancellation.
DEFAULT AND TERMINATION
o If the Net Cash Surrender Value is insufficient to pay the policy's monthly
deductions the policy will go into default unless the operation of the
policy's guaranteed minimum death benefit provision results in a waiver of
the monthly deductions. In order to benefit from the guaranteed minimum death
benefit provision, accumulated premiums you've paid at 4% interest, less
withdrawals at 4% interest, must be at least equal to a guaranteed minimum
death benefit premium fund and any policy loan must not exceed the Cash
Surrender Value. The guaranteed death benefit provision is not available in
some jurisdictions, including New York, New Jersey and Massachusetts. If the
policy goes into default, it will terminate without value unless you make a
required payment. See YOUR POLICY CAN TERMINATE in Part 2 of this prospectus.
o You will be notified if a default occurs and given the opportunity to
maintain the policy in force by paying the amount specified in the notice.
You may be able to restore a terminated policy within a limited time period,
but this will require additional evidence of insurability. See YOU MAY
RESTORE A POLICY AFTER IT TERMINATES in Part 2 of this prospectus.
TAX EFFECTS
o Generally, under current Federal income tax law, death benefits are not
subject to income tax and Policy Account earnings are not subject to income
tax so long as they remain in the Policy Account. Loans, partial withdrawals,
surrender, maturity or policy termination may result in recognition of income
for tax purposes. See TAX EFFECTS in Part 2 of this prospectus.
RATES OF RETURN AND YIELDS OF THE TRUSTS
The rates of return shown in the table below are based on the actual investment
performance of The Hudson River Trust and EQ Advisors Trust portfolios, after
deduction for investment management fees and direct operating expenses of the
Trusts (including Rule 12b-1 distribution fees), for periods ending December 31,
1997. The historical performance of the Alliance Common Stock and Alliance Money
Market Portfolios for periods prior to March 22, 1985, when these funds were
managed separate accounts and subject to a different fee structure, has been
restated to reflect the investment management fees and estimated direct
operating expenses that commenced on that date. The Alliance Common Stock
Portfolio and its predecessors have been in existence since 1976.
The yields shown below are derived from the actual rate of return of the
portfolio for the period, which is then adjusted to omit capital changes in the
portfolio during the period. We show the SEC standardized 7-day yield for the
Alliance Money Market Portfolio and 30-day yield for the Alliance High Yield
Portfolios.
These rates of return and yields are not illustrative of how actual investment
performance would affect the benefits under your policy. Moreover, these rates
of return and yields are not an estimate or guarantee of future performance.
THESE RATES OF RETURN AND YIELDS ARE FOR THE TRUSTS ONLY AND DO NOT REFLECT THE
ADMINISTRATIVE AND COST OF INSURANCE CHARGES, SALES CHARGES, TAX CHARGES AND THE
MORTALITY AND EXPENSE RISK CHARGE APPLICABLE UNDER A SURVIVORSHIP 2000 POLICY.
SUCH CHARGES WOULD REDUCE THE RETURNS AND YIELDS SHOWN. SEE ILLUSTRATIONS OF
SURVIVORSHIP 2000 POLICY ACCOUNT AND CASH SURRENDER VALUES BASED ON HISTORICAL
INVESTMENT RESULTS ON NEXT PAGE.
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1997
---------------------------------------------------------------------------------------
SEC SINCE
PORTFOLIO YIELDS 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION(+)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alliance Money Market...................... 5.10% 5.16% 5.24% 4.44% 5.52% 6.34% -- 6.92%
Alliance High Yield........................ 10.07 18.19 20.15 15.63 12.54 -- -- 11.78
Alliance Common Stock...................... 29.07 28.39 20.81 17.74 17.00 17.30% 15.58
Alliance Aggressive Stock.................. 10.66 21.04 14.66 18.74 -- -- 19.17
Alliance Small Cap Growth.................. -- -- -- -- -- -- 26.57**
MFS Research............................... -- -- -- -- -- -- 16.07**
MFS Emerging Growth Companies.............. -- -- -- -- -- -- 22.42**
Morgan Stanley Emerging Markets Equity..... -- -- -- -- -- -- (20.16)*
EQ/Putnam Growth & Income Value............ -- -- -- -- -- -- 16.23**
EQ/Putnam Investors Growth................. -- -- -- -- -- -- 24.70**
EQ/Putnam International Equity............. -- -- -- -- -- -- 9.58**
</TABLE>
- -------------------
* This performance is unannualized and represents less than five months of
performance.
** This performance is unannualized and represents eight months of performance.
+ The Alliance Small Cap Growth Portfolio received its initial funding on May
1, 1997; the Alliance High Yield Portfolio on January 2, 1987; the Alliance
Aggressive Stock Portfolio on January 27, 1986; the predecessor of the
Alliance Money Market Portfolio on July 13, 1981; and the predecessor of the
Alliance Common Stock Portfolio on January 13, 1976. The Morgan Stanley
Emerging Markets Equity Portfolio received its initial funding on August 20,
1997; EQ/Putnam Growth & Income Value, EQ/Putnam Investors Growth, EQ/Putnam
International Equity, MFS Research and MFS Emerging Growth Companies,
received their initial funding on May 1, 1997.
- --------------------------------------------------------------------------------
Additional investment performance information appears in the attached HRT and
EQAT prospectuses.
PRIOR PERFORMANCE OF ADVISERS. The EQAT portfolios and the Alliance Small Cap
Growth Portfolio of the HRT commenced operations in 1997. For investment
performance of public mutual funds (or combinations thereof) advised by the same
EQAT or HRT Investment Adviser that have investment objectives, policies,
strategies and risks that their advisers believe to be substantially similar to
those of corresponding portfolios of the EQAT or HRT, see the respective EQAT or
HRT prospectus, attached to this prospectus. Such results are intended to show a
potential investor the past results of a similar style of investment management
and are not intended to be a substitute for actual performance, nor are such
results an estimate or guarantee of future results for the EQAT or Alliance
Small Cap Growth Portfolios. Keep in mind that such results do not reflect the
deductions and charges under your policy, which, if applied, would reduce the
returns shown.
ILLUSTRATIONS OF CASH SURRENDER VALUES BASED ON HISTORICAL INVESTMENT RESULTS.
The following table was developed to demonstrate how the actual investment
experience of the HRT (and its predecessors) and the EQAT would have affected
the Cash Surrender Value of hypothetical Survivorship 2000 policies held for
specified periods of time. The table illustrates premiums and Cash Surrender
Values of ten hypothetical Survivorship 2000 policies, each with a 100% premium
allocation to a different Fund. The illustration also assumes that the insureds
are a standard risk 55-year-old male and a standard risk 50-year-old female,
both non-smokers, and that each policy has a level death benefit, a $1,000,000
face amount and a $13,580 annual premium.
The table assumes that each policy was purchased on the first day of a calendar
year. For Trust portfolios whose inception dates fall before June 30, the policy
is assumed to have been purchased at the beginning of, and earned the actual
return over, that entire calendar year of inception. For Trust portfolios whose
inception dates fall after June 30, the policy is assumed to have been purchased
at the beginning of the first full calendar year of that portfolio's operation.
The table then illustrates what the Cash Surrender Value would have been after
one policy year, after five policy years, after ten policy years and from
inception through December 31, 1997. No information has been included for
portfolios whose inception dates were after June 30, 1997.
- --------------------------------------------------------------------------------
5
<PAGE>
ILLUSTRATIONS OF SURVIVORSHIP 2000 POLICY ACCOUNT AND CASH SURRENDER VALUES
BASED ON HISTORICAL INVESTMENT RESULTS, $1,000,000 OF INITIAL INSURANCE
PROTECTION AND CURRENT CHARGES (1)
MALE AGE 55 / FEMALE AGE 50
STANDARD NON-SMOKER
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
ASSUMED
POLICY
PURCHASE AT THE END OF AT THE END OF
DATE(2) THE FIRST POLICY YEAR THE FIFTH POLICY YEAR
------- ----------------------------- -----------------------------
BEGINNING TOTAL POLICY ACCOUNT TOTAL POLICY ACCOUNT
OF PREMIUM VALUE AND PREMIUM VALUE AND
PORTFOLIO: YEAR: PAID CASH SURRENDER VALUE PAID CASH SURRENDER VALUE
------- ----------------------------- -----------------------------
- ------------------------------------------
HRT:
- ------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Money Market.................... 1982 $13,580 $ 9,198 $67,900 $ 68,937
Alliance High Yield...................... 1987 13,580 8,461 67,900 61,760
Alliance Common Stock.................... 1976 13,580 8,868 67,900 103,222
Alliance Aggressive Stock................ 1986 13,580 11,128 67,900 86,242
Alliance Small Cap Growth................ 1997 13,580 10,417 -- --
EQAT:
- ------------------------------------------
MFS Research............................. 1997 13,580 9,513 -- --
MFS Emerging Growth Companies............ 1997 13,580 10,064 -- --
EQ/Putnam Growth & Income Value.......... 1997 13,580 9,527 -- --
EQ/Putnam Investors Growth............... 1997 13,580 10,260 -- --
EQ/Putnam International Equity........... 1997 13,580 8,954 -- --
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
FROM POLICY PURCHASE
AT THE END OF THROUGH
THE TENTH POLICY YEAR DECEMBER 31, 1997
---------------------------- --------------------------
TOTAL POLICY ACCOUNT TOTAL POLICY ACCOUNT
PREMIUM VALUE AND PREMIUM VALUE AND CASH
PORTFOLIO: PAID CASH SURRENDER VALUE PAID SURRENDER VALUE
---------------------------- --------------------------
- -----------------------------------------
HRT:
- -----------------------------------------
<S> <C> <C> <C> <C>
Alliance Money Market....................$135,800 $163,226 $217,280 $ 271,465
Alliance High Yield...................... 135,800 222,439 149,380 273,841
Alliance Common Stock.................... 135,800 268,526 298,760 1,893,101
Alliance Aggressive Stock................ 135,800 310,032 162,960 437,417
Alliance Small Cap Growth................ -- -- 13,580 10,417
EQAT:
- -----------------------------------------
MFS Research............................. -- -- 13,580 9,513
MFS Emerging Growth Companies............ -- -- 13,580 10,064
EQ/Putnam Growth & Income Value.......... -- -- 13,580 9,527
EQ/Putnam Investors Growth............... -- -- 13,580 10,260
EQ/Putnam International Equity........... -- -- 13,580 8,954
- -------------------------------------------------------------------------------------------------
</TABLE>
THE DEATH BENEFIT GUARANTEE PREMIUM FOR THIS POLICY WOULD BE $13,580. SEE DEATH
BENEFITS IN PART 2 OF THIS PROSPECTUS.
THESE VALUES ARE NOT AN ESTIMATE OR GUARANTEE OF FUTURE PERFORMANCE.
(1) Policy values reflect all charges assessed under the policy and by the HRT
or EQAT, including an assumed charge for taxes of 2%. Current
non-guaranteed charges have been used for the cost of insurance charges,
Premium Sales Charge and monthly administrative charge. Such charges may be
increased in the future, but will never exceed the guaranteed maximum
charges set forth in DEDUCTIONS AND CHARGES in Part 2 of this prospectus.
If the guaranteed maximum cost of insurance charges, Premium Sales Charge
and monthly administrative charge were used, the results would be lower.
(2) Assumed Policy Purchase Date is based upon inception date of portfolio.
Please refer to the explanation of this table on the previous page.
6
<PAGE>
PART 1: DETAILED INFORMATION ABOUT EQUITABLE AND SURVIVORSHIP 2000
INVESTMENT CHOICES
THE COMPANY THAT ISSUES SURVIVORSHIP 2000
EQUITABLE. Equitable, a New York stock life insurance company, has been in
business since 1859. We are a wholly owned subsidiary of The Equitable Companies
Incorporated (the Holding Company). The largest shareholder of the Holding
Company is AXA-UAP (AXA), a French insurance holding company. As of December 31,
1997, AXA beneficially owned 58.7% of the outstanding shares of common stock of
the Holding Company. Under its investment arrangements with Equitable and the
Holding Company, AXA is able to exercise significant influence over the
operations and capital structure of the Holding Company and its subsidiaries,
including Equitable. AXA is the holding company for an international group of
insurance and related financial services companies. Equitable, the Holding
Company and their subsidiaries managed approximately $274.1 billion of assets as
of December 31, 1997, including third party assets of approximately $216.9
billion. Equitable's home office is 1290 Avenue of the Americas, New York, New
York 10104. We are licensed to do business in all 50 states, Puerto Rico, the
Virgin Islands and the District of Columbia. We maintain local offices
throughout the United States. At December 31, 1997, we had approximately $125.7
billion face amount of variable life insurance in force, as compared to $114.6
billion at December 31, 1996. Prior to January 1, 1997, Survivorship 2000
policies were issued by Equitable's wholly owned subsidiary, Equitable Variable
Life Insurance Company (Equitable Variable). Equitable Variable was merged into
Equitable as of January 1, 1997.
THE SEPARATE ACCOUNT AND THE TRUSTS
THE SEPARATE ACCOUNT. Separate Account FP (the "Separate Account") was
established on September 21, 1995 under the Insurance Law of the State of New
York. The Separate Account is a type of investment company called a unit
investment trust and is registered with the Securities and Exchange Commission
(SEC) under the Investment Company Act of 1940 (1940 Act). This registration
does not involve any supervision by the SEC of the management or investment
policies of the Separate Account. The Separate Account is a successor to a
separate account that was established by Equitable Variable on April 19, 1985.
The assets of that separate account became assets of the Separate Account on
January 1, 1997 when Equitable Variable was merged into Equitable.
Under New York law, we own the assets of the Separate Account and use them to
support your policy and other variable life insurance policies. The portion of
the Separate Account's assets supporting these policies may not be used to
satisfy liabilities arising out of any other business we may conduct. This means
that the assets supporting Policy Account values maintained in the Separate
Account are not subject to the claims of our other creditors.
The Separate Account has several Funds, each of which invests in Class IB shares
of a corresponding portfolio of the HRT or EQAT. You may allocate some or all
premiums among the Funds.
In addition to premiums made under the policies, we may allocate to the Separate
Account monies received under other variable life insurance policies. Owners of
all such policies will participate in the Separate Account in proportion to the
amounts they have in the Funds that relate to their policies. We may also retain
in the Separate Account assets that are in excess of the reserves and other
liabilities relating to Policy Account values, or we may transfer them to our
general account.
If any changes are made that result in a material change in the underlying
investments of a Fund, policyowners will be notified. We may make other changes
in the policies that do not reduce any Cash Surrender Value, Death Benefit,
Policy Account value, or other accrued rights or benefits.
THE TRUSTS. The following portfolios of The Hudson River Trust (HRT) and the EQ
Advisors Trust (EQAT) are available under your policy. The Funds of the Separate
Account invest in these portfolios according to your instructions.
INVESTMENT PORTFOLIOS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
HRT PORTFOLIOS EQAT PORTFOLIOS
- ------------------------------------------ ---------------------------------------------------------------------------------
<S> <C> <C>
o Alliance Money Market o BT Equity 500 Index o MFS Research
o Alliance High Yield o BT Small Company Index o MFS Emerging Growth Companies
o Alliance Common Stock o BT International Equity Index o Morgan Stanley Emerging Markets
o Alliance Aggressive Stock o JPM Core Bond Equity
o Alliance Small Cap Growth o Lazard Large Cap Value o EQ/Putnam Growth & Income Value
o Lazard Small Cap Value o EQ/Putnam Investors Growth
o EQ/Putnam International Equity
- ------------------------------------------ ---------------------------------------------------------------------------------
</TABLE>
The Trusts are open-end, management investment companies registered under the
1940 Act, more commonly called mutual funds. As a "series" type of mutual fund,
each Trust issues several different series of stock, each of which relates to a
different portfolio of that Trust. The HRT commenced operations in January 1976
with a predecessor of its Alliance Common Stock portfolio. The EQAT commenced
operations on May 1, 1997. The Trusts do not impose sales charges or "loads" for
buying and selling their shares. All dividends and other distributions on a
portfolio's shares are reinvested in full and fractional shares of the portfolio
to which they relate. Each Fund invests in Class IB shares of a corresponding
portfolio.
7
<PAGE>
The EQAT sells its shares to Equitable separate accounts in connection with
Equitable's variable life insurance and annuity products. The HRT sells its
shares to separate accounts of insurance companies, both affiliated and not
affiliated with Equitable. We currently do not foresee any disadvantages to our
policyowners arising out of this. However, the Board of Trustees of HRT intends
to monitor events in order to identify any material irreconcilable conflicts
that possibly may arise and to determine what action, if any, should be taken in
response. If we believe that the Board's response to any of those events
insufficiently protects our policyowners, we will see to it that appropriate
action is taken to do so. Also, if we ever believe that any of the Trusts'
portfolios is so large as to materially impair the investment performance of the
portfolio or the Trust involved, we will examine other investment options.
All of the portfolios, except for the Morgan Stanley Emerging Markets Equity
portfolio and Lazard Small Cap Value portfolio, are "diversified" for 1940 Act
purposes. The Trustees of the HRT or the EQAT may establish additional
portfolios or eliminate existing portfolios at any time. More detailed
information about the Trusts, their investment objectives, policies,
restrictions, risks, expenses, multiple class distribution systems, the Rule
12b-1 distribution plan relating to Class IB shares and all other aspects of
their operations, appears in the HRT prospectus (beginning after this
prospectus), the EQAT prospectus (beginning after the HRT prospectus), or in
their respective Statements of Additional Information, which are available upon
request.
HRT'S MANAGER AND INVESTMENT ADVISER. HRT is managed and its portfolios are
advised by Alliance Capital Management L.P. ("Alliance"), which is registered
with the SEC as an investment adviser under the 1940 Act.
In its role as manager of the HRT, Alliance has overall responsibility for the
general management and administration of the HRT, including selecting the
portfolio managers for HRT's portfolios, monitoring their investment programs
and results, reviewing brokerage matters, performing fund accounting, overseeing
compliance by HRT with various Federal and state statutes, and carrying out the
directives of its Board of Trustees. With the approval of the HRT's Trustees,
Alliance may enter into agreements with other companies to assist with its
administrative and management responsibilities to the HRT.
ALLIANCE CAPITAL MANAGEMENT L.P. Alliance, a leading international investment
adviser, subject to the supervision of the Trustees of HRT, provides investment
management and consulting services to mutual funds, endowment funds, insurance
companies, foreign entities, qualified and non-tax qualified corporate funds,
public and private pension and profit-sharing plans, foundations and tax-exempt
organizations.
Alliance is a publicly traded limited partnership incorporated in Delaware. At
December 31, 1997, Alliance was managing approximately $218.7 billion in assets.
Alliance employs 223 investment professionals, including 83 research analysts.
Portfolio managers have average investment experience of more than 14 years.
