As filed with the Securities and Exchange Commission on
November 5, 1996
Registration No. _________
======================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
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AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
(EXACT NAME OF REGISTRANT)
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AMERITAS VARIABLE LIFE INSURANCE COMPANY
5900 "O" Street
Lincoln, Nebraska 68510
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NORMAN M. KRIVOSHA
Secretary and General Counsel
Ameritas Variable Life Insurance Company
5900 "O" Street
Lincoln, Nebraska 68510
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Approximate date of proposed public offering: As soon as practicable after the
effective date of the Registration Statement.
Flexible Premium Variable Life Insurance Policies--Registration of an indefinite
amount of securities pursuant to Rule 24f-2 under the Investment Company Act of
1940.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a) may determine.
<PAGE>
RECONCILLIATION AND TIE BETWEEN ITEMS IN FORM N-8B-2
AND THE PROSPECTUS
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
----------- ---------------------
1 Cover Page
2 Cover Page
3 Not Applicable
4 Distribution of the Policies
5 Ameritas Variable Life Insurance Company - Separate
Account V
6 Ameritas Variable Life Insurance Company - Separate
Account V
7 Not Required
8 Not Required
9 Legal Proceedings
10 Summary; Addition, Deletion of Substitution of
Investments; Policy Benefits; Policy Rights Payment
and Allocation of Premiums; General Provisions;
Voting Rights
11 Summary; The Funds
12 Summary; The Funds
13 Summary; The Funds - Charges and Deductions
14 Summary; Payment and Allocation of Premiums
15 Summary; Payment and Allocation of Premiums
16 Summary; Variable Insurance Products Fund, Variable
Insurance Products Fund II, Alger American Fund, MFS
Variable Insurance Trust, Morgan Stanley Universal
Funds, Inc.
17 Summary, Policy Rights
18 Variable Insurance Products Fund, Variable Insurance
Products Fund II, Alger American Fund, MFS Variable
Insurance Trust, Morgan Stanley Universal Funds, Inc.
19 General Provisions; Voting Rights
20 Not Applicable
21 Summary; Policy Rights; General Provisions
22 Not Applicable
23 Safekeeping of the Account's Assets
24 General Provisions
25 Ameritas Variable Life Insurance Company
26 Not Applicable
27 Ameritas Variable Life Insurance Company
28 Executive Officers and Directors of AVLIC
29 Ameritas Variable Life Insurance Company
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Not Applicable
36 Not Applicable
37 Not Applicable
38 Distribution of the Policies
39 Distribution of the Policies
40 Not Applicable
41 Distribution of Policies
42 Not Applicable
43 Not Applicable
44 Cash Value, Payment and Allocation of Premium
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
----------- ---------------------
45 Not Applicable
46 The Funds; Cash Value
47 The Funds
48 State Regulation
49 Not Applicable
50 Ameritas Variable Life Insurance Company Separate
Account V
51 Cover Page; Summary; Policy Benefits; Charges and
Deductions
52 Addition, Deletion or Substitution of Investments
53 Summary; Federal Tax Matters
54 Not Applicable
55 Not Applicable
56 Not Required
57 Not Required
58 Not Required
59 Financial Statements
<PAGE>
AMERITAS VARIABLE LIFE INSURANE COMPANY LOGO
PROSPECTUS
FLEXIBLE PREMIUM One Ameritas Way/5900 "O" Street
VARIABLE UNIVERSAL LIFE P.O. Box 82550/Lincoln, NE 68501
- --------------------------------------------------------------------------------
This Prospectus describes a flexible premium variable universal life insurance
policy ("Policy") offered by Ameritas Variable Life Insurance Company ("AVLIC"),
a stock life insurance company. The Policy is designed to provide insurance
protection until the Policy Anniversary nearest the Insured's 100th birthday. It
also provides flexibility to vary the frequency and amount of premium payments
and to change the level of death benefits payable under the Policy. This
flexibility allows a Policyowner to provide for changing insurance needs under a
single insurance policy.
The Policy guarantees the Death Benefit as long as the Policy remains in force.
The Policyowner may choose death benefit Option A (generally, a level benefit
that equals the Specified Amount of the Policy) or Option B (a variable benefit
that generally equals the Specified Amount plus the Policy's Accumulation
Value). The minimum Specified Amount for a policy is generally $500,000 for
Insureds ages 20-49 and $250,000 for those who are 50 or older. The Policy
provides for a Net Cash Surrender Value that can be obtained through partial
withdrawals, Surrender of the Policy, or through policy loans. There is no
minimum guaranteed Accumulation Value. AVLIC agrees to keep the Policy in force
and provide a Guaranteed Death Benefit during the Guaranteed Death Benefit
Period, so long as the Net Policy Funding is equal to or greater than the
cumulative monthly pro rata Guaranteed Death Benefit Premiums.
The Policyowner has the right to examine the Policy and return it for a refund
for a limited time. (See "Free Look Privilege" page 23.) The initial premium
payment will be allocated to the money market Subaccount as of the issue date,
for 13 days. After the 13-day period (see page 25), the Accumulation Value will
be reallocated to the Investment Options selected by the Policyowner. The
Accumulation Value, the duration of the Death Benefit and, if Option B is
selected, the amount of the Death Benefit above the Specified Amount, will vary
with the investment experience of the selected Investment Options. The
Accumulation Value will also be adjusted for other factors, including the amount
of charges imposed and the premium payments made. The Policy will continue in
force so long as the Net Cash Surrender Value is sufficient to pay certain
monthly charges imposed in connection with the Policy or if the Guaranteed Death
Benefit is in effect.
The assets of each Subaccount are invested in shares of a corresponding
portfolio of one of the following mutual funds (collectively, the "Funds"):
Variable Insurance Products Fund and the Variable Insurance Products Fund II,
(respectively, "VIPF" and "VIPF II"; collectively "Fidelity Funds"); Alger
American Fund ("Alger American Fund"); MFS Variable Insurance Trust ("MFS
Trust"); and Morgan Stanley Universal Funds, Inc. ("Morgan Stanley Fund"). VIPF,
which is managed by Fidelity Management & Research Company ("Fidelity") offers
the following portfolios: Money Market, Equity-Income, Growth, High Income and
Overseas Portfolios. VIPF II, also managed by Fidelity, offers the following
portfolios: the Asset Manager, Investment Grade Bond, Asset Manager: Growth ,
Index 500, and Contrafund Portfolios. The Alger American Fund, which is managed
by Fred Alger Management, Inc. ("Alger Management") offers the following
portfolios: Alger American Growth, Alger American Income and Growth, Alger
American Small Capitalization, Alger American Balanced, Alger American MidCap
Growth, and Alger American Leveraged AllCap Portfolios. The MFS Trust, managed
by Massachusetts Financial Services Company ("MFS Co.") offers the following
portfolios or series in connection with this Policy: MFS Emerging Growth , MFS
Utilities, MFS World Governments, MFS Research and MFS Growth With Income. The
Morgan Stanley Fund offers the following portfolios in connection with the
Policy, all of which are managed by Morgan Stanley Asset Management, Inc.
("Morgan Stanley Co."): Emerging Markets Equity, Global Equity, International
Magnum, Asian Equity and U.S. Real Estate Portfolios. This prospectus is
accompanied by prospectuses for each of the Funds, which describe the investment
objectives, policies and risk considerations relating to the respective
portfolios. The investment gains or losses of the monies placed in the various
portfolio Subaccounts will be experienced by the Policyowner.
