Cover Page 497(d)
333-17663
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INCENTIVE LIFE(SM)
A FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE POLICY
PROSPECTUS DATED MAY 1, 2000,
AS SUPPLEMENTED DECEMBER 29, 2000.
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 prospectus for EQ Advisors Trust, which contains important
information about its Portfolios.
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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 financial
professional 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:
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VARIABLE INVESTMENT OPTIONS
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Fixed income
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o Alliance High Yield o Alliance Money Market
o Alliance Intermediate o Alliance Quality Bond
Government Securities
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Domestic stocks
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o EQ/Aggressive Stock(1) o EQ/Evergreen
o Alliance Common Stock o FI Mid Cap
o Alliance Growth and Income o FI Small/Mid Cap Value(3)
o EQ/Alliance Premier Growth o EQ/Janus Large Cap Growth
o Alliance Small Cap Growth o MFS Emerging Growth Companies
o EQ/Alliance Technology o MFS Growth with Income
o EQ/AXP New Dimensions o MFS Research
o EQ/AXP Strategy Aggressive o Mercury Basic Value Equity(4)
o Capital Guardian Research o EQ/Putnam Growth & Income
o Capital Guardian U.S. Equity Value
o EQ Equity 500 Index(2) o T. Rowe Price Equity Income
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International stocks
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o Alliance Global o Morgan Stanley Emerging
o Alliance International Markets Equity
o T. Rowe Price International
Stock
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Balanced/hybrid
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o Alliance Conservative Investors o EQ/Putnam Balanced
o Alliance Growth Investors o EQ/Evergreen Foundation
o EQ/Balanced(5) o Mercury World Strategy(6)
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(1) Formerly named "Alliance Aggressive Stock"
(2) Formerly named "Alliance Equity Index"
(3) Formerly named "Warburg Pincus Small Company Value"
(4) Formerly named "Merrill Lynch Basic Value Equity"
(5) Formerly named "Alliance Balanced"
(6) Formerly named "Merrill Lynch World Strategy"
Amounts that you allocate under your policy to any of the variable investment
options are invested in a corresponding "Portfolio" that is part of EQ Advisors
Trust, a mutual fund. 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
between two life insurance benefit options, (6) elect to receive an insurance
benefit if the insured person becomes terminally ill, and (7) obtain certain
optional benefits that we offer by "riders" to your policy.
Your financial professional 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.
72814 R
<PAGE>
CONTENTS OF THIS PROSPECTUS
2 CONTENTS OF THIS PROSPECTUS
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INCENTIVE LIFE
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What is Incentive Life? Cover
Who is Equitable Life? 4
How to reach us 5
Charges and expenses you will pay 7
Risks you should consider 11
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1 POLICY FEATURES AND BENEFITS 12
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How you can pay for and contribute to your policy 12
The minimum amount of premiums you must pay 12
You can guarantee that your policy will not terminate before a certain date 13
You can elect a "paid up" death benefit guarantee 15
Investment options within your policy 16
About your life insurance benefit 17
You can increase or decrease your insurance coverage 18
Other benefits you can add by rider 19
Your options for receiving policy proceeds 20
Your right to cancel within a certain number of days 21
Variations among Incentive Life policies 21
Other Equitable Life policies 21
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2 DETERMINING YOUR POLICY'S VALUE 22
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Your account value 22
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3 TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS 23
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Transfers you can make 23
Telephone and EQAccess transfers 23
Our dollar cost averaging service 23
Our asset rebalancing service 24
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"We," "our" and "us" refer to Equitable Life. "Financial professional" means the
registered representative who is offering you this policy.
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.
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.
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3 CONTENTS OF THIS PROSPECTUS
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4 ACCESSING YOUR MONEY 25
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Borrowing from your policy 25
Making withdrawals from your policy 26
Surrendering your policy for its net cash surrender value 27
Your option to receive a living benefit 27
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5 TAX INFORMATION 28
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Basic tax treatment for you and your beneficiary 28
Tax treatment of distributions to you 28
Tax treatment of living benefit proceeds 30
Effect of policy on interest deductions taken by business entities 30
Requirement that we diversify investments 30
Estate, gift, and generation-skipping taxes 31
Pension and profit-sharing plans 31
Other employee benefit programs 31
ERISA 31
Our taxes 31
When we withhold taxes from distributions 32
Possibility of future tax changes 32
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6 MORE INFORMATION ABOUT PROCEDURES THAT APPLY TO YOUR POLICY 33
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Ways to make premium and loan payments 33
Requirements for surrender requests 33
Ways we pay policy proceeds 33
Assigning your policy 33
Dates and prices at which policy events occur 33
Policy issuance 35
Gender-neutral policies 35
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7 MORE INFORMATION ABOUT OTHER MATTERS 37
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Your voting privileges 37
About our Separate Account FP 37
About our general account 38
You can change your policy's insured person 38
Transfers of your account value 38
Telephone and EQAccess requests 39
Deducting policy charges 39
Customer loyalty credit 40
Suicide and certain misstatements 41
When we pay policy proceeds 41
Changes we can make 41
Reports we will send you 42
Legal proceedings 42
Illustrations of policy benefits 42
SEC registration statement 42
How we market the policies 42
Insurance regulation that applies to Equitable Life 43
Directors and principal officers 44
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8 FINANCIAL STATEMENTS OF SEPARATE ACCOUNT FP AND EQUITABLE LIFE 52
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Separate Account FP financial statements FSA-1
Equitable Life financial statements F-1
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APPENDICES
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I - Investment performance record A-1
II - Our data on market performance B-1
III - An index of key words and phrases C-1
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EQ ADVISORS TRUST PROSPECTUS (follows after page C-1 of this prospectus,
but is not a part of this prospectus)
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<PAGE>
WHO IS EQUITABLE LIFE?
4 WHO IS EQUITABLE LIFE?
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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 subsidiary of AXA Financial, Inc. (previously,
The Equitable Companies Incorporated). The majority shareholder of AXA
Financial, Inc. 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.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$417.4 billion in assets as of September 30, 2000. For more than 100 years
Equitable Life has 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.
As supplemented December 29, 2000.
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5 WHO IS EQUITABLE LIFE?
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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
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BY MAIL:
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at the Post Office Box for our Administrative Office:
P.O. Box 1047
Charlotte, North Carolina 28201-1047
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BY EXPRESS DELIVERY ONLY:
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at the Street Address for our Administrative Office:
Equitable Life-National Operations Center
10840 Ballantyne Commons Parkway
Charlotte, North Carolina 28277
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BY TOLL-FREE PHONE:
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1-888-855-5100 (automated system available 22 hours a
day, from 6 AM to 4 AM, Eastern Time; customer service
representative available weekdays 8 AM to 9 PM, Eastern
Time)
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BY E-MAIL:
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[email protected]
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BY FAX:
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1-704-540-9714
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BY INTERNET:
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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 by clicking on
"Contact Us." You can also access your policy information
through our Web site by enrolling in EQAccess.
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We require that the following types of communications be on specific forms we
provide for that purpose:
(1) request for dollar cost averaging (our automatic transfer service);
(2) authorization for telephone transfers by a person who is not both the
insured person and the owner;
(3) request for asset rebalancing; and
(4) designation of new policy owner(s).
We also have specific forms that we recommend you use for the following:
(a) policy surrenders;
(b) address changes;
(c) beneficiary changes;
(d) transfers between investment options; and
(e) changes in allocation percentages for premiums and deductions.
You can change your allocation percentages and/or transfer among investment
options (1) by toll-free phone or (2) over the Internet, through EQAccess. This
feature is anticipated to be available in EQAccess by the end of 2000. For more
information about transaction requests you can make by phone or over the
Internet, see "Telephone and EQAccess transfers" and "Telephone and EQAccess
requests" later in this prospectus.
Except for properly authorized telephone or Internet transactions, any notice or
request that does not use our standard form must be in writing. It must be dated
and signed by you and should also specify your name, the 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. 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
<PAGE>
6 WHO IS EQUITABLE LIFE?
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procedures permit to exercise the right or privilege in question. If there are
joint owners all 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.
We reserve the right to limit access to telephone, Internet or fax services if
we determine that you are engaged in a market timing strategy. See "Transfer of
your account value - Market timing" later in this prospectus.
<PAGE>
CHARGES AND EXPENSES YOU WILL PAY
7 CHARGES AND EXPENSES YOU WILL PAY
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TABLE OF POLICY CHARGES
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"
later in this prospectus.
<TABLE>
<S> <C> <C>
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CHARGES WE DEDUCT FROM Premium charge (a) 6% of each premium payment you make up to a certain
AMOUNTS YOU CONTRIBUTE amount1 and (b) 3% of each premium payment thereafter
TO YOUR POLICY: (which we may increase up to 6%)(2)
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CHARGES WE DEDUCT FROM Administrative charge(3) (i) For adults (age 18 and older), $20 in each of your
YOUR POLICY'S VALUE EACH policy's first 12 months; or, for children, $10 in each of
MONTH: your policy's first 24 months and (ii) for everyone, $7 in
each subsequent month (which we may increase up
to $10)
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Cost of insurance charges(3) and Amount varies depending on the specifics of your policy(4)
Optional rider charges
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Charge if you have elected our $.02 for each $1,000 of your policy's face amount at the
optional enhanced death time the charge is deducted(5)
benefit guarantee
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CHARGES WE DEDUCT FROM Mortality and expense .60% (effective annual rate) of the value you have in our
YOUR POLICY'S VARIABLE risk charge variable investment options (we may increase this rate up
INVESTMENT PERFORMANCE to .90%)(6)
EACH DAY:
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CHARGES WE DEDUCT FROM Surrender (turning in) of your A surrender charge that will not exceed the amount set
YOUR ACCOUNT VALUE AT THE policy during its first 15 years forth in your policy(7) (we will also deduct the remaining
TIME OF THE TRANSACTION: amount of surrender charge associated with any face
amount increase, as discussed immediately below)
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Surrender of your policy during An amount of surrender charge that we will compute on
the first 15 years after you have essentially the same basis as if each such face amount
requested an increase in your increase had been a separate, newly-issued Incentive Life
policy's face amount policy(8)
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Requested decrease in your A pro rata portion of the full surrender charge that would
policy's face amount apply to a surrender at the time of the decrease
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</TABLE>
<PAGE>
8 CHARGES AND EXPENSES YOU WILL PAY
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(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 financial professional 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, as a result of changes in the
tax laws which increase our expenses.
(3) Not applicable after the insured person reaches age 100.
(4) See "Monthly cost of insurance charge" and "Other benefits you can add by
rider" later in this prospectus.
(5) The "face amount" is the basic amount of insurance coverage under your
policy.
(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 initial amount of surrender charge depends on
each policy's specific characteristics. For any policy, the lowest initial
surrender charge per $1,000 of initial face amount would be $2.91, and the
highest initial surrender charge per $1,000 of initial face amount would be
$12.99.
(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 changes
that we make automatically as a result of any change in your death benefit
option.
<PAGE>
9 CHARGES AND EXPENSES YOU WILL PAY
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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, 1999. 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.
<TABLE>
<CAPTION>
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1999 FEES AND EXPENSES
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TOTAL FEE WAIVERS NET TOTAL
MANAGEMENT OTHER ANNUAL AND/OR EXPENSE ANNUAL
FEE(1) 12b-1 FEE EXPENSES(2) EXPENSES REIMBURSEMENTS(3) EXPENSES
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<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89% - 0.89%
EQ/Balanced 0.57% 0.25% 0.05% 0.87% - 0.87%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75% - 0.75%
Alliance Conservative Investors 0.60% 0.25% 0.07% 0.92% - 0.92%
Alliance Global 0.73% 0.25% 0.09% 1.07% - 1.07%
Alliance Growth & Income 0.59% 0.25% 0.05% 0.89% - 0.89%
Alliance Growth Investors 0.57% 0.25% 0.05% 0.87% - 0.87%
Alliance High Yield 0.60% 0.25% 0.05% 0.90% - 0.90%
Alliance Intermediate Government Securities 0.50% 0.25% 0.07% 0.82% - 0.82%
Alliance International 0.85% 0.25% 0.20% 1.30% - 1.30%
Alliance Money Market 0.34% 0.25% 0.05% 0.64% - 0.64%
EQ/Alliance Premier Growth(4) 0.90% 0.25% 0.23% 1.38% 0.23% 1.15%
Alliance Quality Bond 0.53% 0.25% 0.05% 0.83% - 0.83%
Alliance Small Cap Growth(5) 0.75% 0.25% 0.07% 1.07% - 1.07%
EQ/Alliance Technology(6) 0.90% 0.25% 0.10% 1.25% 0.10% 1.15%
EQ/AXP New Dimensions(7) 0.65% 0.25% 0.09% 0.99% 0.04% 0.95%
EQ/AXP Strategy Aggressive(7) 0.70% 0.25% 0.09% 1.04% 0.04% 1.00%
Capital Guardian Research(4) 0.65% 0.25% 0.47% 1.37% 0.42% 0.95%
Capital Guardian U.S. Equity(4) 0.65% 0.25% 0.34% 1.24% 0.29% 0.95%
EQ Equity 500 Index 0.25% 0.25% 0.05% 0.55% - 0.55%
EQ/Evergreen 0.65% 0.25% 1.87% 2.77% 1.82% 0.95%
EQ/Evergreen Foundation 0.60% 0.25% 1.07% 1.92% 0.97% 0.95%
FI Mid Cap(7) 0.70% 0.25% 0.09% 1.04% 0.04% 1.00%
FI Small/Mid Cap Value 0.75% 0.25% 0.24% 1.24% 0.14% 1.10%
EQ/Janus Large Cap Growth(7) 0.90% 0.25% 0.10% 1.25% 0.10% 1.15%
Mercury Basic Value Equity 0.60% 0.25% 0.17% 1.02% 0.07% 0.95%
Mercury World Strategy 0.70% 0.25% 0.46% 1.41% 0.21% 1.20%
MFS Emerging Growth Companies 0.65% 0.25% 0.17% 1.07% 0.07% 1.00%
MFS Growth with Income 0.60% 0.25% 0.37% 1.22% 0.27% 0.95%
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</TABLE>
As supplemented December 29, 2000
<PAGE>
10 CHARGES AND EXPENSES YOU WILL PAY
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<TABLE>
<CAPTION>
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1999 FEES AND EXPENSES
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TOTAL FEE WAIVERS NET TOTAL
MANAGEMENT OTHER ANNUAL AND/OR EXPENSE ANNUAL
FEE(1) 12b-1 FEE EXPENSES(2) EXPENSES REIMBURSEMENTS(3) EXPENSES
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<S> <C> <C> <C> <C> <C> <C>
MFS Research 0.65% 0.25% 0.17% 1.07% 0.12% 0.95%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 1.00% 2.40% 0.65% 1.75%
EQ/Putnam Balanced 0.60% 0.25% 0.28% 1.13% 0.23% 0.90%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.16% 1.01% 0.06% 0.95%
T. Rowe Price Equity Income 0.60% 0.25% 0.21% 1.06% 0.11% 0.95%
T. Rowe Price International Stock 0.85% 0.25% 0.30% 1.40% 0.15% 1.25%
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</TABLE>
(1) The management fees shown reflect revised management fees, effective on
or about May 1, 2000, which were approved by shareholders. The management
fees shown for FI Small/Mid Cap Value, EQ/Putnam Balanced, EQ/Putnam
Growth & Income Value and T. Rowe Price International Stock do not
reflect the waiver of a portion of each Portfolio's investment management
fees that is currently in effect. The management fee for each Portfolio
cannot be increased without a vote of each Portfolio's shareholders.
(2) On October 18, 1999 the Alliance Portfolios (including EQ Equity 500
Index and other than EQ/Alliance Premier Growth and EQ/Alliance
Technology) became part of EQ Advisors Trust. Other Expenses for these
Portfolios have been restated to reflect the estimated expenses that
would have been incurred, had these Portfolios been portfolios of EQ
Advisors Trust for the full year ended December 31, 1999. The restated
expenses reflect an increase of 0.01% for each of these Portfolios.
(3) Equitable Life, EQ Advisors Trust's manager, has entered into an Expense
Limitation Agreement with respect to certain Portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses of each of these Portfolios, if necessary, in an amount
that limits each Portfolio's Total Annual Expenses (exclusive of
interest, taxes, brokerage commissions, capitalized expenditures,
extraordinary expenses and 12b-1 fees) to not more than the amounts
specified above as Net Total Annual Expenses. Portfolios that show "-" in
this column have no expense limitation arrangement in effect. See the EQ
Advisors Trust prospectus for more information about the Expense
Limitation Agreement. The expense limitations for MFS Emerging Growth
Companies, MFS Growth with Income, MFS Research, Mercury Basic Value
Equity, EQ/Putnam Growth & Income Value, T. Rowe Price Equity Income, T.
Rowe Price International Stock and FI Small/Mid Cap Value Portfolios
reflect an increase effective on May 1, 2000. The expense limitation for
the EQ/Evergreen Portfolio reflects a decrease effective on May 1, 2000.
(4) Initial seed capital was invested in the EQ/Alliance Premier Growth,
Capital Guardian Research and Capital Guardian U.S. Equity Portfolios on
April 30, 1999; thus, Other Expenses for the Portfolios have been
estimated.
(5) Prior to October 18, 1999, Total Annual Expenses for the Alliance Small
Cap Growth Portfolio were limited to 1.20% under an expense limitation
arrangement which is no longer in effect. The amounts shown have been
restated to reflect the expenses that would have been incurred in 1999,
absent the expense limitation arrangement.
(6) Expenses shown are based on annualized estimates for 2000. Initial seed
capital was invested in the EQ/Alliance Technology Portfolio on May 2,
2000.
(7) Initial seed capital was invested in the EQ/AXP New Dimensions, EQ/AXP
Strategy Aggressive, FI Mid Cap and EQ/Janus Large Cap Growth on
September 1, 2000.
As supplemented December 29, 2000
<PAGE>
RISKS YOU SHOULD CONSIDER
11 RISKS YOU SHOULD CONSIDER
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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" below); (2) make a charge for the
operating expenses of our variable investment options (including, without
limitation, SEC registration fees and 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.
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.
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.
<PAGE>
1
POLICY FEATURES AND BENEFITS
12 POLICY FEATURES AND BENEFITS
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Incentive Life is a variable life insurance policy that provides you with
flexible payment plans and benefits to meet your specific needs. The basic terms
of the policy require you to make certain payments in return for life insurance
coverage. The payments you can make and the coverage you can receive in this
'base policy' are described below.
You can also add riders to your base policy that can increase the benefits you
receive and affect the amounts you pay in certain circumstances. Those riders,
including the Incentive Term rider and Ten-year term insurance rider, are
discussed in "Other benefits you can add by rider" below.
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 on an automatic premium payment
plan may have different minimums.) Otherwise, with a few exceptions mentioned
below, you can make premium payments at any time and in any amount.
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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.
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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. See "Tax
information" below. We may return any premium payments that would exceed those
limits to you.
You can ask your financial professional 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 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.
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 amount of premiums is not mandatory.
Rather, you need to pay only the amount of premiums (if any) 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" below).
("Net cash surrender value" is explained under "Surrendering your policy for its
net cash surrender value" below.)
As supplemented December 29, 2000
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13 POLICY FEATURES AND BENEFITS
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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.
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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 pay 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," 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.
YOU CAN GUARANTEE THAT YOUR POLICY WILL NOT TERMINATE BEFORE A CERTAIN DATE
You can generally 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").
In some states, these guarantees may be unavailable, limited to shorter periods,
or referred to by different names.
If your policy is issued with the Incentive Term rider, the "death benefit
guarantee" is not available. See "Other benefits you can add by rider" below for
more information.
We make no extra charge for either of these two 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.
--------------------------------------------------------------------------------
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.
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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
As supplemented December 29, 2000
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14 POLICY FEATURES AND BENEFITS
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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 due 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 a guarantee against termination 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).
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 $1,000 of the
policy's face amount is deducted from your account value for this 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, for the life of the
insured person; 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. It is not available if your policy
is issued with the Incentive Term rider.
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 guarantee 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 after policy issue. 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.
As supplemented December 29, 2000
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15 POLICY FEATURES AND BENEFITS
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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, so long as the guarantee remains in
effect. The guarantee will terminate, however, if (i) at any time following 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 (see "About your life
insurance benefit" below);
o you must terminate any riders to your policy that carry additional charges,
including the Incentive Term rider;
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.
If your policy is issued with the Incentive Term rider, the "paid up" death
benefit guarantee is only available with respect to the base coverage.
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 calculation 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 "Charges and expenses you
will pay" 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, 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 the paid up death benefit guarantee is in effect will
generally be subject to the same terms and conditions as any other partial
withdrawal (see "Making withdrawals from your policy" below), except that:
o We may decline your request for a partial withdrawal (or any other policy
change) under the circumstances described in the paid up death benefit
guarantee policy endorsement. If this occurs, you may wish to consider
asking us to terminate the paid up death benefit guarantee.
As supplemented December 29, 2000
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16 POLICY FEATURES AND BENEFITS
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o Partial withdrawals (and any distributions we may be required to make for
tax purposes) will generally reduce your policy's face amount by more than
the amount of the withdrawal.
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" below. You should consult your tax advisor before making
this election.
INVESTMENT OPTIONS WITHIN YOUR POLICY
We will initially put all amounts which you have allocated to variable
investment options into our Alliance Money Market investment option. On the
first business day following the twentieth day after your policy is issued (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%.
--------------------------------------------------------------------------------
You can choose among variable investment options
--------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS. The available variable investment options 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 advisors who make the investment decisions for each Portfolio are as
follows:
o Alliance Capital Management L.P. (for each "Alliance" or "EQ/Alliance"
option and for EQ Equity 500 Index option; also, jointly advises
EQ/Aggressive Stock and EQ/Balanced)
o American Express Financial Corporation (for the "EQ/AXP" options)
o Bankers Trust Company advises the EQ International Equity Index and the EQ
Small Company Index options.
o Capital Guardian Trust Company (for the "Capital Guardian" options; also,
jointly advises EQ/Balanced)
o Evergreen Asset Management Corp. (for the "EQ/Evergreen" options)
o Fidelity Management & Research Company ( for the "FI" options)
o Janus Capital Corporation (for the "EQ/Janus" option)
o Jennison Associates LLC (jointly advises EQ/Balanced)
o Massachusetts Financial Services Company (for the "MFS" options; also,
jointly advises EQ/Aggressive Stock)
o Mercury Advisors (for both "Mercury" options)
o Morgan Stanley Asset Management Inc. (for the "Morgan Stanley" option)
o Prudential Investments Fund Management LLC (jointly advises EQ/Balanced)
o Putnam Investment Management, Inc. (for both "EQ/Putnam" options)
o T. Rowe Price International, Inc. (for both "T. Rowe Price" options)
Each Portfolio is a part of EQ Advisors Trust. Equitable Life serves as
investment manager of EQ Advisors Trust. As such, Equitable Life oversees the
activities of the above-listed advisors with respect to EQ Advisors Trust and is
responsible for retaining or discontinuing the services of those advisors.
(Prior to September 1999, EQ Financial Consultants, Inc., the predecessor to AXA
Advisors, LLC and an affiliate of Equitable Life, served as investment manager
to EQ Advisors Trust.) You will find other important information about each
Portfolio in the separate prospectus for EQ Advisors Trust
As supplemented December 29, 2000
<PAGE>
17 POLICY FEATURES AND BENEFITS
--------------------------------------------------------------------------------
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. (The
guaranteed interest option is part of what your policy and other supplemental
material may refer to as the "Guaranteed Interest Account".)
--------------------------------------------------------------------------------
We will pay at least 3% annual interest on our guaranteed interest option.
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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 base policy. $50,000 is the
smallest amount of coverage you can request.
If you are applying for $1.1 million or more of coverage, you should consider
whether it would be to your advantage to take out some of your coverage under
our Incentive Term rider. This rider generally provides fewer guarantees and
lower charges. See "Other benefits you can add by rider" below.
--------------------------------------------------------------------------------
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" below.)
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:
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AGE* 40 45 50 55 60 65
AND UNDER
--------------------------------------------------------------------------------
% 250% 215% 185% 150% 130% 120%
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70 75-95 99-OVER
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% 115% 105% 101%
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* For the then-current policy year.
As supplemented December 29, 2000
<PAGE>
18 POLICY FEATURES AND BENEFITS
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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 remain unpaid because the insured person died during a grace
period. 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" below.
--------------------------------------------------------------------------------
You can request a change in 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. Changes from Option A to Option B are not permitted once the insured
person reaches age 81.
If you change from Option B to A, we automatically increase your policy's face
amount by an amount equal to your policy's account value at the time of the
change.
If the alternative death benefit (discussed above) is higher than the base
policy's death benefit at the time of the change in death benefit option,
o we will determine the new base policy face amount somewhat differently from
the general procedures described above, and
o we will automatically reduce the face amount of any Incentive Term rider
that you then have in effect (we discuss the Incentive Term rider below
under "Other benefits you can add by rider").
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" below, to
learn about certain possible income tax consequences that may result from a
change in death benefit option, including the effect of an increase or decrease
in face amount.
YOU CAN INCREASE OR DECREASE YOUR INSURANCE COVERAGE
If the face amount increase endorsement is issued with your policy, 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" 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 or
pay premiums 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 the insured person still meets our requirements for
coverage. Also, we establish additional amounts of
As supplemented December 29, 2000
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19 POLICY FEATURES AND BENEFITS
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surrender charge and guarantee premiums under your policy for the face amount
increase, reflecting the amount of additional coverage.
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.
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. 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 Internal Revenue Code's definition of life
insurance. Guarantee premiums, as well as our monthly deductions for the cost of
insurance coverage, will generally decrease from the time you reduce the face
amount.
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 at the
time of the decrease 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. We may also be required to make such a distribution to
you in the future on account of a prior decrease in face amount.
OTHER BENEFITS YOU CAN ADD BY RIDER
You may be eligible for the following other optional benefits we currently make
available by rider:
o term insurance on the insured person (Ten-year term insurance or Incentive
Term Rider)
o disability waiver benefits
o accidental death benefit
o option to purchase additional insurance
o cost-of-living rider
o children's term insurance
o ten-year term insurance on an additional insured person
Equitable Life or your financial professional can provide you with more
information about these riders. Some of these riders may only be selected at
issue. Some benefits are not available in combination with others. 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 INCENTIVE TERM RIDER. The Incentive Term rider allows you to purchase
additional coverage on the insured person if the face amount of your base
Incentive Life policy is $1,000,000 or more. Choosing term coverage under this
rider in lieu of coverage under your base Incentive Life policy can reduce your
total charges. Our "cost of insurance" charges under the Incentive Term rider
are
As supplemented December 29, 2000
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20 POLICY FEATURES AND BENEFITS
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currently lower than they are for coverage under the base policy, and this
coverage does not have surrender charges. We reserve the right to raise the
insurance rates for this rider at any time so that they exceed the rates for the
base policy. But rates for the term rider will not be raised above the maximum
rates we are permitted to charge under your base policy.
