Registration No. 333-17663
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 3 TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
SEPARATE ACCOUNT FP
of
THE EQUITABLE LIFE ASSURANCE Edward D. Miller, President
SOCIETY OF THE UNITED STATES The Equitable Life Assurance Society of
(Exact Name of Trust) the United States
THE EQUITABLE LIFE ASSURANCE 1290 Avenue of the Americas
SOCIETY OF THE UNITED STATES New York, New York 10104
(Exact Name of Depositor) (Name and Address of Agent for Service)
1290 Avenue of the Americas
New York, New York 10104
(Address of Depositor's Principal
Executive Offices)
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Telephone Number, Including Area Code: (212) 554-1234
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Please send copies of all communications to:
MARY P. BREEN, ESQ. with a copy to:
Vice President and Thomas C. Lauerman
Associate General Counsel Freedman, Levy, Kroll & Simonds
The Equitable Life Assurance 1050 Connecticut Avenue, N.W., Suite 825
Society of the United States Washington, D.C. 20036
1290 Avenue of the Americas
New York, New York 10104
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Securities Being Registered: Units of Interest in Separate Account FP
It is proposed that this filing will become effective (check appropriate line):
_____ immediately upon filing pursuant to paragraph (b) of Rule 485
_____ on ( ) pursuant to paragraph (b) of Rule 485
__X__ 60 days after filing pursuant to paragraph (a) of Rule 485
_____ on ( ) pursuant to paragraph (a) of Rule 485
<PAGE>
SEPARATE ACCOUNT FP OF
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
Reconciliation and Tie
Incentive Life (SM)
Items of
Form N-8B-2* Captions in Prospectus
1(a), (b) About Our Separate Account FP.
2 Who is Equitable Life?
3 Inapplicable
4 How We Market the Policies.
5,6 About Our Separate Account FP.
7 Inapplicable**
8 Inapplicable**
9 Inapplicable
10(a) Above our Separate Account FP: Your Options for Receiving
Policy Proceeds; Proceeds Payment Options; Assigning
your policy.
(b) Determining Your Policy's Value: Your Policy's Account Value:
Your Policy's Value in Our Variable Investment Options; About
Our Separate Account FP.
(c)(d) Charges and Expenses You Will Pay: Changes in Charges;
Accessing Your Money: Borrowing From Your Policy; Making
Withdrawals From Your Policy; Surrendering Your Policy for its
Net Cash Surrender Value; Your Option to Receive a Living
Benefit; More Information About Procedures That Apply To Your
Policy: Requirements for Surrender Requests; Ways We Pay
Proceeds; Assigning Your Policy; Your Option to Receive a
Living Benefit; Tax Treatment of Living Benefit Proceeds;
Dates and Prices at Which Policy Events Occur.
(e) The Minimum Amount of Premiums You Must Pay--Policy "lapse"
and termination; --Restoring a terminated policy; You can
Guarantee That Your Policy Will Not Terminate Before a Certain
Date; You can Elect A Paid-Up Death Benefit Guarantee.
(f) Your Voting Privileges.
10(g)(1) 10(g)(2) Changes We Can Make; Your Voting Privileges.
10(h)(1) 10(h)(2)
10(g)(3) 10(g)(4) Inapplicable**
10(h)(3) 10(h)(4)
_________________
*Registrants include this Reconciliation and Tie in their Registration Statement
in compliance with Instruction 4 as to the Prospectus as set out in Form S-6.
Separate Account FP will be an investment company registered under the
Investment Company Act of 1940 on a Form N-8B-2 Registration Statement. Pursuant
to Sections 8 and 30(b)(1) of the Investment Company Act of 1940, Rule 30a-1
under the Act, and Forms N-8B-2 and N-SAR under that Act, the Account keeps its
Form N-8B-2 Registration Statement current through the filing of periodic
reports required by the Securities and Exchange Commission.
**Not required pursuant to either Instruction 1(a) as to the Prospectus as set
out in Form S-6 or the administrative practice of the Commission and its staff
of adapting the disclosure requirements of the Commission's registration
statement forms in recognition of the differences between variable life
insurance policies and other periodic payment plan certificates issued by
investment companies and between separate account organized as management
companies and unit investment trusts.
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10(i) Determining Your Policy's Value; Tax Information; Charges and
Expenses You Will Pay; Investment Options Within Your Policy;
Transferring Your Money Among Our Investment Options.
11 What is Incentive Life?; Investment Options Within Your
Policy.
12(a) What is Incentive Life?
12(b) Inapplicable
12(c) About our Separate Account FP.
12(d) How We Market The Policies.
12(e) Inapplicable**
13(a) Charges and Expenses You Will Pay; More information About
Other Matters: Deducting Policy Charges.
13(b), (c), (g) Inapplicable**
13(d) Variations Among Incentive Life Policies
13(e), (f) Inapplicable
14,15 Policy Features and Benefits: How You Can Pay For and
Contribute to Your Policy; More Information About Procedures
that Apply to Your Policy: Ways to Make Premium and Loan
Payments; Dates and Prices at Which Policy Events Occur;
Policy Issuance.
16 More Information About Other Matters: About Our Separate
Account FP; Determining Your Policy's Value: Your Account
Value; Transferring Your Money Among Our Investment Options;
Accessing Your Money.
17(a),(b) Captions referenced under Items 10 (c), (d) and (e) above.
17(c) Inapplicable**
18(a) Policy Features and Benefits: Determining Your Policy's Value
18(b), (d) Inapplicable
18(c) Tax Information: Our Taxes.
19 More Information About Other Matters: Reports We Will Send
You; Your Voting Privileges.
20(a) Captions referenced under Items 10(g)(1), 10(g)(2), 10(h)(1)
and 10(h)(2).
20(b), 20(c),
20(d), 20(e),
20(f) Inapplicable
21(a), 21(b) Accessing Your Money: Borrowing From Your Policy.
21(c) Inapplicable**
<PAGE>
22 More Information About Other Matters: Suicide and Certain
Misstatements; When We Pay Policy Proceeds; --Delay to
challenge coverage.
23 Inapplicable
24 All prospectus captions.
25 Who is Equitable Life?
26(a), 26(b) Inapplicable**
27 Who is Equitable Life?; More Information About Other
Matters: How We Market the Policies.
28 More Information About Other Matters: Directors and Principal
Officers.
29 Who is Equitable Life?
30 Inapplicable
31, 32, 33, 34 Inapplicable**
35 More Information About Other Matters: Insurance Regulation
That Applies to Equitable Life.
36 Inapplicable**
37 Inapplicable**
38 More Information About Other Matters: How We Market the
Policies.
39(a) Who is Equitable Life?
39(b) More Information About Other Matters: How We Market the
Policies.
40(a) Inapplicable** (But see More information About Other Matters:
How We Market the Policies).
40(b) Inapplicable
41(a) Who is Equitable Life? More Information About Other
Matters: How We Market the Policies.
41(b),41(c),42 Inapplicable**
43 Inapplicable
44 (a) (1) Policy Features and Benefits: Determining Your Policy's
Value.
44 (a) (2) More Information About Other Matters: About our Separate
Account FP; About Our General Account; Transfers of Your
Account Value; Telephone Requests; Determining Your Policy's
Value: Your Account Value; Accessing Your Money; About Your
Life Insurance Benefit.
<PAGE>
44(a)(3) Determining Your Policy's Value; Transferring Your Money
Among Our Investment Options; Accessing Your Money.
44(a)(4) Tax Information.
44(a)(5) Charges and Expenses You Will Pay; More Information About
Other Matters: Deducting Policy Charges.
44(a)(6) Determining Your Policy's Value: Your Account Value; More
Information About Other Matters; Our Separate Account FP;
Transfers of Your Account Value; Deducting Policy Charges;
Charges and Expenses You Will Pay.
44(b) Inapplicable**
44(c) Charges and Expenses You Will Pay: Changes in Charges; More
Information About Other Matters: Changes We Can Make.
45 Inapplicable
46(a) Captions referenced under Item 44(a) above.
46(b) Inapplicable**
47,48,49 Inapplicable
50 More Information About Other Matters: About Our Separate
Account FP.
51(a)-(j) Inapplicable**
52(a), (c) More Information About Other Matters: Changes We Can Make.
52(b), (d) Inapplicable
53(a) Tax Information: Our Taxes.
54(b), 54 Inapplicable
55 Inapplicable**
56-59 Inapplicable**
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[Outside Wrapper]
INCENTIVE LIFE(R)
A flexible premium variable life insurance policy
May 1, 1999
Equitable AXA Logo
1
<PAGE>
[FRONT COVER]
INCENTIVE LIFE(R)
A flexible premium variable life insurance policy
Prospectus dated May 1, 1999
Equitable AXA Logo
Please read this prospectus and keep it for future reference. It
contains important information that you should know before purchasing, or taking
any other action under a policy. Also, at the end of this prospectus you will
find attached the prospectuses for The Hudson River Trust and EQ Advisors Trust,
which contain important information about their Portfolios.
This prospectus describes many aspects of an Incentive Life policy, but
is not itself a policy. The policy is the actual contract that determines your
benefits and obligations under Incentive Life. To make this prospectus easier to
read, we sometimes use different words than the policy. Equitable Life or your
Equitable Life associate can provide any further explanation about your policy.
WHAT IS INCENTIVE LIFE? Incentive Life is issued by Equitable Life. It provides
life insurance coverage, plus the opportunity for you to earn a return in our
guaranteed interest option and/or one or more of the following variable
investment options:
<TABLE>
<CAPTION>
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FIXED INCOME OPTIONS: EQUITY OPTIONS: ASSET ALLOCATION OPTIONS:
- ------------------------------ --------------------------------------------------------- ------------------------------
<S> <C> <C> <C>
Domestic Fixed Income Domestic Equity International Equity o Alliance Conservative
- --------------------- --------------- -------------------- Investors
o Alliance Money Market o T. Rowe Price Equity o Alliance Global o EQ/Putnam Balanced
o Alliance Intermediate Income o Alliance International o Alliance Balanced
Government Securities o EQ/Putnam Growth & o T. Rowe Price o Alliance Growth Investors
o Alliance Quality Bond Income Value International Stock
o Merrill Lynch World
Aggressive Fixed Income o Alliance Growth & Income o Morgan Stanley Strategy
- ----------------------- o Alliance Equity Index Emerging Markets Equity
o Alliance High Yield o Merrill Lynch Basic
Value Equity Aggressive Equity
o Alliance Common Stock -----------------
o MFS Research o Alliance Aggressive
o MFS Growth with Income* Stock
o EQ/Alliance Premier o Warburg Pincus Small
Growth* Company Value
o Alliance Small Cap
Growth
o MFS Emerging Growth
* Available June 4, 1999 Companies
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</TABLE>
Amounts that you allocate under your policy to any of the variable investment
options are invested in a corresponding "Portfolio" that is part of one of the
following two mutual funds: The Hudson River Trust or the EQ Advisors Trust.
Your investment results in a variable investment option will depend on those of
the related Portfolio. Any gains will generally be tax-deferred and the life
insurance benefits we pay if the policy's insured person dies will generally be
income tax-free.
Other choices you have. You have considerable flexibility to tailor the
policy to your needs. For example, subject to our rules, you can (1) choose when
and how much you contribute (as "premiums") to your policy, (2) pay certain
premium amounts to guarantee that your insurance coverage will continue for a
number of years, regardless of investment performance, (3) borrow or withdraw
amounts you have accumulated, (4) change the amount of insurance coverage, (5)
choose
2
<PAGE>
between two life insurance benefit options, (6) elect to receive an insurance
benefit if the insured person becomes terminally ill, and (7) add or delete
certain optional benefits that we offer by "riders" to your policy.
Your Equitable Life associate can provide you with information about all forms
of life insurance available from us and help you decide which may best meet your
needs. Replacing existing insurance with Incentive Life or another policy may
not be to your advantage.
THE SECURITIES AND EXCHANGE COMMISSION ("SEC") HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE POLICIES ARE NOT
INSURED BY THE FDIC OR ANY OTHER AGENCY. THEY ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF ANY BANK AND ARE NOT BANK GUARANTEED. THEY ARE SUBJECT TO
INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
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COPYRIGHT 1999 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. ALL
RIGHTS RESERVED. INCENTIVE LIFE IS A REGISTERED SERVICE MARK OF THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES.
3
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[Inside of Front Cover]
WHO IS EQUITABLE LIFE? We are The Equitable Life Assurance Society of the United
States ("Equitable Life"), a New York stock life insurance corporation. We have
been doing business since 1859. Equitable Life is a wholly owned subsidiary of
The Equitable Companies Incorporated ("Equitable Companies"), whose majority
shareholder is AXA, a French holding company for an international group of
insurance and related financial services companies. As a majority shareholder,
and under its other arrangements with Equitable Life and Equitable Life's
parent, AXA exercises significant influence over the operations and capital
structure of Equitable Life and its parent. No company other than Equitable
Life, however, has any legal responsibility to pay amounts that Equitable Life
owes under the policies.
Equitable Companies and its consolidated subsidiaries managed approximately
$347.5 billion in assets as of December 31, 1998. For more than 100 years we
have been among the largest insurance companies in the United States. We are
licensed to sell life insurance and annuities in all fifty states, the District
of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is
located at 1290 Avenue of the Americas, New York, N.Y. 10104.
HOW TO REACH US. To obtain (1) any forms you need for communicating with us, (2)
unit values and other values under your policy, and (3) any other information or
materials that we provide in connection with your policy or the Portfolios, you
can contact us
<TABLE>
<CAPTION>
<S> <C> <C>
BY MAIL: BY EXPRESS DELIVERY: BY TOLL-FREE PHONE: 1-888-855-5100
at the Post Office Box for our at the Street Address for our (automated system available weekdays 7 AM
Administrative Office specified in your Administrative Office specified in to 9 PM, Eastern Time; customer service
policy your policy representative available weekdays 8 AM to 9
BY E-MAIL: life-service@ equitable.com BY FAX: 1-704-540-9714 PM, Eastern Time)
</TABLE>
By internet: Our web site (www.equitable.com) can also provide information; some
of the forms listed below are available for you to print out through our web
site.
We require that the following types of communications be on specific forms we
provide for that purpose:
(1) request for automatic transfer service; and
(2) authorization for telephone transfers by a person who is not
also the insured person
We also have specific forms that we recommend you use for the following:
(a) policy surrenders; (d) transfers between investment
options; and
(b) address changes; (e) changes in allocation percentages
(c) beneficiary changes; for premiums and deductions.
Except for properly authorized telephone transactions, any notice or request
that does not use our standard form must be in writing dated and signed by you
and should also specify your name, the
4
<PAGE>
insured person's name (if different), your policy number, and adequate details
about the notice you wish to give or other action you wish us to take. For
information about transaction requests you can make by phone, see "Telephone
Transfers" on page __ and "Telephone Requests" on page __ of this prospectus. We
may require you to return your policy to us before we make certain policy
changes that you may request.
The proper person to sign forms, notices and requests would normally be the
owner or any other person that our procedures permit to exercise the right or
privilege in question. If there are joint owners both must sign. Any irrevocable
beneficiary or assignee that we have on our records also must sign certain types
of requests.
You should send all requests, and notices to our Administrative Office at the
addresses specified above. We will also accept requests and notices by fax at
the above number, if we believe them to be genuine. We reserve the right,
however, to require an original signature before acting on any faxed item. You
must send premium payments after the first one to our Administrative Office at
the above addresses; except that you should send any premiums for which we have
billed you to the address on the billing notice.
5
<PAGE>
CONTENTS OF THIS PROSPECTUS
<TABLE>
<CAPTION>
PAGE IN THIS
PROSPECTUS
----------
<S> <C>
WHAT IS INCENTIVE LIFE?
WHO IS EQUITABLE LIFE?
HOW TO REACH US
CHARGES AND EXPENSES YOU WILL PAY
RISKS YOU SHOULD CONSIDER
DECIDING TO PURCHASE -- POLICY FEATURES AND BENEFITS
How You Can Pay For and Contribute to Your Policy
The Minimum Amount of Premiums You Must Pay
You Can Guarantee That Your Policy Will Not Terminate Before a Certain Date
You Can Elect a "Paid Up" Death Benefit Guarantee
Investment Options Within Your Policy
About Your Life Insurance Benefit
You Can Increase or Decrease Your Insurance Coverage
Other Benefits You Can Add by Rider
Your Options For Receiving Policy Proceeds
Your Right to Cancel Within a Certain Number of Days
Variations Among Incentive Life Policies
Determining Your Policy's Value
Your Account Value
Transferring Your Money Among Our Investment Options
Transfers You Can Make
Telephone Transfers
Our Dollar Cost Averaging Service
Accessing Your Money
Borrowing From Your Policy
Making Withdrawals From Your Policy
Surrendering Your Policy For its Net Cash Surrender Value
Your Option to Receive a Living Benefit
Tax Information
Basic Tax Treatment For You and Your Beneficiary
Tax Treatment of Distributions to You
Tax Treatment of Living Benefit Proceeds
Effect of Policy on Interest Deductions Taken by Business Entities
Requirement That We Diversify Investments
Estate, Gift, and Generation-Skipping Taxes
Pension and Profit-Sharing Plans
Other Employee Benefit Programs
ERISA
Our Taxes
When We Withhold Taxes From Distributions
Possibility of Future Tax Changes
</TABLE>
6
<PAGE>
MORE INFORMATION ABOUT PROCEDURES THAT APPLY TO YOUR POLICY
Ways to Make Premium and Loan Payments
Requirements For Surrender Requests
Ways We Pay Policy Proceeds
Assigning Your Policy Dates and Prices at Which
Policy Events Occur
Policy Issuance
Gender-Neutral Policies
MORE INFORMATION ABOUT OTHER MATTERS
Your Voting Privileges
About Our Separate Account FP
About Our General Account
You Can Change Your Policy's Insured Person
Transfers of Your Account Value
Telephone Requests
Deducting Policy Charges
Customer Loyalty Credit
Suicide and Certain Misstatements
When We Pay Policy Proceeds
Changes We Can Make
Reports We Will Send You
Legal Proceedings
Illustrations of Policy Benefits
SEC Registration Statement
How We Market the Policies
Insurance Regulation That Applies To Equitable Life
Year 2000 Progress
Directors and Principal Officers
FINANCIAL STATEMENTS OF EQUITABLE LIFE AND SEPARATE ACCOUNT FP
APPENDICES
I -- Investment Performance Record
II-- Our Data on Market Performance
III-- An Index of Key Words and Phrases
THE HUDSON RIVER TRUST PROSPECTUS (follows after page __ of this prospectus, but
is not a part of this prospectus)
EQ ADVISORS TRUST PROSPECTUS (follows after page __ of The Hudson River
Trust Prospectus, but is not a part of that prospectus or this
prospectus.)
"WE", "OUR" AND "US" REFERS TO EQUITABLE LIFE.
WHEN WE ADDRESS THE READER OF THIS PROSPECTUS WITH WORDS SUCH AS "YOU" AND
"YOUR," WE MEAN THE PERSON OR PERSONS HAVING THE RIGHT OR RESPONSIBILITY THAT
THE PROSPECTUS IS DISCUSSING AT THAT POINT. THIS USUALLY IS THE POLICY'S OWNER.
7
<PAGE>
If a policy has more than one owner, all owners must join in the exercise of any
rights an owner has under the policy, and the word "owner" therefore refers to
all owners.
When we use the word "state," we also mean any other local jurisdiction whose
laws or regulations affect a policy.
We do not offer Incentive Life in all states. This prospectus does not offer
Incentive Life anywhere such offers are not lawful. Equitable Life does not
authorize any information or representation about the offering other than that
contained or incorporated in this prospectus, in any current supplements
thereto, or in any related sales materials authorized by Equitable Life.
8
<PAGE>
CHARGES AND EXPENSES YOU WILL PAY
This table shows the charges that we deduct under the terms of your policy. For
more information about some of these charges, see "Deducting Policy Charges"
beginning on page __ below.
TABLE OF POLICY CHARGES
CHARGES WE DEDUCT FROM AMOUNTS YOU CONTRIBUTE TO YOUR POLICY:
Premium charge................... (a) 6% of each premium payment you
make up to a certain amount1 and
(b) 3% of each premium payment
thereafter (which we may increase
up to 6%)2
CHARGES WE DEDUCT FROM YOUR POLICY'S VALUE EACH MONTH:
Administrative charge(3)............ (i) For adults (age 18 and older),
$20 in each of your policy's first
12 months; or, for children, $10 of
each of the policy's first 24
months and (ii) for everyone, $7 in
each subsequent month (which we may
increase up to $10)
Cost of insurance charges(3) and
Optional rider charges............ Amount varies depending on the
specifics of your policy(4)
Charge if you have elected our optional
enhanced death benefit guarantee... $.02 for each $1000 of your
policy's face amount(5)
CHARGES WE DEDUCT FROM YOUR POLICY'S VARIABLE INVESTMENT PERFORMANCE EACH DAY:
- ----------
(1) Up to an amount equal to ten "target premiums." The "target premium" is
actuarially determined for each policy, based on that policy's
characteristics.
(2) The Illustrations of Policy Benefits that your Equitable Life associate
will provide will show the impact of the actual current and guaranteed
maximum rates of these and any other charges, based on various
assumptions. We may increase this charge higher than 6%, however, if
the amount of taxes that we pay based on premium increases.
(3) Not applicable after the insured person reaches age 100.
(4) See "Monthly cost of insurance charge" on page ___ below and "Other
Benefits You Can Add by Rider" on page ___ below.
(5) The "face amount" is the basic amount of insurance coverage under your
policy.
9
<PAGE>
Mortality and expense risk charge..... .60% (effective annual rate) of the
value you have in our variable
investment options (we may increase
this rate up to .90%)(6)
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME OF THE TRANSACTION:
Surrender (turning in) of your policy
during its first 15 years.......... A surrender charge that will not
exceed the maximum set forth in
your policy.(7) (We will also
deduct the amount of surrender
charge remaining for any face
amount increases, as discussed
immediately below.)
Surrender of your policy during the
first 15 years after you have
requested an increase in your
policy's face amount............... An amount of surrender charge that
we will compute on essentially the
same basis as if each such face
amount increase had been a
separate, newly-issued Incentive
Life policy.(8)
Requested decrease in your policy's
face amount ....................... A pro-rata portion of the full
surrender charge that would apply
to a surrender at the time of the
decrease
YOU ALSO BEAR YOUR PROPORTIONATE SHARE OF ALL FEES AND EXPENSES PAID BY A
"PORTFOLIO" THAT CORRESPONDS TO ANY VARIABLE INVESTMENT OPTION YOU ARE USING:
This table shows the fees and expenses paid by each Portfolio for the year ended
December 31, 1998. These fees and expenses are reflected in the Portfolio's net
asset value each day. Therefore, they reduce the investment return of the
Portfolio and of the related variable investment option. Actual fees and
expenses are likely to fluctuate from year to year. All figures are expressed as
an annual percentage of each Portfolio's daily average net assets.
- ----------
(6) This charge does not apply to amounts in our guaranteed interest
option.
(7) Beginning in your policy's ninth year, this amount declines at a
constant rate each month until no surrender charge applies to surrender
made after the policy's 15th year. The maximum amount of surrender
charge depends on each policy's specific characteristics. The lowest
maximum for any policy would be $__________ for each $1,000 of initial
face amount and the highest maximum for any policy would be $_______
per $1,000.
(8) This additional surrender charge, however, applies only to the amount
(if any) by which the increase causes the face amount to exceed its
highest previous amount. For these purposes, we disregard any face
amount charges that we make automatically as a result of any change in
your death benefit option.
10
<PAGE>
<TABLE>
<CAPTION>
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1998 Fees and Expenses
--------------------------------------------------------------------------
Portfolios That Are Part of The Hudson River Management Fee 12b-1 Fees Other Expenses Total Annual
Trust Expenses
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<S> <C> <C> <C> <C>
Alliance Money Market 0.25%
Alliance Intermediate Government Securities 0.25%
Alliance Quality Bond 0.25%
Alliance High Yield 0.25%
Alliance Growth & Income 0.25%
Alliance Equity Index 0.25%
Alliance Common Stock 0.25%
Alliance Global 0.25%
Alliance International 0.25%
Alliance Aggressive Stock 0.25%
Alliance Small Cap Growth 0.25%
Alliance Conservative Investors 0.25%
Alliance Balanced 0.25%
Alliance Growth Investors 0.25%
<CAPTION>
------------------------------------------------------------------------
1998 Fees and Expenses
------------------------------------------------------------------------
Portfolios That Are Part of the EQ Advisors Trust Total
Management Fee 12b-1 Fees Other Expenses* Annual Expenses
(After Expense (After Expense
Reimbursements) Reimbursements)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
T. Rowe Price Equity Income 0.55% 0.25% 0.05% 0.85%
EQ/Putnam Growth & Income Value 0.55% 0.25% 0.05% 0.85%
Merrill Lynch Basic Value Equity 0.55% 0.25% 0.05% 0.85%
MFS Research 0.55% 0.25% 0.05% 0.85%
T. Rowe Price International Stock 0.75% 0.25% 0.20% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
Warburg Pincus Small Company Value 0.65% 0.25% 0.10% 1.00%
MFS Emerging Growth Companies 0.55% 0.25% 0.05% 0.85%
EQ/Putnam Balanced 0.55% 0.25% 0.10% 0.90%
Merrill Lynch World Strategy 0.70% 0.25% 0.25% 1.20%
EQ/Alliance Premier Growth 0.25%
MFS Growth with Income 0.55% 0.25% 0.05% 0.85%
</TABLE>
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*Expense reimbursements are made by EQ Advisors Trust's manager, EQ Financial
Consultants, pursuant to an expense limitation agreement. Under this agreement,
EQ Financial Consultants has agreed to waive or limit its fees and assume other
expenses.
11
<PAGE>
Absent the expense reimbursements, the "Other Expenses" for 1998 on an
annualized basis for each of the following Portfolios would have been as
follows: T. Rowe Price Equity Income -- ___%; EQ/Putnam Growth & Income Value --
___%; Merrill Lynch Basic Value Equity -- ___%; MFS Research -- ___%; T. Rowe
Price International Stock -- ___%; Morgan Stanley Emerging Markets Equity --
___%; Warburg Pincus Small Company Value -- ___%; MFS Emerging Growth Companies
- -- ___%; EQ/Putnam Balanced -- ___%; Merrill Lynch World Strategy -- ___%. For
MFS Growth with Income, which had initial seed capital invested on December 31,
1998, the "Other Expenses" for 1999, absent the expense reimbursement, are
estimated to be as follows: ___%, ____%, and ____%, respectively. For
EQ/Alliance Premier Growth, which had initial seed capital invested on
_________, 1999, the "Other Expenses" for 1999, absent the expense
reimbursement, are estimated to be as follows: ___%.