Replacing existing insurance with a Policy or purchasing a Policy as a means to
obtain additional insurance protection if the purchaser already owns another
flexible premium variable life insurance policy may not be advantageous.
This Prospectus Must Be Accompanied or Preceded By Current Prospectuses For
VIPF, VIPF II, Alger American Fund, MFS Trust and Morgan Stanley Fund.
These securities are not deposits with, or obligations of, or guaranteed or
endorsed by, any financial institution; and the securities are not insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other agency.
These securities involve investment risk, including the possible loss of
principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, OR BY ANY STATE SECURITIES REGULATORY AUTHORITY, NOR HAS
THE COMMISSION, OR ANY STATE SECURITIES REGULATORY AUTHORITY, PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Please Read This Prospectus Carefully And Retain It For Future Reference.
The Date of This Prospectus is __________, 1997.
ENCORE! 1
<PAGE>
TABLE OF CONTENTS
Definitions............................................................... 3
Summary................................................................... 6
Ameritas Variable Life Insurance Company and the Account ................. 10
Ameritas Variable Life Insurance Company......................... 10
Ameritas Variable Life Insurance Company Separate Account V...... 10
Performance Information.......................................... 11
The Funds........................................................ 11
Investment Objectives and Policies Of The Funds' Portfolios...... 12
Fund Expense Summary............................................. 14
Addition, Deletion or Substitution of Investments................ 16
Fixed Account.................................................... 16
Policy Benefits........................................................... 16
Purposes of the Policy........................................... 16
Death Benefit Proceeds........................................... 17
Death Benefit Options............................................ 17
Methods of Affecting Insurance Protection........................ 19
Duration of Policy............................................... 19
Accumulation Value............................................... 19
Net Cash Surrender Value Bonus................................... 20
Benefits at Maturity............................................. 20
Payment of Policy Benefits....................................... 20
Policy Rights............................................................. 21
Loan Benefits.................................................... 21
Surrenders....................................................... 22
Partial Withdrawals.............................................. 22
Transfers........................................................ 22
Systematic Programs.............................................. 23
Free Look Privilege.............................................. 23
Exchange Privilege............................................... 23
Payment and Allocation of Premiums........................................ 24
Issuance of a Policy............................................. 24
Premiums......................................................... 24
Allocation of Premiums and Accumulation Value.................... 25
Policy Lapse and Reinstatement................................... 25
Charges and Deductions.................................................... 26
Deductions From Premium Payments................................. 26
Charges from Accumulation Value.................................. 26
Surrender Charge................................................. 27
Daily Charges Against the Account................................ 28
General Provisions........................................................ 29
Distribution of the Policies.............................................. 31
Federal Tax Matters....................................................... 31
Safekeeping of the Account's Assets....................................... 33
Voting Rights............................................................. 33
State Regulation of AVLIC................................................. 34
Executive Officers and Directors of AVLIC................................. 34
Legal Matters............................................................. 35
Legal Proceedings......................................................... 35
Experts................................................................... 35
Additional Information.................................................... 36
Financial Statements...................................................... 36
Ameritas Variable Life Insurance Company Separate Account V............... 37
Ameritas Variable Life Insurance Company.................................. 44
Appendices................................................................ 56
The Policy, certain funds, and/or certain riders are not available in all
States.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESMAN, OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
2 ENCORE!
<PAGE>
DEFINITIONS
ACCOUNT - This term refers to Separate Account V, a separate investment account
established by AVLIC to receive and invest the Net Premiums paid under the
Policy and allocated by the Policyowner to the Account. The Account is
segregated from the General Account and all other assets of AVLIC. (See page
10.)
ACCRUED EXPENSE CHARGES - Any Monthly Deductions that are due and unpaid.
ACCUMULATION VALUE - The total amount that the Policy provides for investment at
any time. It is equal to the total of the Accumulation Value held in the
Account, the Fixed Account, and any Accumulation Value held in the General
Account which secures Outstanding Policy Debt. (See page 19.)
ADMINISTRATIVE EXPENSE CHARGE - A charge, which is part of the Monthly
Deduction, to cover the cost of administering the Policy. (See page 26.)
ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE - A daily charge that is deducted from
the overall assets of the Account to provide for expenses of ongoing
administrative services to the Policyowners as a group. (See page 28.)
ATTAINED AGE - The Issue Age of the Insured plus the number of complete Policy
Years that the Policy has been in force.
AVLIC - Ameritas Variable Life Insurance Company, a Nebraska stock company.
AVLIC's Home Office is located at One Ameritas Way (5900 "O" Street) P.O. Box
82550, Lincoln, NE 68501
BENEFICIARY - The person or persons to whom the Death Benefit Proceeds are
payable upon the death of the Insured. (See page 29 for "Beneficiary" and
"Change of Beneficiary".)
CONTINGENT DEFERRED ADMINISTRATIVE CHARGE - An administrative charge for the
underwriting, issuance and initial administration of the Policy that is deducted
upon Surrender of the Policy. This charge is part of the Surrender Charge. (See
page 27.)
CONTINGENT DEFERRED SALES CHARGE - A sales charge, calculated based on a
percentage of premiums received, is deducted upon Surrender of the Policy. This
charge is part of the Surrender Charge. (See page 27.)
COST OF INSURANCE - A charge deducted monthly from the Accumulation Value to
provide the life insurance protection; this charge may also include a Flat Extra
Rating Charge. The Cost of Insurance is calculated with reference to an annual
Cost of Insurance Rate. This rate is based on the Insured's sex, Issue Age,
policy duration, Specified Amount, and risk class. The Cost of Insurance is part
of the Monthly Deduction. (See page 26.)
DECLARED RATE - The interest rate declared by AVLIC to be earned on amounts in
the Fixed Account, which AVLIC guarantees to be no less than 3.5%. (See page
16.)
DEATH BENEFIT - The amount of insurance coverage provided under the selected
Death Benefit option of the Policy.
DEATH BENEFIT PROCEEDS - The proceeds payable to the Beneficiary upon receipt by
AVLIC of Satisfactory Proof of Death of the Insured while the Policy is in
force. It is equal to: (l) the Death Benefit; (2) plus additional life insurance
proceeds provided by any riders; (3) minus any Outstanding Policy Debt; (4)
minus any Accrued Expense Charges, including the Monthly Deduction for the month
of death. (See page 17.)
FLAT EXTRA RATING CHARGE - A charge that will be applicable if an Insured is
placed into a class that involves a higher mortality risk. Any applicable Flat
Extra Rating Charge will be added to the Cost of Insurance Rate and, thus, will
be deducted as part of the Monthly Deduction on each Monthly Activity Date.
FIXED ACCOUNT - An account that is a part of AVLIC's General Account to which
all or a portion of Net Premiums and transfers may be allocated for accumulation
at fixed rates of interest. (See page 16.)
GENERAL ACCOUNT - The General Account of AVLIC includes all of AVLIC's assets
except those assets segregated into separate accounts, such as the Account.
ENCORE! 3
<PAGE>
GRACE PERIOD - A 61 day period from the date written notice of lapse is mailed
to the Policyowner's last known address. If the Policyowner makes a payment
during the Grace Period such that the Net Cash Surrender Value of the Policy is
sufficient to pay the Monthly Deduction, the Policy will not lapse. (See page
25.)