If your policy is issued with an Incentive Term rider, the "death benefit
guarantee" and the "enhanced" death benefit guarantee are not available.
Further, the "paid up" death benefit guarantee is only available with respect to
the base coverage. Therefore, if any of these death benefit guarantees is your
priority, you should not take any coverage under the Incentive Term rider.
If you request a face amount decrease or a partial withdrawal that results in a
face amount decrease or a face amount increase, we will adjust your base policy
face amount and your Incentive Term rider face amount proportionately, so that
the ratio between the two remains the same.
Any change in the death benefit option will not change the Incentive Term
rider's face amount, unless the alternative death benefit is in effect. If it
is, any change in your death benefit option will cause your Incentive Term
rider's face amount to be automatically reduced as discussed above under "Change
of death benefit option" in "Policy Features and Benefits."
When the alternative death benefit becomes applicable, the death benefit under
the base policy is increased and the death benefit under the Incentive Term
rider is automatically reduced by the same amount (but not below zero).
THE OPTION TO PURCHASE ADDITIONAL INSURANCE. 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. 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" 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 policy's beneficiary in your
policy application. You can change the 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.
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. A payment option selected by the policy's owner cannot
be changed by the beneficiary after the insured person dies. The terms and
conditions of each option are set out in a separate contract that we will send
to the payee when a payment option goes into effect. Equitable Life or your
financial professional can provide you with samples of such contracts on
request.
--------------------------------------------------------------------------------
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 AccountTM") that we
will automatically open for the beneficiary. The beneficiary will have immediate
access to
As supplemented December 29, 2000
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21 POLICY FEATURES AND BENEFITS
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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.
If a financial professional has assisted the beneficiary in preparing the
documents that are required for payment of the death benefit, we will send the
Equitable Access Account checkbook or check to the financial professional within
the periods specified for death benefit payments under "When we pay policy
proceeds," below. Our financial professionals will take reasonable steps to
arrange for prompt delivery to the beneficiary.
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.
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 financial professional can advise you about any
variations that may apply to your policy.
OTHER EQUITABLE LIFE POLICIES
We offer a variety of fixed and variable life insurance policies which offer
policy features, including investment options, that are different from those
offered by this prospectus. Not every policy is offered through your financial
professional. You can contact us to find out more about any other Equitable Life
insurance policy.
As supplemented December 29, 2000
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2
DETERMINING YOUR POLICY'S VALUE
22 DETERMINING YOUR POLICY'S VALUE
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YOUR ACCOUNT VALUE
As set forth 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
(including any interest on those amounts which has not yet been allocated to the
variable investment options). See "Borrowing from your policy" 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 "Charges and expenses you will pay."
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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.
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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 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 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.
The value of each unit will increase or decrease each day, as though 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 (see "Table of policy charges" in "Charges
and expenses you will pay" 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.
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" 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.
<PAGE>
3
TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
23 TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
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TRANSFERS YOU CAN MAKE
--------------------------------------------------------------------------------
You can transfer among our variable investment options and into our guaranteed
interest option.
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After your policy's 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, you can make a telephone
request or you can make a request over the Internet (see below).
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Transfers out of our guaranteed interest option are more limited.
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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 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 will never apply to a transfer of all of your variable investment
option amounts to our guaranteed investment option, or to any transfer pursuant
to our dollar cost averaging or asset rebalancing service, as discussed below.
TELEPHONE AND EQACCESS TRANSFERS
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 sending us a signed
telephone transfer authorization form. 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 and EQAccess requests" later in this
prospectus. We allow only one request for telephone transfers each day (although
that 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.
EQACCESS TRANSFERS. By the end of 2000, we anticipate that you will be able to
make transfers over the Internet. You may do this by visiting our Web site and
enrolling in EQAccess. This service may not always be available. Generally, the
restrictions relating to telephone transfers apply to EQAccess transfers.
MARKET TIMING. We reserve the right to limit your access to telephone or
EQAccess transfers if we determine that you are engaged in a market timing
strategy. See "Transfers of your account value - Market timing" later in this
prospectus.
OUR DOLLAR COST AVERAGING SERVICE
We offer 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.
<PAGE>
24 TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
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Using the dollar cost averaging service does not guarantee that you will earn a
profit or be protected against losses.
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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 may elect the
dollar cost averaging service with your policy application or at any later time
(provided you are not using the asset rebalancing service described below). At
least $5,000 must be allocated to the Alliance Money Market option to begin
using the dollar cost averaging service. You can choose up to eight other
variable investment options to receive the automatic transfers, but each
transfer to each option must be at least $50.
This service terminates when the Alliance Money Market option is depleted. You
can also cancel the dollar cost averaging service at any time. You may not
simultaneously participate in the asset rebalancing service and the dollar cost
averaging service.
OUR ASSET REBALANCING SERVICE
You may wish us to periodically redistribute the amounts you have in our
variable investment options so that the relative amount of your account value in
each variable option is restored to an asset allocation that you select. You can
accomplish this automatically through our asset rebalancing service. The
rebalancing may be at quarterly, semiannual, or annual intervals.
You may specify asset allocation percentages for up to eight variable investment
options. The allocation percentage you specify for each variable investment
option selected must be at least 5% (whole percentage only) of the total value
you hold under the variable investment options, and the sum of the percentages
must equal 100%. You may not simultaneously participate in the asset rebalancing
service and the dollar cost averaging service (discussed above).
You may request the asset rebalancing service in your policy application or at
any later time. You may change your allocation instructions or discontinue
participation in the asset rebalancing service at any time.
<PAGE>
4
ACCESSING YOUR MONEY
25 ACCESSING YOUR MONEY
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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" below.
--------------------------------------------------------------------------------
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.
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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
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 loan 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.
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.
We credit interest on your loan collateral daily. On each anniversary of your
policy (or when your policy loans are fully
<PAGE>
26 ACCESSING YOUR MONEY
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repaid) 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. Even if a loan is not taxable when made, it may later become taxable, for
example, upon termination or surrender. See "Tax information" 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.
--------------------------------------------------------------------------------
You can withdraw all or part of your policy's net cash surrender value, although
you may 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. 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 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" below, for information about possible tax
consequences of partial withdrawals and any associated reduction in policy
benefits.
<PAGE>
27 ACCESSING YOUR MONEY
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A partial withdrawal may increase the chance that your policy could lapse
because of insufficient value to pay policy charges as they fall due.
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 in "Charges and expenses you will pay" above.
Please refer to "Tax information" 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 (generally 75%) 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).
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.
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You can arrange to receive a "living benefit" if the insured person becomes
terminally ill.
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<PAGE>
5
TAX INFORMATION
28 TAX INFORMATION
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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 generally
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 policy, such as a surrender, a
partial withdrawal, loan or a payment to you.
There may be different tax consequences if you assign your policy or designate a
new owner. See "Assigning your policy" 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.
<PAGE>
29 TAX INFORMATION
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In addition to the above premium limits for testing for modified endowment
status, there are overall limits on the amount of premiums you may pay under
your policy in order for it to qualify as life insurance. Changes made to your
policy, for example, a decrease in face amount (including any decrease that may
occur as a result of a partial withdrawal) or other decrease in benefits may
impact the maximum amount of premiums that can be paid, as well as the maximum
amount of account value that may be maintained under the policy. In some cases,
this may cause us to take current or future action in order to assure that your
policy continues to qualify as life insurance, including distribution of amounts
to you that may be includible as income. See "Changes we can make" below.
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, although interest credited on loan
collateral may become taxable under the rules below if distributed.
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 591/2, (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
<PAGE>
30 TAX INFORMATION
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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 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 pending legislative proposals which might further restrict
available exceptions to this limit on interest deductions or make other tax law
changes with respect to such coverage.
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
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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 $675,000 (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 deductible or 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
(indexed annually for inflation, $1,030,000 for 2000).
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
advisor.
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. Among other issues, 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
As supplemented December 29, 2000.
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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 tax expenses 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 a satisfactory written 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, and you may incur penalties under the
estimated income tax rules. 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.
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 or clarifying 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 or change of
interpretation. Any changes in federal, state, local or foreign tax law or
interpretations could have a retroactive effect both on our taxes and on the way
your policy is taxed.
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
Portfolios within an insurance policy 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.
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This section provides further detail about certain subjects that are addressed
in the previous pages. 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, or any payments in
foreign currency, 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.
REQUIREMENTS FOR SURRENDER REQUESTS
Your surrender request must include the policy number, your name, your tax
identification number, 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. We may also
require you to complete specific tax forms.
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, to effect a change of ownership 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.
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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 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 result from a withdrawal
o changes of allocation percentages for premium payments or monthly deductions
o surrenders
o changes of beneficiary
o transfers from a variable investment option to the guaranteed interest
option
o changes in form of death benefit payment
o loans
o transfers among variable investment options
o assignments
o termination of paid up death benefit guarantee
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 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 (automatic transfer service) occur as of the first day of each policy
month. If you request the dollar cost averaging service in your original policy
application, the first transfer will occur as of the first day of the second
policy month after your policy's initial Allocation Date. If you request this
service at any later time, 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.
ASSET REBALANCING SERVICE. If you request the asset rebalancing service, the
first redistribution will be on the date you specify or the date we receive your
request, if later. However, no rebalancing will occur before your policy's
Allocation Date. Subsequent periodic rebalancings occur quarterly, semiannually
or annually, as you have requested.
DELAY IN CERTAIN CASES. We may delay allocating any payment you make to our
variable investment options, or
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any transfer, for the same reasons stated in "Delay of variable investment
option proceeds" 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 financial
professional 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 your financial professional 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) 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 request and review a copy of our temporary
insurance agreement 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
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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.
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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). 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 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
semiannual 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) of Separate Account FP available
under Incentive Life invests solely in class IB shares issued by the
corresponding Portfolio of 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,
to the trustee of a qualified plan for Equitable Life, and 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 EQ Advisors 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 Trust's Portfolios is so large as to
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materially impair the investment performance of the Portfolio 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" above.
You should consult your tax advisor prior to substituting the insured 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. Similarly, the asset rebalancing
program will terminate if either (2) or (3) occurs.
MARKET TIMING. You should note that the product is not designed for professional
"market timing" organizations, or other organizations or individuals engaging in
a market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the underlying
mutual
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fund portfolios in which the variable investment options invest. If we determine
that your transfer patterns among the variable investment options reflect a
market timing strategy, we reserve the right to take action including, but not
limited to: restricting the availability of transfers through telephone
requests, facsimile transmissions, automated telephone services, Internet
services or any electronic transfer services. We may also refuse to act on
transfer instructions of an agent acting under a power of attorney who is acting
on behalf of more than one owner.
TELEPHONE AND EQACCESS REQUESTS
If you are a properly authorized person, you may make transfers between
investment options by telephone or over the Internet as described above under
"Telephone and EQAccess transfers."
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 (anticipated to be available
through EQAccess by the end of 2000)
o changes of address
For security purposes, 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 you wish to participate in EQAccess, you must first agree to the terms and
conditions set forth in our EQAccess Online Services Agreement, which you can
find at our Web site. For security purposes, you may not initiate any
transactions relating to your policy for five (5) days after you have elected to
use EQAccess. We will send you a confirmation letter by first class mail.
Additionally, you will be required to use a password and protect it from
unauthorized use. We will provide subsequent written confirmation of any
EQAccess transactions. We will assume that all instructions received through
EQAccess from anyone using your password are given by you; however, we reserve
the right to refuse to process any transaction and/or block access to EQAccess
if we have reason to believe the instructions given are unauthorized.
If we do not employ reasonable procedures to confirm the genuineness of
telephone or Internet 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 or Internet instructions that we reasonably believe to be
genuine.
We reserve the right to refuse to process any telephone or Internet transactions
if we have reason to believe that the request compromises the general security
and/or integrity of our automated systems (see discussion of "Market timing"
above).
Any telephone or Internet transaction request that we receive 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 or Internet
request. If this occurs, you should submit a written transaction request to our
Administrative Office. We reserve the right to discontinue telephone or Internet
transactions, or modify the procedures and conditions for such transactions,
without notifying you, 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 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
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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 1980 Commissioner's 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 1980 Commissioner's 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 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 and tax expenses 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.
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41 MORE INFORMATION ABOUT OTHER MATTERS
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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.
CLEARANCE OF CHECKS. We reserve the right to defer payment of that portion of
your account value that is attributable to a premium payment or loan repayment
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 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 to the extent
required by law. We may, for example, cause the variable investment option to
invest in a mutual fund other than, or in addition to, EQ Advisors Trust.
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42 MORE INFORMATION ABOUT OTHER MATTERS
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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. Subject to all
applicable legal requirements, we also 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 your premium payments, loan
repayments, 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 when you purchase your policy and upon request thereafter. 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 assumed rates of return (within limits)
that you request. 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 AXA Advisors, LLC ("AXA Advisors"), the
successor to EQ Financial Consultants, Inc. and an affiliate of Equitable Life.
The Investment Company Act of 1940, therefore, classifies AXA Advisors as the
"principal underwriter" of those policies and contracts. AXA Advisors also
serves as a principal underwriter of EQ Advisors Trust and, prior to September
1999, AXA Advisors' predecessor was the manager of EQ Advisors Trust. AXA
Advisors' address is 1290 Avenue of the Americas, New York, NY 10104. AXA
Advisors is registered with the SEC as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc. In 1998 and 1999, AXA Advisors
was paid a fee of $325,380, annually, for its services as principal underwriter
of our policies.
We sell Incentive Life through financial professionals who are licensed
insurance agents and are also registered representatives of AXA Advisors. The
financial professional 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 4% of all other premiums paid in your
policy's first year; plus 4% of
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43 MORE INFORMATION ABOUT OTHER MATTERS
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the amount of the premium you pay in the second through tenth years; plus 3% of
all other premiums you pay in subsequent years. 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. Use of the
Incentive Term rider instead of an equal amount of coverage under the base
policy generally reduces commissions. Therefore, an agent may receive a higher
commission for selling you a policy that does not include a term rider.
We also sell the policies through financial professionals who are licensed
independent insurance brokers and are also registered representatives either of
AXA Advisors 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.
As supplemented December 29, 2000
<PAGE>
DIRECTORS AND PRINCIPAL OFFICERS
44 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,
New York 10104.
<TABLE>
<CAPTION>
DIRECTORS
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NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
----------------------------------------------------------------------------------------------------------------------------------
FRANCOISE COLLOC'H
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AXA Director of Equitable Life (since July 1992). Member of the AXA Management Board
25, Avenue Matignon and Group Executive President, Human Resources, Communication and Synergies of
75008 Paris, France AXA (since January 2000). Prior thereto, Senior Executive Vice President, AXA
(1993-2000). Director or officer of various subsidiaries and affiliates of the AXA
Group.
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HENRI DE CASTRIES
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AXA Director of Equitable Life (since September 1993). Chairman of the Board of AXA
25, Avenue Matignon Financial (since April 1998); Vice Chairman (February 1996 to April 1998). Vice
75008 Paris, France Chairman of AXA's Management Board and CEO (since January 2000). Prior thereto,
Senior Executive Vice President, Financial Services and Life Insurance Activities in the
United States, Germany, the United Kingdom and Benelux (1996 to 2000); Executive
Vice President, Financial Services and Life Insurance Activities (1993 to 1996) of AXA.
Director or officer of various subsidiaries and affiliates of the AXA Group. Director of
DLJ and Alliance Capital Management Corporation, the general partner of Alliance
Holding and Alliance.
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CLAUS-MICHAEL DILL
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AXA Colonia Konzern AG Director of Equitable Life (since May 2000). Chairman of the Management Board of
Gereonsdriesch 9-11 AXA Colonia Konzern AG (since June 1999). Member of the Management Board
50670 Cologne, Germany since April 1999. Prior thereto, member of the Holding Management Board of
Gerling-Konzern in Cologne (1995 to April 1999). Chairman of the Management
Board of AXA Colonia Versicherung AG, AXA Colonia Lebensversicherung AG,
Colonia Nordstern Versicherungs-Management AG and Colonia Nordstern
Lebensversicherungs-Management AG (since June 1999). Director of AXA Financial
(since May 2000).
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JOSEPH L. DIONNE
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The McGraw-Hill Companies Director of Equitable Life (since May 1982). Retired Chairman of The McGraw-Hill
1221 Avenue of the Americas Companies (since January 2000) and retired Director (since April 2000); prior thereto,
New York, NY 10020 Chairman (April 1988 to January 2000) and Chief Executive Officer (April 1983 to
April 1998). Director of Harris Corporation and Ryder System, Inc. Director of AXA
Financial, Inc. (since May, 1992).
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DENIS DUVERNE
----------------------------------------------------------------------------------------------------------------------------------
AXA Director of Equitable Life (since February 1998). Executive Vice President,
25, Avenue Matignon International (US-UK-Benelux) AXA and member of AXA Executive Board (since
75008 Paris, France January, 2000). Director, Alliance (since February 1996) and Donaldson Lufkin &
Jenrette ("DLJ") (since February 1997).
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</TABLE>
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45 DIRECTORS AND PRINCIPAL OFFICERS
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<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
----------------------------------------------------------------------------------------------------------------------------------
JEAN-RENE FOURTOU
----------------------------------------------------------------------------------------------------------------------------------
Aventis Director of Equitable Life (since July 1992). Vice Chairman of the Management Board
25, Quai Paul Doumer of Aventis (since December 1999). Prior thereto, Chairman and Chief Executive
92408 Courbevoie Cedex Officer of Rhone-Poulenc, S.A. (1986 to December 1999). Member of the Supervisory
France Board of AXA. Director of Schneider Electric, Paribas, and Groupe Pernod-Ricard.
Member of the Consulting Council of Banque de France. Director, AXA Financial
(since July, 1992).
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NORMAN C. FRANCIS
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Xavier University of Louisiana Director of Equitable Life (since March 1989). President of Xavier University of
7325 Palmetto Street Louisiana; Director, Piccadilly Cafeterias, Inc., and Entergy Corporation.
New Orleans, LA 70125
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DONALD J. GREENE
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LeBouef, Lamb, Greene & MacRae, L.L.P. Director of Equitable Life (since July 1991). Of Counsel, LeBoeuf, Lamb, Greene &
125 West 55th Street MacRae, L.L.P. (since 1999). Prior thereto, Partner of the firm (1965 to 1999).
New York, NY 10019-4513 Director of AXA Financial (since May 1992).
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JOHN T. HARTLEY
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1025 NASA Boulevard Director of Equitable Life (since August 1987). Currently a Director and retired
Melbourne, FL 32919 Chairman and Chief Executive Officer of Harris Corporation (retired July 1995);
previously held other officerships with Harris Corporation. Director of AXA Financial
(since May 1992); Director of the McGraw Hill Companies.
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JOHN H.F. HASKELL JR.
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Warburg Dillon Read LLC Director of Equitable Life (since July 1992); Director of AXA Financial (since July
294, Park Avenue 1992); Director, Senior Advisor of Warburg Dillon Read LLC (since 1999); Prior
New York, NY 10171 thereto, Managing Director and member of its Board of Directors (1975-1999);
Chairman, Supervisory Board, Dillon Read (France) Gestion (until 1998); Director, Pall
Corporation (since November 1998).
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NINA HENDERSON
----------------------------------------------------------------------------------------------------------------------------------
Bestfoods Director of Equitable Life (since December 1996). Corporate Vice President, Core
International Plaza Business Development of Bestfoods (since June 1999). Prior thereto, President,
700 Sylvan Avenue Bestfoods Grocery and Vice President, Bestfoods (formerly CPC International, Inc.)
Englewood Cliffs, NJ 07632-9976 (1997 to 1999). President, Bestfoods Specialty Markets Group (1993 to 1997);
Director, Hunt Corporation and PACTIV Corporation. Director, AXA Financial (since
December 1996).
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W. EDWIN JARMAIN
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Jarmain Group Inc. Director of Equitable Life (since July 1992). President, Jarmain Group Inc. (since
121 King Street West 1979); and officer or director of several affiliated companies. Director, DLJ (since
Suite 2525 October 1992), Alliance Capital Management Corporation (since May 2000), AXA
Toronto, Ontario M5H 3T9 Insurance (Canada), Anglo Canada General Insurance Company, and AXA Pacific
Canada Insurance Company, and Alternate Director, AXA Asia Pacific Holdings. Chairman
(non-executive) and Director, FCA International Ltd. (January 1994 to May 1998).
Director of AXA Financial, Inc. (since July 1992).
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</TABLE>
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46 DIRECTORS AND PRINCIPAL OFFICERS
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DIRECTORS (CONTINUED)
<TABLE>
<CAPTION>
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NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
----------------------------------------------------------------------------------------------------------------------------------
GEORGE T. LOWY
----------------------------------------------------------------------------------------------------------------------------------
Cravath, Swaine & Moore Director of Equitable Life (since July 1992). Partner, Cravath, Swaine & Moore.
825 Eighth Avenue Director, Eramet.
New York, NY 10019
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DIDIER PINEAU-VALENCIENNE
----------------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Director of Equitable Life (since February 1996). Vice Chairman Credit Suisse First
c/o Schneider Electric Boston (since March 1999). Chairman and Chief Executive Officer (1981 to February
64, rue de Miromesnil 1999) (now Honorary Chairman) Schneider Electric. Member of the Supervisory Board
75008 Paris, France of AXA. Director of CGIP, Aventis (formerly Rhone-Poulenc, S.A.), Sema Group PLC
(UK), Soft Computing and Swiss Helvetic Fund; member of the Advisory Board of
Booz-Allen & Hamilton. Director of AXA Financial, Inc. (since February 1996).
----------------------------------------------------------------------------------------------------------------------------------
GEORGE J. SELLA, JR.
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P.O. Box 397 Director of Equitable Life (since May 1987). Retired Chairman and Chief Executive
Newton, NJ 07860 Officer of American Cyanamid Company (retired April 1993); previously held other
officerships with American Cyanamid. Director of AXA Financial (since May 1992) and
Coulter Pharmaceutical (since May 1987).
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PETER J. TOBIN
----------------------------------------------------------------------------------------------------------------------------------
St. John's University Director of Equitable Life (since March 1999); Dean of the Peter J. Tobin College of
8000 Utopia Parkway Business Administration, St. John's University (since August 1998); Chief Financial
Jamaica, NY 11439 Officer, Chase Manhattan Corp. (1985 to 1997). Director of Alliance Capital
Management Corporation (since May 2000), the CIT Group, Inc. and H.W. Wilson
Company.
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DAVE H. WILLIAMS
----------------------------------------------------------------------------------------------------------------------------------
Alliance Capital Management Director of Equitable Life (since March 1991). Chairman (since 1977) and former
Corporation Chief Executive Officer (1977 to January 1999), of Alliance, and Chairman or Director
1345 Avenue of the Americas of numerous subsidiaries and affiliated companies of Alliance. Senior Executive Vice
New York, NY 10105 President of AXA (January 1997 to January 2000). Director of AXA Financial (since
May 1992).
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</TABLE>
<PAGE>
47 DIRECTORS AND PRINCIPAL OFFICERS
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OFFICERS - DIRECTORS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
----------------------------------------------------------------------------------------------------------------------------------
MICHAEL HEGARTY
----------------------------------------------------------------------------------------------------------------------------------
Director of Equitable Life (since January 1998). President (since January 1998) and
Chief Operating Officer (since February 1998), Equitable Life. Senior Vice Chairman
(since November 1999), Vice Chairman (since April 1998), Senior Executive Vice
President (January 1998 to April 1998), and Director and Chief Operating Officer
(both since January 1998), AXA Financial. Director, President and Chief Operating
Officer, Equitable of Colorado (since December 1999); AXA Client Solutions & AXA
Distribution Holding Corp. (since September 1999). 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. Director,
ACMC, Inc. ("ACMC") (since March 1998). Trustee, EQ Advisors Trust. Director,
Alliance and DLJ (both since May 1998).
----------------------------------------------------------------------------------------------------------------------------------
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), AXA Financial. Director, Chairman of the Board and Chief
Executive Officer, Equitable of Colorado (since December 1999); AXA Client Solutions
and AXA Distribution Holding Corp. (since September 1999). Member of the
Management Board of AXA (since January 2000); 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), ACMC, Inc. (since
March 1998), and AXA Canada (since September 1998). Director, KeySpan Energy
Corporation.
----------------------------------------------------------------------------------------------------------------------------------
STANLEY B. TULIN
----------------------------------------------------------------------------------------------------------------------------------
Director and Vice Chairman of the Board (since February 1998), and Chief Financial
Officer (since May 1996), Equitable Life. Vice Chairman of the Board (since November
1999) and Chief Financial Officer (since May 1997) and prior thereto, Senior
Executive Vice President (February 1998 to November 1999), AXA Financial. Director,
Vice Chairman and Chief Financial Officer (since December 1999) Equitable of
Colorado; AXA Client Solutions, LLC and AXA Distributions Holding Corp. (since
September 1999). Vice President (until 1998), EQ ADVISORS TRUST. Director,
Alliance (since July 1997), and DLJ (since June 1997). Prior thereto, Chairman,
Insurance Consulting and Actuarial Practice, Coopers & Lybrand, L.L.P.
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
48 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OTHER OFFICERS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
----------------------------------------------------------------------------------------------------------------------------------
LEON B. BILLIS
----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since February 1998) and Chief Information Officer (since
November 1994), Equitable Life and AXA Client Solutions (since September 1999).
Previously held other officerships with Equitable Life.
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DERRY E. BISHOP
----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since September 1998), Managing Director of Retail
Distribution (since July 2000 to); Chief Agency Officer, (since December 1997), and
Senior Vice President (January 1995 to September 1998), Equitable Life; Director and
Executive Vice President, AXA Advisors LLC and Executive Vice President and Chief
Agency Officer, AXA Client Solutions, LLC (all since September 1999). Prior thereto,
Director (since 1995) and Executive Vice President (since 1994) EQF (now AXA
Advisors).
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HARVEY BLITZ
----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President, Equitable Life. Senior Vice President, AXA Financial. Director
and Chairman, Frontier Trust Company, FSB ("Frontier"). Director, EQF (now AXA
Advisors) (until September 1999). Executive Vice President and Director (since
September 1999), AXA Advisors, Director (until May 1996). Director and Senior Vice
President, AXA Network, LLC (formerly EquiSource). Director and Officer of various
Equitable Life affiliates. Previously held other officerships with Equitable Life and its
affiliates.
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KEVIN R. BYRNE
----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President and Treasurer, Equitable Life and AXA Financial. Senior Vice
President and Treasurer, AXA Client Solutions, LLC; Equitable of Colorado (since
December 1999). Treasurer, Frontier (since 1990) and AXA Network, LLC (since
1999). Chairman (since August 2000) and Chief Executive Officer (since
September 1997) Equitable Casualty Insurance Company ("Casualty"). Vice President
and Treasurer, EQ ADVISORS TRUST (since March 1997). Director, Chairman,
President and Chief Executive Officer, Equitable JV Holdings (since August 1997).
Director (since July 1997), and Senior Vice President and Chief Financial Officer (since
April 1998), ACMC. Previously held other officerships with Equitable Life and its
affiliates.