All of the HRT portfolios are advised by Alliance. As adviser, Alliance is
responsible for developing the portfolios' investment programs, making
investment decisions for the portfolios, placing all orders for the purchase and
sale of those investments and performing certain limited related administrative
functions.
Alliance is an indirect, majority-owned subsidiary of Equitable, and its main
office is located at 1345 Avenue of the Americas, New York, New York 10105.
Additional information regarding Alliance is located in the HRT prospectus,
which directly follows this prospectus.
EQAT'S MANAGER. EQ Financial Consultants, Inc. ("EQF"), subject to the
supervision and direction of the Trustees of EQAT, has overall responsibility
for the general management and administration of the EQAT. EQF is an investment
adviser registered under the 1940 Act, as amended, and a broker-dealer
registered under the Securities Exchange Act of 1934, as amended ("1934 Act").
EQF currently furnishes specialized investment advice to other clients,
including individuals, pension and profit-sharing plans, trusts, charitable
organizations, corporations, and other business entities. EQF is a Delaware
corporation and an indirect, wholly owned subsidiary of Equitable.
EQF is responsible for providing management and administrative services to EQAT
and selects the investment advisers for EQAT's portfolios, monitors the EQAT
Advisers' investment programs and results, reviews brokerage matters, oversees
compliance by EQAT with various Federal and state statutes, and carries out the
directives of its Board of Trustees.
Pursuant to a service agreement, Chase Global Funds Services Company assists EQF
in the performance of its administrative responsibilities to the EQAT with other
necessary administrative, fund accounting and compliance services. EQ Financial
Consultants, Inc.'s main office is located at 1290 Avenue of the Americas, New
York, New York 10104.
EQAT'S INVESTMENT ADVISERS. Putnam Investment Management, Inc.; Massachusetts
Financial Services Company; Morgan Stanley Asset Management, Inc.; Bankers Trust
Company; J.P. Morgan Investment Management Inc.; and Lazard Asset Management
serve as EQAT Advisers only for their respective EQAT portfolios.
Each EQAT Adviser furnishes EQAT's manager, EQF, with an investment program
(updated periodically) for each of its portfolios, makes investment decisions on
behalf of its EQAT portfolios, places all orders for the purchase and sale of
investments for the portfolio's account with brokers or dealers selected by such
Adviser and may perform certain limited related administrative functions.
8
<PAGE>
If an EQAT portfolio shall at any time have more than one EQAT Adviser, the
allocation of an EQAT portfolio's assets among EQAT Advisers may be changed at
any time by EQF.
BANKERS TRUST COMPANY. Bankers Trust Company ("Bankers Trust") is a wholly owned
subsidiary of Bankers Trust New York Corporation which was founded in 1903.
Bankers Trust conducts a variety of general banking and trust activities and is
a major wholesale supplier of financial services to the international and
domestic institutional markets. Bankers Trust advises BT Equity 500 Index, a
domestic equity portfolio, BT International Equity Index, an international
equity portfolio, and BT Small Company Index, an aggressive equity portfolio. As
of December 31, 1997, Bankers Trust had approximately $317.8 billion in assets
under management worldwide. The executive offices of Bankers Trust are located
at 130 Liberty Street (One Bankers Trust Plaza), New York, NY 10006.
LAZARD ASSET MANAGEMENT. Lazard Asset Management ("LAM") is a division of Lazard
Freres & Co. LLC, which was founded in 1848. LAM and its affiliates provide
investment management services to client discretionary accounts with assets
totaling approximately $53 billion as of December 31, 1997. LAM advises Lazard
Large Cap Value, a domestic equity portfolio, and Lazard Small Cap Value, an
aggressive equity portfolio. LAM's global headquarters are located at 30
Rockefeller Plaza, New York, NY 10112.
J.P. MORGAN INVESTMENT MANAGEMENT INC. J.P. Morgan Investment Management Inc.
("J.P. Morgan") advises JPM Core Bond, a high quality bond portfolio. It is a
wholly owned subsidiary of J.P. Morgan & Co. Incorporated (JPM & Co.). JPM &
Co., through J.P. Morgan and other subsidiaries, offers a wide range of services
to governmental, institutional, corporate and individual customers and acts as
investment adviser to individual and institutional clients. Its combined assets
under management totaled over $255 billion as of December 31, 1997. J.P. Morgan
is located at 522 Fifth Avenue, New York, NY 10036.
MASSACHUSETTS FINANCIAL SERVICES COMPANY. Massachusetts Financial Services
Company ("MFS") is America's oldest mutual fund organization, whose assets under
management as of December 31, 1997 were approximately $70.2 billion on behalf of
more than 2.7 million investors. MFS advises MFS Research, a domestic equity
portfolio, and MFS Emerging Growth Companies, an aggressive equity portfolio.
MFS is an indirect subsidiary of Sun Life Assurance Company of Canada and is
located at 500 Boylston Street, Boston, MA 02116.
MORGAN STANLEY ASSET MANAGEMENT INC. Morgan Stanley Asset Management ("MSAM")
provides a broad range of portfolio management services to customers in the
United States and abroad and serves as an investment adviser to numerous
open-end and closed-end investment companies. MSAM, together with its affiliated
institutional investment management companies, had approximately $146 billion in
assets under management and fiduciary care as of December 31, 1997. MSAM advises
Morgan Stanley Emerging Markets Equity, an international equity portfolio. MSAM
is a subsidiary of Morgan Stanley, Dean Witter & Co. and is located at 1221
Avenue of the Americas, New York, New York 10020.
PUTNAM INVESTMENT MANAGEMENT, INC. Putnam Investment Management, Inc. ("Putnam")
has been managing mutual funds since 1937. As of December 31, 1997, Putnam and
its affiliates managed more than $235 billion in assets. Putnam advises
EQ/Putnam Growth & Income Value, a domestic equity portfolio, EQ/Putnam
Investors Growth, a domestic equity portfolio and EQ/Putnam International
Equity, an international equity portolio. Putnam is an indirect subsidiary of
Marsh & McLennan Companies, Inc. and is located at One Post Office Square,
Boston, MA 02109.
Additional information regarding each of the companies which serve as an EQAT
Adviser appears in the EQAT prospectus, attached at the end of this prospectus.
INVESTMENT POLICIES AND OBJECTIVES OF THE TRUSTS' PORTFOLIOS. Each portfolio has
a different investment objective which it tries to achieve by following separate
investment policies. The objectives and policies of each portfolio will affect
its expected return and its risks. There is no guarantee that these objectives
will be achieved.
The value of your money invested in these portfolios will fluctuate, and may be
worth more or less than its original value when you or your beneficiaries redeem
your policy or make withdrawals. The policies and objectives of the portfolios
are as follows:
9
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT POLICY OBJECTIVE
---------------------------------------------------------------------------------------------------
HRT PORTFOLIO:
-------------
<S> <C> <C>
Alliance Money Market Primarily high-quality short-term High level of current
money market instruments. income while preserving
assets and maintaining
liquidity.
Alliance High Yield Primarily a diversified mix of High return by maximizing
high-yield, fixed-income securities current income and, to the
involving greater volatility of price extent consistent with
and risk of principal and income than that objective, capital
high-quality fixed-income securities. appreciation.
The medium- and lower-quality debt
securities in which the portfolio may
invest are commonly known as "junk
bonds."
Alliance Common Stock Primarily common stock and other Long-term growth of
equity-type instruments. capital and increasing
income.
Alliance Aggressive Primarily common stocks and other Long-term growth of
Stock equity-type securities issued by capital.
medium- and other smaller-sized
companies with strong growth potential.
Alliance Small Cap Primarily U.S. common stock and other Long-term growth of
Growth equity-type securities issued by capital.
smaller companies with favorable
growth prospects.
EQAT PORTFOLIO:
--------------
BT Equity 500 Index Invest in a statistically selected Replicate as closely as
sample of the 500 stocks included possible (before the
in the Standard & Poor's 500 deduction of Portfolio
Composite Stock Price Index ("S&P 500"). expenses) the total return
of the S&P 500.
BT Small Company Index Invest in a statistically selected Replicate as closely as
sample of the 2,000 stocks included in possible (before the
the Russell 2000 Small Stock Index deduction of Portfolio
("Russell 2000"). expenses) the total return
of the Russell 2000.
BT International Equity Invest in a statistically selected Replicate as closely as
Index sample of the securities of companies possible (before the
included in the Morgan Stanley Capital deduction of Portfolio
International Europe, Australia, Far expenses) the total return
East Index ("EAFE"), although not all of the EAFE.
companies within a country will be
represented in the Portfolio at the
same time.
JPM Core Bond Under normal circumstances, all of the High total return
Portfolio's assets will, at the time consistent with moderate
of purchase, consist of investment risk of capital and
grade fixed-income securities rated maintenance of liquidity.
BBB or better by Standard & Poor's
Rating Service or Baa or better by
Moody's Investors Service, Inc. or
unrated securities of comparable
quality.
Lazard Large Cap Value Primarily equity securities of Capital appreciation.
companies with relatively large market
capitalizations (i.e., companies
having market capitalizations of at
least $1 billion at the time of
initial purchase) that the portfolio
adviser considers to be inexpensively
priced relative to the return on total
capital or equity.
Lazard Small Cap Value Primarily equity securities of United Capital appreciation.
States companies with small market
capitalizations (i.e., in the range of
companies represented in the Russell
2000) that the portfolio adviser
considers inexpensively priced
relative to the return on total
capital or equity.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT POLICY OBJECTIVE
---------------------------------------------------------------------------------------------------
EQAT PORTFOLIO
--------------
(CONTINUED):
-----------
<S> <C> <C>
MFS Research A substantial portion of assets Long-term growth of
invested in common stock or securities capital and future income.
convertible into common stock of
companies believed by the portfolio
adviser to possess better than average
prospects for long-term growth.
MFS Emerging Growth Primarily in common stocks of emerging Long-term growth of
Companies growth companies that the portfolio capital.
adviser believes are early in their life
cycle but which have the potential to
become major enterprises.
Morgan Stanley Emerging Primarily equity securities of Long-term capital appreciation.
Markets Equity emerging market country issuers with a
focus on those in which the portfolio
adviser believes the economies are
developing strongly and in which the
markets are becoming more sophisticated.
EQ/Putnam Growth Primarily common stocks that offer Capital growth and,
& Income Value potential for capital growth and may, secondarily, current
consistent with the portfolio's income.
investment objective, invest in common
stocks that offer potential for
current income.
EQ/Putnam Investors Primarily common stocks that the Long-term growth of
Growth Portfolio adviser believes afford the capital and any increased
best opportunity for long-term capital income that results from
growth. this growth.
EQ/Putnam International Primarily a diversified portfolio of Capital appreciation.
Equity equity securities of companies
organized under laws of countries
other than the United States.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Because you may invest Policy Account values in the Fund options described
above, Survivorship 2000 offers an opportunity for the Policy Account value to
appreciate more rapidly than it would under comparable fixed-benefit whole life
insurance. You must, however, accept the risk that if investment performance is
unfavorable, the Policy Account value may not appreciate as rapidly and indeed,
may decrease in value.
THE GUARANTEED INTEREST ACCOUNT
You may allocate some or all of your Policy Account to the Guaranteed Interest
Account, which is funded by our general account and pays interest at a declared
rate guaranteed for each policy year. The principal, after deductions, is also
guaranteed. The general account supports our insurance and annuity guarantees,
including the Guaranteed Interest Account, as well as our general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. Because of applicable
exemptive and exclusionary provisions, interests in the general account have not
been registered under the Securities Act of 1933 (1933 Act), nor is the general
account an investment company under the 1940 Act. Accordingly, neither the
general account, the Guaranteed Interest Account nor any interests therein are
generally subject to regulation under these Acts. We have been advised that the
staff of the SEC has not made a review of the disclosures that are included in
the prospectus for your information and that relate to the general account and
the Guaranteed Interest Account. These disclosures, however, may be subject to
certain generally applicable provisions of the Federal securities law relating
to the accuracy and completeness of statements made in prospectuses.
AMOUNTS IN THE GUARANTEED INTEREST ACCOUNT. You may accumulate amounts in the
Guaranteed Interest Account by allocating net premiums and loan repayments to
that Account, transferring amounts from the Funds to the Guaranteed Interest
Account or earning interest on amounts you already have in the Guaranteed
Interest Account. A Living Benefit payment will also result in amounts being
transferred to the Guaranteed Interest Account. See LIVING BENEFIT OPTION in
Part 2 of this prospectus. In addition, any policy loan is secured by an amount
in your Policy Account equal to the outstanding loan. This amount remains part
of the Policy Account but is assigned to the Guaranteed Interest Account. We
refer to this amount as the loaned amount in the Guaranteed Interest Account.
The amount you have in the Guaranteed Interest Account at any time is the sum of
all net premiums and loan repayments allocated to that Account, all transfers
into that Account (including amounts securing any policy loan or Living Benefit
payment) plus earned interest, less amounts transferred out or withdrawn, and
monthly deductions allocated to, that Account.
ADDING INTEREST IN THE GUARANTEED INTEREST ACCOUNT. We pay a declared interest
rate on all amounts that you have in the Guaranteed Interest Account. At policy
issuance, and prior to each policy anniversary, we declare the rates that will
apply to amounts in the
11
<PAGE>
Guaranteed Interest Account for the following policy year. Different rates may
apply to policies currently being issued and previously issued policies. These
annual interest rates will never be less than the minimum guaranteed interest
rate of 4% (before deductions). Different rates are also paid on unloaned and
loaned amounts in the Guaranteed Interest Account. We reserve the right to
declare higher interest rates for higher Face Amount policies. See POLICY LOAN
INTEREST in Part 2 of this prospectus. Amounts securing a Living Benefit payment
are considered unloaned amounts for purposes of crediting interest.
Interest is compounded daily at an effective annual rate that equals the
declared rate for each policy year. We credit interest on unloaned amounts in
the Guaranteed Interest Account at the end of each policy month. Interest is
credited on any loaned amount in the Guaranteed Interest Account on each policy
anniversary and at any time you repay a policy loan in full. Credited interest
on the loaned amount is allocated to the Funds and to the unloaned portion of
the Guaranteed Interest Account in accordance with your premium allocation
percentages.
TRANSFERS OUT OF THE GUARANTEED INTEREST ACCOUNT. Once during each policy year,
you may request a transfer from your unloaned amount in the Guaranteed Interest
Account to one or more of the Funds. If we receive your transfer request within
30 days prior to your policy anniversary, the transfer will be made on your
policy anniversary. If we receive your request on or within 30 days after your
policy anniversary, the transfer will be made as of the date we receive your
request. You may transfer up to 25% of your unloaned value in the Guaranteed
Interest Account as of the transfer date or the minimum transfer amount shown in
your policy, whichever is more. The minimum transfer amount is the minimum
transfer amount shown in the policy or your total unloaned value in the
Guaranteed Interest Account on the transfer date, whichever is less. Amounts
securing a Living Benefit payment may not be transferred from the Guaranteed
Interest Account.
PART 2: DETAILED INFORMATION ABOUT SURVIVORSHIP 2000
FLEXIBLE PREMIUMS
You may choose the amount and frequency of premium payments, as long as they are
within the limits described below. We determine the applicable minimum initial
premium based on the age, sex, rating class and smoker/non-smoker status of each
of the insured persons, the initial Face Amount of the policy (the minimum Face
Amount is $200,000) and any additional benefits selected. In certain situations,
however, no distinction is made based on the sex of either insured person. See
COST OF INSURANCE CHARGE in Part 2 of this prospectus. You may choose to pay a
higher initial premium.
The minimum initial premium must be paid on or before the date on which the
policy is delivered to you. No insurance under your policy will take effect (a)
until a policy is delivered and the minimum initial premium is paid while the
persons proposed to be insured are living and (b) unless the information in the
application continues to be true and complete, without material change, as of
the time the initial premium is paid. See POLICY PERIODS, ANNIVERSARIES, DATES
AND AGES in Part 2 of this prospectus.
Your first premium payment should be given to your agent or broker and must be
by check or money order drawn on a U.S. bank in U.S. dollars and made payable to
Equitable. Any additional premiums must be sent directly to our Administrative
Office. The preferred form of payment is a single check on your business or
personal account. Payment may also be in the form of a single money order, bank
draft or cashier's check payable directly to Equitable; however, please be aware
that Equitable is required to report the receipt of these "cash equivalents" to
the Internal Revenue Service under certain circumstances. These checks, money
orders and drafts are accepted subject to collection. Cash and traveler's checks
are not acceptable. Third party checks payable to someone other than Equitable
and endorsed over to Equitable are not acceptable unless the check is money
directly from a qualified retirement plan or pursuant to a 1035 exchange (a
tax-deferred exchange pursuant to Section 1035 of the Internal Revenue Code), or
it is a trustee check that involves no refund. Equitable's policy is to return
any unacceptable forms of payment, and the policyowner bears the risk of lapse
or other consequences which may result from the effective non-payment.
If you have submitted the full initial premium with your application, we may,
subject to certain conditions, provide a limited amount of temporary insurance
on the proposed insureds. You may review a copy of our Temporary Insurance
Agreement on request.
On your application you provide us with initial instructions as to how to
allocate your net premiums and monthly charges among the Funds and the
Guaranteed Interest Account. Allocation percentages may be any whole number from
zero to 100, but the sum must equal 100. Allocations to the Funds take effect on
the first business day that follows the 20th calendar day after the Issue Date
of your policy. The Issue Date is shown on the Information Page of your policy
(the Policy Information Page), and is the date we actually issue your policy.
The date your allocation instructions take effect is called the Allocation Date.
Our business days are described in HOW WE DETERMINE THE UNIT VALUE in Part 2 of
this prospectus.
Until the Allocation Date, any net premiums allocated to a Fund will be
allocated to the Alliance Money Market Fund, and all monthly charges allocable
to the Separate Account will be deducted from the Alliance Money Market Fund. On
the Allocation Date, amounts in the Alliance Money Market Fund will be allocated
to the Funds in accordance with your policy application. See TRANSFERS OF POLICY
ACCOUNT VALUE in Part 2 of this prospectus and POLICY PERIODS, ANNIVERSARIES,
DATES AND AGES in Part 2 of this prospectus. We may delay the Allocation Date
for the same reasons that we would delay effecting a transfer request. There
will be no charge for the transfer out of the Alliance Money Market Fund on the
Allocation Date. See TRANSFERS OF POLICY ACCOUNT VALUE in Part 2 of this
prospectus.
12
<PAGE>
You may change the allocation percentages for either your current premium
payment or the current and future premium payments by writing to our
Administrative Office and indicating the changes you wish to make. Your request
must be signed. These changes will go into effect as of the date your request is
received at our Administrative Office, but no earlier than the first business
day following the Allocation Date, and will affect transactions after such date.