GUARANTEED DEATH BENEFIT PERIOD - The number of years the Guaranteed Death
Benefit provision will apply. The period will vary based upon the Insured's
Issue Age and rating class. The period ranges from 3 to 25 years. This benefit
is provided without an additional policy charge. (See page 17.)
GUARANTEED DEATH BENEFIT PREMIUM - A specified premium which, if paid in advance
on a monthly prorated basis, will keep the Policy in force during the Guaranteed
Death Benefit Period so long as other policy provisions are met, even if the Net
Cash Surrender Value is zero or less. (See page 17.)
INSURED - The person whose life is insured under the Policy.
INVESTMENT OPTIONS - Refers to the Subaccounts and/or the Fixed Account offered
under this Policy.
ISSUE AGE - The age of the Insured at the Insured's birthday nearest the Policy
Date.
ISSUE DATE - The date that all financial, contractual and administrative
requirements have been met and processed for the Policy.
MATURITY BENEFITS - The amount payable to the Policyowner, if the Insured is
living, on the Maturity Date. The Maturity Benefit is the Accumulation Value
less any Outstanding Policy Debt. (See page 20.)
MATURITY DATE - The date AVLIC pays any Maturity Benefit to the Policyowner, if
the Insured is still living.
MONTHLY ACTIVITY DATE - The same date in each succeeding month as the Policy
Date except should such Monthly Activity Date fall on a date other than a
Valuation Date, the Monthly Activity Date will be the next Valuation Date.
MONTHLY DEDUCTION - The deductions taken from the Accumulation Value on the
Monthly Activity Date. These deductions are equal to: (1) the current Cost of
Insurance; (2) the Administrative Expense Charge; and (3) rider charges, if any.
(See page 26.)
MORTALITY AND EXPENSE RISK CHARGE - a daily charge that is deducted from the
overall assets of the Account to provide for the risk that mortality and expense
costs may be greater than expected. (See page 28.)
NET CASH SURRENDER VALUE - The Accumulation Value of the Policy on any Valuation
Date (including for this purpose, the date of Surrender), less any Surrender
Charges and any Outstanding Policy Debt.
NET POLICY FUNDING - Net Policy Funding is the sum of all premiums paid, less
any partial withdrawals and less any Outstanding Policy Debt. (See page 24.)
NET PREMIUM - Premium paid less the Percent of Premium Charge (See page 26.)
OUTSTANDING POLICY DEBT - The sum of all unpaid policy loans and accrued
interest on policy loans. (See page 21.)
PERCENT OF PREMIUM CHARGE - The amount deducted from each premium received to
cover certain expenses, expressed as a percentage of the premium. This charge
may include a Premium Charge for Taxes. (See Deductions From Premium Payment,
page 26.)
PLANNED PERIODIC PREMIUMS - A selected schedule of equal premiums payable at
fixed intervals. The Policyowner is not required to follow this schedule, nor
does following this schedule ensure that the Policy will remain in force unless
the payments meet the requirements of the Guaranteed Death Benefit. (See page
24.)
POLICY - The Flexible Premium Variable Universal Life Insurance Policy offered
by AVLIC and described in this Prospectus.
POLICYOWNER - The owner of the Policy, as designated in the application or as
subsequently changed. If a Policy has been absolutely assigned, the assignee is
the Policyowner. A collateral assignee is not the Policyowner.
4 ENCORE!
<PAGE>
POLICY ANNIVERSARY DATE - The same day as the Policy Date for each year the
Policy remains in force.
POLICY DATE - The effective date for all coverage provided in the application.
The Policy Date is used to determine Policy Anniversary Dates, Policy Years and
Monthly Activity Dates. Policy Anniversaries are measured from the Policy Date.
The Policy Date and the Issue Date will be the same unless: 1) an earlier Policy
Date is specifically requested, or 2) unless there are additional premiums or
application amendments at time of delivery. (See Issuance of a Policy, page 24.)
POLICY YEAR - The period from one Policy Anniversary Date until the next Policy
Anniversary Date. A "Policy Month" is measured from the same date in each
succeeding month as the Policy Date.
PREMIUM CHARGE FOR TAXES - This charge, which is part of the Percent of Premium
Charge, represents the amount AVLIC considers necessary to pay all premium taxes
imposed by the states and their subdivisions and to defray the tax cost due to
capitalizing certain policy acquisition expenses as required under applicable
Federal tax laws. AVLIC does not expect to derive a profit from the Premium
Charge for Taxes.
SATISFACTORY PROOF OF DEATH - Means all of the following must be submitted: (1)
A certified copy of the death certificate; (2) A Claimant Statement; (3) The
Policy; and (4) Any other information that AVLIC may reasonably require to
establish the validity of the claim.
SPECIFIED AMOUNT - The minimum Death Benefit under the Policy, as selected by
the Policyowner.
SUBACCOUNT - A subdivision of the Account. Each Subaccount invests exclusively
in the shares of a specified portfolio of the Funds.
SURRENDER - The termination of the Policy before the Maturity Date during the
Insured's life for the Net Cash Surrender Value.
SURRENDER CHARGE - This charge is assessed against the Accumulation Value of the
Policy if the Policy is Surrendered before the 15th Policy Anniversary Date or,
in the case of an increase in the Specified Amount, the 15th anniversary of the
increase. The Surrender Charge is comprised of the Contingent Deferred
Administrative Charge and the Contingent Deferred Sales Charge. (See page 27.)
VALUATION DATE - Any day on which the New York Stock Exchange is open for
trading.
VALUATION PERIOD - The period between two successive valuation dates, commencing
at the close of the New York Stock Exchange ("NYSE") on one valuation date and
ending at the close of the NYSE on the next succeeding valuation date.
ENCORE! 5
<PAGE>
SUMMARY
The following summary of Prospectus information and diagram of the Policy
should be read in conjunction with the detailed information appearing
elsewhere in this Prospectus. Unless otherwise indicated, the description
of the Policy contained in this Prospectus assumes that the Policy is in
force and that there is no Outstanding Policy Debt.
DIAGRAM OF POLICY
PREMIUM PAYMENTS
You can vary amount and frequency.
DEDUCTIONS FROM PREMIUMS
Premium Charge for Taxes - 3.5%**
NET PREMIUM
You direct the net premium to be invested in the Fixed Account or to the
separate account which offers twenty six different subaccounts. The twenty six
subaccounts invest in the corresponding portfolios (Funds) of the Fidelity
Variable Insurance Product Fund, the Fidelity Variable Insurance Products Fund
II, the Alger American Fund, the MFS Variable Insurance Trust, or Morgan Stanley
Universal Trust
DEDUCTIONS FROM ASSETS
Monthly charge for cost of insurance and cost of any riders.
Monthly charge for administrative expenses $5.00 per month**
Daily charge, at an annual rate of .90%*** for Policy Years 1-20, and
0.65%*** thereafter, from the subaccounts for mortality and expense risks and
administrative expenses. This charge is not deducted from Fixed Account assets.