Each Portfolio may at a later date make a reimbursement to EQ Financial
Consultants for any of the management fees waived or limited and other expenses
assumed and paid by EQ Financial pursuant to the expense limitation agreement
provided that, among other things, such Portfolio has reached sufficient size to
permit such reimbursement to be made and provided that the Portfolio's current
annual operating expenses do not exceed the operating expense limit determined
for such Portfolio. See the attached EQ Advisors Trust prospectus for more
information.
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HOW WE ALLOCATE CHARGES AMONG YOUR INVESTMENT OPTIONS
In your application for a policy, you tell us from which investment
options you want us to take the policy's monthly deductions as they fall due.
You can change these instructions at any time. If we cannot deduct the charge as
your most current instructions direct, we will allocate the deduction among your
investment options proportionately to your value in each.
CHANGES IN CHARGES
We reserve the right in the future to (1) make a charge for certain
taxes or reserves set aside for taxes (see "Our Taxes" on page ___ below), (2)
make a charge for the operating expenses of our variable investment options
(including, without limitation, SEC registration fees, related legal counsel
fees and auditing fees) or (3) make a charge of up to $25 for each transfer
among investment options that you make.
Any changes that we make in our current charges or charge rates will be
by class of insured person and will be based on changes in future expectations
about such factors as investment earnings, mortality experience, the length of
time policies will remain in effect, premium payments, expenses and taxes. Any
changes in charges may apply to then outstanding policies, as well as to new
policies, but we will not raise any charges above any maximums discussed in this
prospectus and shown in your policy.
RISKS YOU SHOULD CONSIDER
Some of the principal risks of investing in a policy are as follows:
o If the investment options you choose perform poorly, you could
lose some or all of the premiums you pay.
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o If the investment options you choose do not make enough money
to pay for the policy charges, you could have to pay more
premiums to keep your policy from terminating.
o We can increase certain charges without your consent, within
limits stated in your policy.
o You may have to pay a surrender charge if you wish to
discontinue some or all of your insurance coverage under a
policy.
Your policy permits other transactions that also have risks. These and other
risks and benefits of investing in a policy are discussed in detail throughout
this prospectus.
DECIDING TO PURCHASE -- POLICY FEATURES AND BENEFITS
HOW YOU CAN PAY FOR AND CONTRIBUTE TO YOUR POLICY
Premium payments. We call the amounts you contribute to your policy
"premiums" or "premium payments." The amount we require as your first premium
varies depending on the specifics of your policy and the insured person. Each
subsequent premium payment must be at least $100, although we can increase this
minimum if we give you advance notice. (Policies issued in some states or
automatic premium payment plans may have different minimums.) Otherwise, with a
few exceptions mentioned below, you can make premium payments at any time and in
any amount.
[Side bar: You can generally pay premiums at such times and in such amounts as
you like, so long as you don't exceed certain limits determined by the federal
income tax laws applicable to life insurance.]
Limits on premium payments. The federal tax law definition of "life
insurance" limits your ability to pay certain high levels of premiums (relative
to the amount of your policy's insurance coverage). Also, if your premium
payments exceed certain other amounts specified under the Internal Revenue Code,
your policy will become a "modified endowment contract," which may subject you
to additional taxes and penalties on any distributions from your policy. These
tax law premium limits are summarized further under "Tax Information" beginning
on page __ below. We may return to you any premium payments that would exceed
those limits.
You can ask your Equitable Life associate to provide you with an
illustration of policy benefits that shows you the amount of premium you can
pay, based on various assumptions, without exceeding these tax law limits. The
tax law limits can change as a result of certain changes you make to your
policy. For example, a reduction in the face amount of your policy may reduce
the amount of premiums that you can pay.
If at any time when your policy's account value is high enough that the
alternative death benefit discussed on page ___ below would apply, we reserve
the right to limit the amount of any premiums that you pay, unless the insured
person provides us with adequate evidence that he/she continues to meet our
requirements for issuing insurance.
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Planned periodic premiums. Page 3 of your policy will specify a
"planned periodic premium." This is the amount that you request us to bill you.
However, payment of these or any other specific amounts of premiums is not
mandatory. Rather, you need to pay only the amount of premiums (if any) that is
necessary to keep your policy from lapsing and terminating as discussed below.
THE MINIMUM AMOUNT OF PREMIUMS YOU MUST PAY
Policy "lapse" and termination. Your policy will lapse (also referred
to in your policy as "default") if it does not have enough "net cash surrender
value" to pay your policy's monthly charges when due unless
o you have paid sufficient premiums to maintain one of our
available guarantees against termination and your policy is
still within the period of that guarantee (see "You Can
Guarantee That Your Policy Will Not Terminate Before a Certain
Date" below) or
o you have elected the Paid Up death benefit guarantee and it
remains in effect (see "You Can Elect a 'Paid Up' Death
Benefit Guarantee" at page __ below).
("Net cash surrender value" is explained under "Surrendering Your Policy For its
Net Cash Surrender Value" on page __ below.)
We will mail a notice to you at your last known address if your policy
lapses. You will have a 61 day grace period to pay at least an amount prescribed
in your policy which would be enough to keep your policy in force for
approximately three months (without regard to investment performance). You may
not make any transfers or request any other policy changes during a grace
period. If we do not receive your payment by the end of the grace period, your
policy (and all riders to the policy) will terminate without value and all
coverage under your policy will cease. We will mail an additional notice to you
if your policy terminates.
[Side bar: Your policy will terminate if you don't either (i) pay enough
premiums to pay the charges we deduct or (ii) maintain in effect one or more of
our other guarantees that can keep your policy from terminating. However, we
will first send you a notice and give you a chance to cure any shortfall.]
You may owe taxes if your policy terminates while you have a loan
outstanding, even though you receive no additional money from your policy at
that time. See "Tax Information," beginning on page __ below.
Restoring a terminated policy. To have your policy "restored" (put back
in force), you must apply within six months after the date of termination. In
some states, you may have a longer period of time. You must also present
evidence of insurability satisfactory to us and pay at least the amount of
premium that we require. Your policy contains additional information about the
minimum amount of this premium and about the values and terms of the policy
after it is restored.
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YOU CAN GUARANTEE THAT YOUR POLICY WILL NOT TERMINATE BEFORE A CERTAIN DATE
You can guarantee that your policy will not terminate for a number of
years by paying at least certain amounts of premiums. We call these amounts
"guarantee premiums" and they will be set forth on page 3 of your policy. In
most states you have three options for how long the guarantee will last. One of
these options is discussed below under "Enhanced death benefit guarantee." The
other two guarantee options are as follows:
(1) a guarantee for the first 5 years of your policy (the policy
calls this the "no-lapse guarantee")
or
(2) a guarantee until the insured reaches age 70, but in no case
less than 10 years (the policy calls this the "death benefit
guarantee").
These guarantees may be unavailable or limited to shorter periods in some
states.
We make no extra charge for either of the two above-listed guarantees
against policy termination. However, in order for either of those guarantees to
be available, you must have satisfied the "guarantee premium test" (discussed
below) and you must not have any outstanding policy loans. In this connection,
maintaining the "age 70/10 year" guarantee against policy termination (where
available) will require you to pay more premiums than maintaining only the 5
year guarantee.
[Side bar: In most states, if you pay at least certain prescribed amounts of
premiums, and have no policy loans, your policy will not terminate for a number
of years, even if the value in your policy becomes insufficient to pay the
monthly charges.]
Guarantee premium test. If your policy's net cash surrender value is
not sufficient to pay a monthly deduction that has become due, we check to see
if the cumulative amount of premiums that you have paid to date at least equals
the cumulative guarantee premiums due to date for either of the two above-listed
guarantee options that are then available under your policy. If it does, your
policy will not lapse, provided that you have no policy loans outstanding (or
you repay all of such loans before the end of the 61 day grace period mentioned
above) and provided that the period of the corresponding guarantee has not
expired.
When we calculate the cumulative amount of guarantee premiums for the
two above-listed guarantee options, we compound each amount at a 4% annual
interest rate from its due date through the date of the calculation. (This
interest rate is purely for purposes of determining whether you have satisfied
the guarantee test for an available duration. It does not bear any relation to
the returns you will actually earn or any loan interest you will actually pay.)
We use the same calculation for determining the cumulative amount of premiums
paid, beginning with the date each premium is received. The amount of premiums
you must pay to maintain the guarantee for either duration will be increased by
the cumulative amount of any partial withdrawals you have taken from your policy
(calculated by the same method, beginning with the date of withdrawal).
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Enhanced death benefit guarantee. On your application for a policy, you
may elect an enhanced death benefit guarantee rider, that will guarantee your
policy against termination for a longer period of time than either of the two
guarantee options described above. If elected, a monthly charge of $.02 per
$1000 of the policy's initial face amount is deducted from your account value
for this enhanced death benefit guarantee. To elect this feature, all of your
policy's account value must be allocated to our variable investment options.
While the enhanced death benefit guarantee is in effect, your policy
will not lapse, even if your net cash surrender value is insufficient to pay a
monthly deduction that has become due, as long as you do not have an outstanding
loan (or you repay the loan within the 61 day grace period). This guarantee is
available for the following periods:
(a) If you have always chosen death benefit Option A, until the
insured person reaches age 100; or
(b) If you have ever selected death benefit Option B (even if you
subsequently changed it to Option A), until the later of the
date the insured person reaches age 80 or the end of the 15th
year of the policy.
This option is not available in all states.
If you have elected the enhanced death benefit guarantee, we test on
each policy anniversary to see if the required premium (the enhanced death
benefit "guarantee premium") has been paid. (The enhanced guarantee premium will
be set forth on page 3 of your Policy.) The required premium has been paid if
the total of all premiums paid, less all withdrawals, is at least equal to the
total of all enhanced guarantee premiums due to date. (In this comparison,
unlike the test for the shorter duration guarantees discussed above, we do not
compound these amounts using any hypothetical interest rate.)
If the required premium has not been paid as of any policy anniversary,
we will mail you a notice requesting that you send us the shortfall. If we do
not receive this additional premium, the enhanced death benefit guarantee will
terminate. The enhanced death benefit guarantee also will terminate if you
request that we cancel it, or if you allocate any value to our guaranteed
interest option. If the enhanced death benefit guaranty terminates, the related
charge terminates, as well. Once terminated, this guarantee can never be
reinstated or restored.
Guarantee premiums. The amount of the guarantee premiums for each of
the guarantees discussed above is set forth in your policy if that guarantee is
available to you. The guarantee premiums are actuarially determined at policy
issuance and depend on the age and other insurance risk characteristics of the
insured person, as well as the amount of the coverage and additional features
you select. Certain additional benefit riders will cause the guarantee premiums
to increase each year. The guarantee premiums also may change if, for example,
you make policy changes that increase or decrease the face amount of the policy
or a rider, add or eliminate a rider, or if there is a change in the insured
person's risk characteristics. We will send you a new policy page showing any
change in your guarantee premiums. Any change will be prospective only, and no
change will extend a guarantee period beyond its original number of years.
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We will not bill you separately for guarantee premiums. If you want to
be billed, therefore, you must select a planned periodic premium that at least
equals the guarantee premium that you plan to pay. If you wish your bills for
planned periodic premiums to cover your guarantee premiums, please remember to
change your planned periodic premium amount, as necessary, if you take any
action that causes your guarantee premiums to change.
YOU CAN ELECT A "PAID UP" DEATH BENEFIT GUARANTEE
In most states, you may elect to take advantage of our "paid up death
benefit guarantee" at any time after the fourth year of your policy. If you
elect the paid up death benefit guarantee, we may initially reduce your policy's
face amount (see below). Thereafter, your policy will not lapse and the death
benefit will never be less than the face amount (as determined below), so long
as the guarantee remains in effect and you do not take any partial withdrawals.
The guarantee will terminate, however, if (i) subsequent to the election, any
outstanding policy loans and accrued loan interest, together with any then
applicable surrender charge, exceed your policy's account value or if (ii) you
request us to terminate the election.
In order to elect the paid up death benefit guarantee:
o you must have death benefit "Option A" in effect (discussed
below on page __),
o you must terminate any riders to your policy that carry
additional charges,
o the election must not cause the policy to lose its
qualification as life insurance under the Internal Revenue
Code or require a current distribution from the policy to
avoid such disqualification, and
o the election must not reduce the face amount (see below) to
less than the minimum face amount for which we would then
issue a policy.
The paid up death benefit guarantee is not available in all states.
Possible reduction of face amount. The face amount of your policy after
this guarantee is elected is the lesser of (a) the face amount immediately
before the election or (b) the policy account value divided by a factor based on
the then age of the insured person. The factors are set forth in your policy. As
a general matter, the factors change as the insured person ages so that, if your
account value stayed the same, the component of the face amount calculation
determined under clause (b) above would be lower the longer your policy is
outstanding.
If electing the paid up death benefit guarantee causes a reduction in
face amount, we will deduct the same portion of any remaining surrender charge
as we would have deducted if you had requested that decrease directly (rather
than electing the paid up death benefit guarantee). See the table on page __
above.
Other effects of this guarantee. You generally may continue to pay
premiums after you have elected the paid up death benefit guarantee (subject to
the same limits as before), but premium payments are not required. If the
election causes your face amount to decrease, however, the amount of additional
premiums you can pay, if any, may be reduced. You may continue to make
transfers,
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but you may not change the death benefit option or add riders that have their
own charges while the paid up death benefit guarantee is in effect.
Partial withdrawals while this rider remains in effect will generally
be subject to the same terms and conditions as any other partial withdrawal (see
"Making Withdrawals From Your Policy" at page __ below), except that
o The policy's face amount will generally decrease more than it
would if this guarantee were not in force, and
o We will deduct the same portion of any remaining surrender
charge as we would have deducted if you had requested that
decrease directly. See the table on page __ above.
Election of the paid up death benefit guarantee may cause your policy
to become a modified endowment contract under certain circumstances. See "Tax
Treatment of Distributions to You" beginning on page __ below. You should
consult your tax advisor before making this election.
INVESTMENT OPTIONS WITHIN YOUR POLICY
We will initially put all amounts which your have allocated to variable
investment options into our Alliance Money Market investment option. On the
twenty-first day after your policy's issue date (the "Allocation Date"), we will
re-allocate that investment in accordance with your premium allocation
instructions then in effect. You give such instructions in your application to
purchase a policy. You can change the premium allocation percentages at any
time, but this will not affect any prior allocations. The allocation percentages
that you specify must always be in whole numbers and total exactly 100%.
Variable investment options. The 26 variable investment options
currently available are listed on the front cover of this prospectus. (Your
policy and other supplemental materials may refer to these as "Investment
Funds".) The investment results you will achieve in any one of these options
will depend on the investment performance of the corresponding Portfolio that
shares the same name as that option. That Portfolio follows investment
practices, policies and objectives that are appropriate to the variable
investment option you have chosen. The advisers who make the investment
decisions for each Portfolio are as follows:
[Side bar: You can choose among 26 variable investment options]
Alliance Capital Management L.P. (for each "Alliance" or "EQ/Alliance"
option)
T. Rowe Price Associates, Inc. and Rowe Price-Fleming International,
Inc. (for both "T. Rowe Price" options)
Putnam Investment Management, Inc. (for both "EQ/Putnam" options)
Merrill Lynch Asset Management L.P. (for both "Merrill Lynch" options)
Massachusetts Financial Services Company (for the "MFS" options)
Morgan Stanley Asset Management Inc. (for the "Morgan Stanley" option)
Warburg Pincus Asset Management, Inc. (for the "Warburg Pincus" option)
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The Portfolio that corresponds to each variable investment option that
has "Alliance" in its name is a part of The Hudson River Trust (except for the
"EQ/Alliance" Portfolio). Each other Portfolio is a part of EQ Advisors Trust.
EQ Financial Consultants, Inc., a subsidiary of Equitable Life, serves as
investment manager of the EQ Advisors Trust. As such, EQ Financial Consultants
oversees the activities of the above-listed advisers with respect to EQ Advisors
Trust and is responsible for retaining or discontinuing the services of those
advisers. You will find other important information about each Portfolio in the
separate prospectuses for The Hudson River Trust and EQ Advisors Trust attached
at the end of this prospectus. We may add or delete variable investment options
or Portfolios at any time.
Guaranteed interest option. You can also allocate some or all of your
policy's value to our guaranteed interest option. We, in turn, invest such
amounts as part of our general assets. Periodically, we declare a fixed rate of
interest (3% minimum) on amounts you allocate to our guaranteed interest option.
(Your policy and other supplemental material may refer to this as the
"Guaranteed Interest Account".)
[Side-bar: We will pay at least 3% annual interest on our guaranteed interest
option.]
ABOUT YOUR LIFE INSURANCE BENEFIT
Your policy's face amount. In your application to buy an Incentive Life
policy, you tell us how much insurance coverage you want on the life of the
insured person. We call this the "face amount" of the policy. $50,000 is the
smallest amount of coverage you can request.
[Side-bar: If the insured person dies, we pay a life insurance benefit to the
"beneficiary" you have named. The amount we pay depends on whether you have
chosen death benefit Option A or death benefit Option B.]
Your policy's "death benefit" options. In your policy application, you
also choose whether the basic amount (or "benefit") we will pay if the insured
person dies is
o Option A - THE POLICY'S FACE AMOUNT on the date of the insured
person's death. The amount of this death benefit doesn't
change over time, unless you take any action that changes the
policy's face amount;
- or -
o Option B - THE FACE AMOUNT PLUS THE POLICY'S "ACCOUNT VALUE"
on the date of death. Under this option, the amount of death
benefit generally changes from day to day, because many
factors (including investment performance, charges, premium
payments and withdrawals) affect your policy's account value.
Your policy's "account value" is the total amount that at any time is
earning interest for you or being credited with investment gains and losses
under your policy. (Account value is discussed in more detail under "Determining
Your Policy's Value" beginning on page __ below.)
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Under Option B, your policy's death benefit will tend to be higher than
under Option A. As a result, the monthly insurance charge we deduct will also be
higher, to compensate us for our additional risk.
Alternative higher death benefit in limited cases. Your policy is
designed to always provide a minimum level of insurance protection relative to
your policy's value, in part to meet the Internal Revenue Code's definition of
"life insurance." Thus, we will automatically pay an alternative death benefit
if it is HIGHER than the basic Option A or Option B death benefit you have
selected. This alternative death benefit is computed by multiplying your
policy's account value on the insured person's date of death by a percentage
specified in your policy. The percentage depends on the insured person's age.
Representative percentages are as follows:
[Side bar: If the value in your policy is high enough, relative to the face
amount, the life insurance benefit will automatically be greater than the Option
A or Option B death benefit you have selected.]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Age:* 40 and Under 45 50 55 60 65 70 75 to 95 99 and Over
%: 250% 215% 185% 150% 130% 120% 115% 105% 101%
</TABLE>
* For the then-current policy year.
This higher alternative death benefit exposes us to greater insurance
risk than the regular Option A and B death benefits. Because the cost of
insurance charges we make under your policy are based in part on the amount of
our risk, you will pay more cost of insurance charges for any periods during
which the higher alternative death benefit is the operative one.
Other adjustments to death benefit. We will increase the death benefit
proceeds by the amount of any other benefits we owe upon the insured person's
death under any optional riders which are in effect.
We will reduce the death benefit proceeds by the amount of any
remaining policy loans and unpaid loan interest, as well as any amount of
monthly charges under the policy that have become due but have not been paid
because of insufficient value in the policy. We also reduce the death benefit if
we have already paid part of it under a living benefit rider. We reduce it by
the amount of the living benefit payment plus interest. See "Your Option to
Receive a Living Benefit" on page __ below.
[Side-bar: You can request to change your death benefit option any time after
the second year of the policy.]
Change of death benefit option. If you change from Option A to B, we
automatically reduce your policy's face amount by an amount equal to your
policy's account value at the time of the change. We may refuse this change if
the policy's face amount would be reduced below our then current minimum for new
policies. Also, we may require you to provide us with satisfactory evidence that
the insured person remains insurable at the time of this change.
If you change from Option B to A, we automatically increase your
policy's face amount by an amount equal to your policy account value at the time
of the change.
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If the alternative death benefit discussed above would be in effect at
the time of the change, we will determine the new face amount somewhat
differently from the general procedures described above. We will not deduct or
establish any amount of surrender charge as a result of a change in death
benefit option.
Please refer to "Tax Information" beginning on page __ below, to learn
about certain possible income tax consequences that may result from a change in
death benefit option.
YOU CAN INCREASE OR DECREASE YOUR INSURANCE COVERAGE
You may increase the life insurance coverage under your policy by
requesting an increase in your policy's face amount. You can do so any time
after the first year of your policy. You may request a decrease in your policy's
face amount any time after the second year of your policy. The requested
increase or decrease must be at least $10,000. Please refer to "Tax Information"
beginning on page __ for certain possible tax consequences of changing the face
amount.
We can refuse any requested increase or decrease. We will not approve
any increase or decrease if we are at that time being required to waive charges
under any optional disability waiver rider that is part of the policy. We will
also not approve a face amount increase if the insured person has reached age
81. The following additional conditions also apply:
Face amount increases. We treat an increase in face amount in many
respects as if it were the issuance of a new policy. For example, you must
submit satisfactory evidence that that the insured person still meets our
requirements for coverage; and the monthly insurance charge we make for the
amount of the increase will be based on the age and other insurance risk
characteristics of the insured person at the time of the increase. Also, we
establish additional amounts of surrender charge and guarantee premiums under
your policy for the face amount increase; these amounts are essentially the same
as they would be if we were issuing the same amount of additional coverage as a
new policy.
In most states, you can cancel the face amount increase within 10 days
after you receive a new policy page showing the increase. If you cancel, we will
reverse any charges attributable to the increase and recalculate all values
under your policy to what they would have been had the increase not taken place.
If we refuse a requested face amount increase because the insured
person's risk characteristics have become less favorable, we may issue the
additional coverage as a separate Incentive Life policy with a different
insurance risk classification. In that case, we would waive the monthly
administrative charge that otherwise would apply to that separate policy.
Face amount decreases. You may not reduce the face amount below the
minimum we are then requiring for new policies. Nor will we permit a decrease
that would cause your policy to fail the Code's definition of life insurance.
Guarantee premiums, as well as our monthly deductions for the cost of insurance
coverage, will generally decrease (prospectively) after you reduce the face
amount.
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If you reduce the face amount during the first 15 years of your policy,
or during the first 15 years after a face amount increase you have requested, we
will deduct all or part of the remaining surrender charge from your policy.
Assuming you have not previously changed the face amount, the amount of
surrender charge we will deduct will be determined by dividing the amount of the
decrease by the initial face amount and multiplying that fraction by the total
amount of surrender charge that still remains applicable to your policy. We
deduct the charge from the same investment options as if it were a part of a
regular monthly deduction under your policy.
In some cases, we may have to make a distribution to you from your
policy in order to decrease your policy's face amount. This may be necessary in
order to preserve your policy's status as life insurance under the Internal
Revenue Code.
OTHER BENEFITS YOU CAN ADD BY RIDER
You may be eligible for the following other optional benefits we
currently make available by rider:
o disability waiver benefits o ten-year term insurance
on the insured person or
an additional insured person
o accidental death benefit o option to purchase additional
insurance
o children's term insurance o cost-of-living rider
Equitable Life or your Equitable Life associate can provide you with more
information about these riders. The riders provide additional information, and
we will furnish samples of them to you on request. The maximum amount of any
charge we make for a rider will be set forth in the rider or in the policy
itself. We can, however, add, delete, or modify the riders we are making
available, at any time before they become effective as part of your policy.
The option to purchase additional insurance rider permits you to
purchase additional coverage on the insured person, without evidence of
insurability, if specified events occur.
The cost of living rider provides for scheduled automatic face amount
increases that, within limits, reflect increases in the Consumer Price Index.
These automatic face amount increases will result in a prospective increase in
your guarantee premiums and an additional surrender charge, in the same manner
as would any other face amount increase you request.
See also "Tax Information" beginning on page __ below for certain
possible tax consequences of face amount increases or adding or deleting riders.
YOUR OPTIONS FOR RECEIVING POLICY PROCEEDS
Beneficiary of death benefit. You designate your beneficiary in your
policy application. You can change your policy's beneficiary at any other time
during the insured person's life. If no beneficiary is living when the insured
person dies, we will pay the death benefit proceeds in equal shares to the
insured person's surviving children. If there are no surviving children, we will
instead pay the insured person's estate.
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Payment options for death benefit. In your policy application, or at
any other time during the insured person's life, you may choose among several
payment options for all or part of any death benefit proceeds that subsequently
become payable. These payment options are described in the policy and may result
in varying tax consequences. The terms and conditions of each option are set out
in a separate contract that we will send the payee when any such option goes
into effect. Equitable Life or your Equitable Life associate can provide you
with samples of such contracts on request.
[Side-bar: You can choose to have the proceeds from the policy's life insurance
benefit paid under one of our payment options, rather than as a single sum.]
If you have not elected a payment option, we will pay any death benefit
in a single sum. If the beneficiary is a natural person (i.e., not an entity
such as a corporation or trust) we will pay any such single sum death benefit
through an interest-bearing checking account (the "Equitable Access
Account(TM)") that we will automatically open for the beneficiary. The
beneficiary will have immediate access to the proceeds by writing a check on the
account. We pay interest on the proceeds from the date of death to the date the
beneficiary closes the Equitable Access Account. The annual rate will be at
least 3%.
If an Equitable Life associate has assisted the beneficiary 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 associate within the
periods specified for death benefit payments under "When We Pay Policy
Proceeds," beginning on page __ below. Our associates will take reasonable steps
to arrange for prompt delivery to the beneficiary.
A beneficiary for whom we have opened an Equitable Access Account has
up to __ days from ___ to select among our death benefit payment options.
Payment options for surrender and withdrawal proceeds. You can also
choose to receive all or part of any proceeds from a surrender or withdrawal
from your policy under one of the above referenced payment options, rather than
as a single sum.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your policy, you may
return it to us for a full refund of the premiums paid. In some states, we will
adjust this amount for any investment performance (whether positive or
negative).
To exercise this cancellation right, you must mail the policy directly
to our Administrative Office with a written request to cancel. Your cancellation
request must be postmarked within 10 days after you receive the policy and your
coverage will terminate as of the date of the postmark. In some states, this
"free look" period is longer than 10 days. Your policy will indicate the length
of your "free look" period.
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VARIATIONS AMONG INCENTIVE LIFE POLICIES
Time periods and other terms and conditions described in this
prospectus may vary due to legal requirements in your state. These variations
will be reflected in your policy.