Although premiums are flexible, page 3 of your policy (the Policy Information
Page) will show a "planned" periodic premium. You determine the planned premium
(within limits set by us) when you apply for the policy. The planned premium is
not necessarily designed to equal the amount of premium that will keep your
policy in effect. You may make or skip a planned premium. We will send premium
notices if you selected annual, semiannual or quarterly planned premiums.
The Policy Information Page will also show a "specified premium" if the policy's
guaranteed minimum death benefit provision is available in your state. This
specified premium is what we refer to in this prospectus as the guaranteed
minimum death benefit premium. We measure actual premium payments against these
hypothetical premiums in order to determine whether your policy is in default
when the Net Cash Surrender Value is insufficient to pay monthly charges in any
month. These are not required premium payments. See YOUR POLICY CAN TERMINATE in
Part 2 of this prospectus.
The guaranteed minimum death benefit premium is actuarially determined at issue
based on the age, sex, smoker status and rating class of the insured persons.
The guaranteed minimum death benefit premium will change if you request a Face
Amount decrease, add or eliminate a rider, or if there is a change in either
insured person's rating or smoker classification. We reserve the right to limit
the amount of any premium payments you make which are in addition to your
guaranteed minimum death benefit premium.
Generally, premiums may be paid at any time and in any amount, as long as each
payment is at least $100. (Policies issued in some states or automatic payment
plans may require different minimum premium payments.) Except for Texas
policyowners, this minimum may be increased if we give you 90 days written
notice. We may return premium payments if we determine that they would cause
your policy to become a modified endowment contract or to cease to qualify as
life insurance under Federal income tax law. We may also make such changes to
the policy as we deem necessary to continue to qualify the policy as life
insurance. See TAX EFFECTS in Part 2 of this prospectus for an explanation of
modified endowment contracts, the special tax consequences of such contracts,
and how your policy might become a modified endowment contract.
DEATH BENEFITS
We pay a benefit to the beneficiary of the policy when the last surviving
insured person dies. This benefit will be equal to the death benefit under your
policy plus any additional benefits included in your policy and then due, less
any unpaid policy loan, any lien securing a Living Benefit payment and accrued
interest. If the last surviving insured person dies during a grace period we
will also deduct any overdue monthly deductions.
You may choose between two death benefit options:
o OPTION A provides a death benefit equal to the policy's Face Amount. Except
as described below, the Option A benefit is fixed.
o OPTION B provides a variable death benefit equal to the policy's Face Amount
PLUS the amount in your Policy Account on the day the last surviving insured
person dies. Under Option B, the value of the benefit is variable and
fluctuates with the amount in your Policy Account.
Policyowners who prefer to have favorable investment experience reflected in
increased insurance coverage should choose Option B. Policyowners who prefer to
have insurance coverage that generally does not vary in amount and lower cost of
insurance charges should choose Option A.
Under both options, a higher death benefit may apply. This higher death benefit
is a percentage multiple of the amount in your Policy Account. The percentage is
designed to ensure that the policy meets the provisions of Federal tax law which
require a minimum death benefit in relation to cash value for your policy to
qualify as life insurance. We may apply a higher percentage multiple than that
required by Federal tax law. This means that when the death benefit is
calculated using those higher percentage multiples, the benefit will be higher
than that otherwise necessary to continue to qualify your policy as life
insurance. See TAX EFFECTS in Part 2 of this prospectus. Since cost of insurance
charges are assessed on the difference between the Policy Account value and the
death benefit, these charges will increase if the higher death benefit takes
effect.
The higher death benefit will be the amount in your Policy Account on the day
the last surviving insured person dies times a percentage based on the younger
insured person's age (nearest birthday) at the beginning of the policy year of
the last surviving insured person's death. The percentages decline with age and
are shown on the Policy Information Page of your policy.
The death benefit is guaranteed if the amount of premiums you've paid,
accumulated at 4% interest, less withdrawals, also accumulated at 4% interest,
is at least equal to a guaranteed minimum death benefit premium fund and any
policy loan does not exceed the Cash Surrender Value. In other words, we will
guarantee your death benefit coverage, regardless of the policy's investment
performance, if you have paid a certain amount of premiums into your policy, as
long as you have not withdrawn or overloaned those amounts. This
13
<PAGE>
guaranteed minimum death benefit provision is not available in some
jurisdictions, including New York, New Jersey and Massachusetts. You should
check with your Equitable agent to determine whether the guaranteed minimum
death benefit is available in your state.
CHANGES IN INSURANCE PROTECTION
REDUCING THE FACE AMOUNT. You may request a Face Amount decrease anytime after
the first policy year by sending a signed written request to our Administrative
Office. Any change will be subject to our approval. You may not reduce the Face
Amount below the minimum we require to issue this policy at the time of the
reduction. Any reduction must be at least $10,000. Our current procedure is to
disapprove a requested decrease if it would cause a death benefit based upon the
Policy Account percentage multiple to apply. See DEATH BENEFITS in Part 2 of
this prospectus. See TAX EFFECTS in Part 2 of this prospectus for the tax
consequences of reducing the Face Amount. If you reduce the Face Amount while
the Estate Protector rider is in effect, the face amount of that rider will
generally be reduced proportionately. See ADDITIONAL BENEFITS MAY BE AVAILABLE
in Part 2 of this prospectus. Monthly deductions from your Policy Account for
the cost of insurance will generally decrease, beginning on the date the
reduction in Face Amount takes effect.
CHANGING THE DEATH BENEFIT OPTION. At any time after the first policy year while
your policy is in force, you may request a change in the death benefit option by
sending a signed written request to our Administrative Office. See TAX EFFECTS
in Part 2 of this prospectus for the tax consequences of changing the death
benefit option.
o If you change from OPTION A TO OPTION B, the Face Amount will be decreased by
the amount in your Policy Account on the date of the change. We may not allow
such a change if it would reduce the Face Amount below the minimum required
to issue this policy at the time of the reduction.
o If you change from OPTION B TO OPTION A, the Face Amount of insurance will be
increased by the amount in the Policy Account on the date of the change.
These increases and decreases in Face Amount are made so that the amount of the
death benefit remains the same on the date of the change. When the death benefit
remains the same, there is no change in the net amount at risk, which is the
amount on which cost of insurance charges are based. See DEDUCTIONS FROM YOUR
POLICY ACCOUNT -- COST OF INSURANCE CHARGE in Part 2 of this prospectus. If your
death benefit is determined by a percentage multiple of the Policy Account,
however, the new Face Amount will be determined differently.
WHEN POLICY CHANGES GO INTO EFFECT. A reduction in Face Amount or change in
death benefit option will go into effect at the beginning of the policy month
that coincides with or follows the date we approve the request for the change.
In some cases we may not approve a change because it might disqualify your
policy as life insurance under applicable Federal income tax law. In other cases
there may be tax consequences as a result of the change. See TAX EFFECTS in Part
2 of this prospectus.
MATURITY BENEFITS
If either or both of the insured persons are still living on the policy
anniversary nearest the younger insured person's 100th birthday (the Maturity
Date), we will pay you a benefit in an amount equal to the Net Cash Surrender
Value as of the Maturity Date, less any lien securing a Living Benefit payment
and accrued interest. The policy will then terminate. You may choose to have
this benefit paid in installments. See TAX EFFECTS in Part 2 of this prospectus
and YOUR PAYMENT OPTIONS in Part 3 of this prospectus.
LIVING BENEFIT OPTION
Subject to regulatory approval in your state and our underwriting guidelines,
our Living Benefit rider will be included with your policy at issue. The Living
Benefit rider enables the policyowner to receive a portion of the policy's death
benefit (excluding death benefits payable under certain riders) if the sole
surviving insured has a terminal illness. Certain eligibility requirements apply
when you submit a Living Benefit claim (for example, satisfactory evidence of
less than six-month life expectancy). There is no additional charge for the
rider, but we will deduct an administrative charge of up to $250 from the
proceeds of the Living Benefit payment. In addition, if you tell us that you do
not wish to have the rider added at issue, but you later ask to add it,
additional underwriting will be required and there will be a $100 administrative
charge.
When a Living Benefit claim is paid, Equitable establishes a lien against the
policy. The amount of the lien is the sum of the Living Benefit payment and any
accrued interest on that payment. Interest will be charged at a rate equal to
the greater of: (i) the yield on a 90-day Treasury bill and (ii) the maximum
adjustable policy loan interest rate permitted in the state your policy is
delivered. See BORROWING FROM YOUR POLICY ACCOUNT -- POLICY LOAN INTEREST in
Part 2 of this prospectus.
Until a death benefit is paid, or the policy is surrendered, a portion of the
lien is allocated to the policy's Cash Surrender Value. This liened amount will
be transferred to the Guaranteed Interest Account where it will earn interest at
the same rate as unloaned amounts. See THE GUARANTEED INTEREST ACCOUNT in Part 1
of this prospectus. This liened amount will not be available for loans,
transfers or partial withdrawals. Any death benefit, maturity benefit or Net
Cash Surrender Value payable upon policy surrender will be reduced by the amount
of the lien.
14
<PAGE>
The receipt of a Living Benefit payment may be able to qualify for exclusion
from income tax. See TAX EFFECTS in Part 2 of this prospectus. Consult your tax
adviser. Receipt of a Living Benefit payment may also affect a policyowner's
eligibility for certain government benefits or entitlements. You should contact
your Equitable agent if you wish to make a claim under the rider.
ADDITIONAL BENEFITS MAY BE AVAILABLE
Your policy may include additional benefits. These benefits are subject to our
rules. More details will be included in your policy if you choose any of these
benefits. The following additional benefits are currently available:
o ESTATE PROTECTOR RIDER under which an additional benefit is payable during
the first four policy years if both insured persons die during this period. A
monthly charge will be deducted from the Policy Account for this rider. This
rider may not be cancelled but will automatically terminate four years from
the policy's Register Date or the date the policy terminates, whichever is
earlier.
o OPTION TO SPLIT UPON DIVORCE RIDER permits you to split the Survivorship 2000
policy into two other individual life insurance policies upon divorce,
without evidence of insurability. A monthly charge will be deducted from the
Policy Account for this rider. Certain conditions, as described in the rider,
must be met before the rider's benefit can be exercised.
o OPTION TO SPLIT UPON FEDERAL TAX LAW CHANGE RIDER also permits you to split
the Survivorship 2000 policy into two other individual life insurance
policies, without evidence of insurability, if certain Federal tax law
changes occur. These changes are described in the rider. There is no charge
for this rider.
See TAX EFFECTS -- RIDERS in Part 2 of this prospectus for possible tax
consequences of splitting a Survivorship 2000 policy.
YOUR POLICY ACCOUNT VALUE
The amount in your Policy Account is the sum of the amounts you have in the
Guaranteed Interest Account and in the various Funds. Your Policy Account also
reflects various charges. See DEDUCTIONS AND CHARGES in Part 2 of this
prospectus.
AMOUNTS IN THE SEPARATE ACCOUNT. Amounts allocated, transferred or added to a
Fund are used to purchase units of that Fund. Units are redeemed from a Fund
when amounts are withdrawn, transferred or deducted for charges or capitalized
loan interest. The number of units purchased or redeemed in a Fund is calculated
by dividing the dollar amount of the transaction by the Fund's unit value
calculated after the close of business that day. On any given day, the value you
have in a Fund is the unit value for that Fund times the number of units
credited to you in that Fund.
HOW WE DETERMINE THE UNIT VALUE. We determine unit values for the Funds at the
end of each business day. A business day is any day the New York Stock Exchange
is open for trading.
A transaction date is the day we perform automatic transactions, such as policy
anniversary reports and monthly charge deductions, or process requested
transactions, such as remittances, disbursements and transfers. If your request
for a policy transaction is not accompanied by complete information or is
directed to the wrong address, the transaction date will be the date we receive
such complete information at our administrative office. If your request for a
policy transaction reaches our administrative office when we are closed, or
after 4:00 p.m. Eastern Time, the transaction date will be the next day we are
open. The transaction date for automatic transactions is the date they are
scheduled to be performed.
The unit value that applies to a transaction will be the unit value calculated
at the close of business on the transaction date. When a transaction is
scheduled on a non-business day, the unit value applied will be the unit value
calculated for the next business day. The unit value for any business day is
equal to the unit value for the preceding business day multiplied by the net
investment factor for that Fund on that business day.
A net investment factor is determined for each Fund every business day as
follows: first, we take the net asset value of a share in the corresponding
Trust portfolio at the close of business that day, as reported by the Trust, and
we add the per share amount of any dividends or capital gains distributions paid
by the Trust on that day. We divide this amount by the per share net asset value
on the preceding business day. Then, we subtract a daily mortality and expense
risk charge for each calendar day between business days (for example, a Monday
calculation will include charges for Saturday, Sunday and Monday). The daily
mortality and expense risk charge is guaranteed not to exceed the current annual
rate of .90%. See CHARGE AGAINST THE SEPARATE ACCOUNT in Part 2 of this
prospectus. Finally, we reserve the right to subtract any daily charge for taxes
or amounts set aside as a reserve for taxes. For current Survivorship 2000 unit
values, call (888) 228-6690.
TRANSFERS OF POLICY ACCOUNT VALUE. You may request a transfer of amounts from
any Fund to any other Fund or to the Guaranteed Interest Account. Special rules
apply to transfers out of the Guaranteed Interest Account. See TRANSFERS OUT OF
THE GUARANTEED INTEREST ACCOUNT in Part 1 of this prospectus. You may make a
transfer by telephone or by submitting a signed written transfer request to our
Administrative Office. Transfer request forms are available from your Equitable
agent or from our Administrative Office. Special rules apply to telephone
transfers. See TELEPHONE TRANSFERS in Part 2 of this prospectus.
15
<PAGE>
The minimum amount which may be transferred on any date will be shown on the
Policy Information Page and is usually $500. This minimum need not come from any
one Fund or be transferred to any one Fund as long as the total amount
transferred that day, including any amount transferred to or from the Guaranteed
Interest Account, is at least equal to the minimum. However, we will transfer
the entire amount in any Fund even if it is less than the minimum specified in
your policy. A lower minimum amount applies to our Automatic Transfer Service,
which is described below.
Transfers take effect on the date we receive your request, but no earlier than
the first business day following the Allocation Date. When part of a transfer
request cannot be processed, we will not process any part of the request. This
could occur, for example, where the request does not comply with our transfer
limitations, or where the request is for a transfer of an amount greater than
currently allocated to that fund. We may delay making a transfer if the New York
Stock Exchange is closed or the SEC has declared that an emergency exists. In
addition, we may delay transfers where permitted under applicable law.
AUTOMATIC TRANSFER SERVICE. The Automatic Transfer Service enables you to make
automatic monthly transfers out of the Alliance Money Market Fund into the other
Funds.
To start using this service you must first complete a special election form that
is available from your agent or our Administrative Office. You must also have a
minimum of $5,000 in the Alliance Money Market Fund on the date the Automatic
Transfer Service is scheduled to begin. You can elect up to eight Funds for
monthly transfers, but the minimum amount that may be transferred to each Fund
each month is $50.
If you elect the Automatic Transfer Service with your policy application, the
automatic transfers will begin in the second policy month following the
Allocation Date. If you elect the Automatic Transfer Service after your
application has been submitted, automatic transfers will begin on the next
monthly processing date after we receive your election form at our
Administrative Office. See POLICY PERIODS, ANNIVERSARIES, DATES AND AGES in Part
2 of this prospectus.
The Automatic Transfer Service will remain in effect until the earliest of the
following events: (1) the amount in the Alliance Money Market Fund is
insufficient to cover the automatic transfer amount; (2) the policy is in a
grace period; (3) we receive at our Administrative Office your written
instruction to cancel the Automatic Transfer Service; or (4) we receive notice
of the sole surviving insured's death under the policy.
Using the Automatic Transfer Service does not guarantee a profit or protect
against loss in a declining market.
TELEPHONE TRANSFERS. You may make transfers by telephone by calling our
Administrative Office toll free at (888) 228-6690. In order to make transfers by
telephone, you must first complete and return an authorization form.
Authorization forms can be obtained from your Equitable agent or our
Administrative Office. The completed signed form MUST be returned to our
Administrative Office before requesting a telephone transfer.
Telephone transfers may be requested on each day we are open to transact
business. The transfer will be processed based on the Fund's unit value as of
the close of business on the day you call. We do not accept telephone transfer
requests after 4:00 P.M. EASTERN TIME. Only one telephone transfer request is
permitted per day and it may not be revoked at any time. Telephone transfer
requests are automatically recorded and are invalid if incomplete information is
given, portions of the request are inaudible, no authorization form is on file,
or the request does not comply with the transfer limitations described above.
We have established reasonable procedures designed to confirm that instructions
communicated by telephone are genuine. Such procedures include requiring certain
personal identification information prior to acting on telephone instructions
and providing written confirmation of instructions communicated by telephone. If
we do not employ reasonable procedures to confirm that instructions communicated
by telephone are genuine, we may be liable for any losses arising out of any act
or any failure to act resulting from our own negligence, lack of good faith, or
willful misconduct. In light of the procedures established, we will not be
liable for following telephone instructions that we reasonably believe to be
genuine.
During times of extreme market activity it may be impossible to contact us to
make a telephone transfer. If this occurs, you should submit a written transfer
request to our Administrative Office. Our rules on telephone transfers are
subject to change and we reserve the right to discontinue telephone transfers in
the future.
CHARGE FOR TRANSFERS. We have reserved the right under your policy to make a
charge of up to $25 for transfers of Policy Account value. You will be able to
make 12 free transfers in any policy year, but we will charge $25 per transfer
after the twelfth transfer. All transfers made on one transfer request form will
count as one transfer, and all transfers made in one telephone request will
count as one transfer. Transfers made through the Automatic Transfer Service or
on the Allocation Date will not count toward the twelve free transfers. No
charge will ever apply to the transfer of all of your amounts in the Separate
Account to the Guaranteed Interest Account.
BORROWING FROM YOUR POLICY ACCOUNT
You may borrow up to 90% of your policy's Cash Surrender Value using only your
policy as security for the loan. Any new loan must be at least the minimum
amount shown on the Policy Information Page, usually $500. If you request an
additional loan, the additional
16
<PAGE>
amount requested will be added to the amount of any outstanding loan and accrued
loan interest. Any amount that secures a loan remains part of your Policy
Account but is assigned to the Guaranteed Interest Account. This loaned amount
earns an interest rate expected to be different from the interest rate for
unloaned amounts. Amounts securing a Living Benefit payment are not available
for policy loans.
HOW TO REQUEST A LOAN. You may request a loan by sending a signed written
request to our Administrative Office. You should tell us how much of the
requested loan you want taken from your unloaned amount in the Guaranteed
Interest Account and how much you want taken from your amounts in the Funds. If
you request a loan from a Fund, we will redeem units sufficient to cover that
part of the loan and transfer the amount to the loaned portion of the Guaranteed
Interest Account. The amounts you have in each Fund or the Account will be
determined as of the day your request for a loan is received at our
Administrative Office.