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JOHN A. CAROSELLI
----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since September 1998), Equitable Life; Senior Vice
President, Equitable Life (February 1998 to September 1998); Senior Vice President,
Chase Manhattan Corp. (1996 to 1998); Vice President, Chemical Bank (1991 to 1996).
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
49 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OTHER OFFICERS (CONTINUED)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
----------------------------------------------------------------------------------------------------------------------------------
JUDY A. FAUCETT
----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President, Equitable Life, (since September 1996) and Actuary (September
1996 to December 1998). 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, AXA Client Solutions, LLC and
AXA Financial. Senior Vice President and Controller, The Equitable of Colorado, Inc.
(since December 1999). Previously held other officerships with Equitable Life and its
affiliates.
----------------------------------------------------------------------------------------------------------------------------------
PAUL J. FLORA
----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President and Auditor, Equitable Life. AXA Financial and AXA Client
Solutions, LLC.
----------------------------------------------------------------------------------------------------------------------------------
ROBERT E. GARBER
----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President and Chief Legal Officer (since November 1999), Equitable
Life; prior thereto, Executive Vice President and General Counsel. General Counsel of
AXA Financial. Executive Vice President and Chief Legal Officer of AXA Client
Solutions, LLC. Previously held other officerships with Equitable Life and its
affiliates.
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DONALD R. KAPLAN
----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President (since September 1999), Chief Compliance Officer and
Associate General Counsel, Equitable Life. Senior Vice President, AXA Client
Solutions, LLC. Previously held other officerships with Equitable Life.
----------------------------------------------------------------------------------------------------------------------------------
MICHAEL S. MARTIN
----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since September 1998) and Managing Director of Retail
Distribution (since July 2000) Chief Marketing Officer (December 1997 to), Equitable
Life; prior thereto, Senior Vice President and Chief Marketing Officer. Chairman and
Chief Executive Officer, AXA Advisors LLC (since September 1999). Executive Vice
President and Managing Director of Retail Distribution, AXA Client Solutions, LLC
(since September 1999). Vice President, EQ ADVISORS TRUST (until April 1998).
Director, Equitable Underwriting and Sales Agency (Bahamas), Ltd. and AXA
Network, LLC; Executive Vice President (since December 1998), Colorado. Previously
held other officerships with Equitable Life and its affiliates.
----------------------------------------------------------------------------------------------------------------------------------
RICHARD J. MATTEIS
----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President, Equitable Life (since May 1998); Executive Vice President,
AXA Client Solutions, LLC (since September 1999); Executive Vice President, Chase
Manhattan Corporation (January 1983 to June 1997); Director, EQF (now AXA
Advisors) (October 1998 to May 1999).
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</TABLE>
<PAGE>
50 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OTHER OFFICERS (CONTINUED)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
----------------------------------------------------------------------------------------------------------------------------------
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), AXA
Financial. Chairman, President and Trustee (since March 1997), EQ ADVISORS TRUST.
Executive Vice President and Chief Investment Officer, Equitable of Colorado (since
December 1999), Executive Vice President, AXA Client Solutions (since
September 1999). Director, Alliance, and Equitable Real Estate (until June 1997).
Executive Vice President, EQF (now AXA Advisors) (since August 1999). Director,
EREIM Managers Corp. (since July 1997), and EREIM LP Corp. (since October 1997).
----------------------------------------------------------------------------------------------------------------------------------
BRIAN S. O'NEIL
----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President, Equitable Life (since June 1998). Executive Vice President,
AXA Client Solutions (since September 1999). Director of Investment, AXA
Investment Management (January 1998 to June 1998); Chief Investment Officer, AXA
Investment Management (July 1995 to January 1998). Trustee (since September
1999), EQ ADVISORS TRUST.
----------------------------------------------------------------------------------------------------------------------------------
ANTHONY C. PASQUALE
----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President, Equitable Life and AXA Client Solutions (since September
1999). Director, Chairman and Chief Operating Officer, Casualty, (September 1997 to
August 2000). Director, Equitable Agri-Business, Inc. (until June 1997). Previously
held other officerships with Equitable Life and its affiliates.
----------------------------------------------------------------------------------------------------------------------------------
PAULINE SHERMAN
----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President (since February 1999); Vice President, Secretary and Associate
General Counsel, Equitable Life and AXA Financial, (since September 1995). Senior
Vice President, Secretary and Associate General Counsel, AXA Financial and AXA
Client Solutions (since November 1999). Senior Vice President, Secretary, and
Associate General Counsel, Equitable of Colorado (since December 1999). Previously
held other officerships with Equitable Life.
----------------------------------------------------------------------------------------------------------------------------------
RICHARD V. SILVER
----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President (since February 1995) and General Counsel (since November
1999) Equitable Life; prior thereto, Deputy General Counsel (1996-1999). Senior Vice
President (since September 1996) and Deputy General Counsel (since September
1999), AXA Financial. Senior Vice President and General Counsel, AXA Client
Solutions (since November 1999). Senior Vice President and General Counsel,
Equitable of Colorado (since December 1999). Director, AXA Advisors. Senior Vice
President and General Counsel, EIC (June 1997 to March 1998). Previously held other
officerships with Equitable Life and its affiliates.
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
51 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OTHER OFFICERS (CONTINUED)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
----------------------------------------------------------------------------------------------------------------------------------
JOSE S. SUQUET
----------------------------------------------------------------------------------------------------------------------------------
Senior Executive Vice President (since February 1998), Chief Distribution Officer (since
December 1997) and Chief Agency Officer (August 1994 to December 1997),
Equitable Life. Senior Executive Vice President, AXA Financial. Senior Executive Vice
President and Chief Distribution Officer, AXA Client Solutions (since September
1999). Senior Executive Vice President, Equitable of Colorado (since December 1999).
Chairman (since December 1997), EDI. Prior thereto, Agency Manager.
----------------------------------------------------------------------------------------------------------------------------------
GREGORY G. WILCOX
----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since September 1998), Senior Vice President (May 1992 to
September 1998), Equitable Life. Executive Vice President (since November 1999),
AXA Financial; prior thereto, Senior Vice President. Executive Vice President, AXA
Client Solutions, LLC (since September 1999).
----------------------------------------------------------------------------------------------------------------------------------
R. LEE WILSON
----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since May 1998) and Deputy Chief Financial Officer
(September 1998 to July 1999), Equitable Life. Executive Vice President, AXA Client
Solutions (since September 1999). Prior thereto, Executive Vice President, Chase
Manhattan Bank.
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
8
FINANCIAL STATEMENTS OF SEPARATE ACCOUNT FP AND EQUITABLE LIFE
52 FINANCIAL STATEMENTS OF SEPARATE ACCOUNT FP AND EQUITABLE LIFE
--------------------------------------------------------------------------------
The financial statements of Separate Account FP as of December 31, 1999 and for
each of the three years in the period ended December 31, 1999 and the financial
statements of Equitable Life as of December 31, 1999 and 1998 and for each of
the three years in the period ended December 31, 1999 included in this
prospectus have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, 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.
<PAGE>
53 FINANCIAL STATEMENTS OF SEPARATE ACCOUNT FP AND EQUITABLE LIFE
--------------------------------------------------------------------------------
[Insert 12/99 Financial Statements for Sep Acct FP and ELAS]
<PAGE>
APPENDIX I:
INVESTMENT PERFORMANCE RECORD
A-1 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 in the EQ Advisors
Trust prospectus attached at the end of this prospectus. The performance figures
on which the tables are based are after deduction of all fees and expenses paid
by the Trust or any of the Portfolios.
For periods prior to October 18, 1999, the "Alliance" Portfolios (other than
EQ/Alliance Premier Growth and EQ/Alliance Technology) were part of The Hudson
River Trust. On October 18, 1999, these Portfolios became corresponding
Portfolios of EQ Advisors Trust. In each case, the performance shown is for the
indicated EQ Advisors Trust Portfolio and any predecessors that it may have had.
In addition, we have adjusted the results for these Portfolios prior to the
dates when the Class IB shares for these Portfolios were available, to reflect
the 12b-1 fees currently imposed.
Class IB shares of Alliance Money Market, Alliance High Yield, Alliance Common
Stock, Alliance Global, EQ/Aggressive Stock* and Alliance Growth Investors
Portfolios first became available in EQ Advisors Trust's predecessor on October
2, 1996. Class IB shares of Alliance Intermediate Government Securities,
Alliance Growth & Income, Alliance International, Alliance Small Cap Growth,
Alliance Conservative and EQ Equity 500 Index*** Investors Portfolios first
became available in the Trust's predecessor on May 1, 1997. Class IB shares of
Alliance Quality Bond and EQ/Balanced** Portfolios first became available in the
Trust's predecessor on July 8, 1998.
---------------------
* Previously "Alliance Aggressive Stock"
** Previously "Alliance Balanced"
*** Previously "Alliance Equity Index"
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" in 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 financial professional will
provide. You can request Equitable Life or your financial professional to
provide you with such illustrations at any time, whether before or after you
purchase a policy.
In a few cases, the return information shown in the first table below 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 second table below provides additional performance information
from the date that those investment options actually received initial funding.
<PAGE>
A-2 APPENDIX I: INVESTMENT PERFORMANCE RECORD
--------------------------------------------------------------------------------
AVERAGE ANNUAL RATE OF RETURN
AFTER DEDUCTION OF MORTALITY AND EXPENSE
RISK CHARGE FOR PERIODS ENDING
DECEMBER 31, 1999*
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
SINCE PORTFOLIO
INCEPTION
VARIABLE INVESTMENT OPTION 1 YR. 3 YRS. 5 YRS. 10 YRS. 20 YRS. (DATE**)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FIXED INCOME
--------------------------------------------------------------------------------------------------------------------------------
Alliance High Yield ............................. (4.16%) 1.92% 8.92% 9.30% - 8.44% (1/2/87)
Alliance Intermediate Government Securities ..... (0.71%) 4.07% 5.45% - - 5.37% (4/1/91)
Alliance Money Market ........................... 4.10% 4.35% 4.47% 4.29% - 6.06% (7/13/81)
Alliance Quality Bond ........................... (2.84%) 4.16% 6.51% - - 4.03% (10/1/93)
--------------------------------------------------------------------------------------------------------------------------------
DOMESTIC STOCKS
--------------------------------------------------------------------------------------------------------------------------------
EQ/Aggressive Stock ........................... 17.83% 8.83% 15.35% 15.71% - 16.92% (1/27/86)
Alliance Common Stock ......................... 24.13% 26.89% 26.97% 17.59% 17.39% 15.76% (1/13/76)
Alliance Growth & Income ...................... 17.66% 21.07% 21.06% - - 16.17% (10/1/93)
Alliance Small Cap Growth ..................... 26.86% - - - - 16.95% (5/1/97)
EQ Equity 500 Index ........................... 19.36% 25.99% 26.84% - - 22.69% (3/1/94)
EQ/Evergreen ................................. 9.06% - - - - 9.06% (12/31/98)
FI Small/Mid Cap Value ........................ 1.19% - - - - 2.71% (5/1/97)
EQ/Putnam Growth & Income Value ............... (1.95%) - - - - 9.46% (5/1/97)
MFS Emerging Growth Companies ................. 72.63% - - - - 47.38% (5/1/97)
MFS Growth with Income ........................ 8.06% - - - - 8.06% (12/31/98)
MFS Research .................................. 22.38% - - - - 23.20% (5/1/97)
Mercury Basic Value Equity .................... 18.23% - - - - 17.23% (5/1/97)
T. Rowe Price Equity Income ................... 2.93% - - - - 12.14% (5/1/97)
--------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL STOCKS
--------------------------------------------------------------------------------------------------------------------------------
Alliance Global ............................... 37.34% 22.46% 19.70% 14.86% - 13.52% (8/27/87)
Alliance International ........................ 36.62% 12.78% - - - 12.19% (4/3/95)
Morgan Stanley Emerging Markets Equity ........ 94.57% - - - - 5.07% (8/20/97)
T. Rowe Price International Stock ............. 31.08% - - - - 15.04% (5/1/97)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
As supplemented December 29, 2000
<PAGE>
A-3 APPENDIX I: INVESTMENT PERFORMANCE RECORD
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
SINCE PORTFOLIO
VARIABLE INVESTMENT OPTION 1 YR. 3 YRS. 5 YRS. 10 YRS. 20 YRS. INCEPTION (DATE**)
----------------------------------------------------------------------------------------------------------------------------------
BALANCED/HYBRID INVESTMENT OPTIONS
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alliance Conservative Investors ......... 9.21% 11.44% 11.50% 9.00% - 9.07% (10/2/89)
Alliance Growth Investors ............... 25.51% 19.77% 19.14% 16.08% - 16.08% (10/2/89)
EQ/Balanced ............................. 16.80% 15.52% 15.18% 10.70% - 12.06% (1/27/86)
EQ/Evergreen Foundation ................. 6.72% - - - - 6.72% (12/31/98)
EQ/Putnam Balanced ...................... (0.56%) - - - - 9.05% (5/1/97)
Mercury World Strategy .................. 20.62% - - - - 11.45% (5/1/97)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* No performance information is shown for EQ/Alliance Technology as that
Portfolio had not received its initial funding prior to December 31,
1999. No performance information is shown for EQ/Alliance Premier Growth,
Capital Guardian Research or Capital Guardian U.S. Equity, as these
Portfolios became available after December 31, 1998. The inception dates
for these Portfolios is April 30, 1999. Additionally, no performance
information is shown for EQ/AXP New Dimensions, EQ/AXP Strategy
Aggressive, FI Mid Cap and EQ/Janus Large Cap Growth, as these Portfolios
became available after December 31, 1998. The inception dates for these
Portfolios is September 1, 2000.
** The inception date shown is the date that the relevant Portfolio (or its
predecessor) received its initial funding.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
AVERAGE ANNUAL RATES OF RETURN FOR PERIODS ENDING
DECEMBER 31, 1999 SINCE VARIABLE INVESTMENT OPTION
VARIABLE INVESTMENT OPTION INCEPTION (DATE)
---------------------------------------------------------------------------------
<S> <C>
Alliance Common Stock 17.40% (1/27/86)
Alliance Money Market 4.91% (1/27/86)
---------------------------------------------------------------------------------
</TABLE>
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, 1999
--------------------------------------------------------------------------------
7 DAYS 30 DAYS
--------------------------------------------------------------------------------
<S> <C> <C>
Alliance High Yield - 12.30%
Alliance Intermediate Government Securities - 5.02%
Alliance Money Market 4.42% -
Alliance Quality Bond - 5.77%
--------------------------------------------------------------------------------
</TABLE>
The information in the tables above is not a guarantee, a prediction, or
necessarily an indication of future performance.
As supplemented December 29, 2000
<PAGE>
APPENDIX II: OUR DATA ON MARKET PERFORMANCE
B-1 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>
<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:
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 Trust. 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.
<PAGE>
B-2 APPENDIX II: OUR DATA ON MARKET PERFORMANCE
--------------------------------------------------------------------------------
The chart below illustrates the average annual compound rates of return over
selected time periods between December 31, 1926 and December 31, 1999 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.
AVERAGE ANNUAL RATES OF RETURN
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
LONG-TERM LONG-TERM INTERMEDIATE-
FOR THE FOLLOWING PERIODS COMMON GOVERNMENT CORPORATE TERM GOV'T U.S. TREASURY CONSUMER
ENDING DECEMBER 31, 1999 STOCKS BONDS BONDS BONDS BILLS PRICE INDEX
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year 21.04% (8.96)% (7.45)% (1.77)% 4.68% 2.81%
3 Years 27.56% 6.04% 5.01% 5.47% 4.93% 2.04%
5 years 28.55% 9.24% 8.35% 6.95% 5.12% 2.39%
10 years 18.20% 8.79% 8.36% 7.20% 4.92% 2.94%
20 years 17.87% 10.69% 10.66% 9.53% 6.89% 4.01%
30 years 13.72% 8.94% 9.17% 8.68% 6.69% 5.12%
40 years 12.22% 7.01% 7.24% 7.35% 5.98% 4.46%
50 years 13.61% 5.56% 5.97% 6.12% 5.15% 4.01%
60 years 12.86% 5.17% 5.42% 5.39% 4.34% 4.24%
Since 1926 11.35% 5.12% 5.61% 5.22% 3.79% 3.07%
Inflation Adjusted Since 1926 8.03% 1.98% 2.46% 2.08% 0.69% 0.00%
------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Ibbotson, Roger G. and Rex A. Sinquefield, STOCKS, BONDS, BILLS, AND
INFLATION (SBBI), 1982, updated in STOCKS, BONDS, BILLS, AND INFLATION 2000
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 1969-1999, 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 1969-1999; 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.
Consumer Price Index - Measured by the Consumer Price Index for all Urban
Consumers (CPI-U), not seasonally adjusted.
<PAGE>
APPENDIX III: AN INDEX OF KEY WORDS AND PHRASES
C-1 APPENDIX III: AN INDEX OF KEY WORDS AND PHRASES
--------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
PAGE
account value 21
Administrative office 5
age 34
Allocation date 15
alternative death benefit 17
amount at risk 38
anniversary 34
assign; assignment 32
automatic transfer service 22
AXA Advisors, LLC 41
AXA Financial, Inc. 4
basis 28
beneficiary 19
business day 33
Cash Surrender Value 26
Code 27
collateral 24
cost of insurance charge 38
cost of insurance rates 38
customer loyalty credit 39
day 33
death benefit guarantee 14
default 12
dollar cost averaging service 22
enhanced death benefit guarantee 14
EQAccess 5
EQ Advisors Trust 16
EQ Financial Consultants 41
Equitable Life 4
Equitable Access Account 19
face amount 16
grace period 12
guaranteed interest option 16
guarantee premium 13
Guaranteed Interest Account 16
Incentive Life cover
insured person 17
investment funds 16
investment option 15
issue date 34
lapse 12
loan, loan interest 24
modified endowment contract 12
month, year 34
monthly deduction 7
net cash surrender value 26
no-lapse guarantee 13
Option A, B 17
our 2
owner 2
paid up 27
paid up death benefit guarantee 14
partial withdrawal 25
payment option 19
planned periodic premium 12
policy cover
Portfolio cover
premium payments 12
prospectus cover
rebalancing 23
receive 33
restore, restoration 13
rider 19
SEC cover
Separate Account FP 36
state 2
subaccount 36
surrender 26
surrender charge 7
target premium 8
telephone transfers 22
transfers 22
Trust 16
units 21
unit values 21
us 2
variable investment option 16
we 2
withdrawal 25
you, your 2
<PAGE>
Incentive Life(SM)
A flexible premium variable life
insurance policy
PROSPECTUS DATED MAY 1, 2000 AS SUPPLEMENTED DECEMBER 29, 2000.
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 prospectus for EQ Advisors Trust, which contains important
information about its 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 financial
professional 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:
--------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS:
--------------------------------------------------------------------------------
o EQ/Aggressive Stock(1) o Lazard Small Cap Value
o Alliance Money Market o MFS Growth with Income
o Alliance High Yield o MFS Research
o Alliance Common Stock o MFS Emerging Growth
o Alliance Small Cap Growth Companies
o EQ/Alliance Premier Growth o Morgan Stanley Emerging
o EQ/Alliance Technology Markets Equity
o EQ Equity 500 Index(2) o EQ/Putnam Growth & Income
o EQ Small Company Index(3) Value
o EQ International Equity o EQ/Putnam Investors Growth
Index(4) o EQ/Putnam International
o Capital Guardian U.S. Equity Equity
o Capital Guardian Research
o Capital Guardian International
o FI Mid Cap
o FI Small/MidCap Value
o EQ/Janus Large Cap Growth
o J.P. Morgan Core Bond(5)
o Lazard Large Cap Value
--------------------------------------------------------------------------------
(1) Formerly named "Alliance Aggressive Stock"
(2) Formerly named "Alliance Equity Index"
(3) Formerly named "BT Small Company Index"
(4) Formerly named "BT International Equity Index"
(5) Formerly named "JPM Core Bond"
Amounts that you allocate under your policy to any of the variable investment
options are invested in a corresponding "Portfolio" that is part of EQ Advisors
Trust, a mutual fund. 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
between two life insurance benefit options, (6) elect to receive an insurance
benefit if the insured person becomes terminally ill, and (7) obtain certain
optional benefits that we offer by "riders" to your policy.
Your financial professional 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.
73352
<PAGE>
CONTENTS OF THIS PROSPECTUS
2 CONTENTS OF THIS PROSPECTUS
--------------------------------------------------------------------------------
INCENTIVE LIFE
--------------------------------------------------------------------------------
What is Incentive Life? Cover
Who is Equitable Life? 4
How to reach us 5
Charges and expenses you will pay 7
Risks you should consider 11
--------------------------------------------------------------------------------
1 POLICY FEATURES AND BENEFITS 12
--------------------------------------------------------------------------------
How you can pay for and contribute to your policy 12
The minimum amount of premiums you must pay 12
You can guarantee that your policy will not terminate
before a certain date 13
You can elect a "paid up" death benefit guarantee 15
Investment options within your policy 16
About your life insurance benefit 17
You can increase or decrease your insurance coverage 18
Other benefits you can add by rider 19
Your options for receiving policy proceeds 20
Your right to cancel within a certain number of days 21
Variations among Incentive Life policies 21
Other Equitable Life policies 21
--------------------------------------------------------------------------------
2 DETERMINING YOUR POLICY'S VALUE 22
--------------------------------------------------------------------------------
Your account value 22
--------------------------------------------------------------------------------
3 TRANSFERRING YOUR MONEY AMONG OUR
INVESTMENT OPTIONS 23
--------------------------------------------------------------------------------
Transfers you can make 23
Telephone and EQAccess transfers 23
Our dollar cost averaging service 23
Our asset rebalancing service 24
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
"We," "our" and "us" refers to Equitable Life. "Financial professional" means
the registered representative who is offering you this policy.
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.
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.
<PAGE>
3 CONTENTS OF THIS PROSPECTUS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4 ACCESSING YOUR MONEY 25
--------------------------------------------------------------------------------
Borrowing from your policy 25
Making withdrawals from your policy 26
Surrendering your policy for its net cash
surrender value 27
Your option to receive a living benefit 27
--------------------------------------------------------------------------------
5 TAX INFORMATION 28
--------------------------------------------------------------------------------
Basic tax treatment for you and your beneficiary 28
Tax treatment of distributions to you 28
Tax treatment of living benefit proceeds 30
Effect of policy on interest deductions taken by
business entities 30
Requirement that we diversify investments 30
Estate, gift, and generation-skipping taxes 31
Pension and profit-sharing plans 31
Other employee benefit programs 31
ERISA 31
Our taxes 31
When we withhold taxes from distributions 32
Possibility of future tax changes 32
--------------------------------------------------------------------------------
6 MORE INFORMATION ABOUT PROCEDURES
THAT APPLY TO YOUR POLICY 33
--------------------------------------------------------------------------------
Ways to make premium and loan payments 33
Requirements for surrender requests 33
Ways we pay policy proceeds 33
Assigning your policy 33
Dates and prices at which policy events occur 33
Policy issuance 35
Gender-neutral policies 35
--------------------------------------------------------------------------------
7 MORE INFORMATION ABOUT OTHER MATTERS 37
--------------------------------------------------------------------------------
Your voting privileges 37
About our Separate Account FP 37
About our general account 38
You can change your policy's insured person 38
Transfers of your account value 38
Telephone and EQAccess requests 39
Deducting policy charges 39
Customer loyalty credit 40
Suicide and certain misstatements 41
When we pay policy proceeds 41
Changes we can make 41
Reports we will send you 42
Legal proceedings 42
Illustrations of policy benefits 42
SEC registration statement 42
How we market the policies 42
Insurance regulation that applies to Equitable Life 43
Directors and principal officers 44
--------------------------------------------------------------------------------
8 FINANCIAL STATEMENTS OF SEPARATE
ACCOUNT FP AND EQUITABLE LIFE 52
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Separate Account FP financial statements FSA-1
Equitable Life financial statements F-1
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APPENDICES
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I - Investment performance record A-1
II - Our data on market performance B-1
III - An index of key words and phrases C-1
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EQ ADVISORS TRUST PROSPECTUS (follows after page C-1 of this prospectus, but is
not a part of this prospectus)
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<PAGE>
WHO IS EQUITABLE LIFE?
4 WHO IS EQUITABLE LIFE?
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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 subsidiary of AXA Financial, Inc. (previously
The Equitable Companies Incorporated). The majority shareholder of AXA
Financial, Inc. 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.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$417.4 billion in assets as of September 30, 2000. For more than 100 years
Equitable Life has 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.
As supplemented December 29, 2000.
<PAGE>
5 WHO IS EQUITABLE LIFE?
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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
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BY MAIL:
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at the Post Office Box for our Administrative Office:
Equitable Life - EDI Service Center
P.O. Box 1047
Charlotte, North Carolina 28201-1047
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BY EXPRESS DELIVERY ONLY:
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at the Street Address for our Administrative Office:
Equitable Life - EDI Service Center
10840 Ballantyne Commons Parkway
Charlotte, North Carolina 28277
1-704-341-7000 (for express delivery purposes only)
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BY TOLL-FREE PHONE:
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1-888-228-6690
(automated system available 22 hours a day from 6AM to 4AM
Eastern Time; customer service representative available
weekdays 8AM to 9PM, Eastern Time)
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BY E-MAIL:
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[email protected]
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BY FAX:
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1-704-540-2199
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BY INTERNET:
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Our Web site (www.equitable.com) can also provide you
information. You can access your policy information through
our Web site by enrolling in EQAccess.
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We require that the following types of communications be on specific forms we
provide for that purpose:
(1) request for dollar cost averaging (our automatic transfer service);
(2) authorization for telephone transfers by a person who is not both the
insured person and the owner;
(3) request for asset rebalancing; and
(4) designation of new policy owner(s).
We also have specific forms that we recommend you use for the following:
(a) policy surrenders;
(b) address changes;
(c) beneficiary changes;
(d) transfers between investment options; and
(e) changes in allocation percentages for premiums and deductions.
You can change your allocation percentages and/or transfer among investment
options (1) by toll-free phone or (2) over the Internet through EQAccess. This
feature is anticipated to be available in EQAccess by the end of 2000. For more
information about transaction requests you can make by phone or over the
Internet, see "Telephone and EQAccess transfers" and "Telephone and EQAccess
requests" later in this prospectus.
Except for properly authorized telephone or Internet transactions, any notice or
request that does not use our standard form must be in writing. It must be dated
and signed by you and should also specify your name, the 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. 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 all must sign. Any
As supplemented December 29, 2000
<PAGE>
6 WHO IS EQUITABLE LIFE?
--------------------------------------------------------------------------------
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.
We reserve the right to limit access to telephone, Internet or fax services if
we determine that you are engaged in a market timing strategy. See "Transfers of
your account value - Market timing" later in this prospectus.