Equitable Life also may vary the charges and other terms of Incentive
Life where special circumstances result in sales or administrative expenses or
mortality risks that are different from those normally associated with Incentive
Life. We will make such variations only in accordance with uniform rules that we
establish.
Equitable Life or your Equitable Life associate can advise you about
any variations that may apply to your policy.
DETERMINING YOUR POLICY'S VALUE
YOUR ACCOUNT VALUE
As set forth on page __ above, we deduct certain charges from each
premium payment you make. We credit the rest of each premium payment to your
policy's "account value." You instruct us to allocate your account value to one
or more of the policy's investment options indicated on the front cover of this
prospectus.
Your account value is the total of (i) your amounts in our variable
investment options, (ii) your amounts in our guaranteed interest option, and
(iii) any amounts that we are holding to secure policy loans that you have
taken. See "Borrowing From Your Policy" beginning on page _____ below. (Your
policy and other supplemental material may refer to (ii) and (iii) above as our
"Guaranteed Interest Account.") These amounts are subject to certain charges
discussed in the table on page __.
[Side-Bar: Your account value will be credited with the same returns as are
achieved by the Portfolios (or guaranteed interest option) that you select, but
will also be reduced by the amount of charges we deduct under the policy.]
Your policy's value in our variable investment options. We invest the
account value that you have allocated to any variable investment option in
shares of the corresponding Portfolio. Your value in each variable investment
option is measured by "units." The value of your units will increase or decrease
each day, by the same amount as if you had invested in the corresponding
Portfolio's shares directly (and reinvested all dividends and distributions from
the Portfolio in additional Portfolio shares). The units' values will be
reduced, however, by the amount of the mortality and expense risk charge for
that period (the charge is described in the table on page __ above). On any day,
your value in any variable investment option equals the number of units credited
to your policy under that option, multiplied by that day's value for one such
unit.
The number of your units in any variable investment option does not
change, absent an event or transaction under your policy that involves moving
assets into or out of that option. Whenever any amount is withdrawn or otherwise
deducted from one of your policy's variable investment
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options, we "redeem" (cancel) the number of units that has a value equal to that
amount. This can happen, for example, when all or a portion of monthly
deductions and transaction-based charges are allocated to that option, or when
loans, transfers, withdrawals and surrenders are made from that option.
Similarly, you "purchase" additional units having the same value as the amount
of any premium, loan repayment, or transfer that you allocate to that option.
Your policy's value in our guaranteed interest option. Your policy's
value in our guaranteed interest option includes: (i) any amounts you have
specifically requested that we allocate to that option and (ii) any "restricted"
amounts that we hold in that option as a result of your election to receive a
living benefit (these restricted amounts may be referred to in your policy as
"liened policy amounts"). See "Your Option to Receive a Living Benefit" on page
__ below. We credit all of such amounts with interest at rates we declare from
time to time. We guarantee that these rates will not be less than a 3% effective
annual rate. The mortality and expense risk charge mentioned above does not
apply to our guaranteed interest option.
Amounts may be allocated to or removed from your policy's value in our
guaranteed interest option for the same purposes as described above for the
variable investment options. We credit your policy with a number of dollars in
that option that equals any amount that is being allocated to it. Similarly, if
amounts are being removed from your guaranteed interest option for any reason,
we reduce the amount you have credited to that option on a dollar-for-dollar
basis.
TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
TRANSFERS YOU CAN MAKE
[Side-bar: You can transfer freely among our variable investment options and
into our guaranteed interest option.]
After your policy's initial investment Allocation Date, you can
transfer amounts from one investment option to another. The total of all
transfers you make on the same day must be at least $500; except that you may
transfer your entire balance in an investment option, even if it is less than
$500. You may submit a written request for a transfer to our Administrative
Office or you can make a telephone request (see below).
[Side-bar: Transfers out of our guaranteed interest option are more limited.]
Restrictions on transfer out of the guaranteed interest option. We only
permit you to make one transfer out of our guaranteed interest option during
each policy year. (No such limit applies to transfers out of our variable
investment options.) Also, the maximum transfer from our guaranteed interest
option is the greater of (a) 25% of your then current balance in that option (b)
$500, or (c) the amount (if any) that you transferred out of the guaranteed
interest option during the immediately preceding policy year.
We will not accept a request to transfer out of the guaranteed interest
option unless we receive it within the period beginning 30 days before and
ending 60 days after an anniversary of your
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policy. If we receive the request within that period, the transfer will occur as
of that anniversary or, if later, the date we receive it.
Transfer charge. We do not currently make any charge for transfers. We
reserve the right, however, to impose up to a $25 charge for each transfer you
make. This charge would not apply to a transfer of all of your variable
investment option amounts to our guaranteed investment option, however, or to
any transfer pursuant to our dollar cost averaging service.
TELEPHONE TRANSFERS
You can make telephone transfers by following one of two procedures:
o if you are both the policy's insured person and its owner, by
calling 1-888-855-5100 (toll free) from a touch tone phone; or
o if you are not both the insured person and owner, by signing a
telephone transfer authorization form and sending it to us.
Once we have the form on file, we will provide you with a
toll-free telephone number to make transfers.
For more information see "Telephone Requests" on page __ below. We allow only
one request for telephone transfers each day (although each request can cover
multiple transfers), and we will not allow you to revoke a telephone transfer.
If you are unable to reach us by telephone, you should send a written transfer
request to our Administrative Office.
OUR DOLLAR COST AVERAGING SERVICE
We offer you a dollar cost averaging service. This service allows you
to gradually allocate amounts to the variable investment options by periodically
transferring approximately the same dollar amount to the variable investment
options you select. This will cause you to purchase more units if the unit's
value is low, and fewer units if the unit's value is high. Therefore, you may
get a lower average cost per unit over the long term. This plan of investing,
however, does not guarantee that you will earn a profit or be protected against
losses.
Our dollar cost averaging service (also referred to as our "automatic
transfer service") enables you to make automatic monthly transfers from the
Alliance Money Market option to our other variable investment options. You need
a minimum of $5,000 in the Alliance Money Market option to begin using the
dollar cost averaging service. You can choose up to eight other variable options
to receive the automatic transfers but each transfer to each option must be at
least $50.
You may elect the dollar cost averaging service with your policy
application or at any later time. You can also cancel the dollar cost averaging
service at any time.
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ACCESSING YOUR MONEY
BORROWING FROM YOUR POLICY
You may borrow up to 90% of the difference between your policy's
account value and any surrender charges that are in effect under your policy.
(In your policy, this "difference" is referred to as your Cash Surrender Value.)
However, the amount you can borrow will be reduced by any amount that we hold on
a "restricted" basis following your receipt of a living benefit payment, as well
as by any other loans (and accrued loan interest) you have outstanding. See
"Your Option to Receive a Living Benefit" beginning on page __ below.
[Side-bar: You can use policy loans to obtain funds from your policy without
surrender charges or, in most cases, paying current income taxes. However, the
borrowed amount is no longer credited with the investment results of any of our
investment options under the policy.]
When you take a policy loan, we remove an amount equal to the loan from
one or more of your investment options and hold it as collateral for the loan's
repayment. (Your policy may sometimes refer to the collateral as the "loaned
portion of your policy account.") We hold this loan collateral under the same
terms and conditions as apply to amounts supporting our guaranteed interest
option, with several exceptions:
o you cannot make transfers or withdrawals of the collateral;
o we expect to credit different rates of interest to loan
collateral than we credit under our guaranteed interest
option;
o we do not count the collateral when we compute our customer
loyalty credit; and
o the collateral is not available to pay policy charges.
When you request your loan, you should tell us how much of the loan
collateral you wish to have taken from any amounts you have in each of our
investment options. If you do not give us directions (or if we are making the
loan automatically to cover unpaid interest), we will take the loan from your
investment options in the same proportion as we are then taking monthly
deductions for charges. If that is not possible, we will take the loan from your
investment options in proportion to your value in each.
Loan interest we charge. The interest we charge on a policy loan
accrues daily at an adjustable interest rate. We determine the rate at the
beginning of each year of your policy and that rate applies to all policy loans
that are outstanding at any time during the year. The maximum rate is the
greater of (a) 4% or (b) the "Monthly Average Corporate" yield published in
Moody's Corporate Bond Yield Averages for the month that ends two months before
the interest rate is set. (If that average is no longer published, we will use
another average, as the policy provides.) In no event, however, will the loan
interest rate be greater than 15%. We will notify you of the current loan
interest rate when you apply for a loan, and will notify you in advance of any
rate increase.
Loan interest payments are due on each policy anniversary. If not paid
when due, we automatically add the interest as a new policy loan.
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Interest that we credit on loan collateral. Under our current rules,
the annual interest rate we credit on your loan collateral during any of your
policy's first fifteen years will be 1% less than the rate we are then charging
you for policy loan interest, and, beginning in the policy's 16th year, equal to
the loan interest rate. The elimination of the rate differential is not
guaranteed. Accordingly, we have discretion to increase the rate differential
for any period, including under policies that are already outstanding (and may
have outstanding loans). We do guarantee that the annual rate of interest
credited on your loan collateral will never be less than 3% and that the
differential will not exceed 2% (except if tax law changes increase the taxes we
pay on policy loans or loan interest). Because we first offered Incentive Life
policies in 1999 the interest rate differential has not yet been eliminated
under any outstanding policies.
[Side-bar: At our current rates, taking a loan effectively costs you 1% per
annum.]
Interest we pay on your loan collateral accrues daily. On each
anniversary of your policy (or when your policy loans are fully discharged) we
contribute that interest to your policy's investment options in the same
proportions as if it were a premium payment.
Effects of policy loans. A loan can reduce the length of time that your
insurance remains in force, because the amount we set aside as loan collateral
cannot be used to pay charges as they become due. A loan can also cause any paid
up guaranteed death benefit to terminate or may cause any other guarantee
against termination to become unavailable. We will deduct any outstanding policy
loan plus accrued loan interest from your policy's proceeds if you do not pay it
back. See "Tax Information" beginning on page __ below for a discussion of the
tax consequences of policy loans.
Paying off your loan. You can repay all or part of your loan at any
time. We normally assume that payments you send us are premium payments.
Therefore, you must submit instructions with your payment indicating that it is
a loan repayment. If you send us more than all of the loan principal and
interest you owe, we will treat the excess as a premium payment.
When you send us a loan repayment, we will transfer an amount equal to
such repayment from your loan collateral back to the investment options under
your policy. First we will restore any amounts that, before being designated as
loan collateral, had been in the guaranteed interest option under your policy.
We will allocate any additional repayments among investment options as you
instruct; or, if you don't instruct us, in the same proportion as if they were
premium payments.
MAKING WITHDRAWALS FROM YOUR POLICY
You may make a partial withdrawal of your net cash surrender value at
any time after the first year of your policy. The request must be for at least
$500, however, and we have discretion to decline any request. If you do not tell
us from which investment options you wish us to take the withdrawal, we will use
the same allocation that then applies for the monthly deductions we make for
charges; and, if that is not possible, we will take the withdrawal from all of
your investment options in proportion to your value in each.
[Side-bar: You can withdraw all or part of your policy's net cash surrender
value, although you may
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incur charges and tax consequences by doing so.]
Effect of partial withdrawals on insurance coverage. If the Option A
death benefit is in effect, a partial withdrawal results in a dollar-for-dollar
automatic reduction in the policy's face amount (and, hence, an equal reduction
in the Option A death benefit). If the paid up death benefit guarantee is in
effect, a partial withdrawal will generally reduce the face amount by more than
the amount of the withdrawal. Face amount reductions that occur automatically as
a result of withdrawals, however, do not result in our deducting any portion of
any then remaining surrender charge, unless the paid up death benefit guarantee
is in effect. We will not permit a partial withdrawal that would reduce the face
amount below our minimum for new policy issuances at the time, or that would
cause the policy to no longer be treated as life insurance for federal income
tax purposes.
If death benefit Option B is in effect, a partial withdrawal reduces
the death benefit on a dollar for dollar basis, but does not affect the face
amount.
The result is different, however, during any time when the alternative
death benefit (discussed on page __ above) would be higher than the Option A or
B death benefit you have selected. In that case, a partial withdrawal will cause
the death benefit to decrease by more than the amount of the withdrawal, even if
the paid up death benefit guarantee is not then in effect. Please also remember
that a partial withdrawal reduces the amount of your premium payments that
counts toward maintaining our other guarantees against termination, as well.
You should refer to "Tax Information" beginning on page __ below, for
information about possible tax consequences of partial withdrawals and any
associated reduction in policy benefits.
SURRENDERING YOUR POLICY FOR ITS NET CASH SURRENDER VALUE
You can surrender (give us back) your policy for its "net cash
surrender value" at any time. The net cash surrender value equals your account
value, minus any outstanding loans and unpaid loan interest, minus any amount of
your account value that is "restricted" as a result of previously distributed
"living benefits," and minus any surrender charge that then remains applicable.
The surrender charge is described on page __ above.
Please refer to "Tax Information" beginning on page __ below for the
possible tax consequences of surrendering your policy.
YOUR OPTION TO RECEIVE A LIVING BENEFIT
Subject to our insurance underwriting guidelines and availability in
your state, your policy will automatically include our living benefit rider.
This feature enables you to receive a portion of the policy's death benefit
(excluding death benefits payable under certain other policy riders), if the
insured person has a terminal illness (as defined in the rider).
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We make no additional charge for the rider. However, if you tell us
that you do not wish to have the living benefit rider added at issue, but you
later ask to add it, we will need to evaluate the insurance risk at that time,
and we may decline to issue the rider.
If you receive a living benefit, the remaining benefits under your
policy will be affected. We will deduct the amount of any living benefit we have
paid, plus interest (as specified in the rider), from the death benefit proceeds
that become payable under the policy if and when the insured person dies.
When we pay a living benefit we automatically transfer a pro-rata
portion of your policy's net cash surrender value to the policy's guaranteed
interest option. This amount, together with the interest you earn thereon, will
be "restricted" - that is, it will not be available for any loans, transfers or
partial withdrawals that you may wish to make. In addition, it may not be used
to satisfy the charges we deduct from your policy's value, and we do not count
it in computing any customer loyalty credit. We will deduct these restricted
amounts from any subsequent surrender proceeds that we pay. (In your policy, we
refer to this as a "lien" we establish against your policy.)
The receipt of a living benefit payment may qualify for exclusion from
income tax. See "Tax Information" below. Receipt of a living benefit payment may
affect your eligibility for certain government benefits or entitlements.
[Side-bar: You can arrange to receive a "living benefit" if the insured person
becomes terminally ill.]
TAX INFORMATION
This discussion is based on current federal income tax law and
interpretations. It assumes that the policyowner is a natural person who is a
U.S. citizen and resident. The tax effects on corporate taxpayers, 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 a
qualified tax advisor.
BASIC TAX TREATMENT FOR YOU AND YOUR BENEFICIARY
An Incentive Life policy will be treated as "life insurance" for
federal income tax purposes (a) if it meets the definition of life insurance
under Section 7702 of the Internal Revenue Code (the "Code") and (b) as long as
the investments made by the underlying Portfolios satisfy certain investment
diversification requirements under Section 817(h) of the Code. We believe that
the policies will meet these requirements and, therefore, that
o the death benefit received by the beneficiary under your
policy will not be subject to federal income tax; and
o increases in your policy's 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
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policy, such as a surrender, a partial withdrawal, loan or a
payment to you that we believe is required to maintain your
policy's status as life insurance under the Code.
There may be different tax consequences if you assign your policy or
designate a new owner. See "Assigning Your Policy" at page __ below.
TAX TREATMENT OF DISTRIBUTIONS TO YOU
The federal income tax consequences of a distribution from your policy
depend on whether your policy is a "modified endowment contract" (sometimes also
referred to as a "MEC"). In all cases, however, the character of any income
described below as being taxable to the recipient will be ordinary income (as
opposed to capital gain).
Testing for modified endowment contract status. Your policy will be a
"modified endowment contract" if, at any time during the first seven years of
your policy, you have paid a cumulative amount of premiums that exceeds the
cumulative seven-pay limit. The cumulative seven-pay limit is the amount of
premiums that you would have paid by that time under a similar fixed-benefit
insurance policy that was designed (based on certain assumptions mandated under
the Code) to provide for paid up future benefits after the payment of seven
equal annual premiums. ("Paid up" means that no future premiums would be
required.) This is called the "seven-pay" test.
Whenever there is a "material change" under a policy, the policy will
generally be (a) treated as a new contract for purposes of determining whether
the policy is a modified endowment contract and (b) 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 prescribed formula, the account value of the policy
at the time of such change. A materially changed policy would be considered a
modified endowment contract if it failed to satisfy the new seven-pay limit at
any time during the new seven-pay period. A "material change" for these purposes
could occur as a result of a change in death benefit option, the selection of
additional rider benefits, an increase in your policy's face amount (including
pursuant to our cost-of-living rider), or certain other changes.
If your policy's benefits are reduced during its first seven years (or
within seven years after a material change), the seven-pay limit will be
redetermined based on the reduced level of benefits and applied retroactively
for purposes of the seven-pay test. (Such a reduction in benefits could include,
for example, a requested decrease in face amount, the termination of additional
benefits under a rider or, in some cases, a partial withdrawal.) If the premiums
previously paid are greater than the recalculated (lower) seven-pay limit, the
policy will become a modified endowment contract.
A life insurance policy that you receive in exchange for a modified
endowment contract will also be considered a modified endowment contract.
Taxation of pre-death distributions if your policy is not a modified
endowment contract. As long as your policy remains in force as a non-modified
endowment contract, policy loans will be treated as indebtedness, and no part of
the loan proceeds will be subject to current federal income tax. Interest on the
loan will generally not be tax deductible.
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If you make a partial withdrawal after the first 15 years of your
policy, the proceeds will not be subject to federal income tax except to the
extent such proceeds exceed your "basis" in your policy. (Your basis generally
will equal the premiums you have paid, less the amount of any previous
distributions from your policy that were not taxable.) During the first 15
years, however, the proceeds from a partial withdrawal could be subject to
federal income tax, under a complex formula, to the extent that your account
value exceeds your basis.
Upon full surrender, any amount by which the proceeds we pay (including
amounts we use to discharge any policy loan and unpaid loan interest) exceed
your basis in the policy will be subject to federal income tax. IN ADDITION, IF
A POLICY TERMINATES AFTER A GRACE PERIOD, THE EXTINGUISHMENT OF ANY
THEN-OUTSTANDING POLICY LOAN AND UNPAID LOAN INTEREST WILL BE TREATED AS A
DISTRIBUTION AND COULD BE SUBJECT TO TAX UNDER THE FOREGOING RULES. Finally, if
you make an assignment of rights or benefits under your policy, you may be
deemed to have received a distribution from your policy, all or part of which
may be taxable.
Taxation of pre-death distributions if your policy is a modified
endowment contract. Any distribution from your policy will be taxed on an
"income-first" basis if your policy is a modified endowment contract.
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 withdrawal. Any such distributions will be considered taxable
income to you to the extent your account value exceeds your basis in the policy.
(For modified endowment contracts, your basis is similar to the basis described
above for other policies, except that it also 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 endowment contracts issued by Equitable Life (or its affiliate) to
the same owner (excluding certain qualified plans) during any calendar year are
treated as if they were a single contract.
A 10% penalty tax also will apply to the taxable portion of most
distributions from a policy that is a modified endowment contract. The penalty
tax will not, however, apply to (i) taxpayers whose actual age is at least 59
1/2, (ii) distributions in the case of a disability (as defined in the Code) or
(iii) distributions 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 his or her beneficiary.
IF YOUR POLICY TERMINATES AFTER A GRACE PERIOD, THE EXTINGUISHMENT OF
ANY THEN OUTSTANDING POLICY LOAN AND UNPAID LOAN INTEREST WILL BE TREATED AS A
DISTRIBUTION (to the extent the loan was not previously treated as such) and
could be subject to tax, including the 10% penalty tax, as described above. In
addition, upon a full surrender, any excess of the proceeds we pay (including
any amounts we use to discharge any loan) over your basis in the policy, will be
subject to federal income tax and, unless an exception applies, the 10% penalty
tax.
Distributions that occur during a year of your policy in which it
becomes a modified endowment contract, and during any subsequent years, will be
taxed as described in the four preceding paragraphs. In addition, distributions
from a policy within two years before it becomes a modified endowment contract
also will be subject to tax in this manner. This means that a
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distribution made from a policy that is not a modified endowment contract could
later become taxable as a distribution from a modified endowment contract.
Restoration of a terminated policy. For tax purposes, some restorations
of a policy that terminated after a grace period may be treated as the purchase
of a new policy.
TAX TREATMENT OF LIVING BENEFIT PROCEEDS
Amounts received under an insurance policy on the life of an individual
who is terminally ill, as defined by the tax law, are generally excludable from
the payee's gross income. We believe that the benefits provided under our living
benefit rider meet the tax law's definition of terminally ill and can qualify
for this income tax exclusion. This exclusion does not apply to amounts paid to
someone other than the insured person, however, if the payee has an insurable
interest in the insured person's life only because the insured person is a
director, officer or employee of the payee or by reason of the insured person
being financially interested in any trade or business carried on by the payee.
EFFECT OF POLICY ON INTEREST DEDUCTIONS TAKEN BY BUSINESS ENTITIES
Ownership of a policy by a trade or business entity can limit the
amount of any interest on business borrowings that entity otherwise could deduct
for federal income tax purposes, even though such business borrowings may be
unrelated to the policy. To avoid the limit, the insured person must be an
officer, director, employee or 20% owner of the trade or business entity when
coverage on that person commences.
The limit does not generally apply for policies owned by natural
persons (even if those persons are conducting a trade or business as sole
proprietorships), unless a trade or business entity that is not a sole
proprietorship is a direct or indirect beneficiary under the policy. Entities
commonly have such a beneficial interest, for example, in so-called "split
dollar" arrangements. If the trade or business entity has such an interest in a
policy, it will be treated the same as if it owned the policy for purposes of
the limit on deducting interest on unrelated business income.
The limit generally applies only to policies issued after June 8, 1997
in taxable years ending after such date. However, for this purpose, any material
increase in face amount that you request, or other material change in a policy,
will be treated as the issuance of a new policy.
In cases where the above-discussed limit on deductibility applies, the
non-deductible portion of unrelated interest on business loans is determined by
multiplying the total amount of such interest by a fraction. The numerator of
the fraction is the policy's average account value (excluding amounts we are
holding to secure any policy loans) for the year in question, and the
denominator is the average for the year of the aggregate tax bases of all the
entity's other assets.
Any corporate, trade, or business use of a policy should be carefully
reviewed by your tax advisor with attention to these rules, as well as the other
rules and possible tax law changes that could occur with respect to such
coverage.
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REQUIREMENT THAT WE DIVERSIFY INVESTMENTS
Under Section 817(h) of the Code, the Treasury Department has issued
regulations that implement investment diversification requirements. Failure to
comply with these regulations would disqualify your policy as a life insurance
policy under Section 7702 of the Code. If this were to occur, you would be
subject to federal income tax on any income and gains under the policy and the
death benefit proceeds would lose their income tax-free status. These
consequences would continue for the period of the disqualification and for
subsequent periods. Through the Portfolios, we intend to comply with the
applicable diversification requirements.
ESTATE, GIFT, AND GENERATION-SKIPPING TAXES
If the policy's owner is the insured person, the death benefit will
generally be includable in the owner's estate for purposes of federal estate
tax. If the owner is not the insured person, and the owner dies before the
insured person, the value of the policy would be includable in the owner's
estate. If the owner is neither the insured person nor the beneficiary, the
owner will be considered to have made a gift to the beneficiary of the death
benefit proceeds when they become payable.
In general, a person will not owe estate or gift taxes until gifts made
by such person, plus that person's taxable estate, total at least $650,000 (a
figure that is scheduled to rise at periodic intervals to $1 million by the year
2006). For this purpose, however, certain amounts may be excludable, such as
gifts and bequests to the person's spouse or charitable institutions and certain
gifts of $10,000 or less per year for each recipient.
As a general rule, if you make a "transfer" to a person two or more
generations younger than you, a generation skipping tax may be payable.
Generation skipping transactions would include, for example, a case where a
grandparent "skips" his or her children and names grandchildren as a policy's
beneficiaries. In that case, the generation-skipping "transfer" would be deemed
to occur when the insurance proceeds are paid. The generation-skipping tax rates
are similar to the maximum estate tax rate in effect at the time. Individuals,
however, are generally allowed an aggregate generation skipping tax exemption of
$1 million.
The particular situation of each policyowner, insured person or
beneficiary will determine how ownership or receipt of policy proceeds will be
treated for purposes of federal estate, gift and generation skipping taxes, as
well as state and local estate, inheritance and other taxes. Because these rules
are complex, you should consult with a qualified tax adviser for specific
information, especially where benefits are passing to younger generations.
PENSION AND PROFIT-SHARING PLANS
There are special limits on the amount of insurance that may be
purchased by a trust or other entity that forms part of a pension or
profit-sharing plan qualified under Section 401(a) or 403 of the Code. In
addition, the federal income tax consequences will be different from those
described in this prospectus. These rules are complex, and you should consult a
qualified tax adviser.
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OTHER EMPLOYEE BENEFIT PROGRAMS
Complex rules may also apply when a policy is held by an employer or a
trust, or acquired by an employee, in connection with the provision of other
employee benefits. These policyowners must consider whether the policy was
applied for by or issued to a person having an insurable interest under
applicable state law and with the insured person's consent. The lack of an
insurable interest or consent may, among other things, affect the qualification
of the policy as life insurance for federal income tax purposes and the right of
the beneficiary to receive a death benefit.
ERISA
Employers and employer-created trusts may be subject to reporting,
disclosure and fiduciary obligations under the Employee Retirement Income
Security Act of 1974. You should consult a qualified legal advisor.
Our Taxes
The operations of our Separate Account FP are reported in our federal
income tax return. The separate account's investment income and capital gains,
however, are, for tax purposes, reflected in our variable life insurance policy
reserves. Therefore, we currently pay no taxes on such income and gains and
impose no charge for such taxes. We reserve the right to impose 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 policies.
If our state, local or other taxes increase, we may add or increase our
charges for such taxes when they are attributable to Separate Account FP, based
on premiums, or otherwise allocable to the policies.
WHEN WE WITHHOLD TAXES FROM DISTRIBUTIONS
Generally, unless you provide us with an election to the contrary prior
to the distribution, we are required to withhold income tax from any proceeds we
distribute as part of a taxable transaction under your policy. If you do not
wish us to withhold tax from the payment, or if we do not withhold enough, you
may have to pay later. In some cases, where generation skipping taxes may apply,
we may also be required to withhold for such taxes unless we are provided
satisfactory notification that no such taxes are due. States may also require us
to withhold tax on distributions to you. Special withholding rules apply if you
are not a U.S. resident or not a U.S. citizen.