LIVING BENEFITS RETIREMENT BENEFITS DEATH BENEFITS
Partial withdrawals can Loans may be taken at a net Generally income tax
be made (subject to zero interest rate after free to beneficiary.
certain restrictions). The ten years.
death benefit will be Available as lump
reduced by the amount Should the policy lapse sum or under the
of the partial withdrawal. while loans are outstanding five payment meth-
the portion of the loan ods available as
Up to fifteen free trans- attributable to earnings retirement benefits.
fers can be made each will become taxable dist-
year between the Invest- ributions. (See page 22).
ment Options.
Payment can be taken under
Accelerated payment of up one or more of five dif-
to 50% of the lowest ferent payment options.
scheduled death benefit
is available under cer-
tain conditions to insur-
eds suffering from termi-
nal illness.
The policy may be sur-
rendered at any time for
its net cash surrender
value.
Because the company
incurs expenses imme-
diately upon the issuance
of the policy that are
recovered over a period
of years, a policy sur-
render prior to the fif-
teenth anniversary date
will be assessed a sur-
render charge consisting
of the contingent defer-
red sales charge and the
contingent deferred ad-
ministrative charge. The
charge decreases each year
until no surrender charge
is applied after the
fifteenth policy year.
Increases in coverage
after issue will also have
a surrender charge
associated with them. (See
pages 22 and 27).
* maximum charge 5.0%
** maximum charge $9.00/mo.
*** maximum charge 1.15%
6 ENCORE!
<PAGE>
THE ISSUER
The Policy is issued by Ameritas Variable Life Insurance Company ("AVLIC"), a
Nebraska stock life insurance company. Separate Account V has been established
to hold the assets supporting the Policy. The Account has twenty-six Subaccounts
which correspond to, and are invested in, the portfolios of the Funds discussed
at page 12 of this Prospectus. (See Ameritas Variable Life Insurance Company and
the Account, page 10, and The Funds, page 11.) The financial statements for
AVLIC and the Account can be found beginning on page 37.
THE POLICY
The Policy, a flexible premium variable universal life insurance policy, allows
the Policyowner, within limitations, to choose: (a) the amount and frequency of
premium payments; (b) the manner in which the Policyowner's Accumulation Values
are invested; and (c) a choice of two Death Benefit options unless the Extended
Maturity Option is in effect.
As long as the Policy remains in force, it will provide for: (1) life insurance
coverage on the Insured up to age 100; (2) an Accumulation Value; (3) Surrender
rights (including partial withdrawals and total Surrenders); (4) policy loan
privileges; and (5) a variety of optional benefits and riders that may be added
to the Policy for an additional charge or without charge if certain minimum
premiums are paid.
PREMIUMS
This Policy differs in two important respects from a conventional life insurance
policy. First, the failure to pay a planned periodic premium will not in itself
cause the Policy to lapse. Second, a Policy can lapse even if planned periodic
premiums have been paid unless the Guaranteed Death Benefit Premium requirements
have been met. (See Payment and Allocation of Premiums, page 24.)
AMOUNTS. An initial premium of at least 1/12 of the first year Guaranteed Death
Benefit Premium times the number of months between the policy date and issue
date, plus one, must be paid in order to put the Policy in force. After the
initial premium is paid, unscheduled premiums may be paid in any amount and at
any frequency, subject only to the maximum and minimum limitations set by AVLIC
and the maximum limitations set by Federal Income Tax Law. A Policyowner may
also choose a Planned Periodic Premium which may include the minimum cumulative
premiums necessary to keep the Guaranteed Death Benefit provision in effect.
A Policy will lapse when the Net Cash Surrender Value is insufficient to pay the
Monthly Deduction unless the Guaranteed Death Benefit provision is in effect. A
Grace Period of 61 days from the date written notice of lapse is mailed to the
Policyowner's last known address will be allowed for the Policyowner to make
sufficient payment to keep the Policy in force.
ALLOCATION OF NET PREMIUMS
The Policyowner may select the manner in which the Net Premiums are allocated
between the Fixed Account (See Fixed Account, page 16) and to one or more of the
Subaccounts. On the Issue Date, Net Premiums are first allocated for 13 days to
the Subaccount that invests in VIPF's Money Market Portfolio (See The Funds,
page 11.) After the expiration of the refund period, the Accumulation Value will
be reallocated to the selected Investment Options. The Policyowner may change
the allocation instructions for premiums and may also make a special designation
for unscheduled premiums. Subject to certain charges and restrictions, a
Policyowner may also transfer amounts among the Investment Options. (See
Allocation of Premiums and Accumulation Value, page 25.)
The various Subaccounts available invest in a corresponding portfolio of the
Funds. VIPF, which is managed by Fidelity Management & Research Company
("Fidelity") offers the following portfolios: Money Market, Equity-Income,
Growth, High Income and Overseas Portfolios. VIPF II, also managed by Fidelity,
offers the following portfolios: the Asset Manager, Investment Grade Bond, Asset
Manager: Growth , Index 500, and Contrafund Portfolios. The Alger American Fund,
which is managed by Fred Alger Management, Inc. ("Alger Management") offers the
following portfolios: Alger American Growth, Alger American Income and Growth,
Alger American Small Capitalization, Alger American Balanced, Alger American
MidCap Growth, Small Capitalization, Alger American Leveraged AllCap Portfolios.
The MFS Trust, managed by Massachusetts Financial Services Company ("MFS Co.")
offers the following portfolios or series in connection with this Policy: MFS
Emerging Growth , MFS Utilities, MFS World Governments, MFS Research and MFS
Growth With Income. The Morgan Stanley Fund offers the following portfolios in
connection with the Policy, all of which are managed by Morgan Stanley Asset
Management, Inc. ("Morgan Stanley Co."): Emerging Markets Equity, Global Equity,
International Magnum, Asian Equity and U.S. Real Estate Portfolios. A summary of
the investment objectives for these portfolios is set forth at page 12 of this
Prospectus, and detailed objectives of these portfolios are described in the
accompanying prospectuses for the Funds. There is no assurance that these
objectives will be met. The Policyowner bears the entire investment risk for
amounts allocated to the Subaccounts.
ENCORE! 7
<PAGE>
POLICY BENEFITS
The rights and benefits under the Policy are summarized in this prospectus;
however prospectus disclosure regarding the policy is qualified in its entirety
by the policy itself, a copy of which is available upon request from AVLIC.
DEATH BENEFIT PROCEEDS While the Policy remains in force, AVLIC will pay the
Death Benefit Proceeds to the Beneficiary upon receipt of Proof of Death of the
Insured. Death Benefit Proceeds may be paid in a lump sum or in accordance with
an optional payment plan.
DEATH BENEFIT OPTIONS
The Policy provides for two Death Benefit options. Under either option, so long
as the Policy remains in force, the Death Benefit will not be less than the
current Specified Amount of the Policy adjusted for any policy indebtedness. The
Death Benefit may, however, exceed the Specified Amount, depending upon the
investment experience of the Policy. Death Benefit Option A provides for a level
benefit equal to the current Specified Amount of the Policy, unless the
Accumulation Value of the Policy on the date of the Insured's death multiplied
by the applicable percentage set forth in the Policy is greater, in which case
the Death Benefit is equal to that larger amount. Death Benefit Option B
provides for a variable Death Benefit equal to the current Specified Amount of
the Policy plus the Policy's Accumulation Value on the date of the Insured's
death, or if greater, the Accumulation Value of the Policy on the date of the
Insured's death multiplied by the applicable percentage set forth in the Policy.
(See Death Benefit Options, page 17.)