<PAGE>
CHARGES AND EXPENSES YOU WILL PAY
7 CHARGES AND EXPENSES YOU WILL PAY
--------------------------------------------------------------------------------
TABLE OF POLICY CHARGES
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"
later in this prospectus.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CHARGES WE DEDUCT FROM Premium charge (a) 6% of each premium payment you make up to a certain
AMOUNTS YOU CONTRIBUTE amount(1) and (b) 3% of each premium payment thereafter
TO YOUR POLICY: (which we may increase up to 6%)(2)
----------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM Administrative charge(3) (i) For adults (age 18 and older), $20 in each of your
YOUR POLICY'S VALUE EACH policy's first 12 months; or, for children, $10 in each of
MONTH: your 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 Amount varies depending on the specifics of your policy(4)
Optional rider charges
------------------------------------------------------------------------------------------------
Charge if you have elected our $.02 for each $1,000 of your policy's face amount at the
optional enhanced death time the charge is deducted(5)
benefit guarantee
----------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM Mortality and expense .60% (effective annual rate) of the value you have in our
YOUR POLICY'S VARIABLE risk charge variable investment options (we may increase this rate up
INVESTMENT PERFORMANCE to .90%)(6)
EACH DAY:
----------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM Surrender (turning in) of your A surrender charge that will not exceed the amount set
YOUR ACCOUNT VALUE AT THE policy during its first 15 years forth in your policy(7) (we will also deduct the remaining
TIME OF THE TRANSACTION: amount of surrender charge associated with any face
amount increase, as discussed immediately below)
------------------------------------------------------------------------------------------------
Surrender of your policy during An amount of surrender charge that we will compute on
the first 15 years after you have essentially the same basis as if each such face amount
requested an increase in your increase had been a separate, newly-issued Incentive Life
policy's face amount policy(8)
------------------------------------------------------------------------------------------------
Requested decrease in your A pro rata portion of the full surrender charge that would
policy's face amount apply to a surrender at the time of the decrease
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
8 CHARGES AND EXPENSES YOU WILL PAY
--------------------------------------------------------------------------------
(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 financial professional 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, as a result of changes in the
tax laws which increase our expenses.
(3) Not applicable after the insured person reaches age 100.
(4) See "Monthly cost of insurance charge" and "Other benefits you can add by
rider" later in this prospectus.
(5) The "face amount" is the basic amount of insurance coverage under your
policy.
(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 initial amount of surrender charge depends on
each policy's specific characteristics. For any policy, the lowest initial
surrender charge per $1,000 of initial face amount would be $2.91, and the
highest initial surrender charge per $1,000 of initial face amount would be
$12.99.
(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 changes
that we make automatically as a result of any change in your death benefit
option.
<PAGE>
9 CHARGES AND EXPENSES YOU WILL PAY
--------------------------------------------------------------------------------
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, 1999. 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.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
1999 FEES AND EXPENSES
--------------------------------------------------------------------------------------------------------------------------------
TOTAL FEE WAIVERS NET TOTAL
MANAGEMENT OTHER ANNUAL AND/OR EXPENSE ANNUAL
FEE(1) 12B-1 FEE EXPENSES(2) EXPENSES REIMBURSEMENTS(3) EXPENSES
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89% - 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75% - 0.75%
Alliance High Yield 0.60% 0.25% 0.05% 0.90% - 0.90%
Alliance Money Market 0.34% 0.25% 0.05% 0.64% - 0.64%
EQ/Alliance Premier Growth(4) 0.90% 0.25% 0.23% 1.38% 0.23% 1.15%
Alliance Small Cap Growth(5) 0.75% 0.25% 0.07% 1.07% - 1.07%
EQ/Alliance Technology(6) 0.90% 0.25% 0.10% 1.25% 0.10% 1.15%
EQ Equity 500 Index 0.25% 0.25% 0.05% 0.55% - 0.55%
EQ Small Company Index 0.25% 0.25% 0.71% 1.21% 0.46% 0.75%
EQ International Equity Index 0.35% 0.25% 0.49% 1.09% 0.09% 1.00%
Capital Guardian International(4) 0.85% 0.25% 0.66% 1.76% 0.56% 1.20%
Capital Guardian Research(4) 0.65% 0.25% 0.47% 1.37% 0.42% 0.95%
Capital Guardian U.S. Equity(4) 0.65% 0.25% 0.34% 1.24% 0.29% 0.95%
FI Mid Cap(7) 0.70% 0.25% 0.09% 1.04% 0.04% 1.00%
FI Small/MidCap Value 0.75% 0.25% 0.24% 1.24% 0.14% 1.10%
EQ/Janus Large Cap(7) 0.90% 0.25% 0.10% 1.25% 0.10% 1.15%
J.P. Morgan Core Bond 0.45% 0.25% 0.20% 0.90% 0.10% 0.80%
Lazard Large Cap Value 0.65% 0.25% 0.21% 1.11% 0.16% 0.95%
Lazard Small Cap Value 0.75% 0.25% 0.26% 1.26% 0.16% 1.10%
MFS Emerging Growth Companies 0.65% 0.25% 0.17% 1.07% 0.07% 1.00%
MFS Growth with Income 0.60% 0.25% 0.37% 1.22% 0.27% 0.95%
MFS Research 0.65% 0.25% 0.17% 1.07% 0.12% 0.95%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 1.00% 2.40% 0.65% 1.75%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.16% 1.01% 0.06% 0.95%
EQ/Putnam Investors Growth 0.65% 0.25% 0.19% 1.09% 0.14% 0.95%
EQ/Putnam International Equity 0.85% 0.25% 0.32% 1.42% 0.17% 1.25%
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
As supplemented December 29, 2000.
<PAGE>
10 CHARGES AND EXPENSES YOU WILL PAY
--------------------------------------------------------------------------------
(1) The management fees shown reflect revised management fees, effective on or
about May 1, 2000, which were approved by shareholders. The management fees
shown for EQ/Putnam Growth & Income Value, FI Small/MidCap Value and Lazard
Large Cap Value do not reflect the waiver of a portion of each Portfolio's
investment management fees that is currently in effect. The management fee
for each Portfolio cannot be increased without a vote of each Portfolio's
shareholders.
(2) On October 18, 1999 the Alliance Money Market, Alliance High Yield,
Alliance Common Stock, Alliance Small Cap Growth, EQ Equity 500 Index and
EQ/Aggressive Stock Portfolios became part of EQ Advisors Trust. Other
Expenses for these Portfolios have been restated to reflect the estimated
expenses that would have been incurred, had these Portfolios been
portfolios of EQ Advisors Trust for the full year ended December 31, 1999.
The restated expenses reflect an increase of 0.01% for each of these
Portfolios.
(3) Equitable Life, EQ Advisors Trust's manager, has entered into an Expense
Limitation Agreement with respect to certain Portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses of each of these Portfolios, if necessary, in an amount that
limits each Portfolio's Total Annual Expenses (exclusive of interest,
taxes, brokerage commissions, capitalized expenditures and extraordinary
expenses) to not more than the amounts specified above as Net Total Annual
Expenses. Portfolios that show "-" in this column have no expense
limitation arrangement in effect. See the EQ Advisors Trust prospectus for
more information about the Expense Limitation Agreement. The expense
limitations for the EQ Equity 500 Index, MFS Emerging Growth Companies, MFS
Growth with Income, MFS Research, EQ/Putnam International Equity and
EQ/Putnam Growth & Income Value Portfolios reflect an increase effective on
May 1, 2000. The expense limitation for the Lazard Small Cap Value
Portfolios reflects a decrease effective on May 1, 2000.
(4) Initial seed capital was invested in the EQ/Alliance Premier Growth,
Capital Guardian International, Capital Guardian Research and Capital
Guardian U.S. Equity Portfolios on April 30, 1999; thus, Other Expenses
for these Portfolios have been estimated.
(5) Prior to October 18, 1999, Total Annual Expenses for the Alliance Small Cap
Growth Portfolio were limited to 1.20% under an expense limitation
arrangement which is no longer in effect. The amounts shown have been
restated to reflect the expenses that would have been incurred in 1999,
absent the expense limitation arrangement.
(6) Expenses shown are based on annualized estimates for 2000. Initial seed
capital was invested in the EQ/Alliance Technology Portfolio on May 2,
2000.
(7) Initial seed capital was invested in the FI Mid Cap and EQ/Janus Large Cap
Growth Portfolios on September 1, 2000.
As supplemented December 29, 2000.
<PAGE>
RISKS YOU SHOULD CONSIDER
11 RISKS YOU SHOULD CONSIDER
--------------------------------------------------------------------------------
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" below); (2) make a charge for the
operating expenses of our variable investment options (including, without
limitation, SEC registration fees and 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.
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.
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.
<PAGE>
1
POLICY FEATURES AND BENEFITS
12 POLICY FEATURES AND BENEFITS
--------------------------------------------------------------------------------
Incentive Life is a variable life insurance policy that provides you with
flexible payment plans and benefits to meet your specific needs. The basic terms
of the policy require you to make certain payments in return for life insurance
coverage. The payments you can make and the coverage you can receive in this
"base policy" are described below.
You can also add riders to your base policy that can increase the benefits you
receive and affect the amounts you pay in certain circumstances. Those riders,
including the Incentive Term rider and Ten-year term insurance rider, are
discussed in "other benefits you can add by rider" below.
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 on an automatic premium payment
plan may have different minimums.) Otherwise, with a few exceptions mentioned
below, you can make premium payments at any time and in any amount.
--------------------------------------------------------------------------------
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. See "Tax
information" below. We may return any premium payments that would exceed those
limits to you.
You can ask your financial professional 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 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.
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 amount of premiums is not mandatory.
Rather, you need to pay only the amount of premiums (if any) 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" below).
("Net cash surrender value" is explained under "Surrendering your policy for its
net cash surrender value" below.)
As supplemented December 29, 2000.
<PAGE>
13 POLICY FEATURES AND BENEFITS
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
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 pay 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," 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.
YOU CAN GUARANTEE THAT YOUR POLICY WILL NOT TERMINATE BEFORE A CERTAIN DATE
You can generally 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").
In some states, these guarantees may be unavailable, limited to shorter periods,
or referred to by different names.
If your policy is issued with the Incentive Term rider, the "death benefit
guarantee" is not available. See "Other benefits you can add by rider" below for
more information.
We make no extra charge for either of these two 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.
--------------------------------------------------------------------------------
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
As supplemented December 29, 2000.
<PAGE>
14 POLICY FEATURES AND BENEFITS
--------------------------------------------------------------------------------
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 due 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 a guarantee against termination 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).
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 $1,000 of the
policy's face amount is deducted from your account value for this 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, for the life of the
insured person; 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. It is not available if your policy
is issued with the Incentive Term rider.
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 guarantee 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 after policy issue. 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.
As supplemented December 29, 2000.
<PAGE>
15 POLICY FEATURES AND BENEFITS
--------------------------------------------------------------------------------
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, so long as the guarantee remains in
effect. The guarantee will terminate, however, if (i) at any time following 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 (see "About your life
insurance benefit" below);
o you must terminate any riders to your policy that carry additional charges,
including the Incentive Term rider;
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.
If your policy is issued with the Incentive Term rider, the "paid up" death
benefit guarantee is only available with respect to the base coverage.
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 calculation 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 "Charges and expenses you
will pay" 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, 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 the paid up death benefit guarantee is in effect will
generally be subject to the same terms and conditions as any other partial
withdrawal (see "Making withdrawals from your policy" below), except that:
o We may decline your request for a partial withdrawal (or any other policy
change) under the circumstances described in the paid up death benefit
guarantee policy endorsement. If this occurs, you may wish to consider
asking us to terminate the paid up death benefit guarantee.
As supplemented December 29, 2000.
<PAGE>
16 POLICY FEATURES AND BENEFITS
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o Partial withdrawals (and any distributions we may be required to make for
tax purposes) will generally reduce your policy's face amount by more than
the amount of the withdrawal.
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" below. You should consult your tax advisor before making
this election.
INVESTMENT OPTIONS WITHIN YOUR POLICY
We will initially put all amounts which you have allocated to variable
investment options into our Alliance Money Market investment option. On the
first business day following the twentieth day after your policy is issued (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%.
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You can choose among variable investment options
--------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS. The available variable investment options 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 advisors who make the investment decisions for each Portfolio are as
follows:
o Alliance Capital Management L.P. (for each "Alliance" or "EQ/Alliance"
option, EQ Small Company Index, EQ International Equity Index and EQ Equity
500 Index, also, jointly advises EQ/Aggressive Stock)
o Bankers Trust Company advises the EQ International Equity Index and the EQ
Small Company Index options
o Capital Guardian Trust Company (for the "Capital Guardian" options)
o Fidelity Management & Research Company (for the "FI" options)
o Janus Capital Corporation (for the "EQ/Janus" option)
o J.P. Morgan Investment Management Inc. (for the "J.P. Morgan" option)
o Lazard Asset Management (for both "Lazard" options)
o Massachusetts Financial Services Company (for the "MFS" options; also,
jointly advises EQ/Aggressive Stock)
o Morgan Stanley Asset Management Inc. (for the "Morgan Stanley" option)
o Putnam Investment Management, Inc. (for both "EQ/Putnam" options)
Each Portfolio is a part of EQ Advisors Trust. Equitable Life serves as
investment manager of EQ Advisors Trust. As such, Equitable Life 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.
(Prior to September 1999, EQ Financial Consultants, Inc., the predecessor to AXA
Advisors, LLC and an affiliate of Equitable Life, served as investment manager
to EQ Advisors Trust.) You will find other important information about each
Portfolio in the separate prospectus for 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. (The
guaranteed interest option
As supplemented December 29, 2000.
<PAGE>
17 POLICY FEATURES AND BENEFITS
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is part of what your policy and other supplemental material may refer to as the
"Guaranteed Interest Account".)
--------------------------------------------------------------------------------
We will pay at least 3% annual interest on our guaranteed interest option.
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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 base policy. $50,000 is the
smallest amount of coverage you can request.
If you are applying for $1.1 million or more of coverage, you should consider
whether it would be to your advantage to take out some of your coverage under
our Incentive Term rider. This rider generally provides fewer guarantees and
lower charges. See "Other benefits you can add by rider" below.
--------------------------------------------------------------------------------
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" below.)
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:
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AGE* 40 45 50 55 60 65
AND UNDER
--------------------------------------------------------------------------------
% 250% 215% 185% 150% 130% 120%
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70 75-95 99-OVER
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% 115% 105% 101%
--------------------------------------------------------------------------------
* 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.
As supplemented December 29, 2000.
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18 POLICY FEATURES AND BENEFITS
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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 remain unpaid because the insured person died during a grace
period. 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" below.)
--------------------------------------------------------------------------------
You can request a change in 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. Changes from Option A to Option B are not permitted once the insured
person reaches age 81.
If you change from Option B to A, we automatically increase your policy's face
amount by an amount equal to your policy's account value at the time of the
change.
If the alternative death benefit (discussed above) is higher than the base
policy's death benefit at the time of the change in death benefit option,
o we will determine the new base policy face amount somewhat differently from
the general procedures described above, and
o we will automatically reduce the face amount of any Incentive Term rider
that you then have in effect (we discuss the Incentive Term rider below
under "Other benefits you can add by rider").
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" below, to
learn about certain possible income tax consequences that may result from a
change in death benefit option, including the effect of an increase or decrease
in face amount.
YOU CAN INCREASE OR DECREASE YOUR INSURANCE COVERAGE
If the face amount increase endorsement is issued with your policy, 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" 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 or
pay premiums 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 the insured person still meets our requirements for
coverage. Also, we establish additional amounts of surrender charge and
guarantee premiums under your policy for the face amount increase, reflecting
the amount of additional coverage.
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.
The monthly insurance charge we make for the amount of the increase will be
based on the age and other insurance
<PAGE>
19 POLICY FEATURES AND BENEFITS
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risk characteristics of the insured person at the time of the increase. 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 Internal Revenue Code's definition of life
insurance. Guarantee premiums, as well as our monthly deductions for the cost of
insurance coverage, will generally decrease from the time you reduce the face
amount.
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 at the
time of the decrease 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. We may also be required to make such a distribution to
you in the future on account of a prior decrease in face amount.
OTHER BENEFITS YOU CAN ADD BY RIDER
You may be eligible for the following other optional benefits we currently make
available by rider:
o term insurance on the insured person (Ten-year term insurance or Incentive
Term rider)
o disability waiver benefits
o accidental death benefit
o option to purchase additional insurance
o cost-of-living rider
o children's term insurance
o ten-year term insurance on an additional insured person
Equitable Life or your financial professional can provide you with more
information about these riders. Some of these riders may only be selected at
issue. Some benefits are not available in combination with others. 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 INCENTIVE TERM RIDER. The Incentive Term rider allows you to purchase
additional coverage on the insured person if the face amount of your base
Incentive Life policy is $1,000,000 or more. Choosing term coverage under this
rider in lieu of coverage under your base incentive life policy can reduce your
total charges. Our "cost of insurance" charges under the Incentive Term rider
are currently lower than they are for coverage under the base policy, and this
coverage does not have surrender charges. We reserve the right to raise the
insurance rates for this rider at any time so that they exceed the rates for the
base policy. But rates for the term rider will not be raised above the maximum
rates we are permitted to charge under your base policy.
If your policy is issued with an Incentive Term rider, the "death benefit
guarantee" and the "enhanced" death benefit guarantee are not available.
Further, the "paid up" death benefit guarantee is only available with respect to
the base coverage. Therefore, if any of these death benefit
As supplemented December 29, 2000.
<PAGE>
20 POLICY FEATURES AND BENEFITS
--------------------------------------------------------------------------------
guarantees is your priority, you should not take any coverage under the
Incentive Term rider.
If you request a face amount decrease or a partial withdrawal that results in a
face amount decrease or a face amount increase, we will adjust your base policy
face amount and your Incentive Term rider face amount proportionately, so that
the ratio between the two remains the same.
Any change in the death benefit option will not change the Incentive Term
rider's face amount, unless the alternative death benefit is in effect. If it
is, any change in your death benefit option will cause your Incentive Term
rider's face amount to be automatically reduced as discussed above under "Change
of death benefit option" in "Policy Features and Benefits."
When the alternative death benefit becomes applicable, the death benefit under
the base policy is increased and the death benefit under the Incentive Term
rider is automatically reduced by the same amount (but not below zero).
THE OPTION TO PURCHASE ADDITIONAL INSURANCE. 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. 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" 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 policy's beneficiary in your
policy application. You can change the 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.
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. A payment option selected by the policy's owner cannot
be changed by the beneficiary after the insured person dies. The terms and
conditions of each option are set out in a separate contract that we will send
to the payee when a payment option goes into effect. Equitable Life or your
financial professional can provide you with samples of such contracts on
request.
--------------------------------------------------------------------------------
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.
If a financial professional has assisted the beneficiary in preparing the
documents that are required for payment of the death benefit, we will send the
Equitable Access Account checkbook or check to the financial professional within
the periods specified for death benefit payments under "When we pay policy
proceeds," below. Our financial professionals will take reasonable steps to
arrange for prompt delivery to the beneficiary.
As supplemented December 29, 2000.
<PAGE>
21 POLICY FEATURES AND BENEFITS
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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.
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 financial professional can advise you about any
variations that may apply to your policy.
OTHER EQUITABLE LIFE POLICIES
We offer a variety of fixed and variable life insurance policies which offer
policy features, including investment options, that are different from those
offered by this prospectus. Not every policy is offered through your financial
professional. You can contact us to find out more about any other Equitable Life
insurance policy.
As supplemented December 29, 2000.
<PAGE>
2
DETERMINING YOUR POLICY'S VALUE
22 DETERMINING YOUR POLICY'S VALUE
--------------------------------------------------------------------------------
YOUR ACCOUNT VALUE
As set forth 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
(including any interest on those amounts which has not yet been allocated to the
variable investment options). See "Borrowing from your policy" 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 "Charges and expenses you will pay."
--------------------------------------------------------------------------------
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 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 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.
The value of each unit will increase or decrease each day, as though 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 (see "Table of policy charges"in "Charges
and expenses you will pay" 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.
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" 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.
<PAGE>
3
TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
23 TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
--------------------------------------------------------------------------------
TRANSFERS YOU CAN MAKE
--------------------------------------------------------------------------------
You can transfer among our variable investment options and into our guaranteed
interest option.
--------------------------------------------------------------------------------
After your policy's 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, you can make a telephone
request or you can make a request over the Internet (see below).
--------------------------------------------------------------------------------
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 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 will never apply to a transfer of all of your variable investment
option amounts to our guaranteed investment option, or to any transfer pursuant
to our dollar cost averaging or asset rebalancing service, as discussed below.
TELEPHONE AND EQACCESS TRANSFERS
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
1-888-228-6690 (toll free) from a touch tone phone; or
o if you are not both the insured person and owner, by sending us a signed
telephone transfer authorization form. 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 and EQAccess requests" later in this
Prospectus. We allow only one request for telephone transfers each day (although
that 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.
EQACCESS TRANSFERS. By the end of 2000, we anticipate that you will be able to
make transfers over the Internet. You may do this by visiting our Website and
enrolling in EQAccess. This service may not always be available. Generally, the
restrictions relating to telephone transfers apply to EQAccess transfers.
MARKET TIMING. We reserve the right to limit your access to telephone or
EQAccess transfers if we determine that you are engaged in a market timing
strategy. See "Transfers of your account value - Market timing" later in this
prospectus.
OUR DOLLAR COST AVERAGING SERVICE
We offer 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.
<PAGE>
24 TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Using the dollar cost averaging service 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 may elect the
dollar cost averaging service with your policy application or at any later time
(provided you are not using the asset rebalancing service described below). At
least $5,000 must be allocated to the Alliance Money Market option to begin
using the dollar cost averaging service. You can choose up to eight other
variable investment options to receive the automatic transfers, but each
transfer to each option must be at least $50.
This service terminates when the Alliance Money Market option is depleted. You
can also cancel the dollar cost averaging service at any time. You may not
simultaneously participate in the asset rebalancing service and the dollar cost
averaging service.
OUR ASSET REBALANCING SERVICE
You may wish us to periodically redistribute the amounts you have in our
variable investment options so that the relative amount of your account value in
each variable option is restored to an asset allocation that you select . You
can accomplish this automatically through our asset rebalancing service. The
rebalancing may be at quarterly, semiannual, or annual intervals.
You may specify asset allocation percentages for up to eight variable investment
options. The allocation percentage you specify for each variable investment
option selected must be at least 5% (whole percentage only) of the total value
you hold under the variable investment options, and the sum of the percentages
must equal 100%. You may not simultaneously participate in the asset rebalancing
service and in the dollar cost averaging service (discussed above).
You may request the asset rebalancing service in your policy application or at
any later time.You may change your allocation instructions or discontinue
participation in the asset rebalancing service at any time.
<PAGE>
4
ACCESSING YOUR MONEY
25 ACCESSING YOUR MONEY
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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" below.
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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.
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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
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 loan 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.
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.
We credit interest on your loan collateral daily. On each anniversary of your
policy (or when your policy loans are fully
<PAGE>
26 ACCESSING YOUR MONEY
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repaid) 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. Even if a loan is not taxable when made, it may later become taxable, for
example, upon termination or surrender. See "Tax information" 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.
--------------------------------------------------------------------------------
You can withdraw all or part of your policy's net cash surrender value, although
you may 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. 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 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" below, for information about possible tax
consequences of partial withdrawals and any associated reduction in policy
benefits.
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27 ACCESSING YOUR MONEY
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A partial withdrawal may increase the chance that your policy could lapse
because of insufficient value to pay policy charges as they fall due.
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 in "Charges and expenses you will pay" above.
Please refer to "Tax information" 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 (generally 75%) 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).
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.
-------------------------------------------------------------------------------
You can arrange to receive a "living benefit" if the insured person becomes
terminally ill.
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<PAGE>
5
TAX INFORMATION
28 TAX INFORMATION
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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 generally
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 policy, such as a surrender, a
partial withdrawal, loan or a payment to you.
There may be different tax consequences if you assign your policy or designate a
new owner. See "Assigning your policy" 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.
<PAGE>
29 TAX INFORMATION
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In addition to the above premium limits for testing for modified endowment
status, there are overall limits on the amount of premiums you may pay under
your policy in order for it to qualify as life insurance. Changes made to your
policy, for example, a decrease in face amount (including any decrease that may
occur as a result of a partial withdrawal) or other decrease in benefits may
impact the maximum amount of premiums that can be paid, as well as the maximum
amount of account value that may be maintained under the policy. In some cases,
this may cause us to take current or future action in order to assure that your
policy continues to qualify as life insurance, including distribution of amounts
to you that may be includible as income. See "Changes we can make" below.
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, although interest credited on loan
collateral may become taxable under the rules below if distributed.
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
<PAGE>
30 TAX INFORMATION
--------------------------------------------------------------------------------
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 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 pending legislative proposals which might further restrict
available exceptions to this limit on interest deductions or make other tax law
changes with respect to such coverage.
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
<PAGE>
31 TAX INFORMATION
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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 $675,000 (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 deductible or 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
(indexed annually for inflation, $1,030,000 for 2000).
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
advisor.
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. Among other issues, 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
As supplemented December 29, 2000.
<PAGE>
32 TAX INFORMATION
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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 tax expenses 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 a satisfactory written 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, and you may incur penalties under the
estimated income tax rules. 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.
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 or clarifying 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 or change in
interpretation. Any changes in federal, state, local or foreign tax law or
interpretations could have a retroactive effect both on our taxes and on the way
your policy is taxed.
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
Portfolios within an insurance policy 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.
<PAGE>
6
MORE INFORMATION ABOUT PROCEDURES THAT APPLY TO YOUR POLICY
33 MORE INFORMATION ABOUT PROCEDURES THAT APPLY TO YOUR POLICY
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This section provides further detail about certain subjects that are addressed
in the previous pages. 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, or any payments in
foreign currency, 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.
REQUIREMENTS FOR SURRENDER REQUESTS
Your surrender request must include the policy number, your name, your tax
identification number, 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. We may also
require you to complete specific tax forms.
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, to effect a change of ownership 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.
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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 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 result from a withdrawal
o changes of allocation percentages for premium payments or monthly
deductions
o surrenders
o changes of beneficiary
o transfers from a variable investment option to the guaranteed interest
option
o changes in form of death benefit payment
o loans
o transfers among variable investment options
o assignments
o termination of paid up death benefit guarantee
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 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 (automatic transfer service) occur as of the first day of each policy
month. If you request the dollar cost averaging service in your original policy
application, the first transfer will occur as of the first day of the second
policy month after your policy's initial Allocation Date. If you request this
service at any later time, 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.
ASSET REBALANCING SERVICE. If you request the asset rebalancing service, the
first redistribution will be on the date you specify or the date we receive your
request, if later. However, no rebalancing will occur before your policy's
Allocation Date. Subsequent periodic rebalancings occur quarterly, semiannually
or annually, as you have requested.
DELAY IN CERTAIN CASES. We may delay allocating any payment you make to our
variable investment options, or
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any transfer, for the same reasons stated in "Delay of variable investment
option proceeds" 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 financial
professional 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 your financial professional 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) 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 request and review a copy of our temporary
insurance agreement 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
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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.