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POSSIBILITY OF FUTURE TAX CHANGES
The U.S. Congress frequently considers legislation that, if enacted,
could change the tax treatment of life insurance policies or increase the taxes
we pay in connection with such policies. In addition, the Treasury Department
may amend existing regulations, issue regulations on the qualification of life
insurance and modified endowment contracts, or adopt new interpretations of
existing law. State and local tax law or, if you are not a U.S. citizen and
resident, foreign tax law, may also affect the tax consequences to you, the
insured person or your beneficiary, and are subject to change. Any changes in
federal, state, local or foreign tax law or interpretations could have a
retroactive effect.
The Treasury Department has stated that it anticipates the issuance of
guidelines prescribing the circumstances in which your ability to direct your
investment to particular Portfolios within a separate account may cause you,
rather than the insurance company, to be treated as the owner of the Portfolio
shares attributable to your policy. In that case, income and gains attributable
to such Portfolio shares would be included in your gross income for federal
income tax purposes. Under current law, however, we believe that Equitable Life,
and not the owner of a policy, would be considered the owner of the Portfolio
shares.
MORE INFORMATION ABOUT PROCEDURES THAT APPLY TO YOUR POLICY
This section provides further detail about certain subjects that are
addressed in pages __ above. The following discussion generally does not repeat
the information already contained in those pages.
WAYS TO MAKE PREMIUM AND LOAN PAYMENTS
Checks and money orders. Premiums or loan payments generally must be
paid by check or money order drawn on a U.S. bank in U.S. dollars and made
payable to "Equitable Life."
We prefer that you make each payment to us with a single check drawn on
your business or personal bank account. We also will accept a single money
order, bank draft or cashier's check payable directly to Equitable Life,
although we must report such "cash equivalent" payments to the Internal Revenue
Service under certain circumstances. Cash and travelers' checks are not
acceptable. We will accept third party checks payable to someone other than
Equitable Life and endorsed over to Equitable Life only (1) as a direct payment
from a qualified retirement plan or (2) if it is made out to a trustee who owns
the policy and endorses the entire check (without any refund) as a payment to
the policy.
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REQUIREMENTS FOR SURRENDER REQUESTS
Your surrender request must include the policy number, your name, the
name of the insured person, and the address where proceeds should be mailed. The
request must be signed by you, as the owner, and by any joint owner, collateral
assignee or irrevocable beneficiary. If you do not want income tax withheld from
the proceeds, you must also include a completed withholding authorization
(I.R.S. Form W-9).
Finally, in order for your surrender request to be complete, you must
return your policy to us.
WAYS WE PAY POLICY PROCEEDS
The payee for death benefit or other policy proceeds (e.g. upon
surrenders) may name a successor to receive any amounts that we still owe
following the payee's death. Otherwise, we will pay any such amounts to the
payee's estate.
We must approve any payment 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 payment
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 payees, and the methods for proving the
payee's age and continued survival.
ASSIGNING YOUR POLICY
You may assign (transfer) your rights in a policy to someone else as
collateral for a loan or for some other reason, if we agree. A copy of the
assignment must be forwarded to our Administrative Office. We are not
responsible for any payment we make or any action we take before we receive
notice of the assignment or for the validity of the assignment. An absolute
assignment is a change of ownership.
Certain transfers for value may subject you to income tax and penalties
and cause the death benefit to lose its income-tax free treatment. Further, a
gift of a policy that has a loan outstanding may be treated as part gift and
part transfer for value, which could result in both gift tax and income tax
consequences. You should consult your tax advisor prior to making a transfer or
other assignment.
DATES AND PRICES AT WHICH POLICY EVENTS OCCUR
We describe below the general rules for when, and at what prices,
events under your policy will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
Date of receipt. Where this prospectus refers to the day when we
receive a payment, request, election, or notice from you, we usually mean the
day on which that item (or the last thing necessary
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for us to process that item) arrives in complete and proper form at our
Administrative Office or via the appropriate telephone or fax number if the item
is a type we accept by those means. There are two main exceptions: if the item
arrives (1) on a day that is not a business day or (2) after the close of a
business day, then, in each case, we are deemed to have received that item on
the next business day.
Business days. Every day that the New York Stock Exchange is open for
regular trading is a business day for us. Each business day ends at the time
regular trading on the exchange closes (or is suspended) for the day. We compute
unit values for our variable investment options as of the end of each business
day. This usually is 4:00 p.m., Eastern Time.
Payments you make. The following are reflected in your policy as of the
date we receive them:
o premium payments received after the policy's investment start
date (discussed below)
o loan repayments and interest payments
Requests you make. The following transactions occur as of the date we
receive your request:
o withdrawals o tax withholding
elections
o face amount decreases that o changes of allocation
result from a withdrawal percentages for premium
payments or monthly
deductions
o surrenders o changes of beneficiary
o transfers from a variable o changes in form of
investment option to the death benefit payment
guaranteed interest option o loans
o transfers among variable investment o assignments
options
The following transactions occur on your policy's next monthly
anniversary that coincides with or follows the date we approve your request:
o changes in face amount o election or termination
of paid up death benefit
guarantee
o changes in death benefit option o changes of insured person
o termination of enhanced death
benefit guarantee o restoration of terminated
policies
Dollar cost averaging service. Transfers pursuant to our dollar cost
averaging service occur as of the first day of each month of your policy. We
make the first such transfer, as of your policy's first monthly anniversary that
coincides with or follows the date we receive your request. If you request the
dollar cost averaging service in your original policy application, however, the
first transfer will occur as of the first day of the second month of your policy
that begins after your policy's initial Allocation date.
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Delay in certain cases. We may delay allocating any payment you make to
our variable investment options, or any transfer, for the same reasons stated in
"Delay of variable investment option proceeds" on page __ below. We may also
delay such transactions for any other legally permitted purpose.
Prices applicable to policy transactions. If a transaction will
increase or decrease the amount you have in a variable investment option as of a
certain date, we process the transaction using the unit values for that option
computed as of that day's close of business, unless that day is not a business
day. In that case, we use unit values computed as of the next business day's
close.
Effect of death or surrender. You may not make any surrender or partial
withdrawal request after the insured person has died. Also, all insurance
coverage ends on the date as of which we process any request for a surrender.
POLICY ISSUANCE
Register date. When we issue a policy, we assign it a "register date,"
which will be shown in the policy. We measure the months, years, and
anniversaries of your policy from your policy's register date.
o If you submit the full minimum initial premium to your
Equitable Life associate 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 you signed
part I of the policy application or (b) the date a medical
professional signed part II of the policy application.
o If we do not receive your full minimum initial premium at our
Administrative Office before the issue date or, if we issue
the policy on a different basis than you applied for, the
register date will be the same as the date we actually issue
the policy (the "issue date").
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.
We may also permit an earlier than customary register date (a) for
employer-sponsored cases, to accommodate a common register date for all
employees or (b) to provide a younger age at issue. (A younger age at issue
reduces the monthly charges that we deduct under a policy.) The charges and
deductions commence as of the register date, even when we have permitted an
early register date. We may also permit policyowners to delay a register date
(up to three months) in employer-sponsored cases.
Investment start date. This is the date your investment first begins to
earn a return for you in our Alliance Money Market option (prior to the
Allocation Date). Generally, this is the register date, or, if later, the date
we receive your full minimum initial premium at our Administrative Office.
Commencement of insurance coverage. You must give the full minimum
initial premium to
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your Equitable Life associate on or before the day the policy is delivered to
you. No insurance under your policy will take effect unless (1) the insured
person is still living at the time such payment and delivery are completed and
(2) unless the information in the application continues to be true and complete,
without material change, as of the time of such payment. If you submit the full
minimum initial premium with your application, we may, subject to certain
conditions, provide a limited amount of temporary insurance on the proposed
insured person. You may review a copy of our temporary insurance agreement, on
request, for more information about the terms and conditions of that coverage.
Non-issuance. If, after considering your application, we decide not to
issue a policy, we will refund any premium you have paid, without interest.
Age; age at issue. Unless the context in this prospectus requires
otherwise, we consider the insured person's "age" during any policy year be his
or her age on his or her birthday nearest to the beginning of that policy year.
For example, the insured person's age for the first policy year ("age at issue")
is that person's age on whichever birthday is closer to (i.e., before or after)
the policy's register date.
GENDER-NEUTRAL POLICIES
Congress and various states have from time to time considered legislation
that would require insurance rates to be the same for males and females. In
addition, employers and employee organizations should consider, in consultation
with counsel, the impact of Title VII of the Civil Rights Act of 1964 on the
purchase of Incentive Life in connection with an employment-related insurance or
benefit plan. In a 1983 decision, the United States Supreme Court held that,
under Title VII, optional annuity benefits under a deferred compensation plan
could not vary on the basis of sex.
There will be no distinctions based on sex in the cost of insurance rates
for Incentive Life policies sold in Montana. We will also make such
gender-neutral policies available on request in connection with certain employee
benefit plans. Cost of insurance rates applicable to a gender-neutral policy
will not be greater than the comparable male rates under a gender specific
Incentive Life policy.
MORE INFORMATION ABOUT OTHER MATTERS
YOUR VOTING PRIVILEGES
Voting of Portfolio shares. As the legal owner of any Portfolio shares that
support a variable investment option, we will attend (and have the right to vote
at) any meeting of shareholders of the Portfolio (or the Trust of which that
Portfolio is a part). To satisfy currently-applicable legal requirements,
however, we will give you the opportunity to tell us how to vote the number of
each Portfolio's shares that are attributable to your policy. We will vote
shares attributable to policies for which we receive no instructions in the same
proportion as the instructions we do receive from all policies that participate
in our Separate Account FP (discussed below). With respect to any Portfolio
shares that we are entitled to vote directly (because we do not hold them in a
separate account or
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because they are not attributable to policies), we will vote in proportion to
the instructions we have received from all holders of variable annuity and
variable life insurance policies who are using that Portfolio.
Under current legal requirements, we may disregard the voting instructions
we receive from policyowners only in certain narrow circumstances prescribed by
SEC regulations. If we do, we will advise you of the reasons in the next annual
or semi-annual report we send to you.
Voting as policyowner. In addition to being able to instruct voting of
Portfolio shares as discussed above, policyowners that use our variable
investment options may in a few instances be called upon to vote on matters that
are not the subject of a shareholder vote being taken by any Portfolio. If so,
you will have one vote for each $100 of account value in any such option; and we
will vote our interest in Separate Account FP in the same proportion as the
instructions we receive from holders of Incentive Life and other policies that
Separate Account FP supports.
ABOUT OUR SEPARATE ACCOUNT FP
Each variable investment option is a part (or "subaccount") of our Separate
Account FP. We established Separate Account FP under special provisions of the
New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable investment
options for owners of our variable life insurance policies. We are the legal
owner of all of the assets in Separate Account FP and may withdraw any amounts
that exceed our reserves and other liabilities with respect to variable
investment options under our policies. The results of Separate Account FP's
operations are accounted for without regard to Equitable Life's other
operations.
Separate Account FP's predecessor was established on April 19, 1985 by our
then wholly-owned subsidiary, Equitable Variable Life Insurance Company. We
established our Separate Account FP under New York Law on September 21, 1995.
When Equitable Variable Life Insurance Company merged into Equitable Life, as of
January 1, 1997, our Separate Account FP succeeded to all the assets,
liabilities and operations of its predecessor.
Separate Account FP is registered with the SEC under the Investment Company
Act of 1940 and is classified by that act as a "unit investment trust." The SEC,
however, does not manage or supervise Equitable Life or Separate Account FP.
Each subaccount (variable investment option) within Separate Account FP
invests solely in class IB shares issued by the corresponding Portfolio of The
Hudson River Trust or EQ Advisors Trust. Separate Account FP immediately
reinvests all dividends and other distributions it receives from a Portfolio in
additional shares of that Portfolio.
The EQ Advisors Trust sells its shares to Equitable Life separate accounts
in connection with Equitable Life's variable life insurance and annuity
products, as well as to the trustee of a qualified plan for Equitable. The
Hudson River Trust sells its shares to separate accounts of insurance companies,
both affiliated and unaffiliated with Equitable Life. We currently do not
foresee any disadvantages to our policyowners arising out of this. However, the
Board of Trustees of The
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Hudson River Trust intends to monitor events to identify any material
irreconcilable conflicts that may arise and to determine what action, if any,
should be taken in response. If we believe that the Board's response
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 the Trust involved, we will examine other investment alternatives.
ABOUT OUR GENERAL ACCOUNT
Our general account assets support all of our obligations, (including those
under the Incentive Life policies and, more specifically, the guaranteed
interest option). Our general assets consist of all of our assets as to which no
class or classes of our annuity or life insurance policies have any preferential
claim. You will not share in the investment experience of our general account
assets, however; and we have full discretion about how we invest those assets
(subject only to any requirements of law).
Because of applicable exemptions and exclusions, we have not registered
interests in the general account under the Securities Act of 1933 or registered
the general account as an investment company with the SEC. Accordingly, neither
the general account, the guaranteed interest option, nor any interests therein,
are subject to regulation under those acts. The staff of the SEC has not
reviewed the portions of this prospectus that relate to the general account and
the guaranteed interest option. The disclosure, however, may be subject to
certain provisions of the federal securities law relating to the accuracy and
completeness of statements made in prospectuses.
We declare the rate of interest periodically, but it will not be less than
3%. We credit and compound the interest daily at an effective annual rate that
equals the declared rate. The rates we are at any time declaring on outstanding
policies may differ from the rates we are then declaring for newly issued
policies.
YOU CAN CHANGE YOUR POLICY'S INSURED PERSON
After the policy's second year, we will permit you to request that a new
insured person replace the existing one. This requires that you provide us with
adequate evidence that the proposed new insured person meets our requirements
for insurance. Other requirements are outlined in your policy.
Upon making this change, the monthly insurance charges we deduct and
prospective guarantee premiums will be based on the new insured person's
insurance risk characteristics. The change of insured person will not, however,
affect the surrender charge computation for the amount of coverage that is then
in force.
Substituting the insured person is a taxable event and may, depending upon
individual circumstances, have other tax consequences as well. For example, the
change could cause the policy to be a "modified endowment contract" or to fail
the Internal Revenue Code's definition of "life insurance," unless we also
distribute certain amounts to you from the policy. See "Tax Information"
beginning on page __ below. You should consult your tax advisor prior to
substituting the insured
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person. As a condition to substituting the insured person we may require you to
sign a form acknowledging the potential tax consequences. In no event, however,
will we permit a change that causes your policy to fail the definition of life
insurance.
TRANSFERS OF YOUR ACCOUNT VALUE
Transfers not implemented. When we cannot process part of a transfer
request, we will not process any other part of the request. This could occur,
for example, where the request does not comply with our transfer limitations, or
where you request transfer of an amount greater than that currently allocated to
an investment option.
Similarly, the dollar cost averaging service will terminate immediately if:
(1) your amount in the Alliance Money Market option is insufficient to cover the
automatic transfer amount; (2) your policy is in a grace period; or (3) we
receive notice of the insured person's death.
TELEPHONE REQUESTS
If you are a properly authorized person, you may make telephone transfers
as described above on page __.
Also, if you are both the owner and the insured person under your policy,
you may call 1-888-855-5100 (toll free) from a touch tone phone to make the
following additional types of requests:
o policy loans o changes of premium allocation percentages
o changes of address
All telephone requests are automatically tape-recorded and are invalid if
the information given is incomplete or any portion of the request is inaudible.
We have established procedures reasonably designed to confirm that telephone
instructions are genuine. These include: requiring personal identification
information from the caller and providing subsequent written confirmation of the
instructions. If we do not employ reasonable procedures to confirm the
genuineness of telephone instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone instructions that we reasonably believe to be genuine.
Any telephone transaction request that you make after the close of a
business day (which is usually 4:00 p.m. Eastern Time) will be processed as of
the next business day. During times of extreme market activity, or for other
reasons, you may be unable to contact us to make a telephone request. If this
occurs, you should submit a written transaction request to our Administrative
Office. We reserve the right to discontinue telephone transactions, or modify
the procedures and conditions for such transactions, at any time.
DEDUCTING POLICY CHARGES
Monthly cost of insurance charge. The monthly cost of insurance charge is
determined by multiplying the cost of insurance rate that is then applicable to
your policy by the amount we have at
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risk under your policy. Our amount at risk (also described in your policy as
"net amount at risk") on any date is the difference between (a) the death
benefit that would be payable if the insured person died on that date and (b)
the then total account value under the policy. A greater amount at risk, or a
higher cost of insurance rate, will result in a higher monthly charge.
As a general rule, the cost of insurance rate increases each year that you
own your policy. This happens automatically because of the insured person's
increasing age.
Our cost of insurance rates are guaranteed not to exceed those that will be
specified in your policy. For most insured persons at most ages, our current
rates are lower than those maximums. Therefore, we have the ability to raise
these rates up to the guaranteed maximum at any time. The guaranteed maximum
cost of insurance rates for gender neutral Incentive Life policies are based on
the Commissioner's 1980 Standard Ordinary SB Smoker and NB Non-Smoker Mortality
Table. For all other policies, the guaranteed maximum cost of insurance rates
are based on the Commissioner's 1980 Standard Ordinary Male and Female Smoker
and Non-Smoker Mortality Tables.
Our cost of insurance rates will generally be lower (except in Montana and
in connection with certain employee benefit plans) if the insured person is a
female than if a male. They also will generally be lower for non-tobacco users
than tobacco users and lower for persons that have other highly favorable health
characteristics, as compared to those that do not. On the other hand, insured
persons who present particular health, occupational or avocational risks may be
charged higher cost of insurance rates and other additional charges as specified
in their policies. In addition, the current rates also vary depending on the
duration of the policy (i.e., the length of time since the policy was issued).
We offer lower rates for non-tobacco users only if they are at least age
18. You may ask us to review a younger insured person's tobacco habits following
the policy anniversary on which such person is age 18.
Date of monthly deductions. We make the regular monthly deductions as of
the first day of each month of the policy.
Purposes 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 we expect, 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 administrative charge, cost of insurance
charge, and mortality and expense risk charge. However, the fact that any charge
bears the name of, or is designed primarily to defray, 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. Nor does it mean that we may not
also be compensated for such expense or risk out
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of any other charges we are permitted to deduct by the terms of the policies.
The surrender charge, for example, is designed primarily to defray sales
expenses, but may also be used to defray other expenses associated with your
policy that we have not recovered by the time of any surrender. Similarly, the
premium charge is designed primarily to defray sales expenses and taxes we incur
that are based on premium payments.
CUSTOMER LOYALTY CREDIT
We provide a customer loyalty credit for policies that have been
outstanding for more than six years. This is added to the account value each
month. The dollar amount of the credit is a percentage of the total amount you
then have in our investment options (not including any value we are holding as
collateral for any policy loans or for a living benefit payment). The percentage
credit is currently at an annual rate of .60% beginning in the policy's seventh
year. This credit is not guaranteed, however. Because we first offered Incentive
Life in 1999, no credit has yet been attained under any outstanding policy.
SUICIDE AND CERTAIN MISSTATEMENTS
If an insured person commits suicide within certain time periods, the
amount of death benefit we pay will be limited as described in the policy. Also,
if an application misstated the age or gender of an insured person, we will
adjust the amount of any death benefit (and certain rider benefits), as
described in the policy (or rider).
WHEN WE PAY POLICY PROCEEDS
General. We will generally pay any death benefit, surrender, withdrawal, or
loan within seven days after we receive the request and any other required
items. In the case of a death benefit, if we do not have information about the
desired manner of payment within 60 days after the date we receive notification
of the insured person's death (and other required items), we will pay the
proceeds as a single sum, normally within seven days thereafter.
Clearance of checks. We reserve the right to defer payment of that portion
of your account value that is attributable to a premium payment made by check
for a reasonable period of time (not to exceed 15 days) to allow the check to
clear the banking system.
Delay of guaranteed interest option proceeds. We also have the right to
defer payment or transfers of amounts out of our guaranteed interest option for
up to six months. If we delay more than 30 days in paying you such amounts, we
will pay interest of at least 3% per year from the date we receive your request.
Delay of variable investment option proceeds. We reserve the right to defer
payment of any death benefit, transfer, loan or other distribution that is
derived from a variable investment option if (a) the New York Stock Exchange is
closed (other than customary weekend and holiday closings) or trading on that
exchange is restricted; (b) the SEC has declared that an emergency exists, as a
result of which disposal of securities is not reasonably practicable or it is
not reasonably practicable to fairly determine the account value; or (c) the law
permits the delay for the protection of owners. If
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we need to defer calculation of values for any of the foregoing reasons, all
delayed transactions will be processed at the next available unit values.
Delay to challenge coverage. We may challenge the validity of your
insurance policy or any rider based on any material misstatements in an
application you have made to us. We cannot make such challenges, however, beyond
certain time limits set forth in the policy or rider. If the insured person dies
within one of these limits, we may delay payment of any proceeds until we decide
whether to challenge the policy.
CHANGES WE CAN MAKE
In addition to any of the other changes described in this prospectus, we
have the right to modify how we or Separate Account FP 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 combine two or more variable investment options or withdraw assets
relating to Incentive Life from one investment option and put them
into another;
o end the registration of, or re-register, Separate Account FP under the
Investment Company Act of 1940;
o operate Separate Account FP under the direction of a "committee" or
discharge such a committee at any time;
o restrict or eliminate any voting rights or privileges of policyowners
(or other persons) that affect Separate Account FP;
o operate Separate Account FP, or one or more of the variable investment
options, in any other form the law allows. This includes any form that
allows us to make direct investments, in which case we may charge
Separate Account FP an advisory fee. We may make any legal investments
we wish for Separate Account FP. In addition, we may disapprove any
change in investment advisers or in investment policy unless a law or
regulation provides differently.
If we take any action that results in a material change in the underlying
investments of a variable investment option, we will notify you as required by
law. We may, for example, cause the variable investment option to invest in a
mutual fund other than, or in addition to, The Hudson River Trust or EQ Advisors
Trust. If you then wish to transfer the amount you have in that option to
another investment option, you may do so.
We may make any changes in the policy or its riders, require additional
premium payments, or make distributions from the policy to the extent we deem
necessary to ensure that your policy qualifies or continues to qualify as life
insurance for tax purposes. Any such change will apply uniformly to all policies
that are affected. We will give you written notice of such changes. We also
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may make other changes in the policies that do not reduce any net cash surrender
value, death benefit, account value, or other accrued rights or benefits.
REPORTS WE WILL SEND YOU
Shortly after the end of each year of your policy, we will send you a
report that includes information about your policy's current death benefit,
account value, cash surrender value (i.e., account value minus any current
surrender charge), policy loans, policy transactions and amounts of charges
deducted. We will send you individual notices to confirm premium payments,
transfers and certain other policy transactions.
LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings.
In our view, none of these proceedings would be considered material with respect
to a policyowner's interest in Separate Account FP, nor would any of these
proceedings be likely to have a material adverse effect upon the Separate
Account, our ability to meet our obligations under the policies, or the
distribution of the policies.
ILLUSTRATIONS OF POLICY BENEFITS
In order to help you understand how your policy values would vary over time
under different sets of assumptions, we will provide you with certain
illustrations upon request. These will be based on the age and insurance risk
characteristics of the insured person under your policy and such factors as the
face amount, death benefit option, premium payment amounts, and rates of return
(within limits) that you request. You can request such illustrations at any
time. We have filed an example of such an illustration as an exhibit to the
registration statement referred to below.
SEC REGISTRATION STATEMENT
We have on file with the SEC a registration statement under the Securities
Act of 1933 that relates to the Incentive Life policies. The registration
statement contains additional information that is not required to be included in
this prospectus. You may obtain this information, for a fee, from the SEC's
Public Reference Section at 450 5th Street, N.W., Washington, D.C. 20549 or,
without charge, from the SEC's web-site (www.sec.gov).
HOW WE MARKET THE POLICIES
We offer variable life insurance policies (including Incentive Life) and
variable annuity contracts through EQ Financial Consultants, Inc. ("EQF"). The
Investment Company Act of 1940, therefore, classifies EQF as the "principal
underwriter" of those policies and contracts. EQF also serves as manager and a
principal underwriter of EQ Advisors Trust and as the principal underwriter of
The Hudson River Trust. EQF is a wholly-owned subsidiary of Equitable Life, with
its address at 1290 Avenue of the Americas, New York, NY 10104. EQF is
registered with the SEC as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. In 1997 and 1998,
47
<PAGE>
EQF was paid a fee of $325,380 and $_____ , respectively, for its services as
principal underwriter of our policies.
We sell Incentive Life through licensed insurance agents who are also
registered representatives of EQF. The agent who sells you this policy receives
sales commissions from Equitable Life. The commissions don't cost you anything
above the charges and expenses already discussed elsewhere in this prospectus.
Generally, the agents will receive maximum commissions of 50% of the amount of
the target premium you pay in your policy's first year, plus __% of all other
premiums paid in your policy's first year; plus __% of the amount of the premium
you pay in the second through tenth years; plus __% of all other premiums you
pay in subsequent year. We pay comparable commissions on the amount of premiums
you pay that we deem attributable to any face amount increase that you request.
The agent may be required to return to us any commissions on premiums that we
have refunded to a policyowner.
We also sell the policies through licensed independent insurance brokers.
They will also be registered representatives either of EQF or of another SEC
registered broker-dealer. The commissions for independent brokers will be no
more than those for agents. The commissions will be paid through the registered
broker-dealer and may be subject to our above-noted return policy if premiums
are refunded.
INSURANCE REGULATION THAT APPLIES TO EQUITABLE LIFE
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 state
where we sell policies. We submit annual reports on our operations and finances
to insurance officials in all of these states. The officials are responsible for
reviewing our reports to see that we are financially sound. Such regulation,
however, does not guarantee or provide absolute assurance of our soundness.
YEAR 2000 PROGRESS
[Copy to come based on Form 10-K disclosure that Equitable Life will
provide.]
DIRECTORS AND PRINCIPAL OFFICERS
Set forth below is information about our directors and, to the extent they
are responsible for variable life insurance operations, our principal officers.
Unless otherwise noted, their address is 1290 Avenue of the Americas, New York,
N.Y. 10104.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Name and Principal Business Experience
Business Address Within Past Five Years
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
DIRECTORS
</TABLE>
48
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Francoise Colloc'h Director of Equitable Life since July 1992. Senior Executive Vice President,
AXA-UAP Human Resources and Communications of AXA-UAP ("AXA-UAP"), and various
23, Avenue Matignon positions with AXA-UAP affiliated companies. Director of the Holding Company.