If you do not indicate how you wish to allocate the loan, it will be allocated
according to the deduction allocation percentages applicable to your Policy
Account. See FLEXIBLE PREMIUMS in Part 2 of this prospectus. If the loan cannot
be allocated based on these percentages, it will be allocated based on the
proportions that your unloaned amounts in the Guaranteed Interest Account and
your value in each Fund bear to the unloaned value of your Policy Account.
POLICY LOAN INTEREST. Interest on a policy loan accrues daily at an adjustable
interest rate. We determine the rate at the beginning of each policy year. The
same rate applies to any outstanding policy loan and any additional amounts you
borrow during the year. You will be notified of the current rate when you apply
for a loan. The maximum rate is the greater of 5%, or the "Published Monthly
Average" for the month that ends two months before the interest rate is set. The
"Published Monthly Average" is the Monthly Average Corporates yield shown in
Moody's Corporate Bond Yield Averages published by Moody's Investors Service,
Inc. If this average is no longer published, we will use any successor or the
average established by the insurance supervisory official of the jurisdiction in
which the policy is delivered. We will not charge more than the maximum rate
permitted by applicable law. We may also set a rate lower than the maximum.
Any change in the rate from one year to the next will be at least 1/2%. Your
maximum loan interest rate will only change, therefore, if the Published Monthly
Average differs from the previous interest rate by at least 1/2 of 1%. You will
be notified in advance of any increase in the interest rate on any loan you have
outstanding.
When you borrow on your policy, the amount of your loan is set aside in the
Guaranteed Interest Account where it earns a declared rate for loaned amounts.
Loaned amounts will earn interest at a lower rate than the rate you are charged
for policy loan interest. Currently, the rate we credit on loaned amounts is 1%
less than the rate we charge for policy loan interest. Beginning in the
twenty-first policy year, the rate we currently credit on loaned amounts is 1/2
of 1% less than the rate we charge for policy loan interest. Because
Survivorship 2000 was offered for the first time in 1992, no reduction in the
loan spread in the twenty-first policy year has yet been attained. These loan
spreads are those currently in effect and are not guaranteed. However, the
interest credited on loaned amounts will never be less than 4%.
Interest accrues daily on any loaned amount in the Guaranteed Interest Account.
On each policy anniversary and anytime you repay a policy loan in full, accrued
interest on the loaned amount is allocated to the Separate Account Funds and to
the unloaned portion of the Guaranteed Interest Account in accordance with your
premium allocation percentages.
WHEN INTEREST IS DUE. Interest is due on each policy anniversary. If you do not
pay the interest when it is due, it will be added to your outstanding loan and
allocated based on the deduction allocation percentages for your Policy Account
which are then in effect. This means an additional loan is made to pay the
interest and amounts are transferred from the Funds to make the loan. If the
interest cannot be allocated on this basis, it will be allocated as described
above for allocating your loan.
REPAYING THE LOAN. You may repay all or part of a policy loan at any time while
your policy is in force. While you have a policy loan and your policy is not in
grace, we assume that any money you send us is meant to repay the loan. If you
wish to have any of these payments applied as premium payments, you must
specifically so indicate in writing at the time you make your payment. Any
amount not needed to repay a loan and accrued loan interest will be applied as a
premium payment. We will first allocate loan repayments to our Guaranteed
Interest Account until the amount of any loan originally allocated to that
Account has been repaid. After you have repaid this amount, you may choose how
you want us to allocate the balance of any additional repayments. If you do not
provide specific instructions, repayments will be allocated on the basis of your
premium allocation percentages.
THE EFFECTS OF A POLICY LOAN. A loan will have a permanent effect on the value
of your Policy Account and, therefore, on the benefits under your policy, even
if the loan is repaid. The loaned amount in the Guaranteed Interest Account will
not be available for investment in the Funds or in the unloaned portion of the
Guaranteed Interest Account. Whether you earn more or less with the loaned
amount set aside depends on the investment experience of the Funds and the rates
declared for the unloaned portion of the Guaranteed Interest Account. The amount
of any policy loan and accrued loan interest will reduce the proceeds paid from
your policy upon the death of the last surviving insured person, maturity or
policy surrender. In addition, a loan will reduce the amount available for you
to withdraw from your policy. A loan may also affect the length of time that
your insurance remains in force because the amount set aside to secure your loan
cannot be used to cover the monthly deductions. See YOUR POLICY CAN TERMINATE
and TAX EFFECTS in Part 2 of this prospectus for the tax consequences of a
policy loan.
17
<PAGE>
PARTIAL WITHDRAWALS AND SURRENDER
PARTIAL WITHDRAWALS. At any time after the first policy year while either of the
insured persons is living, you may request a partial withdrawal of your Net Cash
Surrender Value by sending a signed written request to our Administrative
Office. When you make a partial withdrawal, an expense charge of $25 or 2% of
the amount withdrawn, whichever is less, will be deducted from your Policy
Account. Any such withdrawal is subject to our approval and to certain
conditions. Amounts securing a Living Benefit payment are not available for
partial withdrawals. In addition, we reserve the right to decline a request for
a partial withdrawal. Under our current rules, a withdrawal must:
o be at least $500,
o not cause the Face Amount to fall below the minimum for which we would issue
the policy at the time, and
o not cause the policy to fail to qualify as life insurance under applicable tax
law.
ALLOCATION OF PARTIAL WITHDRAWALS AND CHARGES. You may specify how much of the
withdrawal you want taken from amounts you have in each Fund and the unloaned
portion of the Guaranteed Interest Account. The related expense charge will also
be deducted from the amount withdrawn. If you do not specifically indicate, we
will make the withdrawal and deduct the related expense charge on the basis of
your deduction allocation percentages. If we cannot make the withdrawal and
deduct the expense charge in the manner described above, we will make the
withdrawal and deduction based on the proportions that your unloaned amounts in
the Guaranteed Interest Account and the Funds bear to the total unloaned value
of your Policy Account.
THE EFFECTS OF A PARTIAL WITHDRAWAL. A partial withdrawal reduces the amount you
have in your Policy Account and your Net Cash Surrender Value on a
dollar-for-dollar basis. Normally, it also reduces the death benefit on a
dollar-for-dollar basis, but does not affect the net amount at risk, which is
the difference between the current death benefit and the amount in your Policy
Account. If you selected death benefit Option A, the Face Amount of your policy
will generally be reduced so that there will be no change in the net amount at
risk. However, under either option, if the death benefit is based on the Policy
Account percentage multiple, the reduction in death benefit would be greater and
the net amount at risk would be reduced. See DEATH BENEFITS in Part 2 of this
prospectus. The partial withdrawal and these reductions will be effective as of
the date your withdrawal request is received at our Administrative Office. See
TAX EFFECTS in Part 2 of this prospectus for the tax consequences of a reduction
in benefits or a partial withdrawal.
SURRENDER FOR NET CASH SURRENDER VALUE. You may surrender your policy for its
Net Cash Surrender Value (Policy Account minus any loan and accrued loan
interest) at any time while either of the insured persons are living. We will
deduct from the Net Cash Surrender Value any amount securing a Living Benefit
payment. You may surrender the policy by sending a written request and the
policy to our Administrative Office. We will compute the Net Cash Surrender
Value as of the date we receive your request and the policy at our
Administrative Office. All insurance coverage under your policy will end on that
date. See TAX EFFECTS in Part 2 of this prospectus for the tax consequences of a
policy surrender.
DEDUCTIONS AND CHARGES
DEDUCTIONS FROM YOUR PREMIUMS. Charges for certain taxes are deducted from all
premiums. In addition, a Premium Sales Charge will be deducted from your
premiums as specified below. The balance of each premium (the net premium) is
placed in your Policy Account.
Charge For Taxes. We deduct a charge designed to approximate certain taxes and
additional charges imposed upon us by states and other jurisdictions. Such
charges currently range from .70% to 5% (Virgin Islands).
This charge may be increased or decreased to reflect any changes in our taxes.
In addition, if an insured person changes his or her place of residence, you
should notify us to change our records so that the charge will reflect the new
jurisdiction. Any change will take effect on the next policy anniversary, if
received at least 60 days prior to the policy anniversary.
Premium Sales Charge. This charge is intended to compensate us in part for sales
and promotional expenses in connection with selling Survivorship 2000, such as
commissions, advertising, and the cost of preparing and printing sales
literature and prospectuses.
The Premium Sales Charge in the first policy year is equal to 30% of premiums
paid up to one "target premium," plus 3% of premiums paid in excess of the
target premium in that year. The target premium is actuarially determined based
upon the age, sex and smoker status of each of the insured persons. If your
policy has a guaranteed minimum death benefit provision, a target premium equals
one guaranteed minimum death benefit premium at issue, excluding premiums for
riders and substandard ratings. The target premium is established at issue, and
will be reduced if you request a Face Amount decrease or if there is a change
from smoker to non-smoker status of an insured person. See COST OF INSURANCE
CHARGE below.
If you paid at least one target premium in the first policy year, the Premium
Sales Charge in each subsequent year is equal to 7.5% (6% for joint insureds
whose combined issue ages equal 134 or more) of premiums paid up to one target
premium, plus 3% of premiums paid in excess of the target premium in each year.
18
<PAGE>
If you paid less than one target premium in the first policy year, the Premium
Sales Charge in the second, third and fourth policy years is equal to 7.5% (6%
for joint insureds whose combined issue ages equal 134 or more) of premiums paid
up to the lesser of one target premium or the highest amount of premiums paid in
any prior year, plus 30% on premiums paid in excess of this amount until
premiums paid in that year equal the target premium, plus 3% of premiums paid in
excess of the target premium in that year. The Premium Sales Charge in policy
years five and later is 7.5% (6% for joint insureds whose combined issue ages
equal 134 or more) of premiums paid up to one target premium, plus 3% of
premiums paid in excess of the target premium in each year.
Equitable currently intends to stop deducting the Premium Sales Charge at the
end of the twentieth policy year. However, this is our current intention and is
not guaranteed.
Paying less than one target premium in each of the first four policy years or
paying more than one target premium in any policy year (including the first
year) could reduce the policyowner's total Premium Sales Charge. For an example
of the latter, assume that the target premium is $10,000 and that the
policyowner would like to pay ten target premiums in a way that does not cause
the policy to become a modified endowment contract. If the policyowner paid
$20,000 (i.e., two times the amount of the target premium) in every other policy
year up to the ninth policy year, the total Premium Sales Charge would be
$7,500. If, however, the policyowner paid $10,000 in each of the first ten
policy years, the total Premium Sales Charge would be $9,750.
Attempting to structure the timing and amount of premium payments to reduce the
potential Premium Sales Charge is not recommended as it could increase the risk
that your policy will terminate without value. Remember, a target premium is
generally the equivalent of a guaranteed minimum death benefit premium.
Therefore, delaying the payment of target premiums to later years could
adversely effect the availability of the guaranteed minimum death benefit
provision if, as a result of the delay, actual premium payments were less than
the accumulation of guaranteed minimum death benefit premiums. If the policy's
guaranteed minimum death benefit provision is not in effect and the Net Cash
Surrender Value is insufficient to pay monthly deductions, the policy will lapse
unless a required premium payment is made. See YOUR POLICY CAN TERMINATE in Part
2 of this prospectus. In addition, any acceleration of premium payments to early
years should take into account the modified endowment seven-pay premium limit.
If at any time the aggregate premiums paid exceed the policy's cumulative
seven-pay limit, the policy will become a modified endowment and the policyowner
may incur adverse tax consequences when distributions are made. See TAX EFFECTS
in Part 2 of this prospectus.
DEDUCTIONS FROM YOUR POLICY ACCOUNT. At the beginning of each policy month, the
following charges are deducted from your Policy Account:
Monthly Administrative Charges. $0.07 per $1,000 of Face Amount during the first
policy year, plus a $6 per month charge in each policy year to compensate us for
administrative activities in connection with issuing and maintaining your
policy, such as billing, policy transactions and policyowner communications. We
may increase this latter charge, but we guarantee that it will never exceed $8
per month. All administrative charges are designed to reimburse us for expenses,
and we do not expect to profit from them.
Cost Of Insurance Charge. The cost of insurance charge is calculated by
multiplying the net amount at risk at the beginning of the policy month by the
monthly cost of insurance rate applicable to the insured persons at that time.
The net amount at risk is the difference between the current death benefit and
the amount in your Policy Account. We may earn a profit from this charge.
Your cost of insurance charge will vary from month to month with changes in the
net amount at risk. For example, if the current death benefit for the month is
increased because the death benefit is based on a percentage multiple of the
Policy Account, then the net amount at risk for the month will increase.
Assuming the percentage multiple is not in effect, increases or decreases to the
Policy Account will result in a corresponding decrease or increase to the net
amount at risk under Option A policies, but no change to the net amount at risk
under Option B policies. Increases or decreases to the Policy Account can result
from making premium payments, investment experience or the deduction of charges.
The monthly cost of insurance rate applicable to your policy will be based on
our current monthly cost of insurance rates. The current monthly cost of
insurance rates may be changed from time to time. However, the current rates
will never be more than the guaranteed maximum rates set forth in your policy.
The guaranteed rates are based on the Commissioner's 1980 Standard Ordinary Male
and Female, Smoker and Non-Smoker Mortality Tables. The current monthly cost of
insurance rates are determined based on the sex, age, rating class and
smoker/non-smoker status of each of the insured persons and the policy year.
Lower cost of insurance rates apply for insured persons who qualify as
non-smokers. To qualify, an insured person must meet additional requirements
that relate to smoking habits.
There will be no distinctions based on sex in the cost of insurance rates for
Survivorship 2000 policies sold in Montana and in other states for other special
circumstances. In these cases the references to sex in this prospectus should be
disregarded. Cost of insurance rates applicable to a policy issued with unisex
rates would not be greater than the comparable male rates set forth or
illustrated in this prospectus. Similarly, illustrated policy values in Part 4
would be no less favorable for comparable policies issued with unisex rates. The
guaranteed cost of insurance rates for Survivorship 2000 are based on the
Commissioner's 1980 Standard Ordinary SD Smoker and ND Non-Smoker Mortality
Table. Congress and the legislatures of various states have from time to time
considered legislation that would require insurance rates to be the same for
males and females of the same age and rating class.
19
<PAGE>
Charges For Additional Benefits. The charges for any additional benefits you
choose will be deducted monthly. The amount and duration of these charges are
shown on the Policy Information Page.
Guaranteed Minimum Death Benefit Charge. One cent per $1,000 of Face Amount of
insurance is deducted monthly to compensate us for the risk we assume by
guaranteeing a death benefit, no matter how unfavorable investment experience
may be, as long as the accumulated premiums you've paid, less withdrawals,
exceed a guaranteed minimum death benefit premium fund and any policy loan does
not exceed the Cash Surrender Value. This charge will be deducted only for those
policies that contain a guaranteed minimum death benefit provision regardless of
whether the guaranteed minimum death benefit premiums are paid. See YOUR POLICY
CAN TERMINATE in Part 2 of this prospectus. This charge will be assessed as long
as your policy remains in force.
Any changes in the cost of insurance rates, charges for additional benefits,
Premium Sales Charge, mortality and expense risk charge or administrative
charges will be by class of insured persons and will be based on changes in
future expectations about such factors as investment earnings, mortality, the
length of time policies will remain in effect, expenses and taxes.
In addition to the monthly deductions from your Policy Account described above,
we may charge fees for certain policy transactions. See PARTIAL WITHDRAWALS AND
SURRENDER, LIVING BENEFIT OPTION and TRANSFERS OF POLICY ACCOUNT VALUE in Part 2
of this prospectus for a description of policy transaction fees. Also, if you
request more than one illustration in a policy year, we may charge a fee. See
INDIVIDUAL ILLUSTRATIONS in Part 4 of this prospectus.
HOW POLICY ACCOUNT CHARGES ARE ALLOCATED. Generally, deductions from your Policy
Account for monthly charges are made from the Funds and the unloaned portion of
our Guaranteed Interest Account in accordance with the deduction allocation
percentages specified in your application unless you instruct us in writing to
do otherwise. See FLEXIBLE PREMIUMS in Part 2 of this prospectus. If a deduction
cannot be made in accordance with these percentages, it will be made based on
the proportions that your unloaned amounts in the Guaranteed Interest Account
and your amounts in the Funds bear to the total unloaned value of your Policy
Account.
CHARGE AGAINST THE SEPARATE ACCOUNT. This charge is reflected in the unit values
for the Funds of the Separate Account. See HOW WE DETERMINE THE UNIT VALUE in
Part 2 of this prospectus.
o A daily charge for assuming MORTALITY AND EXPENSE RISKS will be made. The
annual rate is .90%. We are committed to fulfilling our obligations under the
policy and providing service to you over the lifetime of your policy. Despite
the uncertainty of future events, we guarantee that monthly administrative
and cost of insurance deductions from your Policy Account will never be
greater than the maximum amounts shown in your policy. In making this
guarantee, we assume the mortality risk that insured persons will live for
shorter periods than we estimated. When this happens, we have to pay a
greater amount of death benefit than we expected to pay in relation to the
cost of insurance charges we received. We also assume the expense risk that
the cost of issuing and administering policies will be greater than we
expected. We make a charge for these mortality and expense risks at an
effective annual rate applied to the value of the assets in the Separate
Account attributable to Survivorship 2000. If the amount collected from this
charge exceeds losses from the risks assumed, it will be to our profit.
o We reserve the right to make a charge in the future for taxes or reserves set
aside for taxes, which will reduce the investment experience of the Funds.
See TAX EFFECTS in Part 2 of this prospectus.
CHARGES OF THE TRUSTS. The Funds purchase Class IB shares of the HRT or EQAT at
net asset value. That price reflects investment management fees, indirect
expenses, such as brokerage commissions, 12b-1 distribution fee charges and
certain other operating expenses. The Trusts do not impose a sales charge. See
DEDUCTIONS AND CHARGES in the Summary and HRT'S MANAGER AND INVESTMENT ADVISER,
EQAT'S MANAGER and EQAT'S INVESTMENT ADVISERS in Part 1 of this prospectus.
PURPOSE OF POLICY CHARGES. The charges under the policies are designed to cover,
in the aggregate, our direct and indirect costs of selling, administering and
providing benefits under the policies. They are also designed, in the aggregate,
to compensate us for the risks of loss we assume pursuant to the policies.
If, as expected, the charges that we collect from the policies exceed our total
costs in connection with the policies, we will earn a profit. Otherwise, we will
incur a loss. The current and maximum rates of certain of our charges have been
set with reference to estimates of the amount of specific types of expenses or
risks that we will incur. In most cases, this prospectus identifies such
expenses or risks in the name of the charge; e.g., the monthly administrative
charge, cost of insurance charge, and mortality and expense risk charge.