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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). 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 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
semiannual 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) of Separate Account FP available
under Incentive Life invests solely in class IB shares issued by the
corresponding Portfolio of 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,
to the trustee of a qualified plan for Equitable Life and 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 EQ Advisors 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 Trust's Portfolios is so large as to
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materially impair the investment performance of the Portfolio 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" above.
You should consult your tax advisor prior to substituting the insured 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. Similarly, the asset rebalancing
program will terminate if either (2) or (3) occurs.
MARKET TIMING. You should note that the product is not designed for professional
"market timing" organizations, or other organizations or individuals engaging in
a market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the underlying
mutual
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fund portfolios in which the variable investment options invest. If we determine
that your transfer patterns among the variable investment options reflect a
market timing strategy, we reserve the right to take action including, but not
limited to: restricting the availability of transfers through telephone
requests, facsimile transmissions, automated telephone services, Internet
services or any electronic transfer services. We may also refuse to act on
transfer instructions of an agent acting under a power of attorney who is acting
on behalf of more than one owner.
TELEPHONE AND EQACCESS REQUESTS
If you are a properly authorized person, you may make transfers between
investment options by telephone or over the Internet as described above under
"Telephone and EQAccess transfers."
Also, if you are both the owner and the insured person under your policy, you
may call 1-888-228-6690 (toll free) from a touch tone phone to make the
following additional types of requests:
o policy loans
o changes of premium allocation percentages (anticipated to be available
through EQAccess by the end of 2000)
o changes of address
For security purposes, 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 you wish to participate in EQAccess, you must first agree to the terms and
conditions set forth in our EQAccess Online Services Agreement, which you can
find at our Web site. For security purposes, you may not initiate any
transactions relating to your policy for five (5) days after you have elected to
use EQAccess. We will send you a confirmation letter by first class mail.
Additionally, you will be required to use a password and protect it from
unauthorized use. We will provide subsequent written confirmation of any
EQAccess transactions. We will assume that all instructions received through
EQAccess from anyone using your password are given by you; however, we reserve
the right to refuse to process any transaction and/or block access to EQAccess
if we have reason to believe the instructions given are unauthorized.
If we do not employ reasonable procedures to confirm the genuineness of
telephone or Internet 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 or Internet instructions that we reasonably believe to be
genuine.
We reserve the right to refuse to process any telephone or Internet transactions
if we have reason to believe that the request compromises the general security
and/or integrity of our automated systems (see discussion of "Market timing"
above).
Any telephone or Internet transaction request that we receive 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 or Internet
request. If this occurs, you should submit a written transaction request to our
Administrative Office. We reserve the right to discontinue telephone or Internet
transactions, or modify the procedures and conditions for such transactions,
without notifying you, 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 risk under your policy. Our amount at risk
(also described in your policy as "net amount at risk")
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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 1980 Commissioner's 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 1980 Commissioner's 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 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 and tax expenses 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.
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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 or loan repayment
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 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.
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If we take any action that results in a material change in the underlying
investments of a variable investment option, we will notify you to the extent
required by law. We may, for example, cause the variable investment option to
invest in a mutual fund other than, or in addition to, 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. Subject to all
applicable legal requirements, we also 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 your premium payments, loan
repayments, 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 wouldvary over time under
different sets of assumptions, we will provide you with certain illustrations
when you purchase your policy and upon request thereafter. 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 assumed rates of return (within limits) that you request.
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 Equitable Distributors Inc. ("EDI").* The
Investment Company Act of 1940, therefore, classifies EDI as a "principal
underwriter" of those policies and contracts. EDI also serves as a principal
underwriter of EQ Advisors Trust. EDI is a wholly owned subsidiary of Equitable
Life, with its address at 1290 Avenue of the Americas, New York, NY 10104. EDI
is registered with the SEC as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. ("NASD"). In 1998 and 1999, we paid EDI
fees of $35,582,313 and $46,957,345, respectively, for its services under a
Distribution Agreement with Equitable Life and its separate accounts.
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* It is anticipated that during the fourth quarter of 2000, Equitable
Distributors, LLC ("EDI, LLC") will become a successor by merger to all of
the functions, rights and obligations of Equitable Distributors, Inc.
("EDI"), including the role of principal underwriter of Separate Account
FP. Like EDI, EDI, LLC is owned by Equitable Holdings, LLC. Accordingly,
once the successor by merger is complete, all references to the principal
underwriter in each prospectus should be replaced with Equitable
Distributors, LLC.
As supplemented December 29, 2000.
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We sell Incentive Life through licensed insurance agencies (both affiliated and
unaffiliated with Equitable Life) and their affiliated broker-dealers (who are
registered with the SEC and are members of the NASD). Such agencies and their
affiliated broker-dealers have entered into selling agreements with EDI. The
licensed insurance agents who sell our policies are appointed as agents of
Equitable Life, and are financial professionals of the agencies' affiliated
broker-dealer. Sales commissions will be paid by Equitable Life to the agency
which sells you this policy. The commissions don't cost you anything above the
charges and expenses already discussed elsewhere in this prospectus. Generally,
the agencies will receive maximum commissions of: 50% of the amount of the
premium you pay in your policy's first year up to a certain amount, plus 3% of
all other premiums you pay in your policy's first year, plus 3% of all premiums
you pay in the second through tenth years. We pay comparable commissions on the
amount of premiums you pay that we deem attributable to any face amount increase
that you request. The agency may be required to return to us any commissions on
premiums that we have refunded to a policyowner. Use of the Incentive Term rider
instead of an equal amount of coverage under the base policy generally reduces
commissions. Therefore, an agent may receive a higher commission for selling you
a policy that does not include a term rider.
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.
As supplemented December 29, 2000.
<PAGE>
DIRECTORS AND PRINCIPAL OFFICERS
44 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,
New York 10104.
DIRECTORS
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
-----------------------------------------------------------------------------------------------------------------------------
<S> <C>
-----------------------------------------------------------------------------------------------------------------------------
FRANCOISE COLLOC'H
-----------------------------------------------------------------------------------------------------------------------------
AXA Director of Equitable Life (since July 1992). Member of the AXA Management Board
25, Avenue Matignon and Group Executive President, Human Resources, Communication and Synergies of
75008 Paris, France AXA (since January 2000). Prior thereto, Senior Executive Vice President, AXA
(1993-2000). Director or officer of various subsidiaries and affiliates of the AXA
Group.
-----------------------------------------------------------------------------------------------------------------------------
HENRI DE CASTRIES
-----------------------------------------------------------------------------------------------------------------------------
AXA Director of Equitable Life (since September 1993). Chairman of the Board of AXA
25, Avenue Matignon Financial (since April 1998); Vice Chairman (February 1996 to April 1998). Vice
75008 Paris, France Chairman of AXA's Management Board and CEO (since January 2000). Prior thereto,
Senior Executive Vice President, Financial Services and Life Insurance Activities
in the United States, Germany, the United Kingdom and Benelux (1996 to 2000);
Executive Vice President, Financial Services and Life Insurance Activities (1993 to
1996) of AXA. Director or officer of various subsidiaries and affiliates of the AXA
Group. Director of DLJ and Alliance Capital Management Corporation, the general
partner of Alliance Holding and Alliance.
-----------------------------------------------------------------------------------------------------------------------------
CLAUS-MICHAEL DILL
-----------------------------------------------------------------------------------------------------------------------------
AXA Colonia Konzern AG Director of Equitable Life (since May 2000). Chairman of the Management Board of
Gereonsdriesch 9-11 AXA Colonia Konzern AG (since June 1999). Member of the Management Board
50670 Cologne, Germany since April 1999. Prior thereto, member of the Holding Management Board of
Gerling-Konzern in Cologne (1995 to April 1999). Chairman of the Management Board
of AXA Colonia Versicherung AG, AXA Colonia Lebensversicherung AG, Colonia
Nordstern Versicherungs-Management AG and Colonia Nordstern
Lebensversicherungs-Management AG (since June 1999). Director of AXA Financial
(since May 2000).
-----------------------------------------------------------------------------------------------------------------------------
JOSEPH L. DIONNE
-----------------------------------------------------------------------------------------------------------------------------
The McGraw-Hill Companies Director of Equitable Life (since May 1982). Retired Chairman of The McGraw-Hill
1221 Avenue of the Americas Companies (since January 2000) and retired Director (since April 2000); prior thereto,
New York, NY 10020 Chairman (April 1988 to January 2000) and Chief Executive Officer (April 1983 to
April 1998). Director of Harris Corporation and Ryder System, Inc. Director of AXA
Financial, Inc. (since May, 1992).
-----------------------------------------------------------------------------------------------------------------------------
DENIS DUVERNE
-----------------------------------------------------------------------------------------------------------------------------
AXA Director of Equitable Life (since February 1998). Executive Vice President,
25, Avenue Matignon International (US-UK-Benelux) AXA and member of AXA Executive Board (since
75008 Paris, France January, 2000). Director, Alliance (since February 1996) and Donaldson Lufkin &
Jenrette ("DLJ") (since February 1997).
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
45 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
-----------------------------------------------------------------------------------------------------------------------------
<S> <C>
-----------------------------------------------------------------------------------------------------------------------------
JEAN-RENE FOURTOU
-----------------------------------------------------------------------------------------------------------------------------
Aventis Director of Equitable Life (since July 1992). Vice Chairman of the Management Board
25, Quai Paul Doumer of Aventis (since December 1999). Prior thereto, Chairman and Chief Executive
92408 Courbevoie Cedex Officer of Rhone-Poulenc, S.A. (1986 to December 1999). Member of the Supervisory
France Board of AXA. Director of Schneider Electric, Paribas, and Groupe Pernod-Ricard.
Member of the Consulting Council of Banque de France. Director, AXA Financial
(since July, 1992).
-----------------------------------------------------------------------------------------------------------------------------
NORMAN C. FRANCIS
-----------------------------------------------------------------------------------------------------------------------------
Xavier University of Louisiana Director of Equitable Life (since March 1989). President of Xavier University of
7325 Palmetto Street Louisiana; Director, Piccadilly Cafeterias, Inc., and Entergy Corporation.
New Orleans, LA 70125
-----------------------------------------------------------------------------------------------------------------------------
DONALD J. GREENE
-----------------------------------------------------------------------------------------------------------------------------
LeBouef, Lamb, Greene & MacRae, L.L.P. Director of Equitable Life (since July 1991). Of Counsel, LeBoeuf, Lamb, Greene &
125 West 55th Street MacRae, L.L.P. (since 1999). Prior thereto, Partner of the firm (1965 to 1999).
New York, NY 10019-4513 Director of AXA Financial (since May 1992).
-----------------------------------------------------------------------------------------------------------------------------
JOHN T. HARTLEY
-----------------------------------------------------------------------------------------------------------------------------
1025 NASA Boulevard Director of Equitable Life (since August 1987). Currently a Director and retired
Melbourne, FL 32919 Chairman and Chief Executive Officer of Harris Corporation (retired July 1995);
previously held other officerships with Harris Corporation. Director of AXA
Financial (since May 1992); Director of the McGraw Hill Companies.
-----------------------------------------------------------------------------------------------------------------------------
JOHN H.F. HASKELL JR.
-----------------------------------------------------------------------------------------------------------------------------
Warburg Dillon Read LLC Director of Equitable Life (since July 1992); Director of AXA Financial (since July
294, Park Avenue 1992); Director, Senior Advisor of Warburg Dillon Read LLC (since 1999); Prior
New York, NY 10171 thereto, Managing Director and member of its Board of Directors (1975-1999);
Chairman, Supervisory Board, Dillon Read (France) Gestion (until 1998); Director,
Pall Corporation (since November 1998).
-----------------------------------------------------------------------------------------------------------------------------
NINA HENDERSON
-----------------------------------------------------------------------------------------------------------------------------
Bestfoods Director of Equitable Life (since December 1996). Corporate Vice President, Core
International Plaza Business Development of Bestfoods (since June 1999). Prior thereto, President,
700 Sylvan Avenue Bestfoods Grocery and Vice President, Bestfoods (formerly CPC International, Inc.)
Englewood Cliffs, NJ 07632-9976 (1997 to 1999). President, Bestfoods Specialty Markets Group (1993 to 1997);
Director, Hunt Corporation and PACTIV Corporation. Director, AXA Financial (since
December 1996).
-----------------------------------------------------------------------------------------------------------------------------
W. EDWIN JARMAIN
-----------------------------------------------------------------------------------------------------------------------------
Jarmain Group Inc. Director of Equitable Life (since July 1992). President, Jarmain Group Inc. (since
121 King Street West 1979); and officer or director of several affiliated companies. Director, DLJ (since
Suite 2525 October 1992), Alliance Capital Management Corporation (since May 2000), AXA
Toronto, Ontario M5H 3T9 Insurance (Canada), Anglo Canada General Insurance Company, and AXA Pacific
Canada Insurance Company, and Alternate Director, AXA Asia Pacific Holdings. Chairman
(non-executive) and Director, FCA International Ltd. (January 1994 to May 1998).
Director of AXA Financial, Inc. (since July 1992).
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
46 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
DIRECTORS (CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
-----------------------------------------------------------------------------------------------------------------------------
<S> <C>
-----------------------------------------------------------------------------------------------------------------------------
GEORGE T. LOWY
-----------------------------------------------------------------------------------------------------------------------------
Cravath, Swaine & Moore Director of Equitable Life (since July 1992). Partner, Cravath, Swaine & Moore.
825 Eighth Avenue Director, Eramet.
New York, NY 10019
-----------------------------------------------------------------------------------------------------------------------------
DIDIER PINEAU-VALENCIENNE
-----------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Director of Equitable Life (since February 1996). Vice Chairman Credit Suisse First
c/o Schneider Electric Boston (since March 1999). Chairman and Chief Executive Officer (1981 to February
64, rue de Miromesnil 1999) (now Honorary Chairman) Schneider Electric. Member of the Supervisory Board
75008 Paris, France of AXA. Director of CGIP, Aventis (formerly Rhone-Poulenc, S.A.), Sema Group PLC
(UK), Soft Computing and Swiss Helvetic Fund; member of the Advisory Board of
Booz-Allen & Hamilton. Director of AXA Financial, Inc. (since February 1996).
-----------------------------------------------------------------------------------------------------------------------------
GEORGE J. SELLA, JR.
-----------------------------------------------------------------------------------------------------------------------------
P.O. Box 397 Director of Equitable Life (since May 1987). Retired Chairman and Chief Executive
Newton, NJ 07860 Officer of American Cyanamid Company (retired April 1993); previously held other
officerships with American Cyanamid. Director of AXA Financial (since May 1992) and
Coulter Pharmaceutical (since May 1987).
-----------------------------------------------------------------------------------------------------------------------------
PETER J. TOBIN
-----------------------------------------------------------------------------------------------------------------------------
St. John's University Director of Equitable Life (since March 1999); Dean of the Peter J. Tobin College of
8000 Utopia Parkway Business Administration, St. John's University (since August 1998); Chief Financial
Jamaica, NY 11439 Officer, Chase Manhattan Corp. (1985 to 1997). Director of Alliance Capital
Management Corporation (since May 2000), the CIT Group, Inc. and H.W. Wilson
Company.
-----------------------------------------------------------------------------------------------------------------------------
DAVE H. WILLIAMS
-----------------------------------------------------------------------------------------------------------------------------
Alliance Capital Management Director of Equitable Life (since March 1991). Chairman (since 1977) and former
Corporation Chief Executive Officer (1977 to January 1999), of Alliance, and Chairman or Director
1345 Avenue of the Americas of numerous subsidiaries and affiliated companies of Alliance. Senior Executive Vice
New York, NY 10105 President of AXA (January 1997 to January 2000). Director of AXA Financial (since
May 1992).
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
47 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OFFICERS - DIRECTORS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
---------------------------------------------------------------------------------------------------------------------------
<S> <C>
---------------------------------------------------------------------------------------------------------------------------
MICHAEL HEGARTY
---------------------------------------------------------------------------------------------------------------------------
Director of Equitable Life (since January 1998). President (since January 1998) and
Chief Operating Officer (since February 1998), Equitable Life. Senior Vice Chairman
(since November 1999), Vice Chairman (since April 1998), Senior Executive Vice
President (January 1998 to April 1998), and Director and Chief Operating Officer
(both since January 1998), AXA Financial. Director, President and Chief Operating
Officer, Equitable of Colorado (since December 1999); AXA Client Solutions & AXA
Distribution Holding Corp. (since September 1999). 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. Director, ACMC, Inc.
("ACMC") (since March 1998). Trustee, EQ Advisors Trust. Director, Alliance and DLJ
(both since May 1998).
---------------------------------------------------------------------------------------------------------------------------
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), AXA Financial. Director, Chairman of the Board and Chief
Executive Officer, Equitable of Colorado (since December 1999); AXA Client
Solutions and AXA Distribution Holding Corp. (since September 1999). Member of the
Management Board of AXA (since January 2000); 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), ACMC, Inc. (since March 1998), and
AXA Canada (since September 1998). Director, KeySpan Energy Corporation.
---------------------------------------------------------------------------------------------------------------------------
STANLEY B. TULIN
---------------------------------------------------------------------------------------------------------------------------
Director and Vice Chairman of the Board (since February 1998), and Chief Financial
Officer (since May 1996), Equitable Life. Vice Chairman of the Board (since
November 1999) and Chief Financial Officer (since May 1997) and prior thereto,
Senior Executive Vice President (February 1998 to November 1999), AXA Financial.
Director, Vice Chairman and Chief Financial Officer (since December 1999) Equitable
of Colorado; AXA Client Solutions, LLC and AXA Distributions Holding Corp. (since
September 1999). Vice President (until 1998), EQ ADVISORS TRUST. Director, Alliance
(since July 1997), and DLJ (since June 1997). Prior thereto, Chairman, Insurance
Consulting and Actuarial Practice, Coopers & Lybrand, L.L.P.
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
48 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OTHER OFFICERS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
---------------------------------------------------------------------------------------------------------------------------
<S> <C>
---------------------------------------------------------------------------------------------------------------------------
LEON B. BILLIS
---------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since February 1998) and Chief Information Officer (since
November 1994), Equitable Life and AXA Client Solutions (since September 1999).
Previously held other officerships with Equitable Life.
---------------------------------------------------------------------------------------------------------------------------
DERRY E. BISHOP
---------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since September 1998), Managing Director of Retail
Distribution (since July 2000 to); Chief Agency Officer, (since December 1997), and
Senior Vice President (January 1995 to September 1998), Equitable Life; Director
and Executive Vice President, AXA Advisors LLC and Executive Vice President and
Chief Agency Officer, AXA Client Solutions, LLC (all since September 1999). Prior
thereto, Director (since 1995) and Executive Vice President (since 1994) EQF (now
AXA Advisors).
---------------------------------------------------------------------------------------------------------------------------
HARVEY BLITZ
---------------------------------------------------------------------------------------------------------------------------
Senior Vice President, Equitable Life. Senior Vice President, AXA Financial.
Director and Chairman, Frontier Trust Company, FSB ("Frontier"). Director, EQF (now
AXA Advisors) (until September 1999). Executive Vice President and Director (since
September 1999), AXA Advisors, Director (until May 1996). Director and Senior Vice
President, AXA Network, LLC (formerly EquiSource). 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 AXA Financial. Senior Vice
President and Treasurer, AXA Client Solutions, LLC; Equitable of Colorado (since
December 1999). Treasurer, Frontier (since 1990) and AXA Network, LLC (since 1999).
Chairman (since August 2000) and Chief Executive Officer (since September 1997)
Equitable Casualty Insurance Company ("Casualty"). Vice President and Treasurer, EQ
ADVISORS TRUST (since March 1997). Director, Chairman, President and Chief
Executive Officer, Equitable JV Holdings (since August 1997). Director (since July
1997), and Senior Vice President and Chief Financial Officer (since April 1998),
ACMC. Previously held other officerships with Equitable Life and its affiliates.
---------------------------------------------------------------------------------------------------------------------------
JOHN A. CAROSELLI
---------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since September 1998), Equitable Life; Senior Vice
President, Equitable Life (February 1998 to September 1998); Senior Vice President,
Chase Manhattan Corp. (1996 to 1998); Vice President, Chemical Bank (1991 to 1996).
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
49 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OTHER OFFICERS (CONTINUED)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
---------------------------------------------------------------------------------------------------------------------------
<S> <C>
---------------------------------------------------------------------------------------------------------------------------
JUDY A. FAUCETT
---------------------------------------------------------------------------------------------------------------------------
Senior Vice President, Equitable Life, (since September 1996) and Actuary
(September 1996 to December 1998). 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, AXA Client Solutions, LLC and
AXA Financial. Senior Vice President and Controller, The Equitable of Colorado,
Inc. (since December 1999). Previously held other officerships with Equitable Life
and its affiliates.
---------------------------------------------------------------------------------------------------------------------------
PAUL J. FLORA
---------------------------------------------------------------------------------------------------------------------------
Senior Vice President and Auditor, Equitable Life. AXA Financial and AXA Client
Solutions, LLC.
---------------------------------------------------------------------------------------------------------------------------
ROBERT E. GARBER
---------------------------------------------------------------------------------------------------------------------------
Executive Vice President and Chief Legal Officer (since November 1999), Equitable
Life; prior thereto, Executive Vice President and General Counsel. General Counsel
of AXA Financial. Executive Vice President and Chief Legal Officer of AXA Client
Solutions, LLC. Previously held other officerships with Equitable Life and its
affiliates.
---------------------------------------------------------------------------------------------------------------------------
DONALD R. KAPLAN
---------------------------------------------------------------------------------------------------------------------------
Senior Vice President (since September 1999), Chief Compliance Officer and
Associate General Counsel, Equitable Life. Senior Vice President, AXA Client
Solutions, LLC. Previously held other officerships with Equitable Life.
---------------------------------------------------------------------------------------------------------------------------
MICHAEL S. MARTIN
---------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since September 1998) and Managing Director of Retail
Distribution (since July 2000) Chief Marketing Officer (December 1997 to),
Equitable Life; prior thereto, Senior Vice President and Chief Marketing Officer.
Chairman and Chief Executive Officer, AXA Advisors LLC (since September 1999).
Executive Vice President and Managing Director of Retail Distribution, AXA Client
Solutions, LLC (since September 1999). Vice President, EQ ADVISORS TRUST (until
April 1998). Director, Equitable Underwriting and Sales Agency (Bahamas), Ltd. and
AXA Network, LLC; Executive Vice President (since December 1998), Colorado.
Previously held other officerships with Equitable Life and its affiliates.
---------------------------------------------------------------------------------------------------------------------------
RICHARD J. MATTEIS
---------------------------------------------------------------------------------------------------------------------------
Executive Vice President, Equitable Life (since May 1998); Executive Vice
President, AXA Client Solutions, LLC (since September 1999); Executive Vice
President, Chase Manhattan Corporation (January 1983 to June 1997); Director, EQF
(now AXA Advisors) (October 1998 to May 1999).
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
50 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OTHER OFFICERS (CONTINUED)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
---------------------------------------------------------------------------------------------------------------------------
<S> <C>
---------------------------------------------------------------------------------------------------------------------------
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), AXA
Financial. Chairman, President and Trustee (since March 1997), EQ ADVISORS TRUST.
Executive Vice President and Chief Investment Officer, Equitable of Colorado (since
December 1999), Executive Vice President, AXA Client Solutions (since September
1999). Director, Alliance, and Equitable Real Estate (until June 1997). Executive
Vice President, EQF (now AXA Advisors) (since August 1999). Director, EREIM
Managers Corp. (since July 1997), and EREIM LP Corp. (since October 1997).
---------------------------------------------------------------------------------------------------------------------------
BRIAN S. O'NEIL
---------------------------------------------------------------------------------------------------------------------------
Executive Vice President, Equitable Life (since June 1998). Executive Vice
President, AXA Client Solutions (since September 1999). Director of Investment, AXA
Investment Management (January 1998 to June 1998); Chief Investment Officer, AXA
Investment Management (July 1995 to January 1998). Trustee (since September 1999),
EQ ADVISORS TRUST.
---------------------------------------------------------------------------------------------------------------------------
ANTHONY C. PASQUALE
---------------------------------------------------------------------------------------------------------------------------
Senior Vice President, Equitable Life and AXA Client Solutions (since September
1999). Director, Chairman and Chief Operating Officer, Casualty, (September 1997 to
August 2000). Director, Equitable Agri-Business, Inc. (until June 1997). Previously
held other officerships with Equitable Life and its affiliates.
---------------------------------------------------------------------------------------------------------------------------
PAULINE SHERMAN
---------------------------------------------------------------------------------------------------------------------------
Senior Vice President (since February 1999); Vice President, Secretary and
Associate General Counsel, Equitable Life and AXA Financial, (since September
1995). Senior Vice President, Secretary and Associate General Counsel, AXA
Financial and AXA Client Solutions (since November 1999). Senior Vice President,
Secretary, and Associate General Counsel, Equitable of Colorado (since December
1999). Previously held other officerships with Equitable Life.
---------------------------------------------------------------------------------------------------------------------------
RICHARD V. SILVER
---------------------------------------------------------------------------------------------------------------------------
Senior Vice President (since February 1995) and General Counsel (since November
1999) Equitable Life; prior thereto, Deputy General Counsel (1996-1999). Senior
Vice President (since September 1996) and Deputy General Counsel (since September
1999), AXA Financial. Senior Vice President and General Counsel, AXA Client
Solutions (since November 1999). Senior Vice President and General Counsel,
Equitable of Colorado (since December 1999). Director, AXA Advisors. Senior Vice
President and General Counsel, EIC (June 1997 to March 1998). Previously held other
officerships with Equitable Life and its affiliates.
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
51 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OTHER OFFICERS (CONTINUED)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
---------------------------------------------------------------------------------------------------------------------------
<S> <C>
---------------------------------------------------------------------------------------------------------------------------
JOSE S. SUQUET
---------------------------------------------------------------------------------------------------------------------------
Senior Executive Vice President (since February 1998), Chief Distribution Officer
(since December 1997) and Chief Agency Officer (August 1994 to December 1997),
Equitable Life. Senior Executive Vice President, AXA Financial. Senior Executive
Vice President and Chief Distribution Officer, AXA Client Solutions (since
September 1999). Senior Executive Vice President, Equitable of Colorado (since
December 1999). Chairman (since December 1997), EDI. Prior thereto, Agency Manager.
---------------------------------------------------------------------------------------------------------------------------
GREGORY G. WILCOX
---------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since September 1998), Senior Vice President (May 1992 to
September 1998), Equitable Life. Executive Vice President (since November 1999),
AXA Financial; prior thereto, Senior Vice President. Executive Vice President, AXA
Client Solutions, LLC (since September 1999).
---------------------------------------------------------------------------------------------------------------------------
R. LEE WILSON
---------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since May 1998) and Deputy Chief Financial Officer
(September 1998 to July 1999), Equitable Life. Executive Vice President, AXA Client
Solutions (since September 1999). Prior thereto, Executive Vice President, Chase
Manhattan Bank.