75008 Paris, France
- ------------------------------------------------------------------------------------------------------------------------
Henri de Castries Director of Equitable Life since September 1993. Director and Chairman of the
AXA-UAP Board of the Holding Company since April 1998. Prior thereto, Vice Chairman
23, Avenue Matignon of the Board of the Holding Company since February 1996. Senior Executive
75008 Paris, France Vice President, Financial 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 Life affiliates. Previously held other officerships with the AXA
Group.
- ------------------------------------------------------------------------------------------------------------------------
Joseph L. Dionne Director of Equitable Life since May 1982. Chairman and Chief Executive of
The McGraw-Hill Companies The McGraw-Hill Companies. Director of the Holding Company.
1221 Avenue of the Americas
New York, NY 10020
- ------------------------------------------------------------------------------------------------------------------------
Denis Duverne Director of Equitable Life since February 1998. Senior Vice President of
AXA-UAP AXA-UAP. Director since February 1996, Alliance. Director since February
23, Avenue Matignon 1997, Donaldson Lufkin & Jenrette ("DLJ").
75008 Paris, France
- ------------------------------------------------------------------------------------------------------------------------
William T. Esrey Director of Equitable Life since July 1986. Chairman and Chief Executive
Sprint Corporation Officer of Sprint Corporation. Director of the Holding Company.
P.O. Box 11315
Kansas City, MO 64112
- ------------------------------------------------------------------------------------------------------------------------
Jean-Rene Fourtou Director of Equitable Life since July 1992. Chairman and Chief Executive
Rhone-Poulenc S.A. Officer of Rhone-Poulenc S.A. Member of the Supervisory Board of AXA-UAP
25, Quai Paul Doumer since January 1997. Director of the Holding Company.
92408 Courbevoie Cedex
France
- ------------------------------------------------------------------------------------------------------------------------
Norman C. Francis Director of Equitable Life since March 1989. President of Xavier University
Xavier University of Louisiana of Louisiana.
7325 Palmetto Street
New Orleans, LA 70125
- ------------------------------------------------------------------------------------------------------------------------
Donald J. Greene Director of Equitable Life since July 1991. Partner, LeBoeuf, Lamb, Greene &
LeBouef, Lamb, Greene & MacRae MacRae. Director of the Holding Company.
125 West 55th Street
New York, NY 10019-4513
- ------------------------------------------------------------------------------------------------------------------------
John T. Hartley Director of Equitable Life since August 1987. Currently a Director and retired
Harris Corporation Chairman and Chief Executive Officer of Harris Corporation (retired July 1995);
1025 NASA Boulevard previously held other officerships with Harris Corporation. Director of the
Melbourne, FL 32919 Holding Company.
- ------------------------------------------------------------------------------------------------------------------------
John H.F. Haskell, Jr. Director of Equitable Life since July 1992. Managing Director of SBC Warburg
SBC Warburg Dillon Read, Inc. Dillon Read, Inc. and member of its Board of Directors. Director of the
535 Madison Avenue Holding Company.
New York, NY 10028
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
49
<PAGE>
<TABLE>
<S> <C>
Mary R. (Nina) Henderson Director of Equitable Life since December 1996. President of Bestfoods
Bestfoods Grocery Grocery (formerly CPC Specialty Markets Group) of BESTFOODS (formerly CPC
BESTFOODS International, Inc.) since 1993. Prior thereto, President of CPC Specialty
International Plaza Products and Best Foods Exports. Director of the Holding Company.
700 Sylvan Avenue
Englewood Cliffs, NJ 07632-9976
- ------------------------------------------------------------------------------------------------------------------------
W. Edwin Jarmain Director of Equitable Life since July 1992. President of Jarmain Group Inc.;
Jarmain Group Inc. also an Officer or Director of several affiliated companies. Chairman and
121 King Street West Director of FCA International Ltd. Director of various AXA affiliated
Suite 2525 companies. Previously held other officerships with FCA International.
Toronto, Ontario M5H 3T9 Director of the Holding Company.
Canada
- ------------------------------------------------------------------------------------------------------------------------
G. Donald Johnston, Jr. Director of Equitable Life since January 1986. Retired Chairman and Chief
184-400 Ocean Road Executive Officer of JWT Group, Inc. and J. Walter Thompson Company.
John's Island
Vero Beach, FL 32963
- ------------------------------------------------------------------------------------------------------------------------
George T. Lowy Director of Equitable Life since July 1992. Partner, Cravath, Swaine & Moore.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
- ------------------------------------------------------------------------------------------------------------------------
Didier Pineau-Valencienne Director of Equitable Life since February 1996. Chairman and Chief Executive
Schneider S.A. Officer of Schneider S.A. and Chairman or Director of numerous subsidiaries
64/70, Avenue Jean-Baptiste Clement and affiliated companies of Schneider. Director of AXA-UAP and the Holding
92646 Boulogne-Billancourt Cedex Company.
France
- ------------------------------------------------------------------------------------------------------------------------
George J. Sella, Jr. Director of Equitable Life since May 1987. Retired Chairman and Chief
P.O. Box 397 Executive Officer of American Cyanamid Company (retired April 1993);
Newton, NJ 07860 previously held other officerships with American Cyanamid. Director of the
Holding Company.
- ------------------------------------------------------------------------------------------------------------------------
Dave H. Williams Director of Equitable Life since March 1991. Chairman and Chief Executive
Alliance Capital Management Officer of Alliance and Chairman or Director of numerous subsidiaries and
Corporation affiliated companies of Alliance. Director of the Holding Company.
1345 Avenue of the Americas
New York, NY 10105
- ------------------------------------------------------------------------------------------------------------------------
OFFICER-DIRECTORS
- ------------------------------------------------------------------------------------------------------------------------
Michael Hegarty Director of Equitable Life since January 1998. President since January 1998
and Chief Operating Officer since February 1998, Equitable Life. 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").
</TABLE>
50
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Edward D. Miller Director of Equitable Life since August 1997. Chairman of the Board since
January 1998, Chief Executive Officer since August 1997, President (August
1997 to January 1998), Equitable Life. 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 Life since February 1998. Vice Chairman of the Board
since February 1998 and Chief Financial Officer since April 1996, Equitable
Life. Executive Vice President since May 1996 and Chief Financial Officer
since May 1997, the Holding Company. Vice President since March 1997, EQ
ADVISORS TRUST. 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 Life. Previously held other officerships with Equitable Life.
- ------------------------------------------------------------------------------------------------------------------------
Harvey Blitz Senior Vice President and Deputy Chief Financial Officer, Equitable Life.
Senior Vice President, the Holding Company. Vice President and Chief
Financial Officer since March 1997, EQ ADVISORS TRUST. 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 Life affiliates. Previously held other officerships with Equitable
Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Kevin R. Byrne Senior Vice President and Treasurer, Equitable Life and the Holding Company.
Treasurer, EquiSource and Frontier. Vice President and Treasurer, Equitable
Casualty Insurance Company ("Casualty") and EQ ADVISORS TRUST (since March
1997). Previously held other officerships with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Judy A. Faucett Senior Vice President and Actuary, Equitable Life, 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 Life and the Holding Company.
Previously held other officerships with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Paul J. Flora Senior Vice President and Auditor, Equitable Life. 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 Life. Prior thereto, Vice
President, Aetna.
- ------------------------------------------------------------------------------------------------------------------------
Robert E. Garber Executive Vice President and General Counsel, Equitable Life and the Holding
Company. Previously held other officerships with Equitable Life and its
affiliates.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Jerome S. Golden Executive Vice President since November 1997, Equitable Life. Prior thereto,
President, Income Management Group (May 1994 to November 1997), Equitable
Life. 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 Life. Previously held
other officerships with Equitable Life.
- ------------------------------------------------------------------------------------------------------------------------
Vincent M. Marra
- ------------------------------------------------------------------------------------------------------------------------
Michael S. Martin Senior Vice President, and Chief Marketing Officer since January 1997,
Equitable Life. Prior thereto, Senior Vice President. Chairman and Chief
Executive Officer, EQF. Vice President, EQ ADVISORS TRUST (since March 1997)
and THE HUDSON RIVER TRUST (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 Life
and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Douglas Menkes Senior Vice President and Corporate Actuary since June 1997, Equitable Life.
Prior thereto, Consulting Actuary, Milliman & Robertson, Inc.
- ------------------------------------------------------------------------------------------------------------------------
Peter D. Noris Executive Vice President and Chief Investment Officer, Equitable Life.
Executive Vice President since May 1995 and Chief Investment Officer since
July 1995, the Holding Company. Trustee, THE HUDSON RIVER TRUST, and
Chairman, President and Trustee since March 1997, EQ ADVISORS TRUST.
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 Life. Director, Chairman and Chief Operating
Officer, Casualty, since September 1997. Previously held other officerships
with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Pauline Sherman Vice President, Secretary and Associate General Counsel, Equitable Life and
the Holding Company, both since September 1995. Previously held other
officerships with Equitable Life.
- ------------------------------------------------------------------------------------------------------------------------
Richard V. Silver Senior Vice President since February 1995 and Deputy General Counsel since
June 1996, Equitable Life. Director, EQF. Previously held other officerships
with Equitable Life 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 Life. Prior thereto, Agency Manager. Executive Vice President since
May 1996, the Holding Company. Vice President since March 1998, THE HUDSON
RIVER TRUST.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
FINANCIAL STATEMENTS OF EQUITABLE LIFE AND SEPARATE ACCOUNT FP
The financial statements of Separate Account FP and Equitable Life
included in this prospectus have been audited for the years ended December 31,
1998, 1997 and 1996 by PricewaterhouseCoopers LLP, independent accountants, as
stated in their reports. These financial statements have been so included in
reliance on the reports of PricewaterhouseCoopers, given on the authority of
such firm as experts in accounting and auditing. The financial statements of
Equitable Life have relevance for the policies only to the extent that they bear
upon the ability of Equitable Life to meet its obligations under the policies.
52
<PAGE>
[Financial Statements to be filed by amendment]
53
<PAGE>
APPENDIX I: INVESTMENT PERFORMANCE RECORD
The tables below show performance information for the variable investment
options. The performance shown for each option equals the performance of the
Portfolio corresponding to that option, reduced by the current rate of the
policies' mortality and expense risk charge (.60% annual rate). You can find
more information about the performance of the Portfolios under the heading
"__________" in the Trust prospectuses attached at the end of this prospectus.
The performance figures on which the tables are based is after deduction of all
fees and expenses paid by the Trusts or any of the Portfolios.
The tables below, however, do not take into account the following
additional charges that we will deduct under your policy: (1) the sales charge
that we deduct from each premium payment you make; (2) the monthly cost of
insurance charge; (3) the surrender charge; (4) any charge for optional rider
benefits you may select or (5) the policies' monthly administrative charge
(currently $20 for your policy's first 12 months and $7 per month thereafter,
for issue ages 18 and older). For more information about these charges, see
"Charges and Expenses You Will Pay" beginning on page __ of this prospectus. If
we reflected these charges, the performance shown below would be reduced. We
have not done so, however, because the actual impact of these charges on a
particular policy varies considerably based on such factors as the insurance
risk characteristics of the insured person; the face amount and other options
you select for your policy; the amount and timing of your premium payments; and
whether you make withdrawals, take policy loans, or surrender your policy. In
order to better understand how the charges we have omitted from the below tables
will affect your policy's value, you should refer to your Illustrations of
Policy Benefits that your Equitable Life associate will provide. You can request
Equitable Life or your Equitable Life associate to provide you with such
illustrations at any time, whether before or after you purchase a policy.
<TABLE>
<CAPTION>
AVERAGE ANNUAL RATE OF RETURN FOR PERIODS ENDING
December 31, 1998
-----------------
SINCE PORTFOLIO
VARIABLE INVESTMENT OPTION 1 YR. 3 YRS. 5 YRS. 10 YRS. 20 YRS. INCEPTION (DATE*)
<S> <C> <C> <C> <C> <C> <C> <C>
FIXED INCOME OPTIONS
Alliance Money Market x.x% x.x% x.x% x.x% -- x.x% (7/31/81)
Alliance Intermediate Gov't
Securities (4/1/91)
Alliance Quality Bond (10/1/93)
Alliance High Yield (1/2/87)
EQUITY OPTIONS
T. Rowe Price Equity Income (5/1/97)
EQ/Putnam Growth & Income
Value (5/5/97)
Alliance Growth & Income (10/1/93)
Alliance Equity Index (3/1/94)
Merrill Lynch Basic Value
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Equity (5/1/97)
Alliance Common Stock (11/13/76)
MFS Research (5/1/97)
Alliance Global (8/27/87)
Alliance International (4/3/95)
T. Rowe Price International
Stock (5/1/97)
Morgan Stanley Emerging
Markets Equity (8/20/97)
Alliance Aggressive Stock (1/27/86)
Warburg Pincus Small
Company Value (5/1/97)
Alliance Small Cap Growth (5/1/97)
MFS Emerging Growth
Companies (5/1/97)
MFS Growth with Income (--/--/99)
EQ/Alliance Premier Growth (--/--/99)
ASSET ALLOCATION OPTIONS
Alliance Conservative
Investors (10/2/89)
EQ/Putnam Balanced (5/1/97)
Alliance Balanced (1/27/86)
Alliance Growth Investors (10/2/89)
Merrill Lynch World Strategy (5/1/97)
</TABLE>
- ----------------------------
* The inception date shown is the date that the relevant Portfolio (or its
predecessor) received its initial funding.
In some cases, the return information shown above includes a period of time
prior to when Separate Account FP first offered a corresponding variable
investment option under any form of variable life insurance policy. Therefore,
the below table provides additional performance information from the date that
those investment options actually received initial funding.
<TABLE>
<CAPTION>
AVERAGE ANNUAL RATES OF RETURN FOR PERIODS ENDING
VARIABLE INVESTMENT OPTION DECEMBER 31, 1998
-------------------------- -----------------
SINCE VARIABLE INVESTMENT
OPTION INCEPTION (DATE)
<S> <C>
Alliance Money Market x.x% (__/__/__)
Alliance Common Stock
</TABLE>
55
<PAGE>
Unlike the rate of return tables above, the following yield information
does not include capital gains and losses that the Portfolios corresponding to
the indicated variable investment options may have experienced.
<TABLE>
<CAPTION>
ANNUALIZED YIELD FOR PERIODS
VARIABLE INVESTMENT OPTION ENDING DECEMBER 31, 1998
-------------------------- ------------------------
7 DAYS 30 DAYS
------ -------
<S> <C> <C>
Alliance Money Market __% --
Alliance Intermediate Government Securities
Alliance Quality Bond
Alliance High Yield
</TABLE>
The information in the tables above is not a guarantee, a prediction, or
necessarily an indication of future performance.
56
<PAGE>
APPENDIX II: OUR DATA ON MARKET PERFORMANCE
In reports or other communications to policyowners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options, and the Portfolios and may compare the performance
or ranking of those options and the Portfolios with:
o those 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;
o other appropriate indices of investment securities and averages for
peer universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective policyowners advertisements
or other communications that include evaluations of a variable investment option
or Portfolio by nationally recognized financial publications. Examples of such
publications are:
<TABLE>
<CAPTION>
<S> <C>
Barron's Money Management Letter
Morningstar's Variable Annuities/Life Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
Investment Management Weekly
</TABLE>
Lipper Analytical Services, Inc. (Lipper) compiles performance data for
peer universes of Portfolios with similar investment objectives in its Lipper
Variable Insurance Products Performance Analysis Service (Lipper Survey).
Morningstar, Inc. compiles similar data in the Morningstar Variable Annuity/Life
Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800
mutual funds underlying variable annuity and life insurance products. It divides
these actively managed portfolios into 25 categories by portfolio objectives.
The Lipper Survey contains two different universes, which reflect different
types of fees in performance data:
57
<PAGE>
o 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; and
o The "Mutual Fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects
only charges that relate to the underlying mutual fund.
The Morningstar Report consists of nearly 700 variable life and annuity
portfolios, all of which report their data net of investment management fees,
direct operating expenses and separate account level charges.
LONG-TERM MARKET TRENDS
The following chart presents historical return trends for various types of
securities. The information presented does not directly relate to the
performance of our variable investment options or the Trusts. Nevertheless, it
may help you gain 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 Incentive Life 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.
However, common stocks have also experienced dramatic changes in value over
short periods of time. One of our variable investment options that invests
primarily in common stocks may, therefore, be a desirable selection for owners
who are willing to accept such risks. If, on the other hand, you wish to limit
your short-term risk, you may find it preferable to allocate a smaller
percentage of net premiums to those options that invest primarily in common
stock. All investments in securities, whether equity or debt, involve varying
degrees of risk. They also offer varying degrees of potential reward.
The chart on page ___ illustrates the average annual compound rates of
return over selected time periods between December 31, 1926 and December 31,
1998 for the types of securities indicated in the chart. These rates of return
assume the reinvestment of dividends, capital gains and interest. The Consumer
Price Index is also shown as a measure of inflation for comparison purposes. The
investment return information presented is an historical record of unmanaged
categories of securities. In addition, the rates of return shown do not reflect
either (1) investment management fees and expenses, or (2) costs and charges
associated with ownership of a variable life insurance policy.
The rates of return illustrated do not represent returns of our variable
investment options or the Portfolios and do not constitute a representation that
the performance of those options or the Portfolios will correspond to rates of
return such as those illustrated in the chart.
58
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Average Annual Rates of Return
Long-Term Long-Term Intermediate-Term U.S. Consumer
For the following periods ending Common Government Bonds Corporate Gov't Bonds Treasury Price Index
December 31, 1998 Stocks Bonds Bills
- ------------------------------------- ------------- ----------------- --------------- ----------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
1 Year
3 Years
5 years
10 years
20 years
30 years
40 years
50 years
60 years
Since 1926
Inflation Adjusted
Since 1926
</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.
59
<PAGE>
Consumer Price Index - Measured by the Consumer Price Index for all Urban
Consumers (CPI-U), not seasonally adjusted.
60
<PAGE>
APPENDIX III: AN INDEX OF KEY WORDS AND PHRASES
This index should help you locate more information on the terms used in this
prospectus.
<TABLE>
<CAPTION>
PAGE IN PAGE IN
THIS PROSPECTUS THIS PROSPECTUS
--------------- ---------------
<S> <C>
account value loan, loan interest
Administrative office modified endowment contract
age month, year
Allocation date monthly deduction
alternative death benefit monthly processing day
amount at risk net cash surrender value
anniversary no-lapse guarantee
assign; assignment Option A, B
automatic transfer service our
basis owner
beneficiary paid up
business day paid up death benefit guarantee
Cash Surrender Value partial withdrawal
Code payment option
collateral planned periodic premium
cost of insurance rates policy
cost of insurance charge Portfolio
customer loyalty credit premium payments
day prospectus
death benefit guarantee receive
default restore, restoration
dollar cost averaging service rider
enhanced death benefit guarantee sec
EQ advisors trust Separate Account FP
EQ financial consultants state
Equitable Life subaccount
Equitable Access Account surrender
face amount surrender charge
grace period
guarantee against termination target premium
guaranteed interest option telephone transfers
guarantee premium transfers
Guaranteed Interest Account trust(s)
Hudson River Trust units
Incentive Life unit values
insured person us
investment funds variable investment option
investment option we
issue date withdrawal
lapse you, your
</TABLE>
61
<PAGE>
Part II
REPRESENTATION REGARDING REASONABLENESS OF
AGGREGATE POLICY FEES AND CHARGES
Equitable represents that the fees and charges deducted under the Policies
described in this Registration Statement, in the aggregate, are reasonable in
relation to the services rendered, the expenses to be incurred, and the risks
assumed by Equitable under the Policies, Equitable bases its representation on
its assessment of all of the facts and circumstances, including such relevant
factors as: the nature and extent of such services, expenses and risks, the need
for Equitable to earn a profit, the degree to which the Policies include
innovative features, and regulatory standards for the grant of exemptive relief
under the Investment Company Act of 1940 used prior to October 1996, including
the range of industry practice. This representation applies to all policies sold
pursuant to this Registration Statement, including those sold on the terms
specifically described in the prospectuses contained herein, or any variations
therein, based on supplements, data pages or riders to any policies or
prospectuses, or otherwise.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
Reconciliation and Tie.
The Prospectus dated May 1, 1999 (EQF channel) consisting of 61 pages.
Representation regarding reasonableness of aggregate policy fees and charges.
Undertaking to file reports, previously filed with this Registration Statement
File No. 333-17663 on December 11, 1996.
Undertaking pursuant to Rule 484(b)(1) under the Securities Act of 1933,
previously filed with this Registration Statement File No. 333-17663 on December
11, 1996.
The signatures.
Written Consents of the following persons:
Barbara Fraser, F.S.A., M.A.A.A., Vice President of Equitable (See exhibit 2(b))
Independent Public Accountants (See exhibit 6)
The following exhibits: Exhibits required by Article IX, paragraph A of Form
N-8B-2:
1-A(1)(a)(i) Certified resolution re Authority to Market
Variable Life Insurance and Establish Separate
Accounts, previously filed with this
Registration Statement File No. 333-17663 on
December 11, 1996.
II-1
<PAGE>
<TABLE>
<S> <C> <C>
1-A(2) Inapplicable.
1-A(3)(a) See Exhibit 1-A(8).
1-A(3)(b) Broker-Dealer and General Agent Sales Agreement, previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
1-A(3)(c) See Exhibit 1-A(8)(i).
1-A(4) Inapplicable.
+ 1-A(5)(a)(i) Flexible Premium Variable Life Insurance Policy
(94-300) (Incentive Life Plus) (Equitable Variable), previously
filed with this Registration Statement File No. 333-17663
on December 11, 1996.
+ 1-A(5)(a)(ii) Flexible Premium Variable Life Insurance Policy
(94-300) (Incentive Life Plus) (Equitable), previously filed with this Registration
Statement File No. 333-17663 on December 11, 1996.
+ 1-A(5)(a)(iii) Flexible Premium Variable Life Insurance Policy
(95-300) (Corporate Incentive Life) (Equitable Variable), previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
+ 1-A(5)(a)(iv) Flexible Premium Variable Life Insurance Policy
(95-300) (Corporate Incentive Life) (Equitable), previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
1-A(5)(a)(v) Flexible Premium Variable Life Insurance Policy
(85-300) (Equitable Variable), previously filed with this Registration Statement File
No. 333-17663 on December 11, 1996.
1-A(5)(a)(vi) Flexible Premium Variable Life Insurance Policy (99-300).
1-A(5)(b) Name Change Endorsement (S.97-1), previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
+ 1-A(5)(c) Option to Purchase Additional Insurance Rider
(R94-204) (Equitable Variable), previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
+ 1-A(5)(d) Option to Purchase Additional Insurance Rider
(R94-204) (Equitable), previously filed with
this Registration Statement File No. 333-17663
on December 11, 1996.
+ 1-A(5)(e) Substitution of Insured Rider (R94-212) (Equitable Variable),
previously filed with this Registration Statement File No. 333-17663
on December 11, 1996.
+ 1-A(5)(f) Substitution of Insured Rider (R94-212) (Equitable), previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
+ 1-A(5)(g) Renewable Term Insurance Rider on the Insured
(R94-215) (Equitable Variable), previously filed with this Registration Statement File
No. 333-17663 on December 11, 1996.
+ 1-A(5)(h) Renewable Term Insurance Rider on the Insured
(R94-215) (Equitable), previously filed with
this Registration Statement File No. 333-17663
on December 11, 1996.
+ 1-A(5)(i) Disability Rider - Waiver of Monthly Deductions
(R94-216) (Equitable Variable), previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
+ 1-A(5)(j) Disability Rider - Waiver of Monthly Deductions
(R94-216) (Equitable), previously filed with this Registration
Statement File No. 333-17663 on December 11, 1996.
+ 1-A(5)(k) Disability Rider - Waiver of Premiums (R94-216A) (Equitable Variable), previously
filed with this Registration Statement File No. 333-17663 on December 11, 1996.
+ 1-A(5)(l) Disability Rider - Waiver of Premiums (R94-216A) (Equitable), previously filed with
this Registration Statement File No. 333-17663 on December 11, 1996.
</TABLE>
- -----------------------
+State variations not included
II-2
<PAGE>
<TABLE>
<S> <C> <C>
+ 1-A(5)(m) Yearly Renewable Term Insurance Rider on the Insured
(R94-220) (Equitable Variable), previously filed with this Registration
Statement File No. 333-17663 on December 11, 1996.
+ 1-A(5)(n) Yearly Renewable Term Insurance Rider on the Insured
(R94-220) (Equitable), previously filed with this Registration
Statement File No. 333-17663 on December 11, 1996.
1-A(5)(o) Accelerated Death Benefit Rider (R94-102) (Equitable Variable), previously filed
with this Registration Statement File No. 333-17663 on December 11, 1996.
1-A(5)(p) Accelerated Death Benefit Rider (R94-102) (Equitable), previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
1-A(5)(q) Designated Insured Option Rider (R91-107) (Equitable Variable), previously filed
with this Registration Statement File No. 333-17663 on December 11, 1996.
1-A(5)(r) Designated Insured Option Rider (R91-107) (Equitable), previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
1-A(5)(s) Accounting Benefit Rider (S.94-118) (Equitable Variable), previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
1-A(5)(t) Accounting Benefit Rider (S.94-118) (Equitable), previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
1-A(5)(u) Limitation on Amount of Insurance Rider (R85-406)
(Equitable Variable), previously filed with this Registration Statement
File No. 333-17663 on December 11, 1996.
1-A(5)(v) Exchange Privilege Rider (R85-405) (for use with
Policy 85-300) (Equitable Variable), previously filed with this Registration
Statement File No. 333-17663 on December 11, 1996.
1-A(5)(w) Disability Rider - Waiver of Monthly Deductions (R85-408)
(for use with Policy 85-300) (Equitable Variable), previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
1-A(5)(x) Pro Rata Surrender Charge Endorsement (S.87-289)
(for use with Policy 85-300) (Equitable Variable), previously filed
with this Registration Statement File No. 333-17663
on December 11, 1996.
1-A(5)(y) Asset Allocation Endorsement (S.89-301) (for use
with Policy 85-300) (Equitable Variable),
previously filed with this Registration
Statement File No. 333-17663 on December 11,
1996.
1-A(5)(z) Investment Options Rider and Guaranteed Interest Division Transfer Rider
(R.89-303)(for use with Policy No. 85-300) (Equitable Variable),
previously filed with this Registration Statement File No. 333-17663
on December 11, 1996.
1-A(5)(z)(ii) Face Amount Increase Endorsement (S.99-30).
1-A(5)(z)(iii) Table of Guaranteed Payments Endorsement (S.99-33).
1-A(5)(z)(iv) Form of Paid Up Death Benefit Guarantee Endorsement (S.99-32).
1-A(5)(z)(v) Form of Enhanced Death Benefit Guarantee Rider (R99-100).