However, the fact that any charge bears the name of a particular expense or risk
does not mean that the amount we collect from that charge will never be more
than the amount of such expense or risk, or that we may not also be compensated
for such expense or risk out of any other charges we are permitted to deduct by
the terms of the policies.
ADDITIONAL INFORMATION ABOUT SURVIVORSHIP 2000
YOUR POLICY CAN TERMINATE. Your insurance coverage will continue as long as the
Net Cash Surrender Value of the policy is enough to pay the monthly deductions.
If the Net Cash Surrender Value at the beginning of a policy month is less than
such deductions for that month, your policy will go into default unless the
operation of the guaranteed minimum death benefit provision results in a waiver
of the
20
<PAGE>
monthly deductions. The guaranteed minimum death benefit provision is not
available in some jurisdictions, including New York and New Jersey.
Under the guaranteed minimum death benefit provision, we compare the guaranteed
minimum death benefit premium fund with the actual premium fund in order to
determine whether your coverage remains in effect. If the actual premium fund is
equal to or greater than the guaranteed minimum death benefit premium fund and
any policy loan outstanding does not exceed the Cash Surrender Value, then
monthly deductions in excess of the Net Cash Surrender Value will be waived for
that policy month and the policy will not go into default. If there is a loan
outstanding that exceeds the Cash Surrender Value, the policy will be in
default. The policy will also be in default if the actual premium fund is less
than the guaranteed minimum death benefit premium fund.
The guaranteed minimum death benefit premium fund for any policy month is the
accumulation of all the "specified premiums" shown on the Policy Information
Page up to that month, at 4% interest. The actual premium fund for any policy
month is the accumulation of all the premiums actually paid under the policy at
4% interest, less all withdrawals accumulated at 4% interest.
If your policy goes into default, we will notify you, and any assignees on our
records, in writing, that a 61-day grace period has begun and indicate the
payment that is needed to avoid policy termination at the end of the grace
period. The required payment will approximate an amount which would increase the
Net Cash Surrender Value to cover total monthly deductions for three months
(without regard to any investment performance in the Policy Account). The
required payment and any residual Policy Account value will be used to cover the
overdue deductions. However, if your Policy Account has unfavorable investment
experience, the required payment may not be sufficient to cover the overdue
deductions on the date we receive the payment. In this case, a new 61-day grace
period will begin. While a policy is in a grace period you may not transfer
Policy Account value, decrease the Face Amount, make a partial withdrawal or
change the death benefit option.
If we do not receive payment within the 61 days, your policy will terminate
without value. We will withdraw any amount left in your Policy Account and apply
this amount to the overdue deductions and any unpaid loan and accrued loan
interest. We will inform you, and any assignees, at last known addresses, that
your policy has ended without value. See TAX EFFECTS in Part 2 of this
prospectus for the potential tax consequences of a policy termination.
YOU MAY RESTORE A POLICY AFTER IT TERMINATES. Subject to certain state
variations, you may restore a policy within six months after it terminates if
the insured persons who were living on the date the policy terminates are still
alive, you provide evidence of insurability on those insured persons that is
satisfactory to us, and you make the premium payment that we require to restore
the policy. The required premium will not be more than an amount sufficient to
cover (i) total monthly deductions for three months, calculated from the
effective date of restoration; (ii) the monthly administrative charges from the
date of default to the effective date of restoration; and (iii) the charge for
taxes and the Premium Sales Charge associated with this payment. We will
determine the amount of this required premium as if no interest or investment
performance were credited to, or charged against, your Policy Account.
The policy will be restored as of the beginning of the policy month which
coincides with or follows the date we approve your application. Your restored
policy will not have any loan balance even if there was a loan outstanding under
the terminated policy.
From the required payment we will deduct the charge for applicable taxes and the
Premium Sales Charge. On the effective date of restoration, the Policy Account
will be equal to the balance of the required payment. We will start to make
monthly deductions as of the effective date of restoration. On that date, the
monthly administrative charges from the beginning of the grace period to the
effective date of restoration will be deducted from the Policy Account. See TAX
EFFECTS in Part 2 of this prospectus for the potential tax consequences of
restoring a terminated policy. Some states may vary the time period and
conditions of policy restoration.
POLICY PERIODS, ANNIVERSARIES, DATES AND AGES. When the applications for a
Survivorship 2000 policy are completed and submitted to us, we decide whether or
not to issue the policy. This decision is made based on the information in the
applications and our standards for issuing insurance and classifying risks. If
we decide not to issue a policy, we will either refund any premium paid or
reinstate a prior policy.
The Issue Date, shown on the Policy Information Page, is the date your policy is
actually issued, but if we have advanced the Register Date, the Issue Date will
be the same as the Register Date. Generally, contestability is measured from the
Issue Date, as is the suicide exclusion.
The Register Date, also shown on the Policy Information Page, is used to measure
policy years, months and anniversaries (annual and monthly). Charges and
deductions under the policy are first made as of the Register Date, even when we
have permitted an early Register Date as set forth below. For information on
such charges and deductions, see DEDUCTIONS FROM YOUR POLICY ACCOUNT in Part 2
of this prospectus. As to when coverage under the policy begins, see FLEXIBLE
PREMIUMS in Part 2 of this prospectus.
Generally, we determine the Register Date based upon when we receive your
minimum initial premium. In most cases:
o If you submit at least the minimum initial premium to your Equitable agent at
the time you sign the application, and we issue the policy as it was applied
for, then the Register Date will be the later of (a) the date part I of the
policy application was signed or, (b) the date part II of the policy
application was signed by a medical professional.
21
<PAGE>
o If we do not receive a payment equal to or greater than the minimum initial
premium at our Administrative Office before the Issue Date or, if the policy
is not issued as applied for, the Register Date will be the same as the Issue
Date.
An early Register Date may be permitted for employer-sponsored cases in order to
accommodate a common Register Date for all employees. An early Register Date may
also be permitted to provide a younger age at issue. We may also permit
policyowners to delay a Register Date (up to three months) in employer-sponsored
cases. Additionally, policies that would otherwise receive a Register Date of
the 29th, 30th or 31st of any month will receive a Register Date of the 28th of
that month.
The investment start date is the date that your initial net premium begins to
vary with the investment performance of the Funds or accrue interest in the
Guaranteed Interest Account. Generally, the investment start date will be the
same as the Register Date if the minimum initial premium is received at our
Administrative Office before the Register Date. Otherwise, the investment start
date will be the date the full minimum initial premium is received at our
Administrative Office. Thus, to the extent that your first premium is received
before the Register Date, there will be a period during which the initial
premium will not be experiencing investment performance. The investment start
date for policies with early Register Dates will also be the date the minimum
initial premium is received at our Administrative Office. Remember, the amount
of your first net premium to be allocated to the Funds will initially be
allocated to the Alliance Money Market Fund of the Separate Account until the
Allocation Date. See FLEXIBLE PREMIUMS in Part 2 of this prospectus. Any
subsequent premium payment received after the investment start date will begin
to experience investment performance as of the date such payment is received at
our Administrative Office.
Generally, when we refer to the age of an insured person, we mean his or her age
on the birthday nearest to the beginning of the particular policy year.
TAX EFFECTS
This discussion is based on our understanding of the current Federal income tax
laws as currently interpreted on Survivorship 2000 policies owned by U.S.
resident individuals. The tax effects on corporations, other business entities,
other non-natural persons such as trusts, non-U.S. residents or non-U.S.
citizens may be different. This discussion is general in nature and should not
be considered tax advice, for which you should consult your legal or tax
adviser.
POLICY PROCEEDS. A Survivorship 2000 policy will be treated as "life insurance"
for Federal income tax purposes if it meets the definitional requirement of the
Internal Revenue Code of 1986, as amended (the Code) and as long as the
portfolios of the Trust satisfy the diversification requirements under the Code.
We believe that Survivorship 2000 will meet these requirements, and that:
o the death benefit received by the beneficiary under your Survivorship 2000
policy will not be subject to Federal income tax; and
o as long as your policy remains in force, increases in the Policy Account
value as a result of interest or investment experience will not be subject to
Federal income tax unless and until there is a distribution from your policy,
such as a surrender, loan or a partial withdrawal.
Special tax rules may apply, however, if you transfer your ownership of the
policy. Certain transfers for value may subject the transferor to income tax and
result in the transferee becoming subject to income tax on death proceeds to the
extent such proceeds exceed the transferee's investment in the policy. A gift or
bequest of a policy subject to a loan may be viewed as a part sale, part gift
transaction and can also trigger income tax consequences. Consult your tax
adviser before any transfer of your policy.
The Federal income tax consequences of a distribution from your policy will
depend among other things on whether your policy is determined to be a "modified
endowment." The character of any income recognized under your policy will be
ordinary income as opposed to capital gain.
A MODIFIED ENDOWMENT IS a life insurance policy which fails to meet a
"seven-pay" test. In general, a policy will fail the seven-pay test if the
cumulative amount of premiums paid under the policy at any time during the first
seven policy years exceeds a calculated premium level. The calculated seven-pay
premium level is based on a hypothetical policy issued on the same insured
persons and for the same initial death benefit which, under specified conditions
(which include the absence of expense and administrative charges), would be
fully paid for after seven level annual payments. Your policy will be treated as
a modified endowment unless the cumulative premiums paid under your policy, at
all times during the first seven policy years, are less than or equal to the
cumulative seven-pay premiums which would have been paid under the hypothetical
policy on or before such times.
Whenever there is a "material change" under a policy, it will generally be
treated as a new contract for purposes of determining whether the policy is a
modified endowment, and subjected to a new seven-pay period and a new seven-pay
limit. The new seven-pay limit would be determined taking into account, under a
downward adjustment formula, the Policy Account value of the policy at the time
of such change. A materially changed policy would be considered a modified
endowment if it failed to satisfy the new seven-pay limit. A material change
could occur as a result of a change in death benefit option, the selection of
additional benefits, the restoration of a terminated policy and certain other
changes.
22
<PAGE>
If the benefits under your policy are reduced, for example, by requesting a
decrease in Face Amount, or in some cases by making partial withdrawals,
terminating additional benefits under a rider, changing the death benefit
option, or as a result of policy termination, the calculated seven-pay premium
level will be redetermined based on the reduced level of benefits and applied
retroactively for purposes of the seven-pay test. If the premiums previously
paid are greater than the recalculated seven-pay premium level limit, the policy
will become a modified endowment. Generally, a life insurance policy which is
received in exchange for a modified endowment or a modified endowment which
terminates and is restored, will also be considered a modified endowment.
Whether or not your policy is a modified endowment, changes made to a life
insurance policy, for example, a decrease in benefits or the termination of or
restoration of a terminated policy, may have other effects on your policy,
including impacting the maximum amount of premiums that can be paid under the
policy, as well as the maximum amount of Policy Account value that may be
maintained under the policy. In some cases, this may cause us to take action in
order to assure your policy continues to qualify as life insurance, including
distribution of amounts that may be includable as income. Such changes can also
affect the tax treatment of prior distributions made during the same taxable
year or in anticipation of a reduction in benefits (generally within two years
before a reduction in benefits). See POLICY CHANGES below.
IF YOUR SURVIVORSHIP 2000 POLICY IS NOT A MODIFIED ENDOWMENT, as long as it
remains in force, a loan under your policy will be treated as indebtedness and
no part of the loan will be subject to current Federal income tax. Interest on
the loan will generally not be tax deductible. After the first fifteen policy
years, the proceeds from a partial withdrawal will generally not be subject to
Federal income tax except to the extent such proceeds exceed your "Basis" in
your policy. Your Basis in your policy generally will equal the premiums you
have paid less any amounts previously recovered through tax-free policy
distributions. During the first fifteen policy years, the proceeds from a
partial withdrawal could be subject to Federal income tax to the extent your
Policy Account value exceeds your Basis in your policy. The portion subject to
tax will depend upon a complex formula depending in part upon the ratio of your
death benefit to the Policy Account value (or, in some cases, the premiums paid)
under your policy and the ages of the insured persons at the time of the
withdrawal. For example, a partial withdrawal from a heavily funded policy or a
withdrawal from a policy where the benefits have been or within the next two
years will be substantially reduced can cause all or a portion of the
distribution to be taxable to the extent of gain in your policy.
If at any time your policy is surrendered, the excess, if any, of your Cash
Surrender Value (which includes the amount of any policy loan and accrued loan
interest) over your Basis will be subject to Federal income tax. In addition, if
a policy terminates while there is a policy loan, the cancellation of such loan
and accrued loan interest will be treated as a distribution and could be subject
to tax under the above rules. Upon the Maturity Date of the policy, the excess
of the amount of any benefit paid, not taking into account any reduction for any
loan and accrued loan interest, over your Basis in the policy will be subject to
Federal income tax.
IF YOUR POLICY IS A MODIFIED ENDOWMENT, any distribution from your policy will
be taxed on an "income-first" basis. Distributions for this purpose include a
loan (including any increase in the loan amount to pay interest on an existing
loan or an assignment or a pledge to secure a loan) or partial withdrawal. Any
such distribution will be considered taxable income to you to the extent your
Policy Account value exceeds your Basis in the policy. For modified endowments,
your Basis would be increased by the amount of any prior loan under your policy
that was considered taxable income to you. For purposes of determining the
taxable portion of any distribution, all modified endowments issued by the same
insurer or an affiliate to the same policyowner during any calendar year are to
be aggregated. The Secretary of the Treasury has authority to prescribe
additional rules to prevent avoidance of "income-first" taxation on
distributions from modified endowments.
A 10% penalty tax will generally apply to the taxable portion of a distribution
from a modified endowment. The penalty tax will not, however, apply to
distributions (i) to taxpayers 59 1/2 years of age or older, (ii) in the case of
disability (as defined in the Code) or (iii) received as part of a series of
substantially equal periodic annuity payments for the life (or life expectancy)
of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer
and beneficiary. If your policy is surrendered, the excess, if any, of your Cash
Surrender Value over your Basis will be subject to Federal income tax and,
unless one of the above exceptions applies, the 10% penalty tax. If your policy
terminates while there is a policy loan, the cancellation of such loan and
accrued loan interest will be treated as a distribution to the extent not
previously treated as such and could be subject to tax, including the penalty
tax, as described under the above rules. In addition, upon the Maturity Date of
the policy, the excess of the amount of any benefit paid, not taking into
account any reduction for any loan and accrued loan interest, over your Basis in
the policy will be subject to Federal income tax, and, unless an exception
applies, a 10% penalty tax.
If your policy becomes a modified endowment, distributions that occur during the
policy year it becomes a modified endowment and any subsequent policy year will
be taxed as described in the two preceding paragraphs. In addition,
distributions from a policy within two years before it becomes a modified
endowment will be subject to tax in this manner. THIS MEANS THAT A DISTRIBUTION
MADE FROM A POLICY THAT IS NOT A MODIFIED ENDOWMENT COULD LATER BECOME TAXABLE
AS A DISTRIBUTION FROM A MODIFIED ENDOWMENT. The Secretary of the Treasury has
been authorized to prescribe rules which would treat similarly other
distributions made in anticipation of a policy becoming a modified endowment.
23
<PAGE>
POLICY TERMINATIONS. A policy which has terminated without value may have the
tax consequences described under POLICY PROCEEDS above, even though you may be
able to restore your policy. For tax purposes, some restorations may be treated
as the purchase of a new insurance contract.
LIVING BENEFITS. Amounts received under a life insurance contract on the life of
individuals who are terminally ill, as defined by the tax law, are generally
excludable from gross income as amounts paid by reason of the death of the
insured. We believe that the living benefit which may be payable under your
policy meets the law's definition of terminally ill and can qualify for this
exclusion. This exclusion does not apply, however, to amounts paid to someone
other than the insured if the payee has an insurable interest in the insured's
life because the insured is a director, officer or employee of the payee or by
reason of the insured being financially interested in any trade or business
carried on by the payee.
DIVERSIFICATION. Under Section 817(h) of the Code, the Secretary of the Treasury
has the authority to set standards for diversification of the investments
underlying variable life insurance policies. The Treasury Department has issued
final regulations regarding the diversification requirements. Failure to meet
these requirements would disqualify your policy as a variable life insurance
policy under Section 7702 of the Code. If this were to occur, you would be
subject to Federal income tax on the income under the policy for the period of
the disqualification and subsequent periods. The Separate Account, through the
Trust, intends to comply with these requirements in order to avoid such
occurrence.
In connection with the issuance of the then temporary diversification
regulations, the Treasury Department stated that it anticipated the issuance of
regulations or rulings prescribing the circumstances in which the ability of a
policyowner to direct his investment to particular divisions of a separate
account may cause the policyowner, rather than the insurance company, to be
treated as the owner of the assets in the account. If you were considered the
owner of the assets of the Separate Account, income and gains from the Separate
Account would be included in your gross income for Federal income tax purposes.
Under current law we believe that Equitable, and not the owner of the policy,
would be considered the owner of the assets of the Separate Account.
RIDERS. Certain riders permit the splitting of a policy into two other
individual policies on the lives of a husband and wife, upon a divorce or
certain changes in the Federal estate tax law. This splitting of a policy could
have adverse tax consequences including, but not limited to, the recognition of
taxable income in an amount up to any gain in the policy at the time of the
split.
POLICY CHANGES. For you and your beneficiary to receive the tax treatment
discussed above, your policy must initially qualify and continue to qualify as
life insurance under Sections 7702 and 817(h) of the Code. We may make changes
in the policy or its riders or make distributions from the policy to the extent
we deem necessary to qualify your policy as life insurance for tax purposes. Any
such change will apply uniformly to all policies that are affected. You will be
given advance written notice of such changes.
TAX CHANGES. The United States Congress has in the past considered, is currently
considering and may in the future consider legislation that, if enacted, could
change the tax treatment of life insurance policies. In addition, the Treasury
Department may amend existing regulations, issue new regulations, or adopt new
interpretations of existing laws. Proposed Treasury Regulations concerning what
constitutes reasonable mortality and expense charges in testing whether a policy
qualifies as life insurance would, if finalized as now proposed, provide
stricter rules for policies covering more than one life. As currently drafted,
the rules would only apply to policies issued after the regulations are
finalized, causing such policies to generally provide increased levels of death
benefits relative to policy account values. State tax laws or, if you are not a
United States resident, foreign tax laws, may also affect the tax consequences
to you, the insured or your beneficiary. These laws may change from time to time
without notice and, as a result, the tax consequences may be altered. There is
no way of predicting whether, when or in what form any such change would be
adopted. Any such change could have a retroactive effect regardless of the date
of enactment. We suggest you consult your legal or tax adviser.
ESTATE AND GENERATION SKIPPING TAXES. When the last surviving insured dies, the
death benefit will generally be includable in the policyowner's estate for
purposes of Federal estate tax if the insured owned the policy. If the
policyowner is not the insured person, under certain conditions only the fair
market value of the policy would be included upon the death of the policyowner.