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
8
FINANCIAL STATEMENTS OF SEPARATE ACCOUNT FP AND EQUITABLE LIFE
52 FINANCIAL STATEMENTS OF SEPARATE ACCOUNT FP AND EQUITABLE LIFE
--------------------------------------------------------------------------------
The financial statements of Separate Account FP as of December 31, 1999 and for
each of the three years in the period ended December 31, 1999 and the financial
statements of Equitable Life as of December 31, 1999 and 1998 and for each of
the three years in the period ended December 31, 1999 included in this
prospectus have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, 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.
<PAGE>
APPENDIX I: INVESTMENT PERFORMANCE RECORD
A-1 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 in the EQ Advisors
Trust prospectus attached at the end of this prospectus. The performance figures
on which the tables are based are after deduction of all fees and expenses paid
by the Trust or any of the Portfolios.
For periods prior to October 18, 1999, the "Alliance" Portfolios (other than
EQ/Alliance Premier Growth and EQ/Alliance Technology) were part of The Hudson
River Trust. On October 18, 1999, these Portfolios became corresponding
Portfolios of EQ Advisors Trust. In each case, the performance shown is for the
indicated EQ Advisors Trust Portfolio and any predecessors that it may have had.
In addition, we have adjusted the results for these Portfolios prior to the
dates when the Class IB shares for these Portfolios were available, to reflect
the 12b-1 fees currently imposed. Class IB shares of Alliance Money Market,
Alliance High Yield, EQ Equity 500 Index** Alliance Common Stock and
EQ/Aggressive Stock* Portfolios first became available in EQ Advisors Trust's
predecessor on October 2, 1996. Class IB shares of Alliance Small Cap Growth
Portfolio first became available in the Trust's predecessor on May 1, 1997.
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" in 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 financial professional will
provide. You can request Equitable Life or your financial professional to
provide you with such illustrations at any time, whether before or after you
purchase a policy.
In a few cases, the return information shown in the first table below 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 second table below provides additional performance information
from the date that those investment options actually received initial funding.
---------------------
* Previously "Alliance Aggressive Stock"
** Previously "Alliance Equity 500 Index"
As supplemented December 29, 2000
<PAGE>
A-2 APPENDIX I: INVESTMENT PERFORMANCE RECORD
--------------------------------------------------------------------------------
AVERAGE ANNUAL RATE OF RETURN
AFTER DEDUCTION OF MORTALITY AND EXPENSE
RISK CHARGE FOR PERIODS ENDING
DECEMBER 31, 1999*
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
SINCE PORTFOLIO
INCEPTION
VARIABLE INVESTMENT OPTION 1 YR. 3 YRS. 5 YRS. 10 YRS. (DATE**)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 17.83% 8.83% 15.35% 15.71% 16.92% (1/27/86)
Alliance Money Market 4.10% 4.35% 4.47% 4.29% 6.06% (7/13/81)
Alliance High Yield (4.16)% 1.92% 8.92% 9.30% 8.44% (1/2/87)
Alliance Common Stock 24.13% 26.89% 26.97% 17.59% 15.76% (1/13/76)
Alliance Small Cap Growth 26.86% - - - 16.95% (5/1/97)
EQ Equity 500 Index 19.36% 25.99% 26.84% - 22.69% (3/1/94)
EQ Small Company Index 20.00% - - - 7.95% (12/31/97)
EQ International Equity Index 26.70% - - - 22.98% (12/31/97)
FI Small/Mid Cap Value 1.19% - - - 2.71% (5/1/97)
J.P. Morgan Core Bond (2.19)% - - - 2.96% (12/31/97)
Lazard Large Cap Value 2.91% - - - 10.82% (12/31/97)
Lazard Small Cap Value 1.13% - - - (3.40)% (12/31/97)
MFS Growth with Income 8.06% - - - 8.06% (12/31/98)
MFS Research 22.38% - - - 23.20% (5/1/97)
MFS Emerging Growth Companies 72.63% - - - 47.38% (5/1/97)
Morgan Stanley Emerging Markets Equity 94.57% - - - 5.07% (8/20/97)
EQ/Putnam Growth & Income Value (1.95)% - - - 9.46% (5/1/97)
EQ/Putnam Investors Growth 29.48% - - - 33.87% (5/1/97)
EQ/Putnam International Equity 59.29% - - - 31.21% (5/1/97)
-----------------------------------------------------------------------------------------------------------------
</TABLE>
* No performance information is shown for EQ/Alliance Technology, as this
Portfolio had not received its initial funding prior to December 31, 1999.
No performance information is shown for EQ/Alliance Premier Growth, Capital
Guardian U.S. Equity, Capital Guardian Research or Capital Guardian
International, as those Portfolios became available after December 31,
1998.m The inception date for these portfolios is April 30, 1999.
Additionally, no performance information is shown for FI Mid Cap, and
EQ/Janus Large Cap Growth, as these portfolios became available after
December 31, 1998. The inception dates for these portfolios is September 1,
2000.
** The inception date shown is the date that the relevant Portfolio (or its
predecessor) received its initial funding.
As supplemented December 29, 2000
<PAGE>
A-3 APPENDIX I: INVESTMENT PERFORMANCE RECORD
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
AVERAGE ANNUAL RATES OF RETURN FOR PERIODS ENDING
DECEMBER 31, 1999 SINCE VARIABLE INVESTMENT OPTION
VARIABLE INVESTMENT OPTION INCEPTION (DATE)
-----------------------------------------------------------------------------------------
<S> <C>
Alliance Money Market 4.91% (1/27/86)
Alliance Common Stock 17.40% (1/27/86)
-----------------------------------------------------------------------------------------
</TABLE>
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, 1999
-----------------------------------------------------------------------------------------
7 DAYS 30 DAYS
-----------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Money Market 4.42% -
Alliance High Yield - 12.30%
-----------------------------------------------------------------------------------------
</TABLE>
The information in the tables above is not a guarantee, a prediction, or
necessarily an indication of future performance.
<PAGE>
APPENDIX II: OUR DATA ON MARKET PERFORMANCE
B-1 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:
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
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:
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 Trust. 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.
<PAGE>
B-2 APPENDIX II: OUR DATA ON MARKET PERFORMANCE
--------------------------------------------------------------------------------
The chart below illustrates the average annual compound rates of return over
selected time periods between December 31, 1926 and December 31, 1999 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.
AVERAGE ANNUAL RATES OF RETURN
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM LONG-TERM INTERMEDIATE-
FOR THE FOLLOWING PERIODS COMMON GOVERNMENT CORPORATE TERM GOV'T U.S. TREASURY CONSUMER
ENDING DECEMBER 31, 1999 STOCKS BONDS BONDS BONDS BILLS PRICE INDEX
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year 21.04% (8.96)% (7.45)% (1.77)% 4.68% 2.81%
3 Years 27.56% 6.04% 5.01% 5.47% 4.93% 2.04%
5 years 28.55% 9.24% 8.35% 6.95% 5.12% 2.39%
10 years 18.20% 8.79% 8.36% 7.20% 4.92% 2.94%
20 years 17.87% 10.69% 10.66% 9.53% 6.89% 4.01%
30 years 13.72% 8.94% 9.17% 8.68% 6.69% 5.12%
40 years 12.22% 7.01% 7.24% 7.35% 5.98% 4.46%
50 years 13.61% 5.56% 5.97% 6.12% 5.15% 4.01%
60 years 12.86% 5.17% 5.42% 5.39% 4.34% 4.24%
Since 1926 11.35% 5.12% 5.61% 5.22% 3.79% 3.07%
Inflation Adjusted Since 1926 8.03% 1.98% 2.46% 2.08% 0.69% 0.00%
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Ibbotson, Roger G. and Rex A. Sinquefield, STOCKS, BONDS, BILLS, AND
INFLATION (SBBI), 1982, updated in STOCKS, BONDS, BILLS, AND INFLATION 2000
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 1969-1999, 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 1969-1999; 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.
Consumer Price Index - Measured by the Consumer Price Index for all Urban
Consumers (CPI-U), not seasonally adjusted.
<PAGE>
APPENDIX III: AN INDEX OF KEY WORDS AND PHRASES
C-1 APPENDIX III: AN INDEX OF KEY WORDS AND PHRASES
--------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
PAGE
account value 21
Administrative Office 5
age 34
Allocation Date 15
alternative death benefit 17
amount at risk 38
anniversary 34
assign; assignment 32
automatic transfer service 22
AXA Financial, Inc. 4
basis 28
beneficiary 19
business day 33
Cash Surrender Value 26
Code 27
collateral 24
cost of insurance charge 38
cost of insurance rates 38
customer loyalty credit 39
day 33
death benefit guarantee 14
default 12
dollar cost averaging service 22
enhanced death benefit guarantee 14
EQAccess 5
EQ Advisors Trust 16
EQ Financial Consultants 16
Equitable Distributors 41
Equitable Life 4
Equitable Access Account 19
face amount 16
grace period 12
guarantee premium 13
guaranteed interest option 16
Guaranteed Interest Account 16
Incentive Life cover
insured person 17
Investment Funds 16
investment option 15
issue date 34
lapse 12
PAGE
loan, loan interest 24
modified endowment contract 12
month, year 34
monthly deduction 7
net cash surrender value 26
no-lapse guarantee 13
Option A, B 17
our 2
owner 2
paid up 27
paid up death benefit guarantee 14
partial withdrawal 25
payment option 19
planned periodic premium 12
policy cover
Portfolio cover
premium charge 7
premium payments 12
prospectus cover
rebalancing 23
receive 33
restore, restoration 13
rider 19
SEC cover
Separate Account FP 36
state 2
subaccount 36
surrender 26
surrender charge 7
target premium 8
telephone transfer 22
transfers 22
Trust 16
units 21
unit values 21
us 2
variable investment option 16
we 2
withdrawal 25
you, your 2
<PAGE>
Incentive Life(SM)
A flexible premium variable life
insurance policy
PROSPECTUS DATED MAY 1, 2000
AS SUPPLEMENTED DECEMBER 29, 2000.
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 prospectus for EQ Advisors Trust, which contains important
information about its 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 financial professional 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:
-------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS:
-------------------------------------------------------------------------------
o EQ/Aggressive Stock(1) o Lazard Small Cap Value
o Alliance Money Market o Mercury Basic Value Equity(6)
o Alliance High Yield o Mercury World Strategy
o Alliance Common Stock o MFS Growth with Income
o Alliance Small Cap Growth o MFS Research
o EQ/Alliance Premier Growth o MFS Emerging Growth
o EQ/Alliance Technology Companies
o EQ Equity 500 Index(2) o Morgan Stanley Emerging
o EQ Small Company Index(3) Markets Equity
o EQ International Equity o EQ/Putnam Growth & Income
Index(4) Value
o Capital Guardian U.S. Equity o EQ/Putnam Investors Growth
o Capital Guardian Research o EQ/Putnam International
o Capital Guardian International Equity
o EQ/Evergreen
o EQ/Evergreen Foundation
o FI Mid Cap
o FI Small/MidCap Value
o EQ/Janus Large Cap Growth
o J.P. Morgan Core Bond(5)
o Lazard Large Cap Value
-------------------------------------------------------------------------------
(1) Formerly named "Alliance Aggressive Stock"
(2) Formerly named "Alliance Equity Index"
(3) Formerly named "BT Small Company Index"
(4) Formerly named "BT International Equity Index"
(5) Formerly named "JPM Core Bond"
(6) Formerly named "Merrill Lynch Basic Value Equity"
Amounts that you allocate under your policy to any of the variable investment
options are invested in a corresponding "Portfolio" that is part of EQ
Advisors Trust, a mutual fund. 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 between two life insurance benefit options, (6) elect to receive an
insurance benefit if the insured person becomes terminally ill, and (7) obtain
certain optional benefits that we offer by "riders" to your policy.
Your financial professional 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.
72815 MLF
<PAGE>
2 CONTENTS OF THIS PROSPECTUS
--------------------------------------------------------------------------------
INCENTIVE LIFE
--------------------------------------------------------------------
What is Incentive Life? Cover
Who is Equitable Life? 4
How to reach us 5
Charges and expenses you will pay 7
Risks you should consider 11
--------------------------------------------------------------------
1
POLICY FEATURES AND BENEFITS 12
--------------------------------------------------------------------
How you can pay for and contribute to your policy 12
The minimum amount of premiums you must pay 12
You can guarantee that your policy will not terminate
before a certain date 13
You can elect a "paid up" death benefit guarantee 15
Investment options within your policy 16
About your life insurance benefit 17
You can increase or decrease your insurance coverage 18
Other benefits you can add by rider 19
Your options for receiving policy proceeds 20
Your right to cancel within a certain number of days 21
Variations among Incentive Life policies 21
Other Equitable Life policies 21
--------------------------------------------------------------------
2
DETERMINING YOUR POLICY'S VALUE 22
--------------------------------------------------------------------
Your account value 22
--------------------------------------------------------------------
3
TRANSFERRING YOUR MONEY AMONG OUR
INVESTMENT OPTIONS 23
--------------------------------------------------------------------
Transfers you can make 23
Telephone and EQAccess transfers 23
Our dollar cost averaging service 23
Our asset rebalancing service 24
--------------------------------------------------------------------
--------------------------------------------------------------------------------
"We," "our" and "us" refers to Equitable Life. "Financial professional"
means the registered representative who is offering you this policy.
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.
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.
<PAGE>
3 CONTENTS OF THIS PROSPECTUS
--------------------------------------------------------------------------------
--------------------------------------------------------------------
4
ACCESSING YOUR MONEY 25
--------------------------------------------------------------------
Borrowing from your policy 25
Making withdrawals from your policy 26
Surrendering your policy for its net cash
surrender value 27
Your option to receive a living benefit 27
--------------------------------------------------------------------
5
TAX INFORMATION 28
--------------------------------------------------------------------
Basic tax treatment for you and your beneficiary 28
Tax treatment of distributions to you 28
Tax treatment of living benefit proceeds 30
Effect of policy on interest deductions taken by
business entities 30
Requirement that we diversify investments 30
Estate, gift, and generation-skipping taxes 31
Pension and profit-sharing plans 31
Other employee benefit programs 31
ERISA 31
Our taxes 31
When we withhold taxes from distributions 32
Possibility of future tax changes 32
--------------------------------------------------------------------
6
MORE INFORMATION ABOUT PROCEDURES
THAT APPLY TO YOUR POLICY 33
--------------------------------------------------------------------
Ways to make premium and loan payments 33
Requirements for surrender requests 33
Ways we pay policy proceeds 33
Assigning your policy 33
Dates and prices at which policy events occur 33
Policy issuance 35
Gender-neutral policies 35
--------------------------------------------------------------------
7
MORE INFORMATION ABOUT OTHER MATTERS 37
--------------------------------------------------------------------
Your voting privileges 37
About our Separate Account FP 37
About our general account 38
You can change your policy's insured person 38
Transfers of your account value 38
Telephone and EQAccess requests 39
Deducting policy charges 39
Customer loyalty credit 40
Suicide and certain misstatements 41
When we pay policy proceeds 41
Changes we can make 41
Reports we will send you 42
Legal proceedings 42
Illustrations of policy benefits 42
SEC registration statement 42
How we market the policies 42
Insurance regulation that applies to Equitable Life 43
Directors and principal officers 44
--------------------------------------------------------------------
8
FINANCIAL STATEMENTS OF SEPARATE
ACCOUNT FP AND EQUITABLE LIFE 52
--------------------------------------------------------------------
Separate Account FP financial statements FSA-1
Equitable Life financial statements F-1
--------------------------------------------------------------------
APPENDICES
--------------------------------------------------------------------
I - Investment performance record A-1
II - Our data on market performance B-1
III - An index of key words and phrases C-1
--------------------------------------------------------------------
--------------------------------------------------------------------
EQ ADVISORS TRUST PROSPECTUS (follows after
page C-1 of this prospectus, but is not a part of this
prospectus)
--------------------------------------------------------------------
<PAGE>
4 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 subsidiary of AXA Financial, Inc.
(previously The Equitable Companies Incorporated). The majority shareholder of
AXA Financial, Inc. 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.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$417.4 billion in assets as of September 30, 2000. For more than 100 years
Equitable Life has 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.
As supplemented December 29, 2000.
<PAGE>
5 WHO IS EQUITABLE LIFE?
--------------------------------------------------------------------------------
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
-------------------------------------------------------------
BY MAIL:
-------------------------------------------------------------
at the Post Office Box for our Administrative Office:
Equitable Life - EDI Service Center
P.O. Box 1047
Charlotte, North Carolina 28201-1047
-------------------------------------------------------------
BY EXPRESS DELIVERY ONLY:
-------------------------------------------------------------
at the Street Address for our Administrative Office:
Equitable Life - EDI Service Center
10840 Ballantyne Commons Parkway
Charlotte, North Carolina 28277
1-704-341-7000 (for express delivery purposes only)
-------------------------------------------------------------
BY TOLL-FREE PHONE:
-------------------------------------------------------------
1-888-228-6690
(automated system available 22 hours a day from 6AM to
4AM Eastern Time; customer service representative available
weekdays 8AM to 9PM, Eastern Time)
-------------------------------------------------------------
BY E-MAIL:
-------------------------------------------------------------
[email protected]
-------------------------------------------------------------
BY FAX:
-------------------------------------------------------------
1-704-540-2199
-------------------------------------------------------------
BY INTERNET:
-------------------------------------------------------------
Our Web site (www.equitable.com) can also provide you
information. You can access your policy information through
our Web site by enrolling in EQAccess.
-------------------------------------------------------------
We require that the following types of communications be
on specific forms we provide for that purpose:
(1) request for dollar cost averaging (our automatic transfer service);
(2) authorization for telephone transfers by a person who is not both the
insured person and the owner;
(3) request for asset rebalancing; and
(4) designation of new policy owner(s).
We also have specific forms that we recommend you use for the following:
(a) policy surrenders;
(b) address changes;
(c) beneficiary changes;
(d) transfers between investment options; and
(e) changes in allocation percentages for premiums
and deductions.
You can change your allocation percentages and/or transfer among investment
options (1) by toll-free phone or (2) over the Internet through EQAccess. This
feature is anticipated to be available in EQAccess by the end of 2000. For
more information about transaction requests you can make by phone or over the
Internet, see "Telephone and EQAccess transfers" and "Telephone and EQAccess
requests" later in this prospectus.
Except for properly authorized telephone or Internet transactions, any notice
or request that does not use our standard form must be in writing. It must be
dated and signed by you and should also specify your name, the 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. 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 all must sign. Any
As supplemented December 29, 2000
<PAGE>
6 WHO IS EQUITABLE LIFE?
--------------------------------------------------------------------------------
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.
We reserve the right to limit access to telephone, Internet or fax services if
we determine that you are engaged in a market timing strategy. See "Transfers
of your account value - Market timing" later in this prospectus.
<PAGE>
7 CHARGES AND EXPENSES YOU WILL PAY
--------------------------------------------------------------------------------
TABLE OF POLICY CHARGES
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" later in this prospectus.
<TABLE>
<CAPTION>
<S> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM Premium charge (a) 6% of each premium payment you make up to a certain
AMOUNTS YOU CONTRIBUTE amount(1) and (b) 3% of each premium payment thereafter
TO YOUR POLICY: (which we may increase up to 6%)(2)
-----------------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM Administrative charge(3) (i) For adults (age 18 and older), $20 in each of your
YOUR POLICY'S VALUE EACH policy's first 12 months; or, for children, $10 in each of
MONTH: your 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 Amount varies depending on the specifics of your policy(4)
Optional rider charges
--------------------------------------------------------------------------------------------------------
Charge if you have elected our $.02 for each $1,000 of your policy's face amount at the
optional enhanced death time the charge is deducted(5)
benefit guarantee
-----------------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM Mortality and expense .60% (effective annual rate) of the value you have in our
YOUR POLICY'S VARIABLE risk charge variable investment options (we may increase this rate up
INVESTMENT PERFORMANCE to .90%)(6)
EACH DAY:
-----------------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM Surrender (turning in) of your A surrender charge that will not exceed the amount set
YOUR ACCOUNT VALUE AT THE policy during its first 15 years forth in your policy(7) (we will also deduct the remaining
TIME OF THE TRANSACTION: amount of surrender charge associated with any face
amount increase, as discussed immediately below)
--------------------------------------------------------------------------------------------------------
Surrender of your policy during An amount of surrender charge that we will compute on
the first 15 years after you have essentially the same basis as if each such face amount
requested an increase in your increase had been a separate, newly-issued Incentive Life
policy's face amount policy(8)
--------------------------------------------------------------------------------------------------------
Requested decrease in your A pro rata portion of the full surrender charge that would
policy's face amount apply to a surrender at the time of the decrease
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
8 CHARGES AND EXPENSES YOU WILL PAY
--------------------------------------------------------------------------------
(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 financial professional 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, as a result of changes in the
tax laws which increase our expenses.
(3) Not applicable after the insured person reaches age 100.
(4) See "Monthly cost of insurance charge" and "Other benefits you can add by
rider" later in this prospectus.
(5) The "face amount" is the basic amount of insurance coverage under your
policy.
(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 initial amount of surrender charge depends on
each policy's specific characteristics. For any policy, the lowest initial
surrender charge per $1,000 of initial face amount would be $2.91, and the
highest initial surrender charge per $1,000 of initial face amount would be
$12.99.
(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 changes
that we make automatically as a result of any change in your death benefit
option.
<PAGE>
9 CHARGES AND EXPENSES YOU WILL PAY
--------------------------------------------------------------------------------
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, 1999. 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.
<TABLE>
<CAPTION>
1999 FEES AND EXPENSES
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL FEE WAIVERS NET TOTAL
MANAGEMENT OTHER ANNUAL AND/OR EXPENSE ANNUAL
FEE(1) 12B-1 FEE EXPENSES(2) EXPENSES REIMBURSEMENTS(3) EXPENSES
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89% -- 0.89%
-----------------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 0.46% 0.25% 0.04% 0.75% -- 0.75%
-----------------------------------------------------------------------------------------------------------------------------------
Alliance High Yield 0.60% 0.25% 0.05% 0.90% -- 0.90%
-----------------------------------------------------------------------------------------------------------------------------------
Alliance Money Market 0.34% 0.25% 0.05% 0.64% -- 0.64%
-----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth(4) 0.90% 0.25% 0.23% 1.38% 0.23% 1.15%
-----------------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth(5) 0.75% 0.25% 0.07% 1.07% -- 1.07%
-----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology(6) 0.90% 0.25% 0.10% 1.25% 0.10% 1.15%
-----------------------------------------------------------------------------------------------------------------------------------
EQ Equity 500 Index 0.25% 0.25% 0.05% 0.55% -- 0.55%
-----------------------------------------------------------------------------------------------------------------------------------
EQ Small Company Index 0.25% 0.25% 0.71% 1.21% 0.46% 0.75%
-----------------------------------------------------------------------------------------------------------------------------------
EQ International Equity Index 0.35% 0.25% 0.49% 1.09% 0.09% 1.00%
-----------------------------------------------------------------------------------------------------------------------------------
Capital Guardian International(4) 0.85% 0.25% 0.66% 1.76% 0.56% 1.20%
-----------------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research(4) 0.65% 0.25% 0.47% 1.37% 0.42% 0.95%
-----------------------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity(4) 0.65% 0.25% 0.34% 1.24% 0.29% 0.95%
-----------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen 0.65% 0.25% 1.87% 2.77% 1.82% 0.95%
-----------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation 0.60% 0.25% 1.07% 1.92% 0.97% 0.95%
-----------------------------------------------------------------------------------------------------------------------------------
FI Mid Cap(7) 0.70% 0.25% 0.09% 1.04% 0.04% 1.00%
-----------------------------------------------------------------------------------------------------------------------------------
FI Small/MidCap Value 0.75% 0.25% 0.24% 1.24% 0.14% 1.10%
-----------------------------------------------------------------------------------------------------------------------------------
EQ/Janus Large Cap(7) 0.90% 0.25% 0.10% 1.25% 0.10% 1.15%
-----------------------------------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond 0.45% 0.25% 0.20% 0.90% 0.10% 0.80%
-----------------------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value 0.65% 0.25% 0.21% 1.11% 0.16% 0.95%
-----------------------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value 0.75% 0.25% 0.26% 1.26% 0.16% 1.10%
-----------------------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity 0.60% 0.25% 0.17% 1.02% 0.07% 0.95%
-----------------------------------------------------------------------------------------------------------------------------------
Mercury World Strategy 0.70% 0.25% 0.46% 1.41% 0.21% 1.20%
-----------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 0.65% 0.25% 0.17% 1.07% 0.07% 1.00%
-----------------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income 0.60% 0.25% 0.37% 1.22% 0.27% 0.95%
-----------------------------------------------------------------------------------------------------------------------------------
MFS Research 0.65% 0.25% 0.17% 1.07% 0.12% 0.95%
-----------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 1.00% 2.40% 0.65% 1.75%
-----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.16% 1.01% 0.06% 0.95%
-----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth 0.65% 0.25% 0.19% 1.09% 0.14% 0.95%
-----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity 0.85% 0.25% 0.32% 1.42% 0.17% 1.25%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
As supplemented December 29, 2000.
<PAGE>
10 CHARGES AND EXPENSES YOU WILL PAY
--------------------------------------------------------------------------------
(1) The management fees shown reflect revised management fees, effective on
or about May 1, 2000, which were approved by shareholders. The management
fees shown for EQ/Putnam Growth & Income Value, FI Small/MidCap Value and
Lazard Large Cap Value do not reflect the waiver of a portion of each
Portfolio's investment management fees that is currently in effect. The
management fee for each Portfolio cannot be increased without a vote of
each Portfolio's shareholders.
(2) On October 18, 1999 the Alliance Money Market, Alliance High Yield,
Alliance Common Stock, Alliance Small Cap Growth, EQ Equity 500 Index and
EQ/Aggressive Stock Portfolios became part of EQ Advisors Trust. Other
Expenses for these Portfolios have been restated to reflect the estimated
expenses that would have been incurred, had these Portfolios been
portfolios of EQ Advisors Trust for the full year ended December 31,
1999. The restated expenses reflect an increase of 0.01% for each of
these Portfolios.
(3) Equitable Life, EQ Advisors Trust's manager, has entered into an Expense
Limitation Agreement with respect to certain Portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses of each of these Portfolios, if necessary, in an amount
that limits each Portfolio's Total Annual Expenses (exclusive of
interest, taxes, brokerage commissions, capitalized expenditures and
extraordinary expenses) to not more than the amounts specified above as
Net Total Annual Expenses. Portfolios that show "-" in this column have
no expense limitation arrangement in effect. See the EQ Advisors Trust
prospectus for more information about the Expense Limitation Agreement.
The expense limitations for the EQ Equity 500 Index, MFS Emerging Growth
Companies, MFS Growth with Income, MFS Research, Mercury Basic Value
Equity, EQ/Putnam International Equity and EQ/Putnam Growth & Income
Value Portfolios reflect an increase effective on May 1, 2000. The
expense limitation for the EQ/Evergreen and Lazard Small Cap Value
Portfolios reflects a decrease effective on May 1, 2000.