OPTIONAL INSURANCE BENEFITS
Optional insurance benefits offered under the Policy include: Accelerated
Benefit Rider for Terminal Illness (Living Benefit Rider); Accidental Death
Benefit Rider; Disability Benefit Rider; Children's Protection Rider; Waiver of
Monthly Deductions on Disability Rider; Term Rider for Covered Insured and
Guaranteed Insurability Rider. The cost, if any, of these additional insurance
riders/benefits will be deducted from the Policy's Accumulation Value as a part
of the Monthly Deduction. In addition, the Guaranteed Death Benefit provision is
provided without additional cost but requires the described premium payment. The
Extended Maturity Option is also provided as part of the Policy and without
additional cost. The foregoing riders/benefits are not all available in every
state.(See Additional Insurance Benefits, page 30.)
BENEFITS AT MATURITY.
On the Maturity Date of the Policy, if the Insured is still living, the
Policyowner will be paid the Net Cash Surrender Value. An Extended Maturity
Option is available under the Policy. The Extended Maturity Option, if elected,
has the effect of continuing the Policy in force for purposes of providing a
benefit at the time of the Insured's death. There is no additional premium for
this option, but it must be elected by the Policyowner during the 90 days prior
to Maturity Date. (See, Benefits at Maturity, page 20.)
ACCUMULATION VALUE
The Policy's Accumulation Value in the Account will reflect the amount and
frequency of premium payments, the investment experience of the chosen
Investment Options, policy loans, any partial withdrawals, and any charges
imposed in connection with the Policy. The entire investment risk of the Account
is borne by the Policyowner. AVLIC does not guarantee a minimum Accumulation
Value in the Account. (See Accumulation Value, page 19.) It does guarantee the
Fixed Account.
The Policyowner may Surrender the Policy at any time and receive its Net Cash
Surrender Value. Subject to certain limitations, the Policyowner may also make a
partial withdrawal from the Policy and obtain a portion of the Accumulation
Value at any time prior to the Maturity Date. Partial withdrawals will reduce
both the Accumulation Value and the Death Benefit payable under the Policy. (See
Partial Withdrawals, page 22.) A charge will be deducted from the amount paid
upon partial withdrawal. (See Partial Withdrawal Charge, page 28.)
POLICY LOANS. Policy loans, secured by the Accumulation Value of the Policy, are
available. After the first Policy Anniversary, the Policyowner may obtain a loan
at "regular" loan interest rates, currently 5.5% and which shall not exceed 6%
annually.
After the tenth Policy Anniversary, the Policyowner can borrow against a limited
amount of the Net Cash Surrender Value of the Policy at the reduced loan rate.
This rate is currently 3.5% and shall not exceed 4.0% annually. While the loan
is outstanding, the Policyowner earns 3.5% interest on the Accumulation Values
securing the loans. (For details concerning policy loan provisions, see page
21.) Policy loans may have tax consequences and will affect earnings and
Accumulation Values. (See Federal Tax Matters, page 31.)
8 ENCORE!
<PAGE>
CHARGES
PERCENT OF PREMIUM CHARGES. A Premium Charge for Taxes of up to 5% will be
deducted from each premium before placing Net Premium in a Subaccount or
the Fixed Account. Currently, the Premium Charge for Taxes is 3.5%. (See
Deductions From Premium Payments, page 26.)
MONTHLY CHARGES AGAINST THE ACCUMULATION VALUE.
The following monthly charges will be made against the Accumulation Value in the
Account:
a) A monthly Administrative Expense Charge of up to $9.00 may be charged to
compensate AVLIC for the continuing administrative costs of the Policy.
Currently AVLIC is charging $5.00 per month ($60.00 per year.)
b) A monthly charge for the Cost of Insurance, including the cost for any
riders, is also deducted. (See Charges from Accumulation Value, page 26.)
SURRENDER CHARGE. If a Policy is Surrendered prior to the 15th Policy
Anniversary Date, or within 15 years of any increase in the Specified Amount,
AVLIC will assess a Surrender Charge consisting of the Contingent Deferred Sales
Charge and the Contingent Deferred Administrative Charge. In no event shall the
Surrender Charge exceed $40 for every $1,000 of Specified Amount. The Contingent
Deferred Administrative Charge is an amount per $1,000 of Specified Amount that
varies by Issue Age, and Sex. (See Surrender Charge, page 27.) Because the
Surrender Charge may be significant upon early Surrender, prospective
Policyowners should purchase a Policy only if they do not intend to Surrender
the Policy for a substantial period.
TRANSFER CHARGE. Fifteen transfers per Policy Year will be permitted free of
charge. A $10 administrative charge may be assessed for each additional transfer
in that Policy Year. The transfer charge will be deducted from the Accumulation
Value, on a pro rata basis. (See Transfer Charge, page 28.)
PARTIAL WITHDRAWAL CHARGE. A maximum charge, not to exceed the lesser of $50 or
2% of the amount withdrawn may be deducted for each partial withdrawal.
(Currently, the charge is the lesser of $25 or 2%.) The charge will be deducted
from the Accumulation Value as a result of the withdrawal and will compensate
AVLIC for the administrative costs of partial withdrawals. No Surrender Charge
is assessed on a partial withdrawal and a partial withdrawal charge is not
assessed when a Policy is Surrendered. (See Partial Withdrawal Charge, page
28..)
DAILY CHARGES AGAINST THE ACCOUNT. A daily charge at an annual rate not to
exceed 1.15% (currently .90% for Policy Years 1-20 and .65% for later Policy
Years) of the average daily net assets of each Subaccount, but not the Fixed
Account.
(See Daily Charges Against the Account, page 28.)
No charges are currently made against the Account for Federal, state or local
taxes (which are charged in addition to state premium taxes.) If there is a
material change from the expected treatment of AVLIC under Federal, state or
local tax laws, AVLIC may determine to make deductions from the Account to pay
those taxes. (See Daily Charges Against the Account, page 28.)
In addition, because the Account purchases shares of the Funds, the value of the
units in each Subaccount will reflect the net asset value of shares of the
various Funds held therein, and therefore, the management fee and other expenses
incurred by the Funds. (See The Funds, page 11.)
TAX TREATMENT OF THE POLICY
Like Death Benefits payable under conventional life insurance policies, life
insurance proceeds payable under the Policy are generally excludable from the
taxable income of the Beneficiary. Should the Policy be deemed a modified
endowment contract (see Federal Tax Matters-Tax Status of the Policy, page 32),
partial or full Surrenders, assignments, policy pledges, and loans under the
Policy will be taxable to the Policyowner to the extent of any gain under the
Policy. Generally, a 10% penalty tax also applies to the taxable portion of any
distribution prior to the Insured reaching age 59 1/2. (For further detail
regarding taxation, see Federal Tax Matters, page 31.)
"FREE-LOOK PRIVILEGE"
The Policyowner is granted a period of time (a "free look period") to examine
the Policy and return it for a refund. The Policyowner may cancel the Policy
within 45 days after Part I of the application is signed, within 10 days after
the Policyowner receives the Policy, or 10 days after AVLIC delivers a notice
concerning cancellation, whichever is later. (See Free Look Privilege, page 23.)