If the policyowner is not the insured and the insured dies with someone other
than the owner as beneficiary, the policyowner will be considered to have made a
gift transfer to the beneficiary of such proceeds. Federal estate tax is
integrated with Federal gift tax under a unified rate schedule. In general,
estates less than $625,000 for decedents dying during 1998 (scheduled to
increase in subsequent years to $1 million by the year 2005) will not incur a
Federal estate tax liability. In addition, an unlimited marital deduction may be
available for Federal estate and gift tax purposes.
As a general rule, if a "transfer" is made to a person two or more generations
younger than the policyowner, a generation skipping tax may be payable at rates
similar to the maximum estate tax rate in effect at the time. The generation
skipping tax provisions generally apply to "transfers" which would be subject to
the gift and estate tax rules. Individuals are generally allowed an aggregate
generation skipping tax exemption of $1 million. Because these rules are
complex, you should consult with your tax adviser for specific information,
especially where benefits are passing to younger generations.
24
<PAGE>
The particular situation of each policyowner, insured or beneficiary will
determine how ownership or receipt of policy proceeds will be treated for
purposes of Federal estate and generation skipping taxes as well as state and
local estate, inheritance, generation skipping and other taxes.
TRADE OR BUSINESS ENTITY OWNS OR IS DIRECTLY OR INDIRECTLY A BENEFICIARY OF THE
POLICY. Where a joint life policy is owned by other than a natural person, the
owner's ability to deduct interest on business borrowing unrelated to the policy
can be impacted as a result of its ownership of cash value life insurance. No
deduction will be allowed for a portion of a taxpayer's otherwise deductible
interest expense unless the policy covers only two individuals, and such
individuals are, at the time first covered by the policy, a 20 percent owner of
the trade or business entity that owns the policy and his/her spouse. Although
this limitation generally does not apply to policies held by natural persons, if
a trade or business (other than one carried on as a sole proprietorship) is
directly or indirectly the beneficiary under a policy (e.g., pursuant to a
split-dollar agreement), the policy shall be treated as held by such trade or
business. The effect will be that a portion of the trade or business entity's
deduction for its interest expenses will be disallowed unless the above
exception for a 20 percent owner and his/her spouse applies.
The portion of the entity's interest deduction that is disallowed will generally
be a pro rata amount which bears the same ratio to such interest expense as the
taxpayer's average unborrowed cash value bears to the sum of the taxpayer's
average unborrowed cash value and average adjusted bases of all other assets.
These rules disallowing interest expenses for trade or business entities
generally apply to contracts issued after June 8, 1997 in taxable years ending
after such date. However, for purposes of the preceding sentence, any material
increase in the death benefit or other material change in a contract shall be
treated as a new contract. Any corporate or business use of life insurance
should be carefully reviewed by your tax adviser with attention to these rules
as well as any other rules and possible tax law changes that could occur with
respect to business-owned life insurance.
OUR TAXES. Under the life insurance company tax provisions of the Code, variable
life insurance is treated in a manner consistent with fixed life insurance. The
operations of the Separate Account are reported in our Federal income tax return
but we currently pay no income tax on investment income and capital gains
reflected in variable life insurance policy reserves. Therefore, no charge is
currently being made to any Fund of the Separate Account for taxes. We reserve
the right to make a charge in the future for taxes incurred, for example, a
charge to the Separate Account for income taxes incurred by us that are
allocable to the policy.
We may have to pay state, local or other taxes in addition to applicable taxes
based on premiums. At present, these taxes are not substantial. If they
increase, charges may be made for such taxes when they are attributable to the
Separate Account or allocable to the policy.
WHEN WE WITHHOLD INCOME TAXES. Generally, unless you provide us with a written
election to the contrary before we make the distribution, we are required to
withhold Federal income tax from any portion of the money you receive if the
withdrawal of money from your Policy Account or the surrender or the maturity of
your policy is a taxable transaction. If you do not wish us to withhold tax from
the payment, or if enough is not withheld, you may have to make tax payments
later. You may also have to pay penalties under the tax rules if your
withholding and estimated tax payments are insufficient. States may also require
us to withhold tax on payments to you. In the case of non-U.S. residents and/or
non-U.S. citizens, special withholding rules will apply. In some cases, where
generation skipping taxes may apply, we may also be required to withhold for
such taxes unless we are provided satisfactory written notification that no such
taxes are due.
PART 3: ADDITIONAL INFORMATION
YOUR VOTING PRIVILEGES
TRUST VOTING PRIVILEGES. As explained in Part 1, we invest the assets in the
Funds in Class IB shares of the corresponding portfolios of the HRT or the EQAT.
Equitable is the legal owner of the shares of each Trust and will attend, and
has the right to vote at, any meeting of the HRT's or EQAT's shareholders. Among
other things, we may vote on any matters described in either Trust's prospectus
or requiring a vote by shareholders under the 1940 Act.
Even though we own the shares, to the extent required by the 1940 Act, you will
have the opportunity to tell us how to vote the number of shares that can be
attributed to your policy. We will vote those shares at meetings of HRT or EQAT
shareholders according to your instructions. If we do not receive instructions
in time from all policyowners, we will vote shares in a portfolio for which no
instructions have been received in the same proportion as we vote shares for
which we have received instructions in that portfolio. We will vote any HRT or
EQAT shares that we are entitled to vote directly due to amounts we have
accumulated in the Funds in the same proportions that all policyowners vote,
including those who participate in other separate accounts. If the Federal
securities laws or regulations or interpretations of them change so that we are
permitted to vote shares of the HRT or EQAT in our own right or to restrict
policyowner voting, we may do so.
HOW WE DETERMINE YOUR VOTING SHARES. You may participate in voting only on
matters concerning the HRT or EQAT portfolios corresponding to the Funds to
which your Policy Account is allocated. The number of HRT or EQAT shares in each
Fund that are attributable to your policy is determined by dividing the amount
in your Policy Account allocated to that Fund by the net asset value of one
share of the corresponding portfolio as of the record date set by either HRT's
or EQAT's Board for its respective shareholders
25
<PAGE>
meeting. The record date for this purpose must be at least 10 and no more than
90 days before the particular shareholder meeting. Fractional shares are
counted.
If you are entitled to give us voting instructions, we will send you proxy
material and a form for providing instructions. In certain cases, we may
disregard instructions relating to changes in a portfolio's adviser or its
investment policies. We will advise you if we do and detail the reasons in the
next semiannual report to policyowners.
SEPARATE ACCOUNT VOTING RIGHTS. Under the 1940 Act, certain actions (such as
some of those described under OUR RIGHT TO CHANGE HOW WE OPERATE below) may
require policyowner approval. In that case, you will be entitled to one vote for
every $100 of value you have in the Funds. We will cast votes attributable to
amounts we have in the Funds in the same proportions as votes cast by
policyowners.
OUR RIGHT TO CHANGE HOW WE OPERATE
In addition to changing or adding investment companies, we have the right to
modify how we or the Separate Account operate. We intend to comply with
applicable law in making any changes and, if necessary, we will seek policyowner
approval. We have the right to:
o add Funds to, or remove Funds from, the Separate Account, combine two or more
Funds within the Separate Account, or withdraw assets relating to
Survivorship 2000 from one Fund and put them into another;
o register or end the registration of the Separate Account under the 1940 Act;
o operate the Separate Account under the direction of a committee or discharge
such a committee at any time (the committee may be composed entirely of
persons who are "interested persons" of Equitable under the 1940 Act);
o restrict or eliminate any voting rights of policyowners or other people who
have voting rights that affect the Separate Account;
o operate the Separate Account or one or more of the Funds in any other form
the law allows, including a form that allows us to make direct investments.
Our Separate Account may be charged an advisory fee if its investments are
made directly rather than through an investment company. We may make any
legal investments we wish. In choosing these investments, we will rely on our
own or outside counsel for advice. In addition, we may disapprove any change
in investment advisers or in investment policy unless a law or regulation
provides differently.
If any changes are made that result in a material change in the underlying
investments of a Fund, you will be notified as required by law. We may, for
example, cause the Fund to invest in a mutual fund other than, or in addition
to, the Trusts. If you then wish to transfer the amount you have in that Fund to
another Fund or to the Guaranteed Interest Account, you may do so, without
charge, by contacting our Administrative Office. At the same time, you may also
change how your net premiums and deductions are allocated.
OUR REPORTS TO POLICYOWNERS
Shortly after the end of each policy year you will receive a report that
includes information about your policy's current death benefit, Cash Surrender
Value and policy loan. Notices will be sent to you to confirm premium payments
(except premiums paid through an automated payment plan), transfers of amounts
between Funds and certain other policy transactions.
LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY
We can challenge the validity of your insurance policy based on material
misstatements in your application and any application for change. However, there
are some limits on how and when we can challenge the policy.
o We cannot challenge the policy after it has been in effect, during the
lifetimes of both insured persons, for two years from the date the policy was
issued.
o We cannot challenge any policy change that requires evidence of insurability
or any restoration of the policy after the change or restoration has been in
effect for two years during the lifetime of any insured person living at the
time the change or restoration takes effect.
If the last surviving insured person dies within the time that we may challenge
the validity of the policy, we may delay payment until we decide whether to
challenge the policy. Some states may require that we measure these times in
some other way. If an insured person's age or sex is misstated on any
application, the death benefit and any additional benefits provided will be
those which would be purchased by the most recent deduction for the cost of
insurance and the cost of any additional benefits at that insured person's
correct age and sex.
If the last surviving insured person commits suicide within two years after the
date on which the policy was issued or following a policy change that increases
the death benefit, the death benefit will be limited as described in the policy.
Some states require that we measure this time by some other date.
26
<PAGE>
YOUR PAYMENT OPTIONS
Policy benefits or other payments such as the Net Cash Surrender Value may be
paid immediately in one sum or you may choose another form of payment for all or
part of the money. Payments under these options are not affected by the
investment experience of any Fund. Instead, interest accrues pursuant to the
options chosen.
You will make a choice of payment option (or any later changes) and your choice
will take effect in the same way as it would if you were changing a beneficiary.
See YOUR BENEFICIARY below. If you do not arrange for a specific form of payment
before the last surviving insured person dies, the beneficiary will be paid
through the Equitable Access Account.(TM) The Equitable Access Account is not
available to corporate or other non-natural beneficiaries. See WHEN WE PAY
POLICY PROCEEDS below. The beneficiary will then have a choice of payment
options. However, if you do make an arrangement with us for how the money will
be paid, the beneficiary cannot change the choice after the last surviving
insured person dies. Different payment options may result in different tax
consequences.
The beneficiary or any other person who is entitled to receive payment may name
a successor to receive any amount that we would otherwise pay to that person's
estate if that person died. The person who is entitled to receive payment may
change the successor at any time.
We must approve any arrangements that involve more than one payment option, or a
payee who is not a natural person (for example, a corporation), or a payee who
is a fiduciary. Also, the details of all arrangements will be subject to our
rules at the time the arrangements are selected and take effect. This includes
rules on the minimum amount we will pay under an option, minimum amounts for
installment payments, withdrawal or commutation rights (your rights to receive
payments over time, for which we may offer a lump sum payment), the naming of
people who are entitled to receive payment and their successors, and the ways of
proving age and survival.
YOUR BENEFICIARY
You name your beneficiary when you apply for the policy. The beneficiary is
entitled to the insurance benefits of the policy. While either or both of the
insured persons are living, you may change the beneficiary by writing to our
Administrative Office. You can name more than one beneficiary. Beneficiaries may
be classed as primary and contingent beneficiaries. When two or more persons are
named in a class they will share equally unless you have specified their
respective shares. If no beneficiary is living when the last surviving insured
person dies, we will pay the death benefit in equal shares to such insured
person's surviving children. If there are no surviving children, we will pay the
death benefit to that insured person's estate.
ASSIGNING YOUR POLICY
You may assign (transfer) your rights in the policy to someone else as
collateral for a loan or for some other reason, if we agree. If you do, a copy
of the assignment must be forwarded to our Administrative Office. We are not
responsible for any payment we make or any action taken before we receive notice
of the assignment or for the validity of the assignment. An absolute assignment
is a change of ownership. BECAUSE THERE MAY BE TAX CONSEQUENCES, INCLUDING THE
LOSS OF INCOME TAX-FREE TREATMENT FOR ANY DEATH BENEFIT PAYABLE TO THE
BENEFICIARY, YOU SHOULD CONSULT YOUR TAX ADVISER PRIOR TO MAKING AN ASSIGNMENT.
WHEN WE PAY POLICY PROCEEDS
We will pay any death benefits, maturity benefit, Net Cash Surrender Value or
loan proceeds within seven days after we receive the last required form or
request (and other documents that may be required for payment of death benefits)
at our Administrative Office. Death benefits are determined as of the date of
death of the last surviving insured person and will not be affected by
subsequent changes in the unit values of the Funds. Death benefits will
generally be paid through the Equitable Access Account, an interest bearing
checking account. A beneficiary will have immediate access to the proceeds by
writing a check on the account. We pay interest from the date of death to the
date the Equitable Access Account is closed. If an Equitable agent helps the
beneficiary of a policy to prepare the documents that are required for payment
of the death benefit, we will send the Equitable Access Account checkbook or
check to the agent within seven days after we receive the required documents.
Our agents will take reasonable steps to arrange for prompt delivery to the
beneficiary.
We may, however, delay payment if we contest the policy. We may also delay
payment if we cannot determine the amount of the payment because the New York
Stock Exchange is closed, because trading in securities has been restricted by
the SEC, or because the SEC has declared that an emergency exists. In addition,
if necessary to protect our policyowners, we may delay payment where permitted
under applicable law.
We may defer payment of Net Cash Surrender Value withdrawal or loan amount
(except a loan to pay a premium to us) from the Guaranteed Interest Account for
up to six months after we receive your request. We will pay interest of at least
3% a year from the date we receive your request if we delay more than 30 days in
paying you such amounts from the Guaranteed Interest Account.
DIVIDENDS
No dividends are paid on the policy described in this prospectus.
27
<PAGE>
REGULATION
We are regulated and supervised by the New York State Insurance Department. In
addition, we are subject to the insurance laws and regulations in every
jurisdiction where we sell policies. As a result, the provisions of the
Survivorship 2000 policy may vary somewhat from jurisdiction to jurisdiction.
The Survivorship 2000 policy (Plan No. 92-500) has been filed with and approved
by insurance officials in 50 states, the District of Columbia, Puerto Rico and
the Virgin Islands. We submit annual reports on our operations and finances to
insurance officials in all the jurisdictions where we sell policies. The
officials are responsible for reviewing our reports to be sure that we are
financially sound.
SPECIAL CIRCUMSTANCES
Equitable may vary the charges and other terms of Survivorship 2000 where
special circumstances result in sales or administrative expenses or mortality
risks that are different than those normally associated with Survivorship 2000
policies. These variations will be made only in accordance with uniform rules
that we establish.
DISTRIBUTION
Equitable Distributors, Inc. (EDI) is a principal underwriter of HRT and EQAT, a
principal underwriter of the Separate Account, and is also a distributor of
certain of our variable life insurance policies and variable annuity contracts.
EDI's principal business address is 1290 Avenue of the Americas, New York, NY
10104. EDI is registered with the SEC as a broker-dealer under the Securities
Exchange Act of 1934 (1934 Act) and is a member of the National Association of
Securities Dealers, Inc. In 1996 and 1997, EDI was paid a fee of $1,204,370 and
$20,088,049, respectively, for its services under a Distribution Agreement with
Equitable and its separate accounts.
Survivorship 2000 policies are sold through agencies (both affiliated and
unaffiliated with Equitable) licensed by state insurance officials, and their
affiliated broker-dealers who are registered under the 1934 Act and are members
of the NASD. Such agencies and their affiliated broker-dealers have entered into
selling agreements with EDI. Agents who sell our policies are licensed by state
insurance officials to sell our variable life policies, are appointed as agents
of Equitable, and are Registered Representatives of their agencies' affiliated
broker-dealer. When EDI has acted as distributor, sales commissions will be paid
by Equitable to the agency which sells you this policy. We pay commissions from
our own resources, including the Premium Sales Charge deducted from your
premium. Generally, during the first policy year, the agency will receive a
commission equal to a maximum of 50% of the premiums paid up to a certain amount
and 3% of the premiums paid in excess of that amount. For policy years two
through ten, the agency receives a commission up to a maximum of 3% of the
premiums paid. Commissions paid to an agency based upon refunded premiums may be
recovered.
LEGAL PROCEEDINGS
We are not involved in any legal proceedings that would be considered material
with respect to a policyowner's interest in the Separate Account.
ACCOUNTING AND ACTUARIAL EXPERTS
The financial statements of Separate Account FP and Equitable included in this
prospectus have been audited for the years ended December 31, 1997, 1996 and
1995 by Price Waterhouse LLP, as stated in their reports. The financial
statements of Separate Account FP and Equitable have been so included in
reliance on the reports of Price Waterhouse LLP, independent accountants, given
on the authority of such firm as experts in accounting and auditing.
The financial statements of Equitable contained in this prospectus should be
considered only as bearing upon the ability of Equitable to meet its obligations
under the Survivorship 2000 policies. They should not be considered as bearing
upon the investment experience of the Funds of the Separate Account. The
financial statements of Separate Account FP include periods when Separate
Account FP was part of Equitable Variable, a wholly owned subsidiary of
Equitable. The assets of Separate Account FP were assumed by Equitable on
January 1, 1997 when Equitable Variable was merged into Equitable.
Actuarial matters in this prospectus have been examined by Barbara Fraser,
F.S.A., M.A.A.A., who is a Vice President and Actuary of Equitable. Her opinion
on actuarial matters is filed as an exhibit to the Registration Statement we
filed with the SEC.
ADDITIONAL INFORMATION
We have filed a Registration Statement relating to the Separate Account and the
variable life insurance policy described in this prospectus with the SEC. The
Registration Statement, which is required by the Securities Act of 1933,
includes additional information that is not required in this prospectus under
the rules and regulations of the SEC. If you would like the additional
information, you may obtain it from the SEC's main office in Washington, D.C.
You will have to pay a fee for the material.
YEAR 2000 PROGRESS
Equitable relies upon various computer systems in order to administer your
policy and operate the investment portfolios. Some of these systems belong to
service providers who are not affiliated with Equitable.
28
<PAGE>
In 1995, Equitable began addressing the question of whether its computer systems
would recognize the year 2000 before, on or after January 1, 2000 and Equitable
believes it has identified those of its systems critical to business operations
that are not Year 2000 compliant. By year end 1998, Equitable expects that the
work of modifying or replacing non-compliant systems will substantially be
completed and expects a comprehensive test of its Year 2000 compliance will be
performed in the first half of 1999. Equitable is in the process of seeking
assurances from third party service providers that they are acting to address
the Year 2000 issue with the goal of avoiding any material adverse effect on
services provided to policy holders and on operations of the investment
portfolios. Any significant unresolved difficulty related to the Year 2000
compliance initiatives could have a material adverse effect on the ability to
administer your policy and operate the investment portfolios. Assuming the
timely completion of computer modifications by Equitable and third party service
providers, there should be no material adverse effect on our ability to perform
these functions.
MANAGEMENT
Here is a list of our directors and, to the extent they are responsible for
variable life insurance operations, our principal officers and a brief statement
of their business experience for the past five years. Unless otherwise noted,
their address is 1290 Avenue of the Americas, New York, New York 10104.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- -------------------------------------------------------------------------------------------------------------------------------
DIRECTORS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Francoise Colloc'h Director of Equitable since July 1992. Senior Executive Vice President, Human
AXA-UAP Resources and Communications of AXA-UAP ("AXA-UAP"), and various positions with
23, Avenue Matignon AXA-UAP affiliated companies. Director of the Holding Company.
75008 Paris, France
- -------------------------------------------------------------------------------------------------------------------------------
Henri de Castries Director of Equitable since September 1993. Director and Chairman of the Board of
AXA-UAP the Holding Company since April 1998. Prior thereto, Vice Chairman of the Board of
23, Avenue Matignon the Holding Company since February 1996. Senior Executive Vice President, Financial
75008 Paris, France Services and Life Insurance Activities of AXA-UAP since 1996. Also Director or
Officer of various subsidiaries and affiliates of the AXA-UAP Group (formerly known
as the AXA Group). Director of other Equitable affiliates. Previously held other
officerships with the AXA Group.
- -------------------------------------------------------------------------------------------------------------------------------
Joseph L. Dionne Director of Equitable since May 1982. Chairman and Chief Executive of The
The McGraw-Hill Companies McGraw-Hill Companies. Director of the Holding Company.
1221 Avenue of the Americas
New York, NY 10020
- -------------------------------------------------------------------------------------------------------------------------------
Denis Duverne Director of Equitable since February 1998. Senior Vice President of AXA-UAP.
AXA-UAP Director since February 1996, Alliance. Director since February 1997, Donaldson
23, Avenue Matignon Lufkin & Jenrette ("DLJ").
75008 Paris, France
- -------------------------------------------------------------------------------------------------------------------------------
William T. Esrey Director of Equitable since July 1986. Chairman and Chief Executive Officer of
Sprint Corporation Sprint Corporation. Director of the Holding Company.
P.O. Box 11315
Kansas City, MO 64112
- -------------------------------------------------------------------------------------------------------------------------------
Jean-Rene Fourtou Director of Equitable since July 1992. Chairman and Chief Executive Officer of
25, Quai Paul Doumer Rhone-Poulenc S.A. Member of the Supervisory Board of AXA-UAP since January 1997.
92408 Courbevoie Cedex Director of the Holding Company.
France
- -------------------------------------------------------------------------------------------------------------------------------
Norman C. Francis Director of Equitable since March 1989. President of Xavier University of Louisiana.
Xavier University of Louisiana
7325 Palmetto Street
New Orleans, LA 70125
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- -------------------------------------------------------------------------------------------------------------------------------
DIRECTORS (continued)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Donald J. Greene Director of Equitable since July 1991. Partner, LeBoeuf, Lamb, Greene & MacRae.
LeBouef, Lamb, Greene & MacRae Director of the Holding Company.
125 West 55th Street
New York, NY 10019-4513
- -------------------------------------------------------------------------------------------------------------------------------
John T. Hartley Director of Equitable since August 1987. Currently a Director and retired Chairman
Harris Corporation and Chief Executive Officer of Harris Corporation (retired July 1995); previously
1025 NASA Boulevard held other officerships with Harris Corporation. Director of the Holding Company.
Melbourne, FL 32919
- -------------------------------------------------------------------------------------------------------------------------------
John H.F. Haskell, Jr. Director of Equitable since July 1992. Managing Director of SBC Warburg Dillon Read,
SBC Warburg Dillon Read, Inc. Inc. and member of its Board of Directors. Director of the Holding Company.
535 Madison Avenue
New York, NY 10028
- -------------------------------------------------------------------------------------------------------------------------------
Mary R. (Nina) Henderson Director of Equitable since December 1996. President of Bestfoods Grocery (formerly
Bestfoods Grocery CPC Specialty Markets Group) of BESTFOODS (formerly CPC International, Inc.) since
BESTFOODS 1993. Prior thereto, President of CPC Specialty Products and Best Foods Exports.
International Plaza Director of the Holding Company.
700 Sylvan Avenue
Englewood Cliffs, NJ 07632-9976
- -------------------------------------------------------------------------------------------------------------------------------
W. Edwin Jarmain Director of Equitable since July 1992. President of Jarmain Group Inc.; also an
Jarmain Group Inc. Officer or Director of several affiliated companies. Chairman and Director of FCA
121 King Street West International Ltd. Director of various AXA affiliated companies. Previously held
Suite 2525 other officerships with FCA International. Director of the Holding Company.
Toronto, Ontario M5H 3T9
Canada
- -------------------------------------------------------------------------------------------------------------------------------
G. Donald Johnston, Jr. Director of Equitable since January 1986. Retired Chairman and Chief Executive
184-400 Ocean Road Officer of JWT Group, Inc. and J. Walter Thompson Company.
John's Island
Vero Beach, FL 32963
- -------------------------------------------------------------------------------------------------------------------------------
George T. Lowy Director of Equitable since July 1992. Partner, Cravath, Swaine & Moore.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
- -------------------------------------------------------------------------------------------------------------------------------
Didier Pineau-Valencienne Director of Equitable since February 1996. Chairman and Chief Executive Officer of
Schneider S.A. Schneider S.A. and Chairman or Director of numerous subsidiaries and affiliated
64/70, Avenue Jean-Baptiste Clement companies of Schneider. Director of AXA-UAP and the Holding Company.
92646 Boulogne-Billancourt Cedex
France
- -------------------------------------------------------------------------------------------------------------------------------
George J. Sella, Jr. Director of Equitable since May 1987. Retired Chairman and Chief Executive Officer
P.O. Box 397 of American Cyanamid Company (retired April 1993); previously held other
Newton, NJ 07860 officerships with American Cyanamid. Director of the Holding Company.
- -------------------------------------------------------------------------------------------------------------------------------
Dave H. Williams Director of Equitable since March 1991. Chairman and Chief Executive Officer of
Alliance Capital Management Alliance and Chairman or Director of numerous subsidiaries and affiliated companies
Corporation of Alliance. Director of the Holding Company.
1345 Avenue of the Americas
New York, NY 10105
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- -------------------------------------------------------------------------------------------------------------------------------
OFFICERS AND DIRECTORS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Michael Hegarty Director of Equitable since January 1998. President since January 1998 and Chief
Operating Officer since February 1998, Equitable. Vice Chairman since April 1998,
Senior Executive Vice President (January 1998 to April 1998), and Director and Chief
Operating Officer (both since January 1998), the Holding Company. Vice Chairman
(from 1996 to 1997), Chase Manhattan Corporation. Vice Chairman (from 1995 to 1996)
and Senior Executive Vice President (from 1991 to 1995), Chemical Bank. Executive
Vice President, Chief Operating Officer and Director since March 1998, Equitable
Investment Corporation ("EIC"), ACMC, Inc. ("ACMC") and Equitable Capital Management
Corporation ("ECMC").
- -------------------------------------------------------------------------------------------------------------------------------
Edward D. Miller Director of Equitable since August 1997. Chairman of the Board since January 1998,
Chief Executive Officer since August 1997, President (August 1997 to January 1998),
Equitable. Director, President and Chief Executive Officer, all since August 1997,
the Holding Company. Senior Vice Chairman, Chase Manhattan Corporation (March 1996
to April 1997). President (January 1994 to March 1996) and Vice Chairman (December
1991 to January 1994), Chemical Bank. Director, Alliance (since August 1997), DLJ
(since November 1997), ECMC (since March 1998) and ACMC (since March 1998).
Director, Chairman, President and Chief Executive Officer since March 1998, EIC.
- -------------------------------------------------------------------------------------------------------------------------------
Stanley B. Tulin Director of Equitable since February 1998. Vice Chairman of the Board since February
1998 and Chief Financial Officer since April 1996, Equitable. Executive Vice
President since May 1996 and Chief Financial Officer since May 1997, the Holding
Company. Vice President since March 1997, EQAT. Director since July 1997, Alliance.
Director, Executive Vice President and Chief Financial Officer since June 1997, EIC.
Director, Chairman, President and Chief Executive Officer since July 1997, ACMC.
Prior thereto, Chairman, Insurance Consulting and Actuarial Practice, Coopers &
Lybrand, L.L.P.
- -------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- -------------------------------------------------------------------------------------------------------------------------------
Leon B. Billis Executive Vice President and Chief Information Officer (since February 1998),
Equitable. Previously held other officerships with Equitable.
- -------------------------------------------------------------------------------------------------------------------------------
Harvey Blitz Senior Vice President and Deputy Chief Financial Officer, Equitable. Senior Vice
President, the Holding Company. Vice President and Chief Financial Officer since
March 1997, EQAT. Chairman, Frontier Trust Company ("Frontier"). Executive Vice
President since November 1996 and Director, EQ Financial Consultants, Inc. ("EQF").
Director until May 1997, Equitable Distributors, Inc. ("EDI") and Director and
Officer of various Equitable affiliates. Previously held other officerships with
Equitable and its affiliates.
- -------------------------------------------------------------------------------------------------------------------------------
Kevin R. Byrne Senior Vice President and Treasurer, Equitable and the Holding Company. Treasurer,
EquiSource and Frontier. Vice President and Treasurer, Equitable Casualty Insurance
Company ("Casualty") and EQAT (since March 1997). Previously held other
officerships with Equitable and its affiliates.
- -------------------------------------------------------------------------------------------------------------------------------
Judy A. Faucett Senior Vice President and Actuary, Equitable, since September 1996. Partner and
Senior Actuarial Consultant, Coopers & Lybrand, L.L.P. (January 1989 to August 1996).
- -------------------------------------------------------------------------------------------------------------------------------
Alvin H. Fenichel Senior Vice President and Controller, Equitable and the Holding Company. Previously
held other officerships with Equitable and its affiliates.
- -------------------------------------------------------------------------------------------------------------------------------
Paul J. Flora Senior Vice President and Auditor, Equitable. Vice President and Auditor, the
Holding Company, since September 1994. Vice President/Auditor, National Westminster
Bank (November 1984 to June 1993).
- -------------------------------------------------------------------------------------------------------------------------------
Mark A. Hug Senior Vice President since April 1997, Equitable. Prior thereto, Vice President,
Aetna.
- -------------------------------------------------------------------------------------------------------------------------------
Robert E. Garber Executive Vice President and General Counsel, Equitable and the Holding Company.
Previously held other officerships with Equitable and its affiliates.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- -------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS (continued)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Jerome S. Golden Executive Vice President since November 1997, Equitable. Prior thereto, President,
Income Management Group (May 1994 to November 1997), Equitable. Chairman and Chief
Executive Officer (February 1995 to December 1997), EDI. Owner (November 1993 to May
1994), JG Resources.
- -------------------------------------------------------------------------------------------------------------------------------
Donald R. Kaplan Vice President and Chief Compliance Officer, Equitable. Previously held other
officerships with Equitable.
- -------------------------------------------------------------------------------------------------------------------------------
Michael S. Martin Senior Vice President and Chief Marketing Officer since January 1997, Equitable.
Prior thereto, Senior Vice President. Chairman and Chief Executive Officer, EQF.
Vice President, EQAT (since March 1997) and HRT (until March 1998). Director,
Equitable Underwriting and Sales Agency (Bahamas), Ltd. (since May 1996) and
Colorado (since January 1995). Previously held other officerships with
Equitable and its affiliates.
- -------------------------------------------------------------------------------------------------------------------------------
Douglas Menkes Senior Vice President and Corporate Actuary since June 1997, Equitable. Prior
thereto, Consulting Actuary, Milliman & Robertson, Inc.
- -------------------------------------------------------------------------------------------------------------------------------
Peter D. Noris Executive Vice President and Chief Investment Officer, Equitable. Executive Vice
President since May 1995 and Chief Investment Officer since July 1995, the Holding
Company. Trustee, HRT, and Chairman, President and Trustee since March 1997, EQAT.
Director, Alliance, since July 1995. Executive Vice President, EQF, since November
1996. Prior to May 1995, Vice President/Manager, Insurance Companies Investment
Strategies Group, Salomon Brothers, Inc.
- -------------------------------------------------------------------------------------------------------------------------------
Anthony C. Pasquale Senior Vice President, Equitable. Director, Chairman and Chief Operating Officer,
Casualty, since September 1997. Previously held other officerships with
Equitable and its affiliates.
- -------------------------------------------------------------------------------------------------------------------------------
Pauline Sherman Vice President, Secretary and Associate General Counsel, Equitable and the Holding
Company, both since September 1995. Previously held other officerships with
Equitable.
- -------------------------------------------------------------------------------------------------------------------------------
Richard V. Silver Senior Vice President since February 1995 and Deputy General Counsel since June
1996, Equitable. Director, EQF. Previously held other officerships with
Equitable and its affiliates.
- -------------------------------------------------------------------------------------------------------------------------------
Jose S. Suquet Senior Executive Vice President since August 1994, Chief Distribution Officer since
December 1997 and Chief Agency Officer (August 1994 to December 1997), Equitable.
Prior thereto, Agency Manager. Executive Vice President since May 1996, the Holding
Company. Vice President since March 1998, HRT.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
32
<PAGE>
PART 4: ILLUSTRATIONS OF POLICY BENEFITS
To help clarify how the key financial elements of the policy work, a series of
tables has been prepared. The tables show how the death benefits and Cash
Surrender Values ("policy benefits") under a hypothetical Survivorship 2000
policy could vary over time if the Funds of our Separate Account had CONSTANT
hypothetical gross annual investment returns of 0%, 6% or 12% over the years
covered by each table. Actual policy benefits will differ from those shown in
the tables if the annual investment returns AVERAGE 0%, 6% or 12% over a period
of years but go above or below those figures in individual policy years. Actual
policy benefits will also differ, depending on your premium allocations to each
Fund, if the overall actual rates of return averaged 0%, 6% or 12%, but went
above or below those figures for the individual investment Funds. The tables are
for a standard risk male non-smoker, age 55, and a standard risk female
non-smoker, age 50. Planned premiums of $13,580 for an initial Face Amount of
$1,000,000 are assumed to be paid at the beginning of each policy year.
The tables illustrate cost of insurance and expense charges (policy cost
factors) at both the current rates and at the maximum rates guaranteed in the
policy. Beginning in policy year twenty, the current charges reflect the
termination of the Premium Sales Charge, which is not guaranteed. See DEDUCTIONS
FROM YOUR PREMIUMS in Part 2 of this prospectus. The tables also assume daily
charges against the Separate Account Funds of .90% for mortality and expense
risks, .56% for investment management (the average of the advisory fees payable
with respect to each HRT and EQAT portfolio, based on average net assets for
1997, and for portfolios which commenced operations on December 31, 1997,
estimated average net assets for 1998), and .32% for other Trust expenses. The
assumption for other Trust expenses equals the weighted average of other
expenses of the HRT and EQAT portfolios (including 12b-1 fees) based on average
net assets for 1997, and for portfolios which commenced operations on December
31, 1997, estimated average net assets for 1998. The effect of these adjustments
is that on a 0% gross rate of return the net rate of return would be -1.78%, on
6% it would be 4.12% and on 12% it would be 10.01%. Remember, however, that
investment management fees and other Trust expenses vary by portfolio. See HRT'S
MANAGER AND INVESTMENT ADVISER, EQAT'S MANAGER and EQAT'S INVESTMENT ADVISERS in
Part 1 of this prospectus.
The tables assume first year monthly administrative charges of $0.07 per $1,000
of Face Amount and $6 per month, and a charge for taxes of 2% of premiums. There
are tables for both death benefit Option A and death benefit Option B and each
option is illustrated using current and guaranteed policy cost factors. The
current tables assume that the monthly administrative charge remains constant at
$6 after the first policy year. The guaranteed tables assume that this monthly
charge is $8. The tables reflect the fact that no charge is currently made for
Federal taxes. If a charge is made for those taxes in the future, it will take a
higher rate of return to produce after-tax returns of 0%, 6% or 12%.
The second column of each table shows the effect of an amount equal to the
premiums invested to earn interest, without regard to taxes, of 5% compounded
annually. These columns show that if a policy is surrendered in its very early
years, the Cash Surrender Value will be low in comparison to the amount of the
premiums accumulated with interest. Thus, the cost of owning your policy for a
relatively short time will be high.
The internal rate of return on Cash Surrender Value is equivalent to an interest
rate (without regard to taxes) at which an amount equal to the illustrated
premiums could have been invested outside the Policy to arrive at the Cash
Surrender Value of the Policy. The internal rate of return on the death benefit
is equivalent to an interest rate (without regard to taxes) at which an amount
equal to the illustrated premiums could have been invested outside the Policy to
arrive at the death benefit of the Policy. The internal rate of return is
compounded annually, and the premiums are assumed to be paid at the beginning of
each policy year.
INDIVIDUAL ILLUSTRATIONS. On request, we will furnish you with a comparable
illustration based on the age and sex of the proposed insured persons, standard
risk assumptions and an initial Face Amount and planned premium of your choice.
If you purchase a policy, we will, on request, deliver an individualized
illustration reflecting the planned premium you have chosen and the insured
persons' actual risk classes. Upon request after issuance, we will also provide
a comparable illustration reflecting your actual Net Cash Surrender Value. If
you request illustrations more than once in any policy year, we may charge for
the illustration.
33
<PAGE>
SURVIVORSHIP 2000
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
FLEXIBLE PREMIUM JOINT SURVIVORSHIP VARIABLE LIFE INSURANCE
PLANNED PREMIUM $13,580 INITIAL FACE AMOUNT $1,000,000
MALE AGE 55/FEMALE AGE 50
NON-SMOKER DEATH BENEFIT OPTION A
ASSUMING CURRENT CHARGES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT(2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY ACCUMULATED ----------------------------------------------- -----------------------------------------
YEAR PREMIUMS(1) 0% 6% 12% 0% 6% 12%
---- ----------- ------------- ---------- ---------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 14,259 $1,000,000 $1,000,000 $1,000,000 $ 8,027 $ 8,538 $ 9,049
2 29,231 1,000,000 1,000,000 1,000,000 19,694 21,415 23,197
3 44,951 1,000,000 1,000,000 1,000,000 31,093 34,760 38,697
4 61,458 1,000,000 1,000,000 1,000,000 42,215 48,578 55,671
5 78,790 1,000,000 1,000,000 1,000,000 53,059 62,884 74,264
6 96,988 1,000,000 1,000,000 1,000,000 63,639 77,707 94,645
7 116,097 1,000,000 1,000,000 1,000,000 73,932 93,042 116,971
8 136,161 1,000,000 1,000,000 1,000,000 83,926 108,896 141,423
9 157,228 1,000,000 1,000,000 1,000,000 93,611 125,274 168,204
10 179,348 1,000,000 1,000,000 1,000,000 102,977 142,186 197,541
15 307,689 1,000,000 1,000,000 1,118,744 144,162 234,692 391,854
20 471,487 1,000,000 1,000,000 1,665,831 174,668 341,661 693,807
25 680,541 1,000,000 1,000,000 2,342,637 191,275 466,993 1,154,008
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
INTERNAL RATE OF RETURN INTERNAL RATE OF RETURN
ON CASH SURRENDER VALUES ON DEATH BENEFIT
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL RATE OF RETURN OF ANNUAL RATE OF RETURN OF
POLICY ---------------------------------------- ---------------------------------------------
YEAR 0% 6% 12% 0% 6% 12%
---- ------------ ------------ ------------ -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
1 -40.89% -37.13% -33.37% 7,263.76% 7,263.76% 7,263.76%
2 -19.61 -14.84 -10.07 709.58 709.58 709.58
3 -12.92 -7.73 -2.55 281.01 281.01 281.01
4 -9.83 -4.42 0.99 161.03 161.03 161.03
5 -8.11 -2.55 3.00 108.39 108.39 108.39
6 -7.02 -1.35 4.30 79.68 79.68 79.68
7 -6.29 -0.54 5.19 61.90 61.90 61.90
8 -5.77 0.05 5.84 49.92 49.92 49.92
9 -5.39 0.49 6.33 41.37 41.37 41.37
10 -5.10 0.83 6.71 34.99 34.99 34.99
15 -4.46 1.75 7.81 18.25 18.25 19.48
20 -4.43 2.14 8.28 11.26 11.26 15.32
25 -4.77 2.37 8.47 7.55 7.55 12.88
</TABLE>
- -------------------------
(1) Assumes net interest of 5% compounded annually.
(2) Assumes no policy loan has been made.
- --------------------------------------------------------------------------------
THE VALUES WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN.
34
<PAGE>
SURVIVORSHIP 2000
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
FLEXIBLE PREMIUM JOINT SURVIVORSHIP VARIABLE LIFE INSURANCE
PLANNED PREMIUM $13,580
MALE AGE 55/FEMALE AGE 50
NON-SMOKER
ASSUMING GUARANTEED CHARGES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT(2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY ACCUMULATED --------------------------------------------- ----------------------------------------------
YEAR PREMIUMS(1) 0% 6% 12% 0% 6% 12%
---- ----------- ------------- ------------- ------------- --------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 14,259 $1,000,000 $1,000,000 $1,000,000 $ 8,016 $ 8,526 $ 9,037
2 29,231 1,000,000 1,000,000 1,000,000 19,626 21,344 23,123
3 44,951 1,000,000 1,000,000 1,000,000 30,939 34,596 38,523
4 61,458 1,000,000 1,000,000 1,000,000 41,941 48,282 55,351
5 78,790 1,000,000 1,000,000 1,000,000 52,615 62,397 73,728
6 96,988 1,000,000 1,000,000 1,000,000 62,940 76,932 93,784
7 116,097 1,000,000 1,000,000 1,000,000 72,893 91,877 115,662
8 136,161 1,000,000 1,000,000 1,000,000 82,446 107,218 139,519
9 157,228 1,000,000 1,000,000 1,000,000 91,570 122,939 165,527
10 179,348 1,000,000 1,000,000 1,000,000 100,226 139,013 193,872
15 307,689 1,000,000 1,000,000 1,080,017 134,355 223,126 378,290
20 471,487 1,000,000 1,000,000 1,550,945 143,121 305,526 645,958
25 680,541 1,000,000 1,000,000 2,025,648 100,840 367,515 997,856
</TABLE>
<TABLE>
<CAPTION>
INITIAL FACE AMOUNT $1,000,000
DEATH BENEFIT OPTION A
- -------------------------------------------------------------------------------------------------------------------
INTERNAL RATE OF RETURN INTERNAL RATE OF RETURN
ON CASH SURRENDER VALUES ON DEATH BENEFIT
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL RATE OF RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY ----------------------------------------- --------------------------------------------
YEAR 0% 6% 12% 0% 6% 12%
---- ------------ ------------- ------------ ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
1 -40.97% -37.21% -33.45% 7,263.76% 7,263.76% 7,263.76%
2 -19.80 -15.03 -10.26 709.58 709.58 709.58
3 -13.14 -7.95 -2.77 281.01 281.01 281.01
4 -10.08 -4.66 0.75 161.03 161.03 161.03
5 -8.38 -2.80 2.76 108.39 108.39 108.39
6 -7.33 -1.64 4.03 79.68 79.68 79.68
7 -6.64 -0.85 4.91 61.90 61.90 61.90
8 -6.17 -0.29 5.54 49.92 49.92 49.92
9 -5.84 0.12 6.01 41.37 41.37 41.37
10 -5.61 0.42 6.38 34.99 34.99 34.99
15 -5.41 1.13 7.41 18.25 18.25 19.09
20 -6.60 1.11 7.68 11.26 11.26 14.76
25 -11.35 0.60 7.54 7.55 7.55 11.99
</TABLE>
- -------------------------
(1) Assumes net interest of 5% compounded annually.
(2) Assumes no policy loan has been made.
- --------------------------------------------------------------------------------
THE VALUES WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN.
35
<PAGE>
SURVIVORSHIP 2000
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
FLEXIBLE PREMIUM JOINT SURVIVORSHIP VARIABLE LIFE INSURANCE
PLANNED PREMIUM $13,580 INITIAL FACE AMOUNT $1,000,000
MALE AGE 55/FEMALE AGE 50
NON-SMOKER DEATH BENEFIT OPTION B
ASSUMING CURRENT CHARGES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT(2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY ACCUMULATED -------------------------------------------- -------------------------------------------
YEAR PREMIUMS(1) 0% 6% 12% 0% 6% 12%
---- ----------- ------------ ------------- ------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 14,259 $1,008,027 $1,008,537 $1,009,049 $ 8,027 $ 8,537 $ 9,049
2 29,231 1,019,692 1,021,413 1,023,195 19,692 21,413 23,195
3 44,951 1,031,087 1,034,753 1,038,689 31,087 34,753 38,689
4 61,458 1,042,200 1,048,560 1,055,651 42,200 48,560 55,651
5 78,790 1,053,028 1,062,847 1,074,218 53,028 62,847 74,218
6 96,988 1,063,583 1,077,637 1,094,558 63,583 77,637 94,558
7 116,097 1,073,840 1,092,923 1,116,816 73,840 92,923 116,816
8 136,161 1,083,783 1,108,702 1,141,164 83,783 108,702 141,164
9 157,228 1,093,396 1,124,973 1,167,785 93,396 124,973 167,785
10 179,348 1,102,665 1,141,736 1,196,889 102,665 141,736 196,889
15 307,689 1,142,742 1,232,229 1,387,708 142,742 232,229 387,708
20 471,487 1,170,419 1,332,724 1,683,535 170,419 332,724 683,535
25 680,541 1,180,054 1,438,092 2,309,657 180,054 438,092 1,137,762
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
INTERNAL RATE OF RETURN INTERNAL RATE OF RETURN
ON CASH SURRENDER VALUES ON DEATH BENEFIT
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL RATE OF RETURN OF ANNUAL RATE OF RETURN OF
POLICY --------------------------------------- --------------------------------------------
YEAR 0% 6% 12% 0% 6% 12%
---- ----------- ----------- ----------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
1 -40.89% -37.13% -33.37% 7,322.88% 7,326.64% 7,330.40%
2 -19.61 -14.84 -10.07 717.97 718.70 719.46
3 -12.93 -7.74 -2.56 285.35 285.86 286.40
4 -9.85 -4.43 0.97 164.16 164.62 165.14
5 -8.13 -2.57 2.98 110.96 111.43 111.96
6 -7.05 -1.38 4.27 81.94 82.42 83.00
7 -6.32 -0.57 5.15 63.95 64.46 65.09
8 -5.81 0.01 5.80 51.83 52.38 53.07
9 -5.43 0.45 6.28 43.17 43.75 44.51
10 -5.16 0.78 6.66 36.71 37.33 38.16
15 -4.59 1.62 7.69 19.71 20.53 21.82
20 -4.69 1.90 8.15 12.53 13.56 15.40
25 -5.32 1.91 8.38 8.61 9.87 12.80
</TABLE>
- -------------------------
(1) Assumes net interest of 5% compounded annually.
(2) Assumes no policy loan has been made.
- --------------------------------------------------------------------------------
THE VALUES WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN.
36
<PAGE>
SURVIVORSHIP 2000
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
FLEXIBLE PREMIUM JOINT SURVIVORSHIP VARIABLE LIFE INSURANCE
PLANNED PREMIUM $13,580 INITIAL FACE AMOUNT $1,000,000
MALE AGE 55/FEMALE AGE 50
NON-SMOKER DEATH BENEFIT OPTION B
ASSUMING GUARANTEED CHARGES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT(2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY ACCUMULATED -------------------------------------------- --------------------------------------------
YEAR PREMIUMS(1) 0% 6% 12% 0% 6% 12%
---- ----------- ------------ ------------- ------------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 14,259 $1,008,016 $1,008,526 $1,009,037 $ 8,016 $ 8,526 $ 9,037
2 29,231 1,019,623 1,021,341 1,023,120 19,623 21,341 23,120
3 44,951 1,030,930 1,034,586 1,038,512 30,930 34,586 38,512
4 61,458 1,041,919 1,048,256 1,055,321 41,919 48,256 55,321
5 78,790 1,052,569 1,062,340 1,073,660 52,569 62,340 73,660
6 96,988 1,062,854 1,076,823 1,093,648 62,854 76,823 93,648
7 116,097 1,072,745 1,091,685 1,115,413 72,745 91,685 115,413
8 136,161 1,082,208 1,106,898 1,139,089 82,208 106,898 139,089
9 157,228 1,091,205 1,122,430 1,164,819 91,205 122,430 164,819
10 179,348 1,099,688 1,138,235 1,192,747 99,688 138,235 192,747
15 307,689 1,131,734 1,218,550 1,370,385 131,734 218,550 370,385
20 471,487 1,134,270 1,286,326 1,621,920 134,270 286,326 621,920
25 680,541 1,079,498 1,304,104 1,952,966 79,498 304,104 952,966
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
INTERNAL RATE OF RETURN INTERNAL RATE OF RETURN
ON CASH SURRENDER VALUES ON DEATH BENEFIT
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
END OF ANNUAL RATE OF RETURN OF ANNUAL RATE OF RETURN OF
POLICY -------------------------------------- --------------------------------------------
YEAR 0% 6% 12% 0% 6% 12%
---- ---------- ----------- ----------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
1 -40.97% -37.22% -33.45% 7,322.80% 7,326.55% 7,330.32%
2 -19.81 -15.04 -10.27 717.94 718.67 719.43
3 -13.16 -7.97 -2.79 285.33 285.84 286.38
4 -10.10 -4.68 0.73 164.14 164.60 165.11
5 -8.41 -2.83 2.73 110.94 111.40 111.93
6 -7.37 -1.68 3.99 81.92 82.40 82.97
7 -6.69 -0.90 4.85 63.92 64.43 65.05
8 -6.23 -0.36 5.47 51.80 52.34 53.02
9 -5.92 0.03 5.93 43.13 43.71 44.46
10 -5.71 0.32 6.28 36.66 37.27 38.10
15 -5.68 0.87 7.17 19.60 20.41 21.68
20 -7.33 0.50 7.36 12.28 13.28 15.11
25 -14.33 -0.86 7.24 8.04 9.25 11.77
</TABLE>
- -------------------------
(1) Assumes net interest of 5% compounded annually.
(2) Assumes no policy loan has been made.
- --------------------------------------------------------------------------------
THE VALUES WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN.
37
<PAGE>
APPENDIX A
COMMUNICATING PERFORMANCE DATA
In reports or other communications to policyowners or in advertising material,
we may describe general economic and market conditions affecting the Separate
Account and the Trusts and may compare the performance or ranking of the
Separate Account Funds and the Trusts' portfolios with (1) that of other
insurance company separate accounts or mutual funds included in the rankings
prepared by Lipper Analytical Services, Inc., Morningstar, Inc. or similar
investment services that monitor the performance of insurance company separate
accounts or mutual funds, (2) other appropriate indices of investment securities
and averages for peer universes of funds, or (3) data developed by us derived
from such indices or averages. Advertisements or other communications furnished
to present or prospective policyowners may also include evaluations of a
Separate Account Fund or Trust portfolio by financial publications that are
nationally recognized such as Barron's, Morningstar's Variable Annuities / Life,
Business Week, Forbes, Fortune, Institutional Investor, Money, Kiplinger's
Personal Finance, Financial Planning, Investment Adviser, Investment Management
Weekly, Money Management Letter, Investment Dealers Digest, National
Underwriter, Pension & Investments, USA Today, Investor's Daily, The New York
Times, The Wall Street Journal, the Los Angeles Times and the Chicago Tribune.
Performance data for peer universes of funds with similar investment objectives
are compiled by Lipper Analytical Services, Inc. (Lipper) in its Lipper Variable
Insurance Products Performance Analysis Service (Lipper Survey) and Morningstar,
Inc. in the Morningstar Variable Annuity / Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 funds
underlying variable annuity and life insurance products. The Lipper Survey
divides these actively managed funds into 25 categories by portfolio objectives.
The Lipper Survey contains two different universes, which differ in terms of the
types of fees reflected in performance data. The "Separate Account" universe
reports performance data net of investment management fees, direct operating
expenses and asset-based charges applicable under variable insurance and annuity
contracts. The "Mutual Fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects
asset-based charges that relate only to the underlying mutual fund.
The Morningstar Report consists of over 700 variable life and annuity funds, all
of which report their data net of investment management fees, direct operating
expenses and separate account level charges.
LONG-TERM MARKET TRENDS
As a tool for understanding how different investment strategies may affect
long-term results, it may be useful to consider the historical returns on
different types of assets. The following chart presents historical return trends
for various types of securities. The information presented, while not directly
related to the performance of the Funds of the Separate Account or the Trusts'
portfolios, may help to provide a perspective on the potential returns of
different asset classes over different periods of time. By combining this
information with your knowledge of your own financial needs, you may be able to
better determine how you wish to allocate your Survivorship 2000 premiums.
Historically, the investment performance of common stocks over the long term has
generally been superior to that of long- or short-term debt securities, although
common stocks have been subject to more dramatic changes in value over short
periods of time. The Alliance Common Stock Fund of the Separate Account may,
therefore, be a desirable selection for policyowners who are willing to accept
such risks. Policyowners who have a need to limit short-term risk, may find it
preferable to allocate a smaller percentage of their net premiums to those funds
that invest primarily in common stock. Any investment in securities, whether
equity or debt, involves varying degrees of potential risk, in addition to
offering varying degrees of potential reward.
The chart on page A-2 illustrates the average annual compound rates of return
over selected time periods between December 31, 1926 and December 31, 1997 for
common stocks, long-term government bonds, long-term corporate bonds,
intermediate-term government bonds and Treasury Bills. The Consumer Price Index
is shown as a measure of inflation for comparison purposes. The average annual
returns assume the reinvestment of dividends, capital gains and interest.
The information presented is an historical record of unmanaged groups of
securities and is neither an estimate nor a guarantee of future results. In
addition, investment management fees and expenses and charges associated with a
variable life insurance policy, are not reflected.
The rates of return illustrated do not represent returns of the Separate Account
or the Trusts and do not constitute a representation that the performance of the
Separate Account Funds or the Trusts' portfolios will correspond to rates of
return such as those illustrated in the chart. For a comparative illustration of
performance results of The Hudson River Trust plus performance of other Alliance
funds with investment policies and objectives similar to those of the Alliance
Small Cap Growth portfolio, see page B-1 of the HRT prospectus. For a
comparative illustration of performance results of certain public mutual funds
which are similar to EQAT portfolios and are managed by EQAT's Advisers, see
page A-1 of the EQAT prospectus.
A-1
<PAGE>
AVERAGE ANNUAL RATES OF RETURN
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE
FOLLOWING LONG-TERM LONG-TERM INTERMEDIATE- U.S. CONSUMER
PERIODS ENDING COMMON GOVERNMENT CORPORATE TERM GOV'T TREASURY PRICE
12/31/97: STOCKS BONDS BONDS BONDS BILLS INDEX
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 year......................... 33.36% 15.85% 12.95% 8.38% 5.26% 1.92%
3 years........................ 31.15 14.76 13.36 8.93 5.35 2.59
5 years........................ 20.24 10.51 9.22 6.40 4.57 2.64
10 years........................ 18.05 11.32 10.85 8.33 5.44 3.43
20 years........................ 16.65 10.39 10.29 9.51 7.29 4.90
30 years........................ 12.12 8.63 8.86 8.52 6.77 5.34
40 years........................ 12.30 6.71 7.09 7.10 5.85 4.44
50 years........................ 13.12 5.70 6.07 6.04 4.99 3.94
60 years........................ 12.53 5.31 5.54 5.44 4.18 4.11
Since 1926...................... 10.99 5.19 5.71 5.25 3.77 3.17
Inflation Adjusted
Since 1926...................... 7.58 1.96 2.46 2.02 0.58
</TABLE>
- -------------------------
Source: Ibbotson, Roger G. and Rex A. Sinquefield, STOCKS, BONDS, BILLS, AND
INFLATION (SBBI), 1982, updated in STOCKS, BONDS, BILLS, AND INFLATION 1998
YEARBOOK,(TM) Ibbotson Associates, Inc., Chicago. All rights reserved.
Common Stocks (S&P 500) -- Standard and Poor's Composite Index, an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies.
Long-Term Government Bonds -- Measured using a one-bond portfolio constructed
each year containing a bond with approximately a twenty-year maturity and a
reasonably current coupon.
Long-Term Corporate Bonds -- For the period 1969 - 1997, represented by the
Salomon Brothers Long-Term, High-Grade Corporate Bond Index; for the period 1946
- - 1968, the Salomon Brothers' Index was backdated using Salomon Brothers'
monthly yield data and a methodology similar to that used by Salomon for 1969 -
1997; for the period 1926 - 1945, the Standard and Poor's monthly High-Grade
Corporate Composite yield data were used, assuming a 4 percent coupon and a
twenty-year maturity.
Intermediate-Term Government Bonds -- Measured by a one-bond portfolio
constructed each year containing a bond with approximately a five-year maturity.
U.S. Treasury Bills -- Measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month.
Inflation -- Measured by the Consumer Price Index for all Urban Consumers
(CPI-U), not seasonally adjusted.
- --------------------------------------------------------------------------------
A-2