(4) Initial seed capital was invested in the EQ/Alliance Premier Growth,
Capital Guardian International, Capital Guardian Research and Capital
Guardian U.S. Equity Portfolios on April 30, 1999; thus, Other Expenses
for these Portfolios have been estimated.
(5) Prior to October 18, 1999, Total Annual Expenses for the Alliance Small
Cap Growth Portfolio were limited to 1.20% under an expense limitation
arrangement which is no longer in effect. The amounts shown have been
restated to reflect the expenses that would have been incurred in 1999,
absent the expense limitation arrangement.
(6) Expenses shown are based on annualized estimates for 2000. Initial seed
capital was invested in the EQ/Alliance Technology Portfolio on May 2,
2000.
(7) Initial seed capital was invested in the FI Mid Cap and EQ/Janus Large
Cap Growth Portfolios on September 1, 2000.
As supplemented December 29, 2000.
<PAGE>
11 RISKS YOU SHOULD CONSIDER
--------------------------------------------------------------------------------
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" below); (2) make a charge for
the operating expenses of our variable investment options (including, without
limitation, SEC registration fees and 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.
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.
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.
<PAGE>
1
POLICY FEATURES AND BENEFITS
12 POLICY FEATURES AND BENEFITS
--------------------------------------------------------------------------------
Incentive Life is a variable life insurance policy that provides you with
flexible payment plans and benefits to meet your specific needs. The basic
terms of the policy require you to make certain payments in return for life
insurance coverage. The payments you can make and the coverage you can receive
in this 'base policy' are described below.
You can also add riders to your base policy that can increase the benefits you
receive and affect the amounts you pay in certain circumstances. Those riders,
including the Incentive Term rider and Ten-year term insurance rider, are
discussed in "other benefits you can add by rider" below.
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 on an automatic premium
payment plan may have different minimums.) Otherwise, with a few exceptions
mentioned below, you can make premium payments at any time and in any amount.
------------------------------------------------------------------------------
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. See "Tax
information" below. We may return any premium payments that would exceed those
limits to you.
You can ask your financial professional 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 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.
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 amount of premiums is not
mandatory. Rather, you need to pay only the amount of premiums (if any)
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" below).
("Net cash surrender value" is explained under "Surrendering your policy for
its net cash surrender value" below.)
As supplemented December 29, 2000.
<PAGE>
13 POLICY FEATURES AND BENEFITS
-------------------------------------------------------------------------------
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.
-------------------------------------------------------------------------------
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 pay 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," 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.
YOU CAN GUARANTEE THAT YOUR POLICY WILL NOT TERMINATE BEFORE A CERTAIN DATE
You can generally 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").
In some states, these guarantees may be unavailable, limited to shorter
periods, or referred to by different names.
If your policy is issued with the Incentive Term rider, the "death benefit
guarantee" is not available. See "Other benefits you can add by rider" below
for more information.
We make no extra charge for either of these two 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.
-------------------------------------------------------------------------------
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
As supplemented December 29, 2000.
<PAGE>
14 POLICY FEATURES AND BENEFITS
--------------------------------------------------------------------------------
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 due 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 a guarantee against termination 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).
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
$1,000 of the policy's face amount is deducted from your account value for
this 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, for the life of the
insured person; 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. It is not available if your policy
is issued with the Incentive Term rider.
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 guarantee 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 after policy issue. 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.
As supplemented December 29, 2000.
<PAGE>
----------
15
--------------------------------------------------------------------------------
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, so long as the guarantee
remains in effect. The guarantee will terminate, however, if (i) at any time
following 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 (see "About your life
insurance benefit" below);
o you must terminate any riders to your policy that carry additional charges,
including the Incentive Term rider;
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.
If your policy is issued with the Incentive Term rider, the "paid up" death
benefit guarantee is only available with respect to the base coverage.
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 calculation 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 "Charges and expenses
you will pay" 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, 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 the paid up death benefit guarantee is in effect
will generally be subject to the same terms and conditions as any other
partial withdrawal (see "Making withdrawals from your policy" below), except
that:
o We may decline your request for a partial withdrawal (or any other policy
change) under the circumstances described in the paid up death benefit
guarantee policy endorsement. If this occurs, you may wish to consider
asking us to terminate the paid up death benefit guarantee.
As supplemented December 29, 2000.
<PAGE>
16 POLICY FEATURES AND BENEFITS
--------------------------------------------------------------------------------
o Partial withdrawals (and any distributions we may be required to make for
tax purposes) will generally reduce your policy's face amount by more than
the amount of the withdrawal.
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" below. You should consult your tax advisor
before making this election.
INVESTMENT OPTIONS WITHIN YOUR POLICY
We will initially put all amounts which you have allocated to variable
investment options into our Alliance Money Market investment option. On the
first business day following the twentieth day after your policy is issued
(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%.
-------------------------------------------------------------------------------
You can choose among variable investment options
-------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS. The available variable investment options 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 advisors who make the investment decisions for each Portfolio are
as follows:
o Alliance Capital Management L.P. (for each "Alliance" or "EQ/Alliance"
option, EQ Small Company Index, EQ International Equity Index and EQ
Equity 500 Index; also, jointly advises EQ/Aggressive Stock)
o Bankers Trust Company advises the EQ International Equity Index and the EQ
Small Company Index options
o Capital Guardian Trust Company (for the "Capital Guardian" options)
o Evergreen Asset Management Corp. (for the "EQ/Evergreen" options)
o Fidelity Management & Research Company (for the "FI" options)
o Janus Capital Corporation (for the "EQ/Janus" option)
o J.P. Morgan Investment Management Inc. (for the "J.P. Morgan" option)
o Lazard Asset Management (for both "Lazard" options)
o Massachusetts Financial Services Company (for the "MFS" options; also,
jointly advises EQ/Aggressive Stock)
o Mercury Advisors (for both "Mercury" options)
o Morgan Stanley Asset Management Inc. (for the "Morgan Stanley" option)
o Putnam Investment Management, Inc. (for both "EQ/Putnam" options)
Each Portfolio is a part of EQ Advisors Trust. Equitable Life serves as
investment manager of EQ Advisors Trust. As such, Equitable Life 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.
(Prior to September 1999, EQ Financial Consultants, Inc., the predecessor to
AXA Advisors, LLC and an affiliate of Equitable Life, served as investment
manager to EQ Advisors Trust.) You will find other important information about
each Portfolio in the separate prospectus for 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
As supplemented December 29, 2000.
<PAGE>
17 POLICY FEATURES AND BENEFITS
--------------------------------------------------------------------------------
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. (The guaranteed interest option is
part of what your policy and other supplemental material may refer to as the
"Guaranteed Interest Account".)
-------------------------------------------------------------------------------
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 base policy. $50,000 is
the smallest amount of coverage you can request.
If you are applying for $1.1 million or more of coverage, you should consider
whether it would be to your advantage to take out some of your coverage under
our Incentive Term rider. This rider generally provides fewer guarantees and
lower charges. See "Other benefits you can add by rider" below.
-------------------------------------------------------------------------------
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" below.)
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:
-------------------------------------------------------------------------------
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.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
AGE* 40 45 50 55 60 65
AND UNDER
% 250% 215% 185% 150% 130% 120%
70 75-95 99-OVER
% 115% 105% 101%
-------------------------------------------------------------------------------
* 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
As supplemented December 29, 2000.
<PAGE>
18 POLICY FEATURES AND BENEFITS
--------------------------------------------------------------------------------
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 remain unpaid because the insured person died
during a grace period. 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" below.)
-------------------------------------------------------------------------------
You can request a change in 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. Changes from Option A to Option B are not permitted once the
insured person reaches age 81.
If you change from Option B to A, we automatically increase your policy's face
amount by an amount equal to your policy's account value at the time of the
change.
If the alternative death benefit (discussed above) is higher than the base
policy's death benefit at the time of the change in death benefit option,
o we will determine the new base policy face amount somewhat differently from
the general procedures described above, and
o we will automatically reduce the face amount of any Incentive Term rider
that you then have in effect (we discuss the Incentive Term rider below
under "Other benefits you can add by rider").
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" below, to
learn about certain possible income tax consequences that may result from a
change in death benefit option, including the effect of an increase or
decrease in face amount.
YOU CAN INCREASE OR DECREASE YOUR INSURANCE COVERAGE
If the face amount increase endorsement is issued with your policy, 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" 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 or
pay premiums 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 the insured person still meets our requirements for
coverage. Also, we establish additional amounts of surrender charge and
guarantee premiums under your policy for the face amount increase, reflecting
the amount of additional coverage.
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
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19 POLICY FEATURES AND BENEFITS
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attributable to the increase and recalculate all values under your policy to
what they would have been had the increase not taken place.
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. 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 Internal Revenue Code's definition of life
insurance. Guarantee premiums, as well as our monthly deductions for the cost
of insurance coverage, will generally decrease from the time you reduce the
face amount.
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 at
the time of the decrease 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. We may also be required to make such a
distribution to you in the future on account of a prior decrease in face
amount.
OTHER BENEFITS YOU CAN ADD BY RIDER
You may be eligible for the following other optional benefits we currently
make available by rider:
o term insurance on the insured person (Ten-year term insurance or Incentive
Term rider)
o disability waiver benefits
o accidental death benefit
o option to purchase additional insurance
o cost-of-living rider
o children's term insurance
o ten-year term insurance on an additional insured person
Equitable Life or your financial professional can provide you with more
information about these riders. Some of these riders may only be selected at
issue. Some benefits are not available in combination with others. 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 INCENTIVE TERM RIDER. The Incentive Term rider allows you to purchase
additional coverage on the insured person if the face amount of your base
Incentive Life policy is $1,000,000 or more. Choosing term coverage under this
rider in lieu of coverage under your base incentive life policy can reduce
your total charges. Our "cost of insurance" charges under the Incentive Term
rider are currently lower than they are for coverage under the base policy,
and this coverage does not have surrender charges. We reserve the right to
raise the insurance rates for this rider at any time so that they exceed the
rates for the base policy. But rates for the term rider will not be raised
above the maximum rates we are permitted to charge under your base policy.
As supplemented December 29, 2000.
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20 POLICY FEATURES AND BENEFITS
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If your policy is issued with an Incentive Term rider, the "death benefit
guarantee" and the "enhanced" death benefit guarantee are not available.
Further, the "paid up" death benefit guarantee is only available with respect
to the base coverage. Therefore, if any of these death benefit guarantees is
your priority, you should not take any coverage under the Incentive Term
rider.
If you request a face amount decrease or a partial withdrawal that results in
a face amount decrease or a face amount increase, we will adjust your base
policy face amount and your Incentive Term rider face amount proportionately,
so that the ratio between the two remains the same.
Any change in the death benefit option will not change the Incentive Term
rider's face amount, unless the alternative death benefit is in effect. If it
is, any change in your death benefit option will cause your Incentive Term
rider's face amount to be automatically reduced as discussed above under
"Change of death benefit option" in "Policy Features and Benefits."
When the alternative death benefit becomes applicable, the death benefit under
the base policy is increased and the death benefit under the Incentive Term
rider is automatically reduced by the same amount (but not below zero).
THE OPTION TO PURCHASE ADDITIONAL INSURANCE. 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. 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" 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 policy's beneficiary in your
policy application. You can change the 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.
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. A payment option selected by the policy's owner
cannot be changed by the beneficiary after the insured person dies. The terms
and conditions of each option are set out in a separate contract that we will
send to the payee when a payment option goes into effect. Equitable Life or
your financial professional can provide you with samples of such contracts on
request.
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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.
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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
AccountTM") 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.
If a financial professional has assisted the beneficiary in preparing the
documents that are required for payment of the death benefit, we will send the
Equitable Access Account
As supplemented December 29, 2000.
<PAGE>
21 POLICY FEATURES AND BENEFITS
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checkbook or check to the financial professional within the periods specified
for death benefit payments under "When we pay policy proceeds," below. Our
financial professionals will take reasonable steps to arrange for prompt
delivery to the beneficiary.
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.
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 financial professional can advise you about any
variations that may apply to your policy.
OTHER EQUITABLE LIFE POLICIES
We offer a variety of fixed and variable life insurance policies which offer
policy features, including investment options, that are different from those
offered by this prospectus. Not every policy is offered through your financial
professional. You can contact us to find out more about any other Equitable
Life insurance policy.
As supplemented December 29, 2000.
<PAGE>
2
DETERMINING YOUR POLICY'S VALUE
22 DETERMINING YOUR POLICY'S VALUE
--------------------------------------------------------------------------------
YOUR ACCOUNT VALUE
As set forth 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
(including any interest on those amounts which has not yet been allocated to
the variable investment options). See "Borrowing from your policy" 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 "Charges and expenses you will pay."
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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.
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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 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 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.
The value of each unit will increase or decrease each day, as though 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 (see "Table of policy
charges"in "Charges and expenses you will pay" 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.
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" 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.
<PAGE>
3
TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
23 TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
--------------------------------------------------------------------------------
TRANSFERS YOU CAN MAKE
------------------------------------------------------------------------------
You can transfer among our variable investment options and into our guaranteed
interest option.
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After your policy's 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, you can make a telephone
request or you can make a request over the Internet (see below).
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Transfers out of our guaranteed interest option are more limited.
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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 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 will never apply to a transfer of all of your variable investment
option amounts to our guaranteed investment option, or to any transfer
pursuant to our dollar cost averaging or asset rebalancing service, as
discussed below.
TELEPHONE AND EQACCESS TRANSFERS
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
1-888-228-6690 (toll free) from a touch tone phone; or
o if you are not both the insured person and owner, by sending us a signed
telephone transfer authorization form. 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 and EQAccess requests" later in this
Prospectus. We allow only one request for telephone transfers each day
(although that 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.
EQACCESS TRANSFERS. By the end of 2000, we anticipate that you will be able to
make transfers over the Internet. You may do this by visiting our Website and
enrolling in EQAccess. This service may not always be available. Generally,
the restrictions relating to telephone transfers apply to EQAccess transfers.
MARKET TIMING. We reserve the right to limit your access to telephone or
EQAccess transfers if we determine that you are engaged in a market timing
strategy. See "Transfers of your account value - Market timing" later in this
prospectus.
OUR DOLLAR COST AVERAGING SERVICE
We offer 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.
<PAGE>
24 TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Using the dollar cost averaging service does not guarantee that you will earn
a profit or be protected against losses.
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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 may elect
the dollar cost averaging service with your policy application or at any later
time (provided you are not using the asset rebalancing service described
below). At least $5,000 must be allocated to the Alliance Money Market option
to begin using the dollar cost averaging service. You can choose up to eight
other variable investment options to receive the automatic transfers, but each
transfer to each option must be at least $50.
This service terminates when the Alliance Money Market option is depleted. You
can also cancel the dollar cost averaging service at any time. You may not
simultaneously participate in the asset rebalancing service and the dollar
cost averaging service.
OUR ASSET REBALANCING SERVICE
You may wish us to periodically redistribute the amounts you have in our
variable investment options so that the relative amount of your account value
in each variable option is restored to an asset allocation that you select .
You can accomplish this automatically through our asset rebalancing service.
The rebalancing may be at quarterly, semiannual, or annual intervals.
You may specify asset allocation percentages for up to eight variable
investment options. The allocation percentage you specify for each variable
investment option selected must be at least 5% (whole percentage only) of the
total value you hold under the variable investment options, and the sum of the
percentages must equal 100%. You may not simultaneously participate in the
asset rebalancing service and in the dollar cost averaging service (discussed
above).
You may request the asset rebalancing service in your policy application or at
any later time.You may change your allocation instructions or discontinue
participation in the asset rebalancing service at any time.
<PAGE>
4
ACCESSING YOUR MONEY
25 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" below.
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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.
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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
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 loan 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.
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.
We credit interest on your loan collateral daily. On each anniversary of your
policy (or when your policy loans are fully
<PAGE>
26 ACCESSING YOUR MONEY
--------------------------------------------------------------------------------
repaid) 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. Even if a loan is not taxable when made, it may later become
taxable, for example, upon termination or surrender. See "Tax information"
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.
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You can withdraw all or part of your policy's net cash surrender value,
although you may incur charges and tax consequences by doing so.
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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. 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 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" below, for information about possible
tax consequences of partial withdrawals and any associated reduction in policy
benefits.
<PAGE>
27 ACCESSING YOUR MONEY
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A partial withdrawal may increase the chance that your policy could lapse
because of insufficient value to pay policy charges as they fall due.
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 in "Charges and expenses you
will pay" above.
Please refer to "Tax information" 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 (generally 75%) 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).
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.
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You can arrange to receive a "living benefit" if the insured person becomes
terminally ill.
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<PAGE>
5
TAX INFORMATION
28 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 generally
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 policy, such as a surrender, a
partial withdrawal, loan or a payment to you.
There may be different tax consequences if you assign your policy or designate
a new owner. See "Assigning your policy" 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.
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In addition to the above premium limits for testing for modified endowment
status, there are overall limits on the amount of premiums you may pay under
your policy in order for it to qualify as life insurance. Changes made to your
policy, for example, a decrease in face amount (including any decrease that
may occur as a result of a partial withdrawal) or other decrease in benefits
may impact the maximum amount of premiums that can be paid, as well as the
maximum amount of account value that may be maintained under the policy. In
some cases, this may cause us to take current or future action in order to
assure that your policy continues to qualify as life insurance, including
distribution of amounts to you that may be includible as income. See "Changes
we can make" below.
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, although interest credited on loan
collateral may become taxable under the rules below if distributed.
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 591/2, (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
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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 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 pending legislative proposals which might further restrict
available exceptions to this limit on interest deductions or make other tax
law changes with respect to such coverage.
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
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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 $675,000 (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 deductible or
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 (indexed annually for inflation, $1,030,000 for
2000).
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
advisor.
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. Among other issues, 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
As supplemented December 29, 2000.
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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 tax expenses 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 a satisfactory written 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, and you may incur penalties
under the estimated income tax rules. 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.
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 or clarifying
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 or change in interpretation. Any changes in federal, state, local or
foreign tax law or interpretations could have a retroactive effect both on our
taxes and on the way your policy is taxed.
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
Portfolios within an insurance policy 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.
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This section provides further detail about certain subjects that are addressed
in the previous pages. 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, or any payments in
foreign currency, 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.
REQUIREMENTS FOR SURRENDER REQUESTS
Your surrender request must include the policy number, your name, your tax
identification number, 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. We may also
require you to complete specific tax forms.
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, to effect a change of ownership 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.
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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 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 result from a withdrawal
o changes of allocation percentages for premium payments or monthly
deductions
o surrenders
o changes of beneficiary
o transfers from a variable investment option to the guaranteed interest
option
o changes in form of death benefit payment
o loans
o transfers among variable investment options
o assignments
o termination of paid up death benefit guarantee
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 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 (automatic transfer service) occur as of the first day of each policy
month. If you request the dollar cost averaging service in your original
policy application, the first transfer will occur as of the first day of the
second policy month after your policy's initial Allocation Date. If you
request this service at any later time, 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.
ASSET REBALANCING SERVICE. If you request the asset rebalancing service, the
first redistribution will be on the date you specify or the date we receive
your request, if later. However, no rebalancing will occur before your
policy's Allocation Date. Subsequent periodic rebalancings occur quarterly,
semiannually or annually, as you have requested.
DELAY IN CERTAIN CASES. We may delay allocating any payment you make to our
variable investment options, or
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any transfer, for the same reasons stated in "Delay of variable investment
option proceeds" 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 financial
professional 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 your financial professional 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) 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 request and review a copy of our temporary
insurance agreement 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
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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.
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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). 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 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 semiannual 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) of Separate Account FP available
under Incentive Life invests solely in class IB shares issued by the
corresponding Portfolio of 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,
to the trustee of a qualified plan for Equitable Life and 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 EQ Advisors 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 Trust's Portfolios is so large as to
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materially impair the investment performance of the Portfolio 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"
above. You should consult your tax advisor prior to substituting the insured
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. Similarly, the asset rebalancing
program will terminate if either (2) or (3) occurs.
MARKET TIMING. You should note that the product is not designed for
professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy, making programmed transfers,
frequent transfers or transfers that are large in relation to the total assets
of the underlying mutual fund portfolio. Market timing strategies are
disruptive to the underlying mutual
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fund portfolios in which the variable investment options invest. If we
determine that your transfer patterns among the variable investment options
reflect a market timing strategy, we reserve the right to take action
including, but not limited to: restricting the availability of transfers
through telephone requests, facsimile transmissions, automated telephone
services, Internet services or any electronic transfer services. We may also
refuse to act on transfer instructions of an agent acting under a power of
attorney who is acting on behalf of more than one owner.
TELEPHONE AND EQACCESS REQUESTS
If you are a properly authorized person, you may make transfers between
investment options by telephone or over the Internet as described above under
"Telephone and EQAccess transfers."
Also, if you are both the owner and the insured person under your policy, you
may call 1-888-228-6690 (toll free) from a touch tone phone to make the
following additional types of requests:
o policy loans
o changes of premium allocation percentages (anticipated to be available
through EQAccess by the end of 2000)
o changes of address
For security purposes, 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 you wish to participate in EQAccess, you must first agree to the terms and
conditions set forth in our EQAccess Online Services Agreement, which you can
find at our Web site. For security purposes, you may not initiate any
transactions relating to your policy for five (5) days after you have elected
to use EQAccess. We will send you a confirmation letter by first class mail.
Additionally, you will be required to use a password and protect it from
unauthorized use. We will provide subsequent written confirmation of any
EQAccess transactions. We will assume that all instructions received through
EQAccess from anyone using your password are given by you; however, we reserve
the right to refuse to process any transaction and/or block access to EQAccess
if we have reason to believe the instructions given are unauthorized.
If we do not employ reasonable procedures to confirm the genuineness of
telephone or Internet 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 or Internet instructions that we reasonably believe to be
genuine.
We reserve the right to refuse to process any telephone or Internet
transactions if we have reason to believe that the request compromises the
general security and/or integrity of our automated systems (see discussion of
"Market timing" above).
Any telephone or Internet transaction request that we receive 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 or Internet
request. If this occurs, you should submit a written transaction request to
our Administrative Office. We reserve the right to discontinue telephone or
Internet transactions, or modify the procedures and conditions for such
transactions, without notifying you, 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 risk under your policy. Our amount at
risk (also described in your policy as "net amount at risk")
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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 1980 Commissioner's 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 1980 Commissioner's 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 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 and tax expenses 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.
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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 or loan repayment
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 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.
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If we take any action that results in a material change in the underlying
investments of a variable investment option, we will notify you to the extent
required by law. We may, for example, cause the variable investment option to
invest in a mutual fund other than, or in addition to, 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.
Subject to all applicable legal requirements, we also 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 your premium payments, loan
repayments, 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 when you purchase your policy and upon request thereafter. 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 assumed rates of return (within limits)
that you request. 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 Equitable Distributors Inc. ("EDI").* The
Investment Company Act of 1940, therefore, classifies EDI as a "principal
underwriter" of those policies and contracts. EDI also serves as a principal
underwriter of EQ Advisors Trust. EDI is a wholly owned subsidiary of
Equitable Life, with its address at 1290 Avenue of the Americas, New York, NY
10104. EDI is registered with the SEC as a broker-dealer and is a member of
the National Association of Securities Dealers, Inc. ("NASD"). In 1998 and
1999, we paid EDI fees of $35,582,313 and $46,957,345, respectively, for its
services under a Distribution Agreement with Equitable Life and its separate
accounts.
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* It is anticipated that during the fourth quarter of 2000, Equitable
Distributors, LLC ("EDI, LLC") will become a successor by merger to all
of the functions, rights and obligations of Equitable Distributors, Inc.
("EDI"), including the role of principal underwriter of Separate Account
FP. Like EDI, EDI, LLC is owned by Equitable Holdings, LLC. Accordingly,
once the successor by merger is complete, all references to the principal
underwriter in each prospectus should be replaced with Equitable
Distributors, LLC.
As supplemented December 29, 2000.
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We sell Incentive Life through licensed insurance agencies (both affiliated
and unaffiliated with Equitable Life) and their affiliated broker-dealers (who
are registered with the SEC and are members of the NASD). Such agencies and
their affiliated broker-dealers have entered into selling agreements with EDI.
The licensed insurance agents who sell our policies are appointed as agents of
Equitable Life, and are financial professionals of the agencies' affiliated
broker-dealer. Sales commissions will be paid by Equitable Life to the agency
which sells you this policy. The commissions don't cost you anything above the
charges and expenses already discussed elsewhere in this prospectus.
Generally, the agencies will receive maximum commissions of: 50% of the amount
of the premium you pay in your policy's first year up to a certain amount,
plus 3% of all other premiums you pay in your policy's first year, plus 3% of
all premiums you pay in the second through tenth years. We pay comparable
commissions on the amount of premiums you pay that we deem attributable to any
face amount increase that you request. The agency may be required to return to
us any commissions on premiums that we have refunded to a policyowner. Use of
the Incentive Term rider instead of an equal amount of coverage under the base
policy generally reduces commissions. Therefore, an agent may receive a higher
commission for selling you a policy that does not include a term rider.
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.
As supplemented December 29, 2000.
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44 DIRECTORS AND PRINCIPAL OFFICERS
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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, New York 10104.
DIRECTORS
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<TABLE>
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NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
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<S> <C>
FRANCOISE COLLOC'H
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AXA Director of Equitable Life (since July 1992). Member of the AXA Management Board
25, Avenue Matignon and Group Executive President, Human Resources, Communication and Synergies of
75008 Paris, France AXA (since January 2000). Prior thereto, Senior Executive Vice President, AXA
(1993-2000). Director or officer of various subsidiaries and affiliates of the AXA
Group.
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HENRI DE CASTRIES
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AXA Director of Equitable Life (since September 1993). Chairman of the Board of AXA
25, Avenue Matignon Financial (since April 1998); Vice Chairman (February 1996 to April 1998). Vice
75008 Paris, France Chairman of AXA's Management Board and CEO (since January 2000). Prior thereto,
Senior Executive Vice President, Financial Services and Life Insurance Activities in the
United States, Germany, the United Kingdom and Benelux (1996 to 2000); Executive
Vice President, Financial Services and Life Insurance Activities (1993 to 1996) of AXA.
Director or officer of various subsidiaries and affiliates of the AXA Group. Director of
DLJ and Alliance Capital Management Corporation, the general partner of Alliance
Holding and Alliance.
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CLAUS-MICHAEL DILL
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AXA Colonia Konzern AG Director of Equitable Life (since May 2000). Chairman of the Management Board of
Gereonsdriesch 9-11 AXA Colonia Konzern AG (since June 1999). Member of the Management Board
50670 Cologne, Germany since April 1999. Prior thereto, member of the Holding Management Board of
Gerling-Konzern in Cologne (1995 to April 1999). Chairman of the Management
Board of AXA Colonia Versicherung AG, AXA Colonia Lebensversicherung AG,
Colonia Nordstern Versicherungs-Management AG and Colonia Nordstern
Lebensversicherungs-Management AG (since June 1999). Director of AXA Financial
(since May 2000).