ENCORE! 9
<PAGE>
EXCHANGE PRIVILEGE
During the first 24 months after the Policy Date of the Policy, subject to
certain restrictions, the Policyowner may exchange the Policy for a flexible
premium adjustable life insurance policy issued and made available for exchange
by AVLIC or its affiliates. The policy provisions and applicable charges for the
new policy will be based on the same Policy Date and Issue Date as under this
Policy. (See Exchange Privilege, page 23.)
AMERITAS VARIABLE LIFE INSURANCE COMPANY AND THE ACCOUNT
AMERITAS VARIABLE LIFE INSURANCE COMPANY
Ameritas Variable Life Insurance Company ("AVLIC") is a stock life insurance
company organized in the State of Nebraska. AVLIC was incorporated on June 22,
1983 and commenced business December 29, 1983. AVLIC is currently licensed to
sell life insurance in 46 states, and the District of Columbia. AVLIC's
financial statements may be found at page 44.
AVLIC is a wholly-owned subsidiary of AMAL Corporation, a Nebraska stock
company. AMAL Corporation is a joint venture of Ameritas Life Insurance Corp.
("Ameritas"), which owns a majority interest in AMAL Corporation; and AmerUs
Life Insurance Company ("AmerUs Life", formerly known as American Mutual Life
Insurance Company), an Iowa stock life insurance company, which owns a minority
interest in AMAL Corporation. The Home Offices of both AVLIC and Ameritas are at
One Ameritas Way, 5900 "O" Street, P.O. Box 82550, Lincoln, Nebraska 68501.
On April 1, 1996 Ameritas consummated an agreement with AmerUs Life whereby
AVLIC became a wholly-owned subsidiary of a newly formed holding company, AMAL
Corporation. Under terms of the agreement the AMAL Corporation will initially be
66% owned by Ameritas and 34% owned by AmerUs Life. AmerUs Life has options to
purchase an additional 15% interest over the next five years if certain
production requirements are met.
Ameritas and its subsidiaries had total assets at December 31, 1995 of over $2.4
billion. AmerUs Life and its subsidiaries had total assets as of December 31,
1995 of over $ 4.3 billion.
AVLIC has a rating of A (Excellent) from A.M. Best Company, a firm that analyzes
insurance carriers, and a rating of AA ("Excellent") from Standard & Poor's for
claims-paying ability. Ameritas enjoys a long standing A+ (Superior) rating from
A.M. Best.
Ameritas, AmerUs Life and AMAL Corporation guarantee the obligations of AVLIC.
This guarantee will continue until AVLIC is recognized by a national rating
agency as having a financial rating equal to or greater than Ameritas Life, or
until AVLIC is acquired by another insurance company who has a financial rating
by a national rating agency equal to or greater than Ameritas and who agrees to
assume the guarantee; provided that if AmerUs Life sells its interest in AMAL
Corporation to another insurance company who has a financial rating by a
national rating agency equal to or greater than that of AmerUs Life, and the
purchaser assumes the guarantee, AmerUs Life will be relieved of its obligations
under the Guarantee.
Ameritas Investment Corp., the principal underwriter of the policies, may
publish in advertisements and reports to Policyowners, the ratings and other
information assigned to Ameritas and AVLIC by one or more independent rating
services and charts and other information concerning dollar cost averaging,
portfolio rebalancing, earnings sweep, tax-deference, asset allocations and
other investment methods. The purpose of the ratings is to reflect the financial
strength and/or claims-paying ability of AVLIC. The ratings do not relate to the
performance of the Account.
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
Ameritas Variable Life Insurance Company Separate Account V ("the Account") was
established under Nebraska law on August 28, 1985. The assets of the Account are
held by AVLIC segregated from all of AVLIC's other assets, are not chargeable
with liabilities arising out of any other business which AVLIC may conduct, and
income, gains, or losses of AVLIC. Although the assets maintained in the Account
will not be charged with any liabilities arising out of AVLIC's other business,
all obligations arising under the Policies are liabilities of AVLIC who will
maintain assets in the Account of a total market value at least equal to the
reserve and other contract liabilities of the Account. The Account will at all
times contain assets equal to or greater than Accumulation Values invested in
the Account. Nevertheless, to the extent assets in the Account exceed AVLIC's
liabilities in the Account, the assets are available to cover the liabilities of
AVLIC's General Account. AVLIC may, from time to time, withdraw assets available
to cover the General Account obligations.
10 ENCORE!
<PAGE>
The Account is registered with the Securities and Exchange Commission ("SEC")
under the Investment Company Act of 1940 ("1940 Act") as a unit investment
trust, which is a type of investment company. This does not involve any SEC
supervision of the management or investment policies or practices of the
Account. For state law purposes, the Account is treated as a Division of AVLIC.
PERFORMANCE INFORMATION
Performance information for the Subaccounts of the Account and the Funds
available for investment by the Account may appear in advertisements, sales
literature, or reports to Policyowners or prospective purchasers. AVLIC may also
provide a hypothetical illustration of Accumulation Value, Net Cash Surrender
Value and Death Benefit based on historical investment returns of the Funds for
a sample insured based on assumptions as to age, sex, and other policy specific
assumptions.
AVLIC may also provide individualized hypothetical illustrations of Accumulation
Value, Net Cash Surrender Value and Death Benefit based on historical investment
returns of the Funds. These illustrations will reflect deductions for fund
expenses and Policy and Account charges, including the Monthly Deduction,
Percent of Premium Charge, and the Surrender Charge. These hypothetical
illustrations will be based on the actual historical experience of the funds as
if the Subaccounts had been in existence and a Policy issued for the same
periods as those indicated for the funds.
THE FUNDS
There are currently twenty-six Subaccounts within the Account available to
Policyowners for new allocations. Each Subaccount of the Account will invest
only in the shares of a corresponding portfolio of the VIPF, VIPF II, the Alger
American Fund, the MFS Fund and the Morgan Stanley Universal Funds (collectively
the "Funds".) Each Fund is registered with the SEC under the Investment Company
Act of 1940 as an open-end management investment company.
The assets of each portfolio of the Funds are held separate from the assets of
the other portfolios. Thus, each portfolio operates as a separate investment
portfolio, and the income or losses of one portfolio generally have no effect on
the investment performance of any other portfolio.
The investment objectives and policies of each portfolio are summarized below.
There is no assurance that any of the portfolios will achieve their stated
objectives. More detailed information, including a description of investment
objectives, policies, restrictions, expenses and risks, is in the prospectuses
for each of the Funds, which must accompany or precede this Prospectus. All
underlying fund information, including Fund prospectuses, has been provided to
AVLIC by the underlying Funds. AVLIC has not independently verified this
information. One or more of the Portfolios may employ investment techniques that
involve certain risks, including investing in non-investment grade, high risk
debt securities, entering into repurchase agreements and reverse repurchase
agreements, lending portfolio securities, engaging in "short sales against the
box," investing in instruments issued by foreign banks, entering into firm
commitment agreements and investing in warrants and restricted securities. In
addition, certain of the portfolios may invest in securities of foreign issuers.
The Leveraged AllCap Portfolio may borrow money to increase its portfolio of
securities, and may purchase or sell options and enter into futures contracts on
securities indexes to increase gain or to hedge the value of the Portfolio.
Certain of the portfolios are permitted to invest a portion of their assets in
non-investment grade, high risk debt securities; these portfolios include The
High Income, Equity-Income, Asset Manager: Growth, Asset Manager Portfolios of
the Fidelity Funds, and the Research Portfolio of the MFS Fund. Certain
portfolios are designed to invest a substantial portion of their assets
overseas, such as the Overseas Portfolio of VIPF. Other portfolios invest
primarily in the securities markets of emerging nations. Investments of this
type involve different risks than investments in more established economies, and
will be affected by greater volatility of currency exchange rates and overall
economic and political factors. Such portfolios include the International
Magnum, Emerging Markets Equity, Global Equity and Asian Equity Portfolios of
the Morgan Stanley Fund. The Emerging Markets Equity Portfolio may also invest
in securities of Russian companies; such investment may involve risks associated
with that nation's system of share registration and custody. Securities of
non-U.S. issuers (including issuers in emerging nations) may also be purchased
by each of the portfolios of the MFS Trust. Investments acquired by the U.S.
Real Estate Portfolio of the Morgan Stanley Fund may be subject to the risks
associated with the direct ownership of real estate and direct investments in
real estate investment trusts. Further information about the risks associated
with investments in each of the Funds and their respective portfolios is
contained in the prospectus relating to that Fund. These prospectuses, together
with this Prospectus, should be read carefully and retained.
Each Policyowner should periodically consider the allocation among the
Subaccounts in light of current market conditions and the investment risks
attendant to investing in the Funds' various portfolios.
ENCORE! 11
<PAGE>
The Account will purchase and redeem shares from the Funds at net asset value.
Shares will be redeemed to the extent necessary for AVLIC to collect charges,
pay the Surrender Values, partial withdrawals, and make policy loans or to
transfer assets among Investment Options as requested by Policyowners. Any
dividend or capital gain distribution received from a portfolio of the Funds
will be reinvested immediately at net asset value in shares of that portfolio
and retained as assets of the corresponding Subaccount.
Since each of the Funds is designed to provide investment vehicles for variable
annuity and variable life insurance contracts of various insurance companies and
will be sold to separate accounts of other insurance companies as investment
vehicles for various types of variable life insurance policies and variable
annuity contracts, there is a possibility that a material conflict may arise
between the interests of the Account and one or more of the separate accounts of
another participating insurance company. In the event of a material conflict,
the affected insurance companies agree to take any necessary steps, including
removing its separate accounts from the Funds, to resolve the matter. The risks
of such mixed and shared funding are described further in the prospectuses of
the Funds.
<TABLE>
<CAPTION>
FIDELITY FUNDS
PORTFOLIO INVESTMENT POLICIES OBJECTIVE
<S> <C> <C>
Money Market1 High-quality U.S. dollar denominated money market Seeks to obtain as high a level of current
instruments of domestic and foreign Issuers. income as is consistent with preserving
(Commercial Paper, Certificate of Deposit.) capital and providing liquidity
Equity-Income1 At least 65% in income producing common or preferred Seeks reasonable income by investing primarily
stock. The remainder will normally be invested in in income producing equity securities. The goal
convertible and non-convertible debt obligations. is to achieve a yield in excess of the composite
yield of the Standard & Poor's 500 Composite
Stock Price Index
Growth1 Portfolio purchases normally will be common stocks of Dividend income will only be considered if it
both well-known established companies and smaller might have an effect on stock values. Seeks to
less-known companies, although the investments are achieve capital appreciation.
not restricted to any one type of security.
Dividend income will only be considered if it might
have an effect on stock values. Seeks to achieve
capital appreciation.
High Income1 At least 65% in income producing debt Seeks to obtain a high level of current income
securities and preferred stocks, up to 20% in common by investing in high income producing lower-
stocks and other equity securities, and up to 15% rated debt securities (sometimes called "junk
in securities subject to restriction on resale. bonds"), preferred stocks including covertible
securities and restricted securities.
Overseas1 At least 65% invested in securities of issuers Seeks long-term growth of capital primarily
outside of North America. Most issuers will be through investments in foreign securities.
located in developed countries in the Americas, the
Far East and Pacific Basin, Scandinavia and
Western Europe. While the primary purchases will be
common stocks, all types of securities may be
purchased.
Asset Manager2 Equities (Growth, High Dividends, Utility), bonds Seeks to obtain high total return with reduced
(Government, Agency, Mortgage backed, Convertible risk over the long term by allocating its assets
and Zero Coupon) and money market instruments among domestic and foreign stocks, bonds, and
short-term fixed-income securities.
Investment A portfolio of investment grade fixed-income Seeks as high a level of current income as is
Grade Bond2 securities with an average maturity of ten years or consistent with the preservation of capital.
less.
Asset Manager: Focuses on stocks for high potential returns but also Seeks to maximize total return by allocating its
Growth2 purchases bonds and short-term instruments. assets among stocks, bonds, short-term
instruments and other investments.
Index 5002 At least 80% (65% if fund assets are below Seeks investment results that correspond to the
$20 million) in equity securities of companies that total return of common stocks publicly traded in
compose the Standard & Poor's 500. Also purchases the United States, as represented by the
short-term debt securities for cash management Standard & Poor's 500.
purposes and uses various investment techniques, such
as futures contracts, to adjust its exposure to the
Standard & Poor's 500.
Contrafund2 Portfolio purchases will normally be common stock or Seeks long-term capital appreciation
securities convertible into common stock of companies
believed to be undervalued due to an overly
pessimistic appraisal by the public.
</TABLE>
1 VIPF
2 VIPF II
12 ENCORE!
<PAGE>
<TABLE>
<CAPTION>
ALGER
AMERICAN FUNDS
PORTFOLIO INVESTMENT POLICIES OBJECTIVE
<S> <C> <C>
Growth The Portfolio will invest its assets in companies Seeks long-term capital appreciation.
whose securities are traded on domestic stock
exchanges or in the over-the-counter market. The
Portfolio will invest at least 85% of its net assets
in equity securities and at least 65% of its total
assets in the securities of companies that have a
total market capitalization of $1 billion or greater.
Income and The Portfolio attempts to invest 100% of its Seeks to provide a high level of dividend
Growth assets, except during temporary defensive periods, income to the extent consistent with prudent
and it is a fundamental policy of the Portfolio to investment management. Capital appreciation
invest at least 65% of its total assets in dividend is a secondary objective of the Portfolio.
paying equity securities that are listed on a
national exchange or in securities convertible into
dividend paying equity securities.
Small-Capitalization Except during temporary defensive periods, the Seeks long-term capital appreciation.
Portfolio invest at least 65% of its total assets in
equity securities of companies that, at the time of
purchase of the securities, have total market
capitalization within the range of companies
included in the Russell 2000 Growth Index, updated
quarterly. The Portfolio may invest up to 35% of its
total assets in equity securities of companies that,
at the time of purchase, have total market
capitalization outside the range of companies
included in the Russell 2000 Growth Index and in
excess of that amount (up to 100% of its assets)
during temporary defensive periods.
Balanced The Portfolio will invest its assets in common stocks Seeks current income and long-term capital
and investment grade preferred stock and debt appreciation by investment in common stocks
securities as well as securities convertible and fixed income securities, with emphasis
into common stocks. Except during defensive periods, on income producing securities which appears to
it is anticipated that 25% of the portfolio assets have some potential for capital appreciation.
will be invested in fixed income senior securities.
MidCap Growth Except during temporary defensive periods, the Seeks long-term capital appreciation.
Portfolio invests at least 65% of its total assets in
equity securities of companies that, at the time of
purchase of the securities, have total market
capitalization within the range of companies included
in the S&P MidCap 400 Index, updated quarterly.
The S&P Mid Cap 400 Index is designed to track the
performance of medium capitalization companies. The
Portfolio may invest up to 35% of its total assets
in securities that, at the time of purchase, have
total market capitalization outside the range of
companies included in the S&P MidCap 400 Index and in
excess of that amount (up to 100% of its assets)
during temporary defensive periods.
Leveraged AllCap Invests at least 85% of net assets in equity Seeks long-term capital appreciation.
securities of companies of any size, except during
defensive periods. May purchase put and call
options and sell covered options to increase gain
and hedge. May enter into futures contracts and
purchase and sell options on these futures
contracts. May also borrow money for purchase of
additional securities.
MFS FUNDS
PORTFOLIO INVESTMENT POLICIES OBJECTIVE
Emerging Growth Series At least 80% normally will be invested in equity Seeks to provide long-term capital growth;
securities of emerging growth companies. Up to 25% dividend and interest income is incidental
may be invested in foreign securities not including
ADRs
Utilities Series At least 65%, but up to 100% normally will be Seeks capital growth and current income (above
invested in equity and debt securities of both that available from a portfolio invested
domestic and foreign companies in the utilities entirely in equity securities).
industry. Normally, not more than 35% will be
invested in equity and debt securities of
issuers in other industries, including foreign
securities, emerging market securities and non-dollar
denominated securities.
World Governments Series At least 80% normally will be invested in debt Seeks to provide long-term growth of capital and
securities. May invest up to 100% of assets in future income.
foreign securities, including emerging market
securities
Research Series Invests in common stocks or securities convertible Seeks to provide long-term growth of capital
into common stocks of companies believed to possess and future income.
. better than average prospects for long-term growth.
Up to 10% may be invested in non-investment
grade debt; up to 20% may be invested in foreign
securities (including emerging market issues.)
Growth With Income Series At least 65% will normally be invested in common Seeks to provide reasonable current income and
stocks or securities convertible into common stocks long-term growth of capital and income.
of companies believed to have long-term prospects
for growth and income. Expects to invest not more
than 15% in foreign securities (including emerging
market issues.)
ENCORE! 13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MORGAN STANLEY
FUNDS
PORTFOLIO INVESTMENT POLICIES OBJECTIVE
<S> <C> <C>
Emerging Markets Equity Invests primarily in equity securities of emerging Long-term appreciation
market countries with a focus on those
whose economies are believed to be developing
strongly and in which markets are becoming more
sophisticated.
Global Equity Invests primarily in equity securities of Long-term appreciation
issuers through out the world, including U.S.
issuers, using an approach that is oriented to
the selection of individual stocks that the
portfolio's adviser believes are undervalued.
International Magnum Invests primarily in equity securities of Long-term appreciation
non-U.S. issuers, generally in accordance with the
Morgan Stanley Capital International Europe,
Australia, Far East Index, commonly known as the
"EAFE Index."
Asian Equity Invests primarily in equity securities of Long-term appreciation
Asian issuers, excluding Japan, using an
approach that is oriented to the selection of
individual stocks, traded on recognized stock
exchanges of Asian countries and whose business is
conducted principally in Asia, believed by the
portfolio's adviser to be undervalued.
U.S. Real Estate Invests primarily in equity securities of U.S. and Above-average current income and long
non-U.S. companies primarily engaged in the U.S. term capital appreciation
real estate industry, including real estate
investment trusts
</TABLE>
FUND EXPENSE SUMMARY
The information shown below relating to the Funds was provided to AVLIC by the
Funds and AVLIC has not independently verified such information. Each of the
Funds is managed by an investment advisory organization that is not affiliated
with AVLIC. Each such organization is entitled to receive a fee for its services
based on the value of the relevant portfolio's net assets. The amount of
expenses, including the asset based advisory fee referred to above, borne by
each portfolio for the fiscal year ended December 31, 1995, was as follows:
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT ADVISORY AND OTHER EXPENSE TOTAL
MANAGEMENT
<S> <C> <C> <C>
FIDELITY
Money Market .24% .09% .33%
Equity-Income .51% .10% .61%
Growth .61% .09% .70%
High Income .60% .11% .71% (1)
Overseas .76% .15% .91%
Asset Manager .71% .08% .79% (1)
Investment Grade Bond .45% .14% .59%
Asset Manager: Growth .71% .29% 1.00% (1, 2)
Index 500 .00% .28% .28% (2)
Contrafund .61% .11% .72% (1)
ALGER AMERICAN (3)
Growth .75% .10% .85%
Income and Growth .625% .125% .75%
Small Capitalization .85% .07% .92%
Balanced .75% .25% 1.00%
MidCap Growth .80% .10% .90%
Leveraged AllCap .85% .71% 1.56%
</TABLE>
14 ENCORE!
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT ADVISORY AND OTHER EXPENSE TOTAL
MANAGEMENT
<S> <C> <C> <C>
MFS
Emerging Growth .75% .25% 1.00% (4)
Utilities .75% .25% 1.00% (4)
World Governments .75% .25% 1.00% (5)
Research .75% .25% 1.00% (4)
Growth With Income .75% .25% 1.00% (4)
MORGAN STANLEY (6)
Emerging Markets Equity 1.25% .50% 1.75%
Global Equity .80% .35% 1.15%
International Magnum .80% .35% 1.15%
Asian Equity .80% .40% 1.20%
U.S. Real Estate .80% .30% 1.10%
</TABLE>
(1) A portion of the brokerage commissions the fund paid was used to reduce
its expenses. Without this reduction total operating expenses would have
been (for High Income: 0.71% (please note there were brokerage
commissions paid, but it did not affect the ratio); for Asset Manager
0.81%; for Asset Manager: Growth 1.13%; and for Contrafund:
0.73%)
(2) The fund's expenses were voluntarily reduced by the fund's investment
adviser. Absent reimbursement, management fee, other expenses, and total
expenses would have been (Index 500 Portfolio) 0.28%, 0.19% and 0.47%,
respectively; and (Asset Manager: Growth) 0.71%, 0.42% and 1.13%,
respectively.
(3) Alger Management has agreed to reimburse the portfolios to the extent
that the annual operating expenses (excluding interest, taxes, fees for
brokerage services and extraordinary expenses) exceed respectively; Alger
American Income and Growth, and Alger American Balanced, 1.25%; Alger
American Small-Cap, Alger American MidCap, Alger American Leveraged All
Cap, and the Alger American Growth, 1.50%. As long as the expense
limitations continue for a portfolio, if a reimbursement occurs, it has
the effect of lowering the portfolio's expense ratio and increasing its
total return.
(4) MFS Co. has agreed to bear, subject to reimbursement, expenses for each
of the Emerging Growth Series, Utilities Series. Research Series, and
Growth With Income Series such that each Series' aggregate operating
expenses shall not exceed, on an annualized basis, 1.00% of the average
daily net assets of the Series from November 2, 1994 through December 31,
1996, 1.25% of the average daily net assets of the Series from January 1,
1997 through December 31, 1998, and 1.50% of the average daily net assets
of the Series from January 1, 1999 through December 31, 2004; provided
however, that this obligation may be terminated or revised at any time.
Absent this expense arrangement, "