1-A(6)(a) Declaration and Charter of Equitable, as amended January 1, 1997, previously filed with this
Registration Statement File No. 333-17663 on April 30, 1997.
1-A(6)(b) By-Laws of Equitable, as amended November 21, 1996, previously filed with this
Registration Statement File No. 333-17663 on April 30, 1997.
1-A(7) Inapplicable.
</TABLE>
- -----------------------
+State variations not included
II-3
<PAGE>
<TABLE>
<S> <C>
1-A(8) Distribution and Servicing Agreement among EQ
Financial Consultants, Inc. (formerly known as Equico
Securities, Inc.), Equitable and Equitable Variable
dated as of May 1, 1994, previously filed with this Registration Statement
File No. 333-17663 on December 11, 1996.
1-A(8)(i) Schedule of Commissions, previously filed with this Registration
Statement File No. 333-17663 on December 11, 1996.
1-A(9)(a) Agreement and Plan of Merger of Equitable Variable with
and into Equitable dated September 19, 1996, previously
filed with this Registration Statement File No. 333-17663
on December 11, 1996.
1-A(9)(b) Form of Participation Agreement among EQ Advisors Trust, Equitable,
Equitable Distributors, Inc. and EQ Financial Consultants, Inc.,
incorporated by reference to the Registration Statement of EQ Advisors
Trust on Form N-1A (File Nos. 333-17217 and 811-07953).
1-A(10)(a) Application EV4-200Y (Equitable Variable), previously filed
with this Registration Statement File No. 333-17663
on December 11, 1996.
1-A(10)(b) Application EV4-200Y (Equitable), previously filed with
this Registration Statement File No. 333-17663
on December 11, 1996.
2(a)(i) Opinion and Consent of Mary P. Breen, Vice President and Associate General Counsel
of Equitable, previously filed with this Registration Statement File No. 333-17663
on December 11, 1996.
2(a)(ii) Opinion and Consent of Mary P. Breen, Vice President and Associate General Counsel
of Equitable, previously filed with this Registration Statement File No. 333-17663
on April 30, 1997.
2(a)(iii) Opinion and Consent of Counsel (to be filed by amendment).
2(b)(i) Opinion and Consent of Barbara Fraser, F.S.A.,
M.A.A.A., Vice President of Equitable, previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
2(b)(ii) Consent of Barbara Fraser, F.S.A., M.A.A.A., Vice President of
Equitable relating to Exhibit 2(b)(i), previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
2(b)(iii) Opinion and Consent of Barbara Fraser, F.S.A.,
M.A.A.A., Vice President of Equitable, previously filed with this
Registration Statement File No. 333-17663 on December 11, 1996.
2(b)(iv) Opinion and Consent of Barbara Fraser, F.S.A.,
M.A.A.A., Vice President of Equitable, previously filed with this
Registration Statement File No. 333-17663 on April 30, 1997.
2(b)(v) Opinion and Consent of Barbara Fraser, F.S.A.,
M.A.A.A., Vice President of Equitable, previously filed with this Registation
Statement File No. 333-17663 on May 1, 1998.
2(b)(vi) Opinion and Consent of Barbara Fraser, F.S.A., M.A.A.A., Vice President
of Equitable. (To be filed by amendment)
3 Inapplicable.
4 Inapplicable.
6 Consent of Independent Public Accountant (to be filed by Amendment?).
7 Powers-of-Attorney, previously filed with this Registration Statement on May 1, 1998.
II-4
</TABLE>
<PAGE>
<TABLE>
<S> <C>
8 Description of Equitable's Issuance,
Transfer and Redemption Procedures for Flexible
Premium Policies pursuant to Rule 6e-3(T)(b)(12)(iii)
under the Investment Company Act of 1940, previously
filed with this Registration Statement File No. 333-17663
on December 11, 1996.
9 Illustration of Policy Benefits (to be filed by Amendment).
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, and its seal to be
hereunto affixed and attested, in the City and State of New York, on the 1st
day of March, 1999.
SEPARATE ACCOUNT FP OF THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES
By: THE EQUITABLE LIFE
[SEAL] ASSURANCE SOCIETY OF
THE UNITED STATES,
DEPOSITOR
By: /s/ Mark A. Hug
------------------------------
(Mark A. Hug)
Senior Vice President
Attest: /s/ Linda Galasso
------------------------
(Linda Galasso)
Assistant Secretary
March 1, 1999
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Depositor
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City and State of
New York, on the 1st day of March, 1999.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By: /s/ Mark A. Hug
--------------------------------
(Mark A. Hug)
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
*Edward D. Miller Chairman of the Board and
Chief Executive Officer
*Michael Hegarty President and Chief Operating Officer
PRINCIPAL FINANCIAL OFFICER:
*Stanley B. Tulin Vice Chairman of the Board
and Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ Alvin H. Fenichel
- --------------------------
Alvin H. Fenichel Senior Vice President and Controller
March 1, 1999
*DIRECTORS:
Francoise Colloc'h Donald J. Greene George T. Lowy
Henri de Castries John T. Hartley Edward D. Miller
Joseph L. Dionne John H.F. Haskell, Jr. Didier Pineau-Valencienne
Denis Duverne Michael Hegarty George J. Sella, Jr.
William T. Esrey Mary R. (Nina) Henderson Stanley B. Tulin
Jean-Rene Fourtou W. Edwin Jarmain Dave H. Williams
Norman C. Francis G. Donald Johnston, Jr.
*By: /s/ Mark A. Hug
-----------------------
(Mark A. Hug)
Attorney-in-Fact
March 1, 1999
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. TAG VALUE
- ----------- ---------
<S> <C> <C>
1-A(5)(a)(vi) Flexible Premium Variable Life Insurance Policy (99-300). EX-99.1A(5)(a)(vi)
1-A(5)(z)(ii) Face Amount Increase Endorsement (S.99-30). EX-99.1A(5)(z)(ii)
1-A(5)(z)(iii) Table of Guaranteed Payments Endorsement (S.99-33). EX-99.1A(5)(z)(iii)
1-A(5)(z)(iv) Form of Paid Up Death Benefit Guarantee Endorsement
(S.99-32). EX-99.1A(5)(z)(iv)
1-A(5)(z)(v) Form of Enhanced Death Benefit Guarantee Rider (R99-100). EX-99.1A(5)(z)(v)
</TABLE>
II-8
INSURED PERSON RICHARD ROE [LOGO] THE
EQUITABLE
POLICY OWNER RICHARD ROE LIFE ASSURANCE SOCIETY OF THE U.S.
----------------------------------
FACE AMOUNT Member of the Global AXA Group
OF INSURANCE $50,000
VARIABLE LIFE
DEATH BENEFIT OPTION A (SEE PAGE 6) INSURANCE
POLICY
POLICY NUMBER XX XXX XXX
- --------------------------------------------------------------------------------
We agree to pay the Insurance Benefit of this policy and to provide its other
benefits and rights in accordance with its provisions.
Flexible Premium Variable Life Insurance Policy
This is a flexible premium variable life insurance policy. You can, within
limits:
o make premium payments at any time and in any amount;
o change the death benefit option;
o change the allocation of net premiums and deductions among your
investment options; and
o transfer amounts among your investment options.
This policy is guaranteed not to lapse during the first five policy years, if
premiums are paid in accordance with the No Lapse Guarantee provision.
The death benefit of this policy is guaranteed for the period of time shown on
Page 3, if premiums are paid in accordance with the Death Benefit Guarantee
provision.
All of these rights and benefits are subject to the terms and conditions of this
policy. All requests for policy changes are subject to our approval and may
require evidence of insurability.
We put your net premiums into your Policy Account. You may allocate them to one
or more investment funds of our Separate Account(s) (SA) or to our Guaranteed
Interest Account (GIA).
The portion of your Policy Account that is in an investment fund of our SA will
vary up or down depending on the unit value of such investment fund, which in
turn depends on the investment performance of the securities held by that fund.
There are no minimum guarantees as to such portion of your Policy Account.
The portion of your Policy Account that is in our GIA will accumulate, after
deductions, at rates of interest we determine. Such rates will not be less than
3% a year.
The amount and duration of the death benefit may be variable or fixed under
specified conditions. See the Death Benefit provision for a description of the
variable death benefit.
This is a non-participating policy.
Right to Examine Policy. You may examine this policy and if for any reason you
are not satisfied with it, you may cancel it by returning this policy with a
written request for cancellation to our Administrative Office by the 10th day
after you receive it. If you do this, we will refund the premiums that were paid
on this policy.
Read Your Policy Carefully. It is a legal contract between you and The Equitable
Life Assurance Society of the United States.
/s/ Pauline Sherman /s/ Edward D. Miller
Pauline Sherman, Vice President, Secretary Edward D. Miller, Chairman & Chief
& Associate General Counsel Executive Officer
No. 99-300
<PAGE>
Contents
- --------
Policy Information 3
Table of Maximum Monthly Charges
for Benefits 4
Those Who Benefit from this Policy 5
The Insurance Benefit We Pay 5
Changing the Face Amount of Insurance
or the Death Benefit Option 7
The Premiums You Pay 7
Your Policy Account and How it
Works 9
Your Investment Options 10
The Value of Your Policy Account 11
The Cash Surrender Value of this
Policy 12
How a Loan Can Be Made 13
Our Separate Account(s) (SA) 14
Our Annual Report to You 15
How Benefits are Paid 15
Other Important Information 16
Table of Guaranteed Payments 19
In this policy: Administrative Office
- --------------- ---------------------
"We," "our," and "us" mean The The address of our
Equitable Life Assurance Society Administrative Office is shown
of the United States. on Page 3. You should send
correspondence to that office.
"You" and "your" mean the Premium payments should be
owner of this policy at the time sent to the address on your
an owner's right is exercised. billing notice.
Unless otherwise stated, all
references to interest in this
policy are effective annual rates
of interest.
Attained age means age on the Copies of the application for this
birthday nearest to the beginning policy and any additional benefit
of the current policy year. riders are attached to the policy.
INTRODUCTION
The premiums you pay, after deductions are made in accordance with the Table of
Expense Charges in the Policy Information section, are put into your Policy
Account. Amounts in your Policy Account are allocated at your direction to one
or more investment funds of our SA or to our GIA.
The investment funds of our SA invest in securities and other investments whose
value is subject to market fluctuations and investment risk. There is no
guarantee of principal or investment experience.
Our GIA earns interest at rates we declare. The principal, after deductions, is
guaranteed.
If death benefit Option A is in effect, the death benefit is the Face Amount of
Insurance, and the amount of the death benefit is fixed except when it is a
percentage of your Policy Account. If death benefit Option B is in effect, the
death benefit is the Face Amount of Insurance plus the amount in your Policy
Account. The amount of the death benefit is variable. Under either option, the
death benefit will never be less than a percentage of your Policy Account as
stated in the Death Benefit provision.
The policy is guaranteed not to lapse during the first five policy years, if
premiums are paid in accordance with the No Lapse Guarantee provision. The death
benefit of this policy is guaranteed for the period of time shown on Page 3, if
premiums are paid in accordance with the Death Benefit Guarantee provision.
We make monthly deductions from your Policy Account to cover the cost of the
benefits provided by this policy and the cost of any benefits provided by riders
to this policy. If you give up this policy for its Net Cash Surrender Value,
reduce the Face Amount of Insurance, or if this policy ends without value at the
end of the grace period, we may deduct a surrender charge from your Policy
Account.
This is only a summary of what this policy provides, You should read all of it
carefully. Its terms govern your rights and our obligations.
No. 99-300 Page 2
<PAGE>
POLICY INFORMATION
INSURED PERSON RICHARD ROE
POLICY OWNER RICHARD ROE
FACE AMOUNT
OF INSURANCE $50,000
DEATH BENEFIT OPTION A (SEE PAGE 6) SEPARATE ACCOUNT [FP]
POLICY NUMBER XX XXX XXX ISSUE AGE 35
BENEFICIARY MARGARET ROE SEX MALE
REGISTER DATE MARCH 4, 1999
RATING CLASS: STANDARD
DATE OF ISSUE MARCH 4, 1999 NON-TOBACCO USER
A MINIMUM INITIAL PREMIUM PAYMENT OF $87.66 IS DUE ON OR BEFORE DELIVERY OF THE
POLICY.
THE PLANNED PERIODIC PREMIUM OF [$150.00] IS PAYABLE [QUARTERLY].
NO LAPSE GUARANTEE PERIOD IS 5 YEARS FROM THE REGISTER DATE. SEE NO LAPSE
GUARANTEE PROVISION.
DEATH BENEFIT GUARANTEE PERIOD - 35 YEARS FROM THE REGISTER DATE - SEE DEATH
BENEFIT GUARANTEE PROVISION.
SEE PAGE 3 -- CONTINUED FOR TABLES OF NO LAPSE GUARANTEE AND DEATH BENEFIT
GUARANTEE PREMIUMS.
PREMIUM PAYMENTS ARE FOR THE INSURANCE BENEFIT AND ANY ADDITIONAL BENEFIT RIDERS
LISTED BELOW.
THE PLANNED PERIODIC PREMIUMS SHOWN ABOVE MAY NOT BE SUFFICIENT TO CONTINUE THE
POLICY AND LIFE INSURANCE COVERAGE IN FORCE DURING THE LIFETIME OF THE INSURED.
THE PERIOD FOR WHICH THE POLICY AND COVERAGE WILL CONTINUE IN FORCE WILL DEPEND
ON: (1) THE AMOUNT, TIMING AND FREQUENCY OF PREMIUM PAYMENTS; (2) CHANGES IN THE
FACE AMOUNT OF INSURANCE AND THE DEATH BENEFIT OPTIONS; (3) CHANGES IN THE
INTEREST RATES CREDITED TO OUR GIA AND THE INVESTMENT PERFORMANCE OF THE
INVESTMENT FUNDS OF OUR SA; (4) CHANGES IN THE MONTHLY DEDUCTIONS FROM THE
POLICY ACCOUNT FOR THIS POLICY AND ANY BENEFITS PROVIDED BY RIDERS TO THIS
POLICY; AND (5) LOAN AND PARTIAL NET CASH SURRENDER VALUE WITHDRAWAL ACTIVITY.
99-300-3 PAGE 3
(CONTINUED ON NEXT PAGE)
<PAGE>
POLICY INFORMATION CONTINUED - POLICY NUMBER XX XXX XXX
------ TABLE OF GUARANTEE PREMIUMS ------
FOR BASIC LIFE INSURANCE
GUARANTEE MONTHLY PREMIUM PREMIUM PERIOD
- --------- --------------- --------------
NO LAPSE GUARANTEE $29.30 5 YEARS
DEATH BENEFIT GUARANTEE $44.86 35 YEARS
99-300-3 PAGE 3 -- CONTINUED
<PAGE>
POLICY INFORMATION CONTINUED -- POLICY NUMBER XX XXX XXX
------ TABLE OF SURRENDER CHARGES ------
FOR THE INITIAL FACE AMOUNT
BEGINNING OF BEGINNING OF
POLICY POLICY
YEAR CHARGE YEAR CHARGE
---- ------ ---- ------
1 $287.30 9 $283.88
2 287.30 10 242.84
3 287.30 11 201.80
4 287.30 12 160.75
5 287.30 13 119.71
6 287.30 14 78.67
7 287.30 15 37.62
8 287.30 16 AND LATER 0.00
A SURRENDER CHARGE WILL BE SUBTRACTED FROM YOUR POLICY ACCOUNT IF THIS POLICY IS
GIVEN UP FOR ITS NET CASH SURRENDER VALUE OR IF THIS POLICY TERMINATES WITHIN
THE FIRST FIFTEEN POLICY YEARS. THE CHARGE IN THE FIRST POLICY MONTH OF EACH
POLICY YEAR IS SHOWN IN THE TABLE ABOVE. AFTER THE EIGHTH POLICY YEAR, THE
CHARGE IN ANY OTHER POLICY MONTH WILL BE BASED ON THE NUMBER OF POLICY MONTHS
SINCE THE BEGINNING OF THE POLICY YEAR.
IF THE FACE AMOUNT OF INSURANCE IS REDUCED WITHIN THE FIRST FIFTEEN POLICY
YEARS, A PROPORTIONATE SHARE OF THE APPLICABLE SURRENDER CHARGE AT THAT TIME
WILL BE DEDUCTED FROM YOUR POLICY ACCOUNT. SEE "SURRENDER CHARGES" PROVISION FOR
A DESCRIPTION OF THE PROPORTIONATE SURRENDER CHARGE.
ADMINISTRATIVE OFFICE:
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SPECIMEN SERVICE CENTER
100 SPECIMEN STREET
CITY, STATE 10001-6018
99-300-3 PAGE 3 -- CONTINUED
<PAGE>
POLICY INFORMATION CONTINUED -- POLICY NUMBER XX XXX XXX
------ TABLE OF MAXIMUM MONTHLY CHARGES FOR BENEFITS ------
MONTHLY DEDUCTION
BENEFITS FROM POLICY ACCOUNT PERIOD
- -------- ------------------- ------
BASIC COST OF INSURANCE MAXIMUM MONTHLY COST OF 65 YEARS
INSURANCE RATE (SEE PAGE 4 --
CONTINUED) TIMES THOUSANDS OF
NET AMOUNT AT RISK
BASIC COST OF INSURANCE $0.00 THEREAFTER
99-300-4 PAGE 4
(CONTINUED ON NEXT PAGE)
<PAGE>
POLICY INFORMATION CONTINUED -- POLICY NUMBER XX XXX XXX
------ TABLE OF MAXIMUM MONTHLY COST OF INSURANCE RATES ------
PER $1,000 OF NET AMOUNT AT RISK FOR BASIC LIFE INSURANCE
INSURED INSURED INSURED
PERSON'S PERSON'S PERSON'S
ATTAINED ATTAINED ATTAINED
AGE RATE AGE RATE AGE RATE
35 0.14083 55 0.65333 75 5.03667
36 0.14750 56 0.72167 76 5.59000
37 0.15667 57 0.79417 77 6.17500
38 0.16667 58 0.87250 78 6.78667
39 0.17833 59 0.96083 79 7.44000
40 0.19083 60 1.05917 80 8.16167
41 0.20583 61 1.16833 81 8.97250
42 0.22083 62 1.29417 82 9.89750
43 0.23833 63 1.43667 83 10.95167
44 0.25583 64 1.59833 84 12.11833
45 0.27667 65 1.77750 85 13.37417
46 0.29917 66 1.97083 86 14.69833
47 0.32333 67 2.18083 87 16.08083
48 0.34917 68 2.40583 88 17.49667
49 0.37833 69 2.65333 89 18.96583
50 0.41000 70 2.93250 90 20.51167
51 0.44667 71 3.30167 91 22.16500
52 0.48917 72 3.61750 92 23.98667
53 0.53667 73 4.04167 93 26.06583
54 0.59250 74 4.52000 94 28.78417
95 32.81750
96 39.64250
97 53.06583
98 83.33250
99 83.33250
100 AND 00.00000
OVER
99-300-4 PAGE 4 -- CONTINUED
<PAGE>
POLICY INFORMATION CONTINUED -- POLICY NUMBER XX XXX XXX
------ TABLE OF FACTORS FOR ------
PAID UP DEATH BENEFIT GUARANTEE
ATTAINED ATTAINED
AGE FACTOR AGE FACTOR
35 0.19902 70 0.63108
36 0.20659 71 0.64643
37 0.21446 72 0.66144
38 0.22260 73 0.67645
39 0.23103 74 0.69115
40 0.23975 75 0.70545
41 0.24877 76 0.71934
42 0.25807 77 0.73285
43 0.26769 78 0.74599
44 0.27760 79 0.75885
45 0.28783 80 0.77146
46 0.29838 81 0.78380
47 0.30925 82 0.79581
48 0.32044 83 0.80741
49 0.33196 84 0.81847
50 0.34382 85 0.82895
51 0.35601 86 0.83885
52 0.36853 87 0.84823
53 0.38135 88 0.85718
54 0.39447 89 0.86584
55 0.40786 90 0.87440
56 0.42150 91 0.88302
57 0.43540 92 0.89193
58 0.44954 93 0.90140
59 0.46394 94 0.91323
60 0.47856 95 0.92832
61 0.49340 96 0.95417
62 0.50842 97 0.96345
63 0.52359 98 0.98168
64 0.53886 99 AND OVER 1.00000
65 0.55419
66 0.56953
67 0.58490
68 0.60028
69 0.61568
99-300-4 PAGE 4 -- CONTINUED
<PAGE>
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Those Who Benefit from this Policy
Owner. The owner of this policy is the insured person unless otherwise stated in
the application, or later changed.
As the owner, you are entitled to exercise all the rights of this policy while
the insured person is living. To exercise a right, you do not need the consent
of anyone who has only a conditional or future ownership interest in this
policy.
Beneficiary. The beneficiary is as stated in the application, unless later
changed. The beneficiary is entitled to the Insurance Benefit of this policy.
One or more beneficiaries for the Insurance Benefit can be named in the
application. If more than one beneficiary is named, they can be classed as
primary or contingent. If two or more persons are named in a class, their shares
in the benefit can be stated. The stated shares in the Insurance Benefit will be
paid to any primary beneficiaries who survive the insured person. If no primary
beneficiaries survive, payment will be made to any surviving contingent
beneficiaries. Beneficiaries who survive in the same class will share the
Insurance Benefit equally, unless you have made another arrangement with us.
If there is no designated beneficiary living at the death of the insured person,
we will pay the Insurance Benefit to the insured person's surviving children in
equal shares. If none survive, we will pay the insured person's estate.
Changing the Owner or Beneficiary. While the insured person is living, you may
change the owner or beneficiary by written notice in a form satisfactory to us.
You can get such a form from our agent or by writing to us at our Administrative
Office. The change will take effect on the date you sign the notice; however, it
will not apply to any payment we make or other action we take before we receive
the notice. If you change the beneficiary, any previous arrangement you made as
to a payment option for benefits is cancelled. You may choose a payment option
for the new beneficiary in accordance with the "How Benefits Are Paid" section
of this policy.
Assignment. You may assign this policy, if we agree; however, we will not be
bound by an assignment unless we have received it in writing at our
Administrative Office. Your rights and those of any other person referred to in
this policy will be subject to the assignment. We assume no responsibility for
the validity of an assignment. An absolute assignment will be considered as a
change of ownership to the assignee.
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The Insurance Benefit We Pay
We will pay the Insurance Benefit of this policy to the beneficiary when we
receive at our Administrative Office (1) proof that the insured person died
while this policy was in force; and (2) all other requirements we deem
necessary. The Insurance Benefit includes the following amounts, which we will
determine as of the date of the insured person's death:
o the death benefit described on Page 6;
o plus any other benefits then due from riders to this policy;
o minus any policy loan and accrued loan interest;
o minus any overdue deductions from your Policy Account if the insured
person dies during a grace period.
We will add interest to the resulting amount in accordance with applicable law.
We will compute the interest at a rate we determine, but not less than the
greater of (a) the rate we are paying on the date of payment under the Deposit
Option provision, or (b) the rate required by any applicable law. Payment of the
Insurance Benefit may also be affected by other provisions of this policy. See
the "Other Important Information" section of this policy, where we specify our
right to contest the policy, the suicide exclusion, and what happens if age or
sex has been misstated. Additional exclusions or limitations (if any) are listed
in the Policy Information section.
Death Benefit. The death benefit of this policy will be determined under either
Option A or Option B, whichever you have chosen and is in effect on the date of
death of the insured person.
99-300-5 Page 5
<PAGE>
Under Option A, the death benefit is the greater of (a) the Face Amount of
Insurance; or (b) a percentage of the amount in your Policy Account on the date
of death of the insured person. Under this option, the amount of the death
benefit is fixed, except when it is determined by such a percentage.
Under Option B, the death benefit is the greater of (a) the Face Amount of
Insurance plus the amount in your Policy Account on the date of death of the
insured person; or (b) a percentage of the amount in your Policy Account on the
date of death of the insured person. Under this option the amount of the death
benefit is variable.
The percentages referred to above are the percentages from the following table
for the insured person's age (nearest birthday) at the beginning of the policy
year of determination.
TABLE OF PERCENTAGES
For ages not shown, the percentages shall
decrease by a ratable portion for each full year
Insured Insured
Person's Age Percentage Person's Age Percentage
------------ ---------- ------------ ----------
40 and under 250% 65 120%
45 215 70 115
50 185 75 thru 95 105
55 150 99 and over 101
60 130
Section 7702 of the Internal Revenue Code of 1986, as amended (i.e., the
"Code"), gives a definition of life insurance which limits the amounts that may
be paid into a life insurance policy relative to the benefits it provides. Even
if this policy states otherwise, at no time will the "future benefits" under
this policy be less than an amount such that the "premiums paid" do not exceed
the Code's "guideline premium limitations". We may adjust the amount of premium
paid to meet these limitations. Also, at no time will the "death benefit" under
the policy be less than the "applicable percentage" of the "cash surrender
value" of the policy. The above terms are as defined in the Code. In addition,
we may take certain actions, described here and elsewhere in the policy, to meet
the definitions and limitations in the Code, based on our interpretation of the
Code. Please see "Policy Changes -- Applicable Tax Law" for more information.
No Lapse Guarantee. This policy is guaranteed not to lapse during the first five
policy years if the sum of premium payments accumulated at 4%, less any partial
withdrawals accumulated at 4%, is at least equal to the sum of the No Lapse
Guarantee Premium(s) accumulated at 4%, and any outstanding loan and accrued
loan interest does not exceed the cash surrender value; see "Guarantee Premiums"
provision. This no lapse guarantee terminates at the end of five years. Certain
policy changes after issue will change the No Lapse Guarantee Premium(s),
however, they will not start a new guarantee period.
Death Benefit Guarantee. The death benefit of this policy is guaranteed if,
during the death benefit guarantee period, the sum of premium payments
accumulated at 4%, less any partial withdrawals accumulated at 4%, is at least
equal to the sum of the Death Benefit Guarantee Premium(s) accumulated at 4%,
and any outstanding loan and accrued loan interest does not exceed the cash
surrender value; see "Guarantee Premiums" provision. The death benefit guarantee
period is shown on Page 3. Certain policy changes after issue will change the
Death Benefit Guarantee Premium(s); however, they will not start a new guarantee
period.
99-300-5 Page 6
<PAGE>
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Changing the Face Amount of Insurance or the Death Benefit Option
You may change the Face Amount of Insurance or the death benefit option by
written request to us at our Administrative Office, subject to the following
conditions:
1. At any time after the second policy year while this policy is in force,
you may ask us to reduce the Face Amount of Insurance but not to less than
the minimum amount for which we would then issue this policy under our
rules. Any such reduction in the face amount may not be less than $10,000.
2. At any time after the second policy year while this policy is in force,
you can change your death benefit option. Any requested change to death
benefit Option B must be made while the insured person is not more than
attained age 80. If you ask us to change from Option A to Option B, we
will decrease the Face Amount of Insurance by the amount in your Policy
Account on the date the change takes effect. However, we reserve the right
to decline to make such change if it would reduce the Face Amount of
Insurance below the minimum amount for which we would then issue this
policy under our rules. If you ask us to change from Option B to Option A,
we will increase the Face Amount of Insurance by the amount in your Policy
Account on the date the change takes effect. Such decreases and increases
in the Face Amount of Insurance are made so that the death benefit remains
the same on the date the change takes effect.
3. The change will take effect at the beginning of the policy month that
coincides with or next follows the date we approve your request.
4. We reserve the right to decline to make any change that we determine would
cause this policy to fail to qualify as life insurance under applicable
tax law as interpreted by us.
5. You may ask for a change by completing an application for change, which
you can get from our agent or by writing to us at our Administrative
Office. A copy of your application for change will be attached to the new
Policy Information section that we will issue when the change is made. The
new section and the application for change will become a part of this
policy. We may require you to return this policy to our Administrative
Office to make a policy change.
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The Premiums You Pay
The minimum initial premium payment shown in the Policy Information section is
due on or before delivery of this policy. No insurance will take effect before a
premium at least equal to the minimum initial premium is paid. Other premiums
may be paid at our Administrative Office at any time while this policy is in
force.
We will send premium notices to you for the planned periodic premium shown in
the Policy Information section. You may skip planned periodic premium payments.
However, this may adversely affect the duration of the death benefit and your
policy's values. We will assume that any payment you make to us is a premium
payment, unless you tell us in writing that it is a loan repayment.
If you stop paying premiums, insurance coverage will continue for as long as the
Net Cash Surrender Value is sufficient to cover the monthly deductions described
in the Monthly Deductions provision, with a further extension of coverage as
described in the Grace Period provision.
Guarantee Premiums. You may choose to pay premiums equal to the No Lapse
Guarantee Premium(s) or to the Death Benefit Guarantee Premium(s). A table of
these different premium levels for base policy life insurance benefits is shown
on Page 3 -- Continued; these premiums differ in both amount and duration for
each of these guarantee periods. A table for any additional rider benefits is
also shown on a Page 3 -- Continued.
The calculations that are described in the "Grace Period" provision refer to a
Guarantee Premium fund. The Guarantee Premium fund at any time means the
accumulation of all the guarantee premiums (for base policy and any additional
benefit riders) for the shortest guarantee period that is still applicable. For
instance, if these calculations are performed during the first five policy
years, the Guarantee Premium fund for any policy month will equal the
accumulation of all the No Lapse Guarantee Premium(s) from the Register Date of
this policy up to that month. After five policy years, the Guarantee Premium
fund for any policy month will equal the accumulation of all the Death Benefit
Guarantee Premium(s) from the Register Date of this policy up to that month.
99-300-7 Page 7
<PAGE>
You may wish to consider paying premiums that will always be sufficient to meet
the longest guarantee period. This means paying the highest level of Death
Benefit Guarantee Premium(s) at all times, starting from the policy Register
Date. In this way, you are assured that the actual premium fund will always be
at least equal to the Guarantee Premium fund in any calculation.
Limits. Each premium payment after the initial one must be at least $100. We may
increase this minimum limit 90 days after we send you written notice of such
increase. We reserve the right to limit the amount of any premium payments you
may make if they would immediately result in more than a dollar for dollar
increase in the death benefit (which would happen if the death benefit is
determined as a percentage of the policy account, as described in the Death
Benefit provision), unless you provide satisfactory evidence of insurability of
the insured person.
We also reserve the right not to accept premium payments or to return excess
amounts (in a policy year) that we determine would cause this policy to fail to
qualify as life insurance under applicable tax law as interpreted by us.
Grace Period. At the beginning of each policy month, we compare the Net Cash
Surrender Value to the total monthly deductions described in the "Monthly
Deductions" provision. If the Net Cash Surrender Value is sufficient to cover
the total monthly deductions, the policy is not in default.
If the Net Cash Surrender Value at the beginning of any policy month is not
sufficient to cover the total monthly deductions, but the no lapse guarantee or
death benefit guarantee period is in effect, we will perform the following
calculations to determine whether the policy is in default:
1. Determine the Guarantee Premium fund. The Guarantee Premium fund for
any policy month is the accumulation of all the guarantee premiums
applicable to the shortest guarantee period in effect, shown on Page
3 -- Continued, from the Register Date up to that month at 4%
interest.
2. Determine the actual premium fund. The actual premium fund for any
policy month is the accumulation of all the premiums received at 4%
interest minus all withdrawals accumulated at 4% interest.
3. If the result in Step 2 is greater than or equal to the result in
Step 1, and any loan and accrued loan interest does not exceed the
Cash Surrender Value, the policy is not in default. The guarantee
will be in effect and monthly deductions in excess of the Policy
Account will be waived.
4. If the result of Step 2 is less than the result in Step 1, or if the
result of Step 2 is greater than or equal to the result in Step 1
and any loan and accrued loan interest exceeds the Cash Surrender
Value, the policy is in default as of the first day of that policy
month. This is the date of default.
If all guarantee periods have terminated (see No Lapse Guarantee and Death
Benefit Guarantee provisions) the calculations described in Steps 1. - 4. above
will not be performed. In that case, if the Net Cash Surrender Value at the
beginning of any policy month is less than the monthly deductions for that
month, the policy is in default as of the first day of such policy month.
If the policy is in default, we will send you and any assignee on our records at
last known addresses written notice stating that a grace period of 61 days has
begun starting with the date the notice is mailed. The notice will also state
the amount of payment that is due.
The payment required will not be more than an amount sufficient to increase the
Net Cash Surrender Value to cover all monthly deductions for 3 months calculated
assuming no interest or investment performance were credited to or charged
against the Policy Account and no policy changes were made.
If we do not receive such amount at our Administrative Office before the end of
the grace period, we will then (1) withdraw and retain any amount in your Policy
Account; and (2) send a written notice to you and any assignee on our records at
last known addresses stating that this policy has ended without value.
99-300-7 Page 8
<PAGE>
If we receive the requested amount before the end of the grace period, but the
Net Cash Surrender Value is still insufficient to cover total monthly
deductions, we will send a written notice that a new 61-day grace period has
begun and request an additional payment.
If the insured person dies during a grace period, we will pay the Insurance
Benefit as described on Page 5.
Restoring Your Policy Benefits. If this policy has ended without value, you may
restore policy benefits while the insured person is alive if you:
1. Ask for restoration of policy benefits within 6 months from the end
of the grace period; and
2. Provide evidence of insurability satisfactory to us; and
3. Make a required payment. The required payment will not be more than
an amount sufficient to cover (i) total monthly deductions for 3
months, calculated from the effective date of restoration; (ii) any
excess of the applicable surrender charge on the date of restoration
over the surrender charge that was deducted on the date of default;
and (iii) the premium charge. We will determine the amount of this
required payment as if no interest or investment performance were
credited to or charged against your Policy Account.
We must receive the required payment while the insured person is alive. We will
deduct the premium charge from the required payment. The policy account on the
date of restoration will be equal to the balance of the required payment plus a
surrender charge credit. The surrender charge credit will be the surrender
charge that was deducted on the date of default, but not greater than the
applicable surrender charge as of the effective date of restoration.
The effective date of the restoration of policy benefits will be the beginning
of the policy month which coincides with or next follows the date we approve
your request. We will start to make monthly charges again as of the effective
date of restoration.
We reserve the right to decline to restore this policy if in our opinion it
would cause this policy to fail to qualify as life insurance under applicable
tax law.
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Your Policy Account and How it Works
Premium Payments. When we receive your premium payments, we subtract the expense
charges shown in the table in the Policy Information section and any overdue
monthly deductions (unless waived by us). We put the balance (the net premium)
into your Policy Account as of the date we receive the premium payment at our
Administrative Office, and before any deductions from your Policy Account due on
that date are made. However, we will put the initial net premium payment into
your Policy Account as of the Register Date if it is later than the date of
receipt. No premiums will be applied to your Policy Account until the minimum
initial premium payment, as shown in the Policy Information Section, is received
at our Administrative Office.
Monthly Deductions. At the beginning of each policy month we make a deduction
from your Policy Account to cover the monthly administrative charge and to
provide insurance coverage. The first deduction is made on the Register Date. No
deduction is made after age 100 of the insured person. Such deduction for any
policy month is the sum of the following amounts determined as of the beginning
of that month:
o the monthly administrative charge;
o the monthly cost of insurance for the insured person; and
o the monthly cost of any benefits provided by riders to this policy.
The monthly cost of insurance is the sum of a) our current monthly cost of
insurance rate times the net amount at risk at the beginning of the policy month
divided by $1,000; plus b) any flat extra charge shown in the Policy Information
section. The net amount at risk at any time is the death benefit (calculated as
of that time) minus the amount in your Policy Account at that time.
We will determine cost of insurance rates from time to time. Any change in the
cost of insurance rates we use will be as described in the "Changes in Policy
Cost Factors" provision. They will never be more than those shown in the Table
of Maximum Cost of Insurance Rates on Page 4 -- Continued.
99-300-9 Page 9
<PAGE>
Other Deductions. We also make the following other deductions from your Policy
Account as they occur:
o We deduct a surrender charge if, before the end of the fifteenth policy
year, you give up this policy for its Net Cash Surrender Value, you reduce
the Face Amount of Insurance, or if this policy terminates without value
at the end of a grace period.
o We may deduct a charge for certain transfers (see "Transfers" provision).
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Your Investment Options
Allocations. This policy provides investment options for the amount in your
Policy Account. Amounts put into your Policy Account and deductions from it are
allocated to the investment funds of our SA and to the unloaned portion of our
GIA at your direction. You specified your initial premium allocation and
deduction allocation percentages in your application for this policy, a copy of
which is attached to this policy. Unless you change them, such percentages shall
also apply to subsequent premium and deduction allocations. However, any amounts
which are put into your Policy Account prior to the Allocation Date and which
are to be allocated to the investment funds of our SA will initially be
allocated to (and monthly deductions taken from) the Money Market Fund of our
SA. The Allocation Date is the first business day twenty calendar days after the
date of issue of this policy. On the Allocation Date, any such amounts then in
the Money Market Fund will be allocated in accordance with the directions
contained in your policy application.
Allocation percentages must be zero or a whole number not greater than 100. The
sum of the premium allocation percentages and of the deduction allocation
percentages must each equal 100.
You may change such allocation percentages by written notice to our
Administrative Office. A change will take effect on the date we receive it at
our Administrative Office except for changes received on or prior to the
Allocation Date, which will take effect on the first business day following the
Allocation Date.
If we cannot make a monthly deduction on the basis of the deduction allocation
percentages then in effect, we will make that deduction based on the proportion
that your unloaned value in our GIA and your values in the investment funds of
our SA bear to the total unloaned value in your Policy Account.
Transfers. At your written request to our Administrative Office, we will
transfer amounts from your value in any investment fund of our SA to one or more
other funds of our SA or to our GIA. Any such transfer will take effect on the
date we receive your written request for it at our Administrative Office.
However, no transfers will be made prior to the Allocation Date.
Once during each policy year you may ask us by written request to our
Administrative Office to transfer an amount you specify from your unloaned value
in our GIA to one or more investment funds of our SA. We must receive your
request within a period beginning 30 days prior to the policy anniversary and
ending 60 days after the policy anniversary. A transfer request received up to
30 days prior to the policy anniversary will be effective on the anniversary. A
transfer request received on or within 60 days after the policy anniversary will
be effective on the date the request is received at our Administrative Office.
The maximum amount that you may transfer in any policy year is the greater of a)
$500, b) 25% of the unloaned value in the GIA on the policy anniversary, or c)
the amount transferred from the GIA in the immediately preceding policy year, if
any. In no event will we transfer more than your unloaned value in our GIA.
The minimum amount that we will transfer from your value in an investment fund
of our SA on any date is the lesser of $500.00 or your value in that investment
fund on that date, except as stated in the next paragraph. The minimum amount
that we will transfer from your value in our GIA is the lesser of $500.00 or
your unloaned value in our GIA as of the date the transfer takes effect, except
as stated in the next paragraph.
We will waive the minimum amount limitations set forth in the immediately
preceding paragraph if the total amount being transferred on that date is at
least $500.00.
99-300-9 Page 10
<PAGE>
We reserve the right to make a transfer charge up to $25.00 for each transfer of
amounts among your investment options. The transfer charge, if any, is deducted
from the amounts transferred from the investment funds of our SA and our GIA
based on the proportion that the amount transferred from each investment fund of
our SA and our GIA bears to the total amount being transferred. A transfer from
the Money Market Fund on the Allocation Date (if applicable) will not incur a
transfer charge.
If you ask us to transfer the entire amount of your value in the investment
funds of our SA to our GIA, we will not make a charge for that transfer.
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The Value of Your Policy Account
The amount in your Policy Account at any time is equal to the sum of the amounts
you then have in our GIA and in the investment funds of our SA under this
policy.
Your Value in our GIA. The amount you have in our GIA at any time is equal to
the amounts allocated and transferred to it, plus the interest credited to it,
minus amounts deducted, transferred and withdrawn from it. We will credit the
amount in our GIA with interest at rates we determine. We will determine such
interest rates periodically in advance for unloaned and loaned amounts in our
GIA. The rates may be different for unloaned and loaned amounts. Any change in
the interest rates we determine will be as described in the "Changes in Policy
Cost Factors" provision. Such interest rates will not be less than 3%. Interest
accrues and is credited on unloaned amounts in the GIA daily. However, we will
credit interest on the initial net premium from the Register Date if it is later
than the date of receipt provided the initial premium is at least equal to the
minimum initial premium shown on Page 3 of the policy.
We credit interest on the loaned portion of our GIA daily. The interest rate we
credit to the loaned portion of our GIA will be at an annual rate up to 2% less
than the loan interest rate we charge. However, we reserve the right to credit a
lower rate than this if in the future tax laws change such that our taxes on
policy loans or policy loan interest are increased. In no event will we credit
less than 3% a year.
On each policy anniversary and at any time you repay all of a policy loan, we
allocate the interest that has been credited to the loaned portion of our GIA to
the investment funds of our SA and the unloaned portion of our GIA in accordance
with your premium allocation percentages.
Your Value in the Investment Funds of our SA. The amount you have in an
investment fund of our SA under this policy at any time is equal to the number
of units this policy then has in that fund multiplied by the fund's unit value
at that time.
Amounts allocated, transferred or added to an investment fund of our SA are used
to purchase units of that fund; units are redeemed when amounts are deducted,
loaned, transferred or withdrawn. These transactions are called policy
transactions.
The number of units a policy has in an investment fund at any time is equal to
the number of units purchased minus the number of units redeemed in that fund to
that time. The number of units purchased or redeemed in a policy transaction is
equal to the dollar amount of the policy transaction divided by the fund's unit
value on the date of the policy transaction. Policy transactions may be made on
any day. The unit value that applies to a transaction made on a business day
will be the unit value for that day. The unit value that applies to a
transaction made on a non-business day will be the unit value for the next
business day.
We determine unit values for the investment funds of our SA at the end of each
business day. Generally, a business day is any day the New York Stock Exchange
is open for trading. A business day immediately preceded by one or more
non-business days will include those non-business days as part of that business
day. For example, a business day which falls on a Monday will consist of that
Monday and the immediately preceding Saturday and Sunday.
The unit value of an investment fund of our SA on any business day is equal to
the unit value for that fund on the immediately preceding business day
multiplied by the net investment factor for that fund on that business day.
99-300-11 Page 11
<PAGE>
The net investment factor for an investment fund of our SA on any business day
is (a) divided by (b), minus (c), where:
(a) is the net asset value of the shares in designated investment companies that
belong to the investment fund at the close of business on such business day
before any policy transactions are made on that day, plus the amount of any
dividend or capital gain distribution paid by the investment companies on that
day;
(b) is the value of the assets in that investment fund at the close of business
on the immediately preceding business day after all policy transactions were
made for that day; and
(c) is a charge for each calendar day in that business day, as defined above,
corresponding to a charge not exceeding .90% yearly for mortality and expense
risks, plus any charge for that day for taxes, amounts set aside as a reserve
for taxes, or any operating expenses of our SA (including, without limitation,
SEC registration fees and auditing fees).
The net asset value of an investment company's shares held in each investment
fund shall be the value reported to us by that investment company.
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The Cash Surrender Value of this Policy
Cash Surrender Value. The Cash Surrender Value on any date is equal to the
amount in your Policy Account on that date minus any applicable surrender
charge.
Net Cash Surrender Value. The Net Cash Surrender Value is equal to the Cash
Surrender Value minus any policy loan and accrued loan interest. You may give up
this policy for its Net Cash Surrender Value at any time while the insured
person is living. You may do this by sending us a written request for it and
this policy to our Administrative Office. Your written request for cancellation
or surrender must include the following:
1. A statement that makes it clear that you intend to surrender the contract;
2. The policy number of the policy to be surrendered;
3. The name of the insured person and your name (if other than the insured
person) and address where proceeds should be mailed;
4. Your signature and, if required by the policy or by a legally binding
document of which we have an actual notice, the signature of a collateral
assignee, irrevocable beneficiary. or other person having an interest in
the policy through the legally binding document.
If this policy has a cash surrender value and is being given up for its net cash
surrender value, a completed withholding authorization must also be included
with your written request. If this form is not provided to us with your written
request for surrender, we will withhold income tax on the taxable portion of
your distribution at the mandated federal and state tax rates. We will compute
the Net Cash Surrender Value as of the date we receive your request for it and
this policy at our Administrative Office. If the policy has been lost, stolen or
destroyed, you must include a statement in the written request that the policy
was lost, stolen or destroyed with an approximate date of when the policy was
lost, stolen or destroyed. All insurance coverage under this policy ends on the
date we receive your written request.
Surrender Charges. If you give up this policy for its Net Cash Surrender Value
or if it ends without value at the end of a grace period before the end of the
fifteenth policy year, we will subtract a surrender charge from your Policy
Account. A table of surrender charges for the initial face amount is in the
Policy Information section.
If the Face Amount of Insurance is reduced before the end of the fifteenth
policy year, we will also deduct a proportionate amount of any applicable
surrender charge from your Policy Account. Such deduction will be made in
accordance with the "Allocations" provision.
We have filed a detailed statement of the method of computing surrender charges
with the insurance supervisory official of the jurisdiction in which this policy
is delivered.
99-300-11 Page 12
<PAGE>
Partial Net Cash Surrender Value Withdrawal. After the first policy year and
while the insured person is living, you may ask for a partial Net Cash Surrender
Value withdrawal by written request to our Administrative Office. Your request
will be subject to our approval based on our rules in effect when we receive
your request, and to the minimum withdrawal amount of $500.00. We have the right
to decline a request for a partial Net Cash Surrender Value withdrawal if this
would cause the policy to fail to qualify as life insurance under applicable tax
law, as interpreted by us, or if this would cause a decrease in face amount
below the minimum for which we would then issue this policy. A partial
withdrawal will result in a reduction in the Cash Surrender Value and in your
Policy Account equal to the amount withdrawn as well as a reduction in your
death benefit. If the death benefit is Option A, the withdrawal may also result
in a decrease in the face amount; there will be no proportionate surrender
charge due to such a decrease.
You may tell us how much of each partial withdrawal is to come from your
unloaned value in our GIA and from your values in each of the investment funds
of our SA. If you do not tell us, we will make the withdrawal on the basis of
your monthly deduction allocation percentages then in effect. If we cannot make
the withdrawal as indicated above, we will make the withdrawal based on the
proportion that your unloaned value in our GIA and your values in the investment
funds of our SA bear to the total unloaned value in your Policy Account.
Such withdrawal and resulting reduction in the death benefit, in Cash Surrender
Value and in your Policy Account will take effect on the date we receive your
written request at our Administrative Office. We will send you a new Policy
Information section if a withdrawal results in a reduction in the Face Amount of
Insurance. It will become a part of this policy. We may require you to return
this policy to our Administrative Office to make a change.
- --------------------------------------------------------------------------------
How a Loan Can Be Made
Policy Loans. You can take a loan on this policy while it has a loan value. This
policy will be the only security for the loan. Any amount on loan is part of
your Policy Account. We refer to this as the loaned portion of your Policy
Account.
Loan Value. The loan value on any date is 90% of the Cash Surrender Value on
that date. The amount of any new loan you take may not be more than the loan
value, less any existing loan and accrued loan interest. If you request an
increase to an existing loan, the additional amount requested will be added to
the amount of the existing loan and accrued loan interest.
Your request for a policy loan must be in writing to our Administrative Office.
You may tell us how much of the requested loan is to be allocated to your
unloaned value in our GIA and your value in each investment fund of our SA. Such
values will be determined as of the date we receive your request. If you do not
tell us, we will allocate the loan on the basis of your monthly deduction
allocation percentages then in effect. If we cannot allocate the loan on the
basis of your direction or those percentages, we will allocate it based on the
proportion that your unloaned value in our GIA and your values in the investment
funds of our SA bear to the total unloaned value in your Policy Account.
The loaned portion of your Policy Account will be maintained as a part of our
GIA. Thus, when a loaned amount is allocated to an investment fund of our SA, we
will redeem units of that investment fund sufficient in value to cover the
amount of the loan so allocated and transfer that amount to our GIA.
Loan Interest. Interest on a loan accrues daily at an adjustable loan interest
rate. We will determine the rate at the beginning of each policy year, subject
to the following paragraphs. It will apply to any new or outstanding loan under
the policy during the policy year next following the date of determination.
The maximum loan interest rate for a policy year shall be the greater of: (1)
the "Published Monthly Average," as defined below, for the calendar month that
ends two months before the date of determination; or (2) 4%. "Published Monthly
Average" means the Monthly Average Corporates yield shown in Moody's Corporate
Bond Yield Averages published by Moody's Investors Service, Inc., or any
successor thereto. If such averages are no longer published, we will use such
other averages as may be established by regulation by the insurance supervisory
official of the jurisdiction in which this policy is delivered. In no event will
the loan interest rate for a policy year be greater than 15%. We reserve the
right to establish a rate lower than the maximum.
99-300-13 Page 13
<PAGE>
No change in the rate shall be less than 1/2 of 1% a year. We may increase the
rate whenever the maximum rate as determined by clause (1) of the preceding
paragraph exceeds the rate being charged by 1/2 of 1% or more. We will reduce
the rate to or below the maximum rate as determined by clause (1) of the
preceding paragraph if such maximum is lower than the rate being charged by 1/2
of 1% or more.
We will notify you of the initial loan interest rate when you make a loan. We
will also give you advance written notice of any increase in the interest rate
of any outstanding loan.
Loan interest is due on each policy anniversary. If the interest is not paid
when due, it will be added to your outstanding loan and allocated on the basis
of the deduction allocation percentages then in effect. If we cannot make the
allocation on the basis of these percentages, we will make it based on the
proportion that your unloaned value in our GIA and your values in the investment
funds of our SA bear to the total unloaned value in your Policy Account. The
unpaid interest will then be treated as part of the loaned amount and will bear
interest at the loan rate.
When unpaid loan interest is allocated to an investment fund of our SA, we will
redeem units of that investment fund sufficient in value to cover the amount of
the interest so allocated and transfer that amount to your loaned Policy
Account.
Loan Repayment. You may repay all or part of a policy loan at any time while the
insured person is alive and this policy is in force.
Repayments will first be allocated to our GIA until you have repaid any loaned
amounts that were allocated to our GIA. You may tell us how to allocate
repayments above that amount among our GIA and the investment funds of our SA.
If you do not tell us, we will make the allocation on the basis of the premium
allocation percentages then in effect.
Failure to repay a policy loan or to pay loan interest will not terminate this
policy unless at the beginning of a policy month the Net Cash Surrender Value is
less than the total monthly deduction then due. In that case, the Grace Period
provision will apply.
A policy loan will have a permanent effect on your benefits under this policy
even if it is repaid.
- --------------------------------------------------------------------------------
Our Separate Account(s) (SA)
We established and we maintain our SA under the laws of New York State. Realized
and unrealized gains and losses from the assets of our SA are credited to or
charged against it without regard to our other income, gains, or losses. Assets
are put in our SA to support this policy and other variable life insurance
policies. Assets may be put in our SA for other purposes, but not to support
contracts or policies other than variable contracts.
The assets of our SA are our property. The portion of its assets equal to the
reserves and other policy liabilities with respect to our SA will not be
chargeable with liabilities arising out of any other business we conduct. We may
transfer assets of an investment fund in excess of the reserves and other
liabilities with respect to that fund to another investment fund or to our
General Account.
Investment Funds. Our SA consists of investment funds. Each fund may invest its
assets in a separate class of shares of a designated investment company or
companies or make direct investments in securities. The investment funds of our
SA that you chose for your initial allocations are shown on the application for
this policy, a copy of which is attached to this policy. We may from time to
time make other investment funds available to you or we may create a new SA. We
will provide you with written notice of all material details including
investment objectives and all charges.
We have the right to change or add designated investment companies. We have the
right to add or remove investment funds. We have the right to withdraw assets of
a class of policies to which this policy belongs from an investment fund and put
them in another investment fund. We also have the right to combine any two or
more investment funds. The term investment fund in this policy shall then refer
to any other investment fund in which the assets of a class of policies to which
this policy belongs were placed.
99-300-13 Page 14
<PAGE>
We have the right to:
1. register or deregister any SA available under this policy under the
Investment Company Act of 1940;
2. run any SA available under this policy under the direction of a committee,
and discharge such committee at any time;
3. restrict or eliminate any voting rights of policy owners, or other persons
who have voting rights as to any SA available under this policy; and
4. operate any SA available under this policy or one or more of its
investment funds by making direct investments or in any other form. If we
do so, we may invest the assets of such SA or one or more of the
investment funds in any legal investments. We will rely upon our own or
outside counsel for advice in this regard. Also, unless otherwise required
by law or regulation, an investment adviser or any investment policy may
not be changed without our consent. If required by law or regulation, the
investment policy of an investment fund of any SA available under this
policy will not be changed by us unless approved by the Superintendent of
Insurance of New York State or deemed approved in accordance with such law
or regulation. If so required, the process for getting such approval is on
file with the insurance supervisory official of the jurisdiction in which
this policy is delivered.
If any of these changes result in a material change in the underlying
investments of an investment fund of our SA, we will notify you of such change,
as required by law. If you have value in that investment fund we will, if you
wish, transfer it at your written direction from that fund to another fund(s) of
our SA or to our GIA, and you may then change your premium and deduction
allocation percentages. There will be no charge for such a transfer.
- --------------------------------------------------------------------------------
Our Annual Report to You
For each policy year we will send you a report for this policy that shows the
current death benefit, the value you have in our GIA and in each investment fund
of any SA available under this policy, the Cash Surrender Value and any policy
loan with the current loan interest rate. It will also show the premiums paid
and any other information as may be required by the insurance supervisory
official of the jurisdiction in which this policy is delivered.
- --------------------------------------------------------------------------------
How Benefits Are Paid
You can have the Insurance Benefit, or your Net Cash Surrender Value withdrawals
paid immediately in one sum. Or, you can choose another form of payment for all
or part of them. If you do not arrange for a specific choice before the insured
person dies, the beneficiary will have this right when the insured person dies.
If you do make an arrangement, however, the beneficiary cannot change it after
the insured person dies.
The options are:
1. Deposit: The sum will be left on deposit for a period mutually agreed
upon. We will pay interest at the end of every month, every 3 months,
every 6 months or every 12 months, as chosen.
2. Installment Payments: There are two ways that we pay installments:
A. FIXED PERIOD: We will pay the sum in equal installments for a
specified number of years (not more than 30). The installments will
be at least those shown in the Table of Guaranteed Payments.
B. FIXED AMOUNT: We will pay the sum in installments as mutually agreed
upon until the original sum, together with interest on the unpaid
balance, is used up.
99-300-15 Page 15
<PAGE>
3. Monthly Life Income: We will pay the sum as a monthly income for life. The
amount of the monthly payment will be at least that shown in the Table of
Guaranteed Payments. The basis for these payments is the 1983 Individual
Annuity Mortality Table "a" projected with modified Scale G. You may
choose any one of three ways to receive monthly life income. We will
guarantee payments for at least 10 years (called "10 Years Certain"); at
least 20 years (called "20 Years Certain"); or until the payments we make
equal the original sum (called "Refund Certain").
Payments that we make under options 1.-3. above will not be affected by the
investment experience of any investment fund of our SA after proceeds are
applied under such options.
We will also apply the sum under any other option requested that we make
available at the time of payment.
The payee may name and change a successor payee for any amount we would
otherwise pay to the payee's estate.
Any arrangements involving more than one of the options, or a payee who is not a
natural person (for example, a corporation) or who is a fiduciary, must have our
approval. Also, details of all arrangements will be subject to our rules at the
time the arrangement takes effect. These include rules on: the minimum amount we
will apply under an option and minimum amounts for installment payments;
withdrawal or commutation rights; naming payees and successor payees; and
proving age and survival.
Payment choices (or any later changes) will be made and will take effect in the
same way as a change of beneficiary. Amounts applied under these options will
not be subject to the claims of creditors or to legal process, to the extent
permitted by law.
- --------------------------------------------------------------------------------
Other Important Information
Your Contract with Us. This policy is issued in consideration of payment of a
premium at least equal to the the minimum initial premium shown in the Policy
Information section.
This policy, any riders or endorsements, and the attached copies of the initial
applications and all subsequent applications to change this policy, and all
additional Policy Information sections added to this policy, make up the entire
contract. The rights conferred by this policy are in addition to those provided
by applicable Federal and State laws and regulations.
Only our Chairman of the Board, our President or one of our Vice Presidents can
modify this contract or waive any of our rights or requirements under it. The
person making these changes must put them in writing and sign them.
Policy Changes -- Applicable Tax Law. For you and the beneficiary to receive the
tax treatment accorded to life insurance under Federal law, this policy must
qualify initially and continue to qualify as life insurance under the Code or
successor law. Therefore, we have reserved earlier in this policy the right to
decline to accept premium payments, to decline to change death benefit options,
to decline to change the Face Amount of Insurance, or to decline to make partial
withdrawals that, in our opinion, would cause this policy to fail to qualify as
life insurance under the applicable tax law. Further, we reserve the right to
make changes in this policy or its riders (for example, in the percentages on
Page 6) or to require additional premium payments or to make distributions from
this policy or to change the Face Amount of Insurance to the extent we deem it
necessary to continue to qualify this policy as life insurance. Any such changes
will apply uniformly to all policies that are affected. You will be given
advance written notice of such changes.
Changes in Policy Cost Factors. Changes in policy cost factors (interest rates
we credit, cost of insurance deductions, and expense charges) will be by class
and based upon changes in future expectations for such elements as: investment
earnings, mortality, persistency, expenses and taxes. Any change in policy cost
factors will be determined in accordance with procedures and standards on file,
if required, with the insurance supervisory official of the jurisdiction in
which this policy is delivered.
99-300-15 Page 16
<PAGE>
When the Policy is Incontestable. We have the right to contest the validity of
this policy based on material misstatements made in the initial applications for
this policy. We also have the right to contest the validity of any policy change
or restoration based on material misstatements made in any application for that
change or restoration. However, we will not contest the validity of this policy
after it has been in effect during the lifetime of that insured person for two
years from the earlier of the Register Date or the date of issue shown in the
Policy Information section. We will not contest any policy change that requires
evidence of insurability, or any restoration of this policy, after the change or
restoration has been in effect for two years during the insured person's
lifetime.
No statement shall be used to contest a claim unless contained in an
application.
All statements made in an application are representations and not warranties.
See any additional benefit riders for modifications of this provision that apply
to them.
What if Age or Sex has Been Misstated? If the insured person's age or sex has
been misstated on any application, the death benefit and any benefits provided
by riders to this policy shall be those which would be purchased by the most
recent deduction for the cost of insurance, and the cost of any benefits
provided by riders, at the correct ages and sex.
How the Suicide Exclusion Affects Benefits. If the insured person commits
suicide (while sane or insane) within two years after the earlier of the
Register Date or the date of issue shown in the Policy Information section, our
liability will be limited to the payment of a single sum. This sum will be equal
to the premiums paid, minus any loan and accrued loan interest and minus any
partial withdrawal of the Net Cash Surrender Value. If the insured person
commits suicide (while sane or insane) within two years after the effective date
of a change that you asked for that increases the death benefit, then our
liability as to the increase in amount will be limited to the payment of a
single sum equal to the monthly cost of insurance deductions made for such
increase.
How We Measure Policy Periods and Anniversaries. We measure policy years, policy
months, and policy anniversaries from the Register Date shown in the Policy
Information section. Each policy month begins on the same day in each calendar
month as the day of the month in the Register Date.
How, When and What We May Defer. We may not be able to obtain the value of the
assets of the investment funds of our SA if: (1) the New York Stock Exchange is
closed; or (2) the Securities and Exchange Commission requires trading to be
restricted or declares an emergency. During such times, as to amounts allocated
to the investment funds of our SA, we may defer:
1. Determination and payment of Net Cash Surrender Value withdrawals (except
when used to pay premiums);
2. Determination and payment of any death benefit in excess of the Face
Amount of Insurance;
3. Payment of loans (except when used to pay premiums);
4. Determination of the unit values of the investment funds of our SA; and
5. Any requested transfer or the transfer on the Allocation Date.
As to amounts allocated to our GIA, we may defer payment of any Net Cash
Surrender Value withdrawal or loan amount (except when used to pay premiums) for
up to six months after we receive a request for it. We will allow interest, at a
rate of at least 3% a year. on any Net Cash Surrender Value payment derived from
our GIA that we defer for 30 days or more.
The Basis We Use for Computation. We provide Cash Surrender Values that are at
least equal to those required by law. If required to do so, we have filed with
the insurance supervisory official of the jurisdiction in which this policy is
delivered a detailed statement of our method of computing such values. We
compute reserves under this policy by the Commissioners Reserve Valuation
Method.
We base minimum cash surrender values and reserves on the Commissioners 1980
Standard Ordinary Male or Female Mortality Tables at attained ages 0-17 or the
Commissioners 1980 Standard Ordinary, Male or Female, Smoker or Non-Smoker,
Mortality Tables at attained ages 18 and over. We also use these tables as the
basis for determining maximum insurance costs, taking account of sex, attained
age, class of risk and tobacco user status of the insured person. We use an
effective annual interest rate of 3%.
99-300-17 Page 17
<PAGE>
Policy illustrations. Upon request we will give you an illustration of the
future benefits under this policy based upon both guaranteed and current cost
factor assumptions.
Policy Changes. You may add additional benefit riders or make other changes,
subject to our rules at the time of change.
99-300-17 Page 18
<PAGE>
Table of Guaranteed Payments
(MINIMUM AMOUNT FOR EACH $1,000 APPLIED)
<TABLE>
<CAPTION>
Option 2A Option 3
FIXED PERIOD INSTALLMENTS MONTHLY LIFE INCOME
------------------------- -------------------
Number Monthly Annual 10 Years Certain 20 Years Certain Refund Certain
of Years' Install- Install- ---------------- ---------------- --------------
Installments ment ment Age Male Female Male Female Male Female
- ------------ -------- -------- --- ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $84.28 $1000.00 50 $3.48 $3.19 $3.42 $3.17 $3.37 $3.14
2 42.66 506.17 51 3.54 3.23 3.47 3.21 3.42 3.17
3 28.79 341.60 52 3.59 3.28 3.51 3.25 3.46 3.21
4 21.86 259.33 53 3.65 3.32 3.56 3.29 3.51 3.25
5 17.70 210.00 54 3.70 3.37 3.61 3.33 3.56 3.29
55 3.77 3.42 3.66 3.37 3.61 3.34
6 14.93 177.12 56 3.83 3.47 3.72 3.42 3.67 3.38
7 12.95 153.65 57 3.90 3.52 3.77 3.47 3.72 3.43
8 11.47 136.07 58 3.97 3.58 3.83 3.52 3.78 3.48
9 10.32 122.40 59 4.04 3.64 3.88 3.57 3.84 3.53
10 9.39 111.47
60 4.12 3.70 3.94 3.62 3.90 3.58
61 4.20 3.76 4.00 3.68 3.97 3.64
11 8.64 102.54 62 4.29 3.83 4.06 3.74 4.04 3.69
12 8.02 95.11 63 4.38 3.90 4.12 3.79 4.11 3.75
13 7.49 88.83 64 4.48 3.98 4.18 3.85 4.19 3.82
14 7.03 83.45
15 6.64 78.80 65 4.58 4.06 4.25 3.92 4.26 3.88
66 4.68 4.14 4.31 3.98 4.35 3.95
67 4.79 4.23 4.37 4.04 4.43 4.02
16 6.30 74.73 68 4.90 4.32 4.43 4.11 4.52 4.10
17 6.00 71.15 69 5.02 4.42 4.50 4.18 4.62 4.18
18 5.73 67.97
19 5.49 65.13 70 5.14 4.52 4.56 4.25 4.71 4.26
20 5.27 62.58 71 5.26 4.63 4.62 4.31 4.82 4.35
72 5.39 4.75 4.67 4.38 4.92 4.44
73 5.52 4.87 4.73 4.45 5.03 4.53
21 5.08 60.28 74 5.66 4.99 4.78 4.51 5.14 4.63
22 4.90 58.19
23 4.74 56.29 75 5.80 5.12 4.83 4.58 5.27 4.74
24 4.60 54.55 76 5.95 5.26 4.88 4.64 5.39 4.84
25 4.46 52.95 77 6.10 5.40 4.93 4.70 5.53 4.96
78 6.25 5.55 4.97 4.75 5.66 5.08
79 6.40 5.70 5.01 4.80 5.80 5.20
80 6.56 5.85 5.04 4.86 5.96 5.33
26 4.34 51.48 81 6.72 6.01 5.08 4.90 6.11 5.45
27 4.22 50.12 82 6.88 6.18 5.11 4.95 6.27 5.60
28 4.12 48.87 83 7.04 6.34 5.13 4.99 6.43 5.73
29 4.02 47.70 84 7.20 6.51 5.16 5.03 6.62 5.89
30 3.93 46.61 85 & over 7.36 6.67 5.18 5.07 6.81 6.04
If installments are paid every 3 Amounts for Monthly Life Income are based on age nearest
months, they will be 25.23% of birthday when income starts. Amounts for ages not shown
the annual installments. If they will be furnished on request.
are paid every 6 months, they
will be 50.31% of the annual
installments.
</TABLE>
99-300-19 Page 19
<PAGE>
THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES
A Stock Life Insurance Company
Home Office: 1290 Avenue of the Americas, New York, New York 10104
Flexible Premium Variable Life Insurance Policy. Insurance benefit payable
upon the death of the insured person while this policy is in force.
Premiums may be paid while the insured person is living. Values provided
by this policy are based on declared interest rates and on the unit values
of the investment funds of a separate account, which in turn depends on
the investment performance of the securities held by such investment
funds. They are not guaranteed as to dollar amount. This is a
non-participating policy.
No. 99-300
In this endorsement "we", "our" and "us" mean
The Equitable Life Assurance Society of the United
FACE AMOUNT States. "You" and "your" mean the owner of the
INCREASE ENDORSEMENT policy at the time an owner's right is exercised.
- --------------------------------------------------------------------------------
This endorsement is made part of this policy and modifies it by adding the
following as the new item 1. of the "Changing the Face Amount of Insurance or
the Death Benefit Option" section of this policy:
1. At any time after the first policy year while this policy is in force and the
insured is not more than age 80, you may ask us to increase the Face Amount of
Insurance if you provide evidence satisfactory to us of the insurability of the
insured person. If you request an increase and the rating class of the insured
person on the date of the increase is higher, a separate policy will be issued
for the amount of the increase. Any increase you ask for must be at least
$10,000.
We will establish surrender charges for any increase in the Face Amount of
Insurance that represents an increase over the previous highest Face Amount.
These will apply before the end of the fifteenth year from the effective date of
increase.
If you reduce the Face Amount of Insurance within fifteen years following a face
amount increase, we will deduct a proportionate amount of any applicable
surrender charge from your Policy Account. Such deduction will be made in
accordance with the "Allocations" provision. Reductions will first be applied
against the most recent increase in the Face Amount of Insurance. They will then
be applied to prior increases in the Face Amount of Insurance in the reverse
order in which such increases took place, and then to the original Face Amount
of Insurance. Changes in the Face Amount resulting from a change in death
benefit option will not be considered in computing the previous highest Face
Amount.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
/s/Pauline Sherman /s/Edward D. Miller
- -------------------------------- ------------------------------
Pauline Sherman, Vice President, Edward D. Miller, Chairman and
Secretary and Associate General Counsel Chief Executive Officer
S.99-30
ENDORSEMENT
- --------------------------------------------------------------------------------
Endorsed on this policy as of its Date of Issue:
1. All references to sex or Male or Female in this policy and in any additional
benefit riders are deleted.
2. In "The Basis We Use For Computation" provision, the second paragraph is
deleted and replaced by the following: We base minimum cash surrender values
and reserves on the Commissioners 1980 Standard Ordinary SB Smoker or NB
Non-Smoker Mortality Tables. We also use these tables as the basis for
determining maximum insurance costs, taking account of the attained age,
class of risk, and tobacco user status of the insured person. We use an
effective annual interest rate of 3%.
3. The Table of Guaranteed Payments is replaced by the table below.
<TABLE>
<CAPTION>
TABLE OF GUARANTEED PAYMENTS
(MINIMUM AMOUNT FOR EACH $1,000 APPLIED)
OPTION 2A OPTION 3
FIXED PERIOD INSTALLMENTS MONTHLY LIFE INCOME
------------------------- -------------------
Number Monthly Annual
of Years' Install- Install- AGE 10 Years Certain 20 Years Certain Refund Certain
Installments ment ment --- ---------------- ---------------- ---------------
------------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
1 $84.28 $1000.00 50 $3.25 $3.22 $ 3.18
2 42.66 506.17 51 3.29 3.26 3.22
3 28.79 341.60 52 3.34 3.30 3.26
4 21.86 259.33 53 3.38 3.34 3.30
5 17.70 210.00 54 3.43 3.38 3.34
6 14.93 177.12 55 3.48 3.43 3.39
7 12.95 153.65 56 3.54 3.48 3.43
8 11.47 136.07 57 3.59 3.53 3.48
9 10.32 122.40 58 3.65 3.58 3.53
10 9.39 111.47 59 3.71 3.63 3.58
11 8.64 102.54 60 3.78 3.68 3.64
12 8.02 95.11 61 3.84 3.74 3.69
13 7.49 88.83 62 3.91 3.80 3.75
14 7.03 83.45 63 3.99 3.85 3.81
15 6.64 78.80 64 4.07 3.92 3.88
16 6.30 74.73 65 4.15 3.98 3.95
17 6.00 71.15 66 4.24 4.04 4.02
18 5.73 67.97 67 4.33 4.10 4.09
19 5.49 65.13 68 4.42 4.17 4.17
20 5.27 62.58 69 4.53 4.24 4.25
21 5.08 60.28 70 4.63 4.30 4.34
22 4.90 58.19 71 4.74 4.37 4.43
23 4.74 56.29 72 4.86 4.43 4.52
24 4.60 54.55 73 4.98 4.50 4.61
25 4.46 52.95 74 5.11 4.56 4.71
26 4.34 51.48 75 5.24 4.62 4.82
27 4.22 50.12 76 5.37 4.68 4.93
28 4.12 48.87 77 5.52 4.74 5.04
29 4.02 47.70 78 5.66 4.79 5.16
30 3.93 46.61 79 5.81 4.84 5.29
If installments are paid every 3 months, they will 80 5.97 4.89 5.42
be 25.23% of the annual installments, If they are 81 6.13 4.93 5.56
paid every 6 months, they will be 50.31% of the 82 6.29 4.98 5.69
annual installments. 83 6.45 5.01 5.83
84 6.62 5.05 5.99
85 & over 6.78 5.08 6.15
Amounts for Monthly Life Income are based on age nearest birth-
day when income starts. Amounts for ages not shown will be
furnished on request.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
/s/Pauline Sherman /s/Edward D. Miller
- ------------------------------------------ ------------------------------
Pauline Sherman, Vice President, Secretary Edward D. Miller, Chairman and
and Associate General Counsel Chief Executive Officer
S .99-33
</TABLE>
In this endorsement "we", "our" and "us" mean
PAID UP DEATH BENEFIT The Equitable Life Assurance Society of the United
GUARANTEE ENDORSEMENT States. "You" and "your" mean the owner of the
policy at the time an owner's right is exercised.
- --------------------------------------------------------------------------------
This endorsement is made part of this policy and modifies it as follows:
1. The following provision is added to this policy:
PAID UP DEATH BENEFIT GUARANTEE. You may elect the Paid Up Death Benefit
Guarantee at any time after the fourth policy year while this policy is in
force, subject to the following conditions:
a) The death benefit option in effect is Option A; and
b) The election of the Paid Up Death Benefit Guarantee would not cause this
policy to lose its qualification as life insurance under the Internal Revenue
Service Code or require a distribution from the policy to avoid such
disqualification.
If the policy is made paid up, any additional benefit riders will automatically
terminate.
The face amount of the paid up policy will equal the lesser of 1) the face
amount before the election, or 2) the policy account value at the time of
election divided by the factor appropriate to the then attained age of the
insured person as shown in the Policy Information section (if this is a joint
survivorship policy, the factors shown are based instead upon the policy year).
We reserve the right to decline your election if the face amount of the paid up
policy would be less than the minimum amount for which we would then issue this
policy.
If the face amount of the paid up policy is less than the face amount of the
policy prior to the election, we will deduct a proportionate amount of any
applicable surrender charge from your policy account.
When the policy is made paid up, the policy is guaranteed to remain in force and
the death benefit never to be less than the face amount of the paid up policy so
long as the Paid Up Death Benefit Guarantee remains in effect. The Paid Up
Death Benefit Guarantee will terminate if any outstanding policy loan and
accrued laon interest exceeds the cash surrender value.
We reserve the right to decline to make any changes or to allow any partial
withdrawals while the Paid Up Death Benefit Guarantee is in effect, if this
would cause the paid up guarantee to terminate. However, if the requested
change or partial withdrawal would be permissisble for a policy where the Paid
Up Death Benefit Guarantee is not in effect, you may terminate the Paid Up Death
Benefit Guarantee by written request in order to accomplish the change or
partial withdrawal.
The net cash surrender value after the Paid Up Death Benefit Guarantee becomes
effective will equal the policy account value minus any applicable surrender
charge and any outstanding policy loan and accrued loan interest. We will
continue to make monthly deductions from your policy account; interest and
investment performance will continue to be credited to or charged against your
policy account. You may continue to pay premiums, subject to our normal rules.
Partial withdrawals of net cash surrender value will generally reduce the face
amount by more than the amount of the withdrawal.
2. The third paragraph of the "The Premiums You Pay" section is deleted and
replaced by the following:
If you stop paying premiums and the Paid Up Death Benefit Guarantee is not in
effect, insurance coverage will continue for as long as the Net Cash Surrender
Value is sufficient to cover the monthly deductions described in the Monthly
Deductions provision, with a further extension of coverage as described in the
Grace Period provision.
3. The following paragraph is added as the new second paragraph of the "Grace
Period" provision:
If the Net Cash Surrender Value at the beginning of any policy month is not
sufficient to cover the total monthly deductions, but the Paid Up Death Benefit
Guarantee is in effect, the policy is not in default and we will waive monthly
deductions in excess of the Policy Account.
S.99-32
<PAGE>
4. The third paragraph of the "Grace Period" provision is deleted and replaced
by the following:
If the Net Cash Surrender Value at the beginning of any policy month is not
sufficient to cover the total monthly deductions and the Paid Up Death Benefit
Guarantee is not in effect, but the no lapse guarantee or death benefit
guarantee period is in effect, we will perform the following calculations to
determine whether the policy is in default:
5. The eighth paragraph of the "Grace Period" provision is deleted and replaced
by the following:
If all guarantee periods have terminated (see No Lapse Guarantee and Death
Benefit Guarantee provisions) the calculations described in Steps 1. - 4. above
will not be performed. In that case, if the Net Cash Surrender Value at the
beginning of any policy month is less than the monthly deductions for that month
and the Paid Up Death Benefit Guarantee is not in effect, the policy is in
default as of the first day of such policy month.
The Equitable Life Assurance Society of the United States
/s/ Pauline Sherman /s/ Edward D. Miller
- -------------------- --------------------
Pauline Sherman, Vice President, Secretary Edward D. Miller, Chairman and
and Associate Genereal Counsel Chief Executive Officer
S.99-32
ENHANCED DEATH BENEFIT In this rider "we", "our" and "us" mean
GUARANTEE RIDER The Equitable Life Assurance Society of the United
States. "You" and "your" mean the owner of the
policy at the time an owner's right is exercised.
- --------------------------------------------------------------------------------
THIS RIDERS' BENEFITS. While this rider is in effect, the following provisions
of the policy will be changed to provide an enhanced death benefit guarantee
period subject to the enhanced death benefit guarantee premiums being paid in
accordance with the Death Benefit Guaranteee and Guarantee Premiums provisions.
1. The "Death Benefit Guarantee" provision of this policy is deleted and
replaced by the following:
DEATH BENEFIT GUARANTEE. The death benefit of this policy is guaranteed if,
during the death benefit guarantee periods, the sum of premium payment
accumulated at 4%, less any partial withdrawals accumulated at 4%, is at least
equal to the sum of the Death Benefit Guarantee Premium(s) accumulated at 4%,
and any outstanding loan and accrued loan interest does not exceed the cash
surrender value; see "Guarantee Premiums" provision.
The death benefit guarantee periods are shown on Page 3. If the Death Benefit
Option is Option B, then in no event will the longest guarantee period extend
beyond the later of the insured person's attained age 80 (if this is a joint
survivorship policy, the younger insured person's attained age 80) or 15 years
from policy issue. Certain policy changes after issue will change the Death
Benefit Guarantee Premium(s) and Enhanced Death Benefit Guarantee Premium(s);
however, they will not start new guarantee periods.
2. The "Guarantee Premiums" provision of this policy is deleted and replaced by
the following:
GUARANTEE PREMIUMS. You may chose to pay premiums equal to the No Lapse
Guarantee Premium(s), the Death Benefit Guarantee Premium(s), or the Enhanced
Death Benefit Guarantee Premium(s). A table of these different premium levels
for base policy life insurance benefits is shown on Page 3. - Continued; these
premiums differ in both amount and duration for each of these guarantee periods.
A table for any additional rider benefits is also shown on a Page 3 - Continued.
The calculations that are described in the "Grace Period" provision refer to a
Guarantee Premium fund. The Guarantee Premium fund at any time means the
accumulation of all the guarantee premiums (for base policy and any additional
benefit riders) for the SHORTEST guarantee period that is still applicable. For
instance, if these calculations are performed during the first five policy
years, the Guarantee Premium fund for any policy month will equal the
accumulation of all the No Lapse Guarantee Premium(s) from the Register Date of
this policy up to that month. After five policy years, the Guarantee Premium
fund for any policy month will equal the accumulation of all the Death Benefit
Guarantee Premium(s) from the Register Date of this policy up to that month.
After the expiration of the Death Benefit Guarantee period, the Guarantee
Premium fund for any policy month will equal the accumulation of all the
Enhanced Death Benefit Guarantee Premium(s) from the Register Date of this
policy up to that month.
You may wish to consider paying premiums that will always be sufficient to
meeting the LONGEST guarantee period. This means paying the highest level of
Enhanced Death Benefit Guarantee Premium(s) at all times, starting from the
policy Register Date. In this way, you are assured that the actual premium fund
will always be at least equal to the Guarantee Premium fund in any calculation.
3. The second paragraph of the "Grace Period" provision is deleted and replaced
by the following:
If the Net Cash Surrender value at the beginning of any policy month is not
sufficient to cover the total monthly deductions and the Paid Up Death Benefit
Guarantee is not in effect, but the no lapse guarantee or death benefit
guarantee or enhanced death benefit guarantee period is in effect, we will
perform the following calculations to determine whether the policy is in
default:
4. The Guaranteed Interest Account (GIA) option is not available under this
policy if this rider is elected. All references in this policy to GIA are hereby
eliminated.
THE COST OF THIS RIDER. While this rider is in effect, its charge will be part
of the monthly deductions from the Policy Account.
R99-100
<PAGE>
WHEN THIS RIDER WILL TERMINATE. This will terminate on the date the policy
terminates.
You may also terminate this rider at any time after the first policy year rider
by asking for this in writing. The effective date of termination will be the
beginning of the policy month which coincides with or next follows the date we
receive your request.
INCONTESTABILITY AND SUICIDE EXCLUSION. The Incontestability and Suicide
Exclusion provisions of this policy also apply to this rider.
GENERAL. This rider is part of this policy. Its benefit is subject to all the
terms of this rider and the policy.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
A B C D A B C D E
Pauline Sherman, Vice President, Edward D. Miller, Chairman and
Secretary and Associate Counsel Chief Executive Officer
R99-100