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JOSEPH L. DIONNE
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The McGraw-Hill Companies Director of Equitable Life (since May 1982). Retired Chairman of The McGraw-Hill
1221 Avenue of the Americas Companies (since January 2000) and retired Director (since April 2000); prior thereto,
New York, NY 10020 Chairman (April 1988 to January 2000) and Chief Executive Officer (April 1983 to
April 1998). Director of Harris Corporation and Ryder System, Inc. Director of AXA
Financial, Inc. (since May, 1992).
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DENIS DUVERNE
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AXA Director of Equitable Life (since February 1998). Executive Vice President,
25, Avenue Matignon International (US-UK-Benelux) AXA and member of AXA Executive Board (since
75008 Paris, France January, 2000). Director, Alliance (since February 1996) and Donaldson Lufkin &
Jenrette ("DLJ") (since February 1997).
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<TABLE>
<CAPTION>
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NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
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<S> <C>
JEAN-RENE FOURTOU
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Aventis Director of Equitable Life (since July 1992). Vice Chairman of the Management Board
25, Quai Paul Doumer of Aventis (since December 1999). Prior thereto, Chairman and Chief Executive
92408 Courbevoie Cedex Officer of Rhone-Poulenc, S.A. (1986 to December 1999). Member of the Supervisory
France Board of AXA. Director of Schneider Electric, Paribas, and Groupe Pernod-Ricard.
Member of the Consulting Council of Banque de France. Director, AXA Financial
(since July, 1992).
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NORMAN C. FRANCIS
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Xavier University of Louisiana Director of Equitable Life (since March 1989). President of Xavier University of
7325 Palmetto Street Louisiana; Director, Piccadilly Cafeterias, Inc., and Entergy Corporation.
New Orleans, LA 70125
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DONALD J. GREENE
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LeBouef, Lamb, Greene & MacRae, L.L.P. Director of Equitable Life (since July 1991). Of Counsel, LeBoeuf, Lamb, Greene &
125 West 55th Street MacRae, L.L.P. (since 1999). Prior thereto, Partner of the firm (1965 to 1999).
New York, NY 10019-4513 Director of AXA Financial (since May 1992).
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JOHN T. HARTLEY
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1025 NASA Boulevard Director of Equitable Life (since August 1987). Currently a Director and retired
Melbourne, FL 32919 Chairman and Chief Executive Officer of Harris Corporation (retired July 1995);
previously held other officerships with Harris Corporation. Director of AXA Financial
(since May 1992); Director of the McGraw Hill Companies.
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JOHN H.F. HASKELL JR.
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Warburg Dillon Read LLC Director of Equitable Life (since July 1992); Director of AXA Financial (since July
294, Park Avenue 1992); Director, Senior Advisor of Warburg Dillon Read LLC (since 1999); Prior
New York, NY 10171 thereto, Managing Director and member of its Board of Directors (1975-1999);
Chairman, Supervisory Board, Dillon Read (France) Gestion (until 1998); Director, Pall
Corporation (since November 1998).
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NINA HENDERSON
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Bestfoods Director of Equitable Life (since December 1996). Corporate Vice President, Core
International Plaza Business Development of Bestfoods (since June 1999). Prior thereto, President,
700 Sylvan Avenue Bestfoods Grocery and Vice President, Bestfoods (formerly CPC International, Inc.)
Englewood Cliffs, NJ 07632-9976 (1997 to 1999). President, Bestfoods Specialty Markets Group (1993 to 1997);
Director, Hunt Corporation and PACTIV Corporation. Director, AXA Financial (since
December 1996).
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W. EDWIN JARMAIN
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Jarmain Group Inc. Director of Equitable Life (since July 1992). President, Jarmain Group Inc. (since
121 King Street West 1979); and officer or director of several affiliated companies. Director, DLJ (since
Suite 2525 October 1992), Alliance Capital Management Corporation (since May 2000), AXA
Toronto, Ontario M5H 3T9 Insurance (Canada), Anglo Canada General Insurance Company, and AXA Pacific
Canada Insurance Company, and Alternate Director, AXA Asia Pacific Holdings. Chairman
(non-executive) and Director, FCA International Ltd. (January 1994 to May 1998).
Director of AXA Financial, Inc. (since July 1992).
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DIRECTORS (CONTINUED)
<TABLE>
<CAPTION>
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NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
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<S> <C>
GEORGE T. LOWY
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Cravath, Swaine & Moore Director of Equitable Life (since July 1992). Partner, Cravath, Swaine & Moore.
825 Eighth Avenue Director, Eramet.
New York, NY 10019
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DIDIER PINEAU-VALENCIENNE
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Credit Suisse First Boston Director of Equitable Life (since February 1996). Vice Chairman Credit Suisse First
c/o Schneider Electric Boston (since March 1999). Chairman and Chief Executive Officer (1981 to February
64, rue de Miromesnil 1999) (now Honorary Chairman) Schneider Electric. Member of the Supervisory Board
75008 Paris, France of AXA. Director of CGIP, Aventis (formerly Rhone-Poulenc, S.A.), Sema Group PLC
(UK), Soft Computing and Swiss Helvetic Fund; member of the Advisory Board of
Booz-Allen & Hamilton. Director of AXA Financial, Inc. (since February 1996).
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GEORGE J. SELLA, JR.
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P.O. Box 397 Director of Equitable Life (since May 1987). Retired Chairman and Chief Executive
Newton, NJ 07860 Officer of American Cyanamid Company (retired April 1993); previously held other
officerships with American Cyanamid. Director of AXA Financial (since May 1992) and
Coulter Pharmaceutical (since May 1987).
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PETER J. TOBIN
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St. John's University Director of Equitable Life (since March 1999); Dean of the Peter J. Tobin College of
8000 Utopia Parkway Business Administration, St. John's University (since August 1998); Chief Financial
Jamaica, NY 11439 Officer, Chase Manhattan Corp. (1985 to 1997). Director of Alliance Capital
Management Corporation (since May 2000), the CIT Group, Inc. and H.W. Wilson
Company.
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DAVE H. WILLIAMS
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Alliance Capital Management Director of Equitable Life (since March 1991). Chairman (since 1977) and former
Corporation Chief Executive Officer (1977 to January 1999), of Alliance, and Chairman or Director
1345 Avenue of the Americas of numerous subsidiaries and affiliated companies of Alliance. Senior Executive Vice
New York, NY 10105 President of AXA (January 1997 to January 2000). Director of AXA Financial (since
May 1992).
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OFFICERS - DIRECTORS
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
MICHAEL HEGARTY
-----------------------------------------------------------------------------------------------------------------------------------
Director of Equitable Life (since January 1998). President (since January 1998) and
Chief Operating Officer (since February 1998), Equitable Life. Senior Vice Chairman
(since November 1999), Vice Chairman (since April 1998), Senior Executive Vice
President (January 1998 to April 1998), and Director and Chief Operating Officer
(both since January 1998), AXA Financial. Director, President and Chief Operating
Officer, Equitable of Colorado (since December 1999); AXA Client Solutions & AXA
Distribution Holding Corp. (since September 1999). 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. Director,
ACMC, Inc. ("ACMC") (since March 1998). Trustee, EQ Advisors Trust. Director,
Alliance and DLJ (both since May 1998).
-----------------------------------------------------------------------------------------------------------------------------------
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), AXA Financial. Director, Chairman of the Board and Chief
Executive Officer, Equitable of Colorado (since December 1999); AXA Client Solutions
and AXA Distribution Holding Corp. (since September 1999). Member of the
Management Board of AXA (since January 2000); 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), ACMC, Inc. (since
March 1998), and AXA Canada (since September 1998). Director, KeySpan Energy
Corporation.
-----------------------------------------------------------------------------------------------------------------------------------
STANLEY B. TULIN
-----------------------------------------------------------------------------------------------------------------------------------
Director and Vice Chairman of the Board (since February 1998), and Chief Financial
Officer (since May 1996), Equitable Life. Vice Chairman of the Board (since November
1999) and Chief Financial Officer (since May 1997) and prior thereto, Senior
Executive Vice President (February 1998 to November 1999), AXA Financial. Director,
Vice Chairman and Chief Financial Officer (since December 1999) Equitable of
Colorado; AXA Client Solutions, LLC and AXA Distributions Holding Corp. (since
September 1999). Vice President (until 1998), EQ ADVISORS TRUST. Director,
Alliance (since July 1997), and DLJ (since June 1997). Prior thereto, Chairman,
Insurance Consulting and Actuarial Practice, Coopers & Lybrand, L.L.P.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
48 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OTHER OFFICERS
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
LEON B. BILLIS
-----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since February 1998) and Chief Information Officer (since
November 1994), Equitable Life and AXA Client Solutions (since September 1999).
Previously held other officerships with Equitable Life.
-----------------------------------------------------------------------------------------------------------------------------------
DERRY E. BISHOP
-----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since September 1998), Managing Director of Retail
Distribution (since July 2000 to); Chief Agency Officer, (since December 1997), and
Senior Vice President (January 1995 to September 1998), Equitable Life; Director and
Executive Vice President, AXA Advisors LLC and Executive Vice President and Chief
Agency Officer, AXA Client Solutions, LLC (all since September 1999). Prior thereto,
Director (since 1995) and Executive Vice President (since 1994) EQF (now AXA
Advisors).
-----------------------------------------------------------------------------------------------------------------------------------
HARVEY BLITZ
-----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President, Equitable Life. Senior Vice President, AXA Financial. Director
and Chairman, Frontier Trust Company, FSB ("Frontier"). Director, EQF (now AXA
Advisors) (until September 1999). Executive Vice President and Director (since
September 1999), AXA Advisors, Director (until May 1996). Director and Senior Vice
President, AXA Network, LLC (formerly EquiSource). 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 AXA Financial. Senior Vice
President and Treasurer, AXA Client Solutions, LLC; Equitable of Colorado (since
December 1999). Treasurer, Frontier (since 1990) and AXA Network, LLC (since
1999). Chairman (since August 2000) and Chief Executive Officer (since
September 1997) Equitable Casualty Insurance Company ("Casualty"). Vice President
and Treasurer, EQ ADVISORS TRUST (since March 1997). Director, Chairman,
President and Chief Executive Officer, Equitable JV Holdings (since August 1997).
Director (since July 1997), and Senior Vice President and Chief Financial Officer (since
April 1998), ACMC. Previously held other officerships with Equitable Life and its
affiliates.
-----------------------------------------------------------------------------------------------------------------------------------
JOHN A. CAROSELLI
-----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since September 1998), Equitable Life; Senior Vice
President, Equitable Life (February 1998 to September 1998); Senior Vice President,
Chase Manhattan Corp. (1996 to 1998); Vice President, Chemical Bank (1991 to 1996)
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
49 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OTHER OFFICERS (CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
JUDY A. FAUCETT
-----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President, Equitable Life, (since September 1996) and Actuary (September
1996 to December 1998). 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, AXA Client Solutions, LLC and
AXA Financial. Senior Vice President and Controller, The Equitable of Colorado, Inc.
(since December 1999). Previously held other officerships with Equitable Life and its
affiliates.
-----------------------------------------------------------------------------------------------------------------------------------
PAUL J. FLORA
-----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President and Auditor, Equitable Life. AXA Financial and AXA Client
Solutions, LLC.
-----------------------------------------------------------------------------------------------------------------------------------
ROBERT E. GARBER
-----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President and Chief Legal Officer (since November 1999), Equitable
Life; prior thereto, Executive Vice President and General Counsel. General Counsel of
AXA Financial. Executive Vice President and Chief Legal Officer of AXA Client
Solutions, LLC. Previously held other officerships with Equitable Life and its affiliates.
-----------------------------------------------------------------------------------------------------------------------------------
DONALD R. KAPLAN
-----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President (since September 1999), Chief Compliance Officer and
Associate General Counsel, Equitable Life. Senior Vice President, AXA Client
Solutions, LLC. Previously held other officerships with Equitable Life.
-----------------------------------------------------------------------------------------------------------------------------------
MICHAEL S. MARTIN
-----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since September 1998) and Managing Director of Retail
Distribution (since July 2000) Chief Marketing Officer (December 1997 to), Equitable
Life; prior thereto, Senior Vice President and Chief Marketing Officer. Chairman and
Chief Executive Officer, AXA Advisors LLC (since September 1999). Executive Vice
President and Managing Director of Retail Distribution, AXA Client Solutions, LLC
(since September 1999). Vice President, EQ ADVISORS TRUST (until April 1998).
Director, Equitable Underwriting and Sales Agency (Bahamas), Ltd. and AXA
Network, LLC; Executive Vice President (since December 1998), Colorado. Previously
held other officerships with Equitable Life and its affiliates.
-----------------------------------------------------------------------------------------------------------------------------------
RICHARD J. MATTEIS
-----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President, Equitable Life (since May 1998); Executive Vice President,
AXA Client Solutions, LLC (since September 1999); Executive Vice President, Chase
Manhattan Corporation (January 1983 to June 1997); Director, EQF (now AXA
Advisors) (October 1998 to May 1999).
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
50 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OTHER OFFICERS (CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
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), AXA
Financial. Chairman, President and Trustee (since March 1997), EQ ADVISORS TRUST.
Executive Vice President and Chief Investment Officer, Equitable of Colorado (since
December 1999), Executive Vice President, AXA Client Solutions (since
September 1999). Director, Alliance, and Equitable Real Estate (until June 1997).
Executive Vice President, EQF (now AXA Advisors) (since August 1999). Director,
EREIM Managers Corp. (since July 1997), and EREIM LP Corp. (since October 1997).
-----------------------------------------------------------------------------------------------------------------------------------
BRIAN S. O'NEIL
-----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President, Equitable Life (since June 1998). Executive Vice President,
AXA Client Solutions (since September 1999). Director of Investment, AXA
Investment Management (January 1998 to June 1998); Chief Investment Officer, AXA
Investment Management (July 1995 to January 1998). Trustee (since September
1999), EQ ADVISORS TRUST.
-----------------------------------------------------------------------------------------------------------------------------------
ANTHONY C. PASQUALE
-----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President, Equitable Life and AXA Client Solutions (since September
1999). Director, Chairman and Chief Operating Officer, Casualty, (September 1997 to
August 2000). Director, Equitable Agri-Business, Inc. (until June 1997). Previously
held other officerships with Equitable Life and its affiliates.
-----------------------------------------------------------------------------------------------------------------------------------
PAULINE SHERMAN
-----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President (since February 1999); Vice President, Secretary and Associate
General Counsel, Equitable Life and AXA Financial, (since September 1995). Senior
Vice President, Secretary and Associate General Counsel, AXA Financial and AXA
Client Solutions (since November 1999). Senior Vice President, Secretary, and
Associate General Counsel, Equitable of Colorado (since December 1999). Previously
held other officerships with Equitable Life.
-----------------------------------------------------------------------------------------------------------------------------------
RICHARD V. SILVER
-----------------------------------------------------------------------------------------------------------------------------------
Senior Vice President (since February 1995) and General Counsel (since November
1999) Equitable Life; prior thereto, Deputy General Counsel (1996-1999). Senior Vice
President (since September 1996) and Deputy General Counsel (since September
1999), AXA Financial. Senior Vice President and General Counsel, AXA Client
Solutions (since November 1999). Senior Vice President and General Counsel,
Equitable of Colorado (since December 1999). Director, AXA Advisors. Senior Vice
President and General Counsel, EIC (June 1997 to March 1998). Previously held other
officerships with Equitable Life and its affiliates.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
51 DIRECTORS AND PRINCIPAL OFFICERS
--------------------------------------------------------------------------------
OTHER OFFICERS (CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS ADDRESS BUSINESS EXPERIENCE WITHIN PAST FIVE YEARS
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
JOSE S. SUQUET
-----------------------------------------------------------------------------------------------------------------------------------
Senior Executive Vice President (since February 1998), Chief Distribution Officer (since
December 1997) and Chief Agency Officer (August 1994 to December 1997),
Equitable Life. Senior Executive Vice President, AXA Financial. Senior Executive Vice
President and Chief Distribution Officer, AXA Client Solutions (since September
1999). Senior Executive Vice President, Equitable of Colorado (since December 1999).
Chairman (since December 1997), EDI. Prior thereto, Agency Manager.
-----------------------------------------------------------------------------------------------------------------------------------
GREGORY G. WILCOX
-----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since September 1998), Senior Vice President (May 1992 to
September 1998), Equitable Life. Executive Vice President (since November 1999),
AXA Financial; prior thereto, Senior Vice President. Executive Vice President, AXA
Client Solutions, LLC (since September 1999).
-----------------------------------------------------------------------------------------------------------------------------------
R. LEE WILSON
-----------------------------------------------------------------------------------------------------------------------------------
Executive Vice President (since May 1998) and Deputy Chief Financial Officer
(September 1998 to July 1999), Equitable Life. Executive Vice President, AXA Client
Solutions (since September 1999). Prior thereto, Executive Vice President, Chase
Manhattan Bank.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
8
FINANCIAL STATEMENTS OF SEPARATE ACCOUNT FP AND EQUITABLE LIFE
52 FINANCIAL STATEMENTS OF SEPARATE ACCOUNT FP AND EQUITABLE LIFE
--------------------------------------------------------------------------------
The financial statements of Separate Account FP as of December 31, 1999 and for
each of the three years in the period ended December 31, 1999 and the financial
statements of Equitable Life as of December 31, 1999 and 1998 and for each of
the three years in the period ended December 31, 1999 included in this
prospectus have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, 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.
<PAGE>
A-1 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 in the EQ Advisors
Trust prospectus attached at the end of this prospectus. The performance
figures on which the tables are based are after deduction of all fees and
expenses paid by the Trust or any of the Portfolios.
For periods prior to October 18, 1999, the "Alliance" Portfolios (other than
EQ/Alliance Premier Growth and EQ/Alliance Technology) were part of The Hudson
River Trust. On October 18, 1999, these Portfolios became corresponding
Portfolios of EQ Advisors Trust. In each case, the performance shown is for
the indicated EQ Advisors Trust Portfolio and any predecessors that it may
have had. In addition, we have adjusted the results for these Portfolios prior
to the dates when the Class IB shares for these Portfolios were available, to
reflect the 12b-1 fees currently imposed. Class IB shares of Alliance Money
Market, Alliance High Yield, EQ Equity 500 Index** Alliance Common Stock and
EQ/Aggressive Stock* Portfolios first became available in EQ Advisors Trust's
predecessor on October 2, 1996. Class IB shares of Alliance Small Cap Growth
Portfolio first became available in the Trust's predecessor on May 1, 1997.
-------------
* Previously "Alliance Aggressive Stock"
** Previously "Alliance Equity 500 Index"
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" in 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 financial professional will provide. You can request Equitable Life
or your financial professional to provide you with such illustrations at any
time, whether before or after you purchase a policy.
In a few cases, the return information shown in the first table below 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 second table below provides additional
performance information from the date that those investment options actually
received initial funding.
As supplemented December 29, 2000
<PAGE>
A-2 APPENDIX I: INVESTMENT PERFORMANCE RECORD
--------------------------------------------------------------------------------
AVERAGE ANNUAL RATE OF RETURN
AFTER DEDUCTION OF MORTALITY AND EXPENSE
RISK CHARGE FOR PERIODS ENDING
DECEMBER 31, 1999*
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
SINCE PORTFOLIO
INCEPTION
VARIABLE INVESTMENT OPTION 1 YR. 3 YRS. 5 YRS. 10 YRS. (DATE**)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 17.83% 8.83% 15.35% 15.71% 16.92% (1/27/86)
Alliance Money Market 4.10% 4.35% 4.47% 4.29% 6.06% (7/13/81)
Alliance High Yield (4.16)% 1.92% 8.92% 9.30% 8.44% (1/2/87)
Alliance Common Stock 24.13% 26.89% 26.97% 17.59% 15.76% (1/13/76)
Alliance Small Cap Growth 26.86% -- -- -- 16.95% (5/1/97)
EQ Equity 500 Index 19.36% 25.99% 26.84% -- 22.69% (3/1/94)
EQ Small Company Index 20.00% -- -- -- 7.95% (12/31/97)
EQ International Equity Index 26.70% -- -- -- 22.98% (12/31/97)
EQ/Evergreen 9.06% -- -- -- 9.06% (12/31/98)
EQ/Evergreen Foundation 6.72% -- -- -- 6.72% (12/31/98)
FI Small/Mid Cap Value 1.19% -- -- -- 2.71% (5/1/97)
J.P. Morgan Core Bond (2.19)% -- -- -- 2.96% (12/31/97)
Lazard Large Cap Value 2.91% -- -- -- 10.82% (12/31/97)
Lazard Small Cap Value 1.13% -- -- -- (3.40)% (12/31/97)
Mercury Basic Value Equity 18.23% -- -- -- 17.23% (5/1/97)
Mercury World Strategy 20.62% -- -- -- 11.45% (5/1/97)
MFS Growth with Income 8.06% -- -- -- 8.06% (12/31/98)
MFS Research 22.38% -- -- -- 23.20% (5/1/97)
MFS Emerging Growth Companies 72.63% -- -- -- 47.38% (5/1/97)
Morgan Stanley Emerging Markets Equity 94.57% -- -- -- 5.07% (8/20/97)
EQ/Putnam Growth & Income Value (1.95)% -- -- -- 9.46% (5/1/97)
EQ/Putnam Investors Growth 29.48% -- -- -- 33.87% (5/1/97)
EQ/Putnam International Equity 59.29% -- -- -- 31.21% (5/1/97)
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* No performance information is shown for EQ/Alliance Technology, as this
Portfolio had not received its initial funding prior to December 31, 1999.
No performance information is shown for EQ/Alliance Premier Growth,
Capital Guardian U.S. Equity, Capital Guardian Research or Capital
Guardian International, as those Portfolios became available after
December 31, 1998. The inception date for these portfolios is April 30,
1999. Additionally, no performance information is shown for FI Mid Cap,
and EQ/Janus Large Cap Growth, as these portfolios became available after
December 31, 1998. The inception dates for these portfolios is September
1, 2000.
** The inception date shown is the date that the relevant Portfolio (or its
predecessor) received its initial funding.
As supplemented December 29, 2000
<PAGE>
A-3 APPENDIX I: INVESTMENT PERFORMANCE RECORD
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AVERAGE ANNUAL RATES OF RETURN FOR PERIODS ENDING
DECEMBER 31, 1999 SINCE VARIABLE INVESTMENT
VARIABLE INVESTMENT OPTION OPTION INCEPTION (DATE)
--------------------------------------------------------------------------------
Alliance Money Market 4.91% (1/27/86)
Alliance Common Stock 17.40% (1/27/86)
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
ANNUALIZED YIELD FOR PERIODS
VARIABLE INVESTMENT OPTION ENDING DECEMBER 31, 1999
--------------------------------------------------------------------------------
7 DAYS 30 DAYS
--------------------------------------------------------------------------------
Alliance Money Market 4.42% --
Alliance High Yield -- 12.30%
--------------------------------------------------------------------------------
The information in the tables above is not a guarantee, a prediction, or
necessarily an indication of future performance.
<PAGE>
B-1 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:
--------------------------------------------------------------------------
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
--------------------------------------------------------------------------
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:
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 Trust. 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.
<PAGE>
B-2 APPENDIXII: OUR DATA ON MARKET PERFORMANCE
--------------------------------------------------------------------------------
The chart below illustrates the average annual compound rates of return over
selected time periods between December 31, 1926 and December 31, 1999 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.
AVERAGE ANNUAL RATES OF RETURN
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM LONG-TERM INTERMEDIATE-
FOR THE FOLLOWING PERIODS COMMON GOVERNMENT CORPORATE TERM GOV'T U.S. TREASURY CONSUMER
ENDING DECEMBER 31, 1999 STOCKS BONDS BONDS BONDS BILLS PRICE INDEX
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year 21.04% (8.96)% (7.45)% (1.77)% 4.68% 2.81%
3 Years 27.56% 6.04 % 5.01 % 5.47 % 4.93% 2.04%
5 years 28.55% 9.24 % 8.35 % 6.95 % 5.12% 2.39%
10 years 18.20% 8.79 % 8.36 % 7.20 % 4.92% 2.94%
20 years 17.87% 10.69 % 10.66 % 9.53 % 6.89% 4.01%
30 years 13.72% 8.94 % 9.17 % 8.68 % 6.69% 5.12%
40 years 12.22% 7.01 % 7.24 % 7.35 % 5.98% 4.46%
50 years 13.61% 5.56 % 5.97 % 6.12 % 5.15% 4.01%
60 years 12.86% 5.17 % 5.42 % 5.39 % 4.34% 4.24%
Since 1926 11.35% 5.12 % 5.61 % 5.22 % 3.79% 3.07%
Inflation Adjusted Since 1926 8.03% 1.98 % 2.46 % 2.08 % 0.69% 0.00%
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Ibbotson, Roger G. and Rex A. Sinquefield, STOCKS, BONDS, BILLS, AND
INFLATION (SBBI), 1982, updated in STOCKS, BONDS, BILLS, AND INFLATION 2000
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 1969-1999, 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
1969-1999; 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.
Consumer Price Index - Measured by the Consumer Price Index for all Urban
Consumers (CPI-U), not seasonally adjusted.
<PAGE>
C-1 APPENDIX III: AN INDEX OF KEY WORDS AND PHRASES
--------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
PAGE
account value 21
Administrative Office 5
age 34
Allocation Date 15
alternative death benefit 17
amount at risk 38
anniversary 34
assign; assignment 32
automatic transfer service 22
AXA Financial, Inc. 4
basis 28
beneficiary 19
business day 33
Cash Surrender Value 26
Code 27
collateral 24
cost of insurance charge 38
cost of insurance rates 38
customer loyalty credit 39
day 33
death benefit guarantee 14
default 12
dollar cost averaging service 22
enhanced death benefit guarantee 14
EQAccess 5
EQ Advisors Trust 16
EQ Financial Consultants 16
Equitable Distributors 41
Equitable Life 4
Equitable Access Account 19
face amount 16
grace period 12
guarantee premium 13
guaranteed interest option 16
Guaranteed Interest Account 16
Incentive Life cover
insured person 17
Investment Funds 16
investment option 15
issue date 34
lapse 12
PAGE
loan, loan interest 24
modified endowment contract 12
month, year 34
monthly deduction 7
net cash surrender value 26
no-lapse guarantee 13
Option A, B 17
our 2
owner 2
paid up 27
paid up death benefit guarantee 14
partial withdrawal 25
payment option 19
planned periodic premium 12
policy cover
Portfolio cover
premium charge 7
premium payments 12
prospectus cover
rebalancing 23
receive 33
restore, restoration 13
rider 19
SEC cover
Separate Account FP 36
state 2
subaccount 36
surrender 26
surrender charge 7
target premium 8
telephone transfer 22
transfers 22
Trust 16
units 21
unit values 21
us 2
variable investment option 16
we 2
withdrawal 25
you, your 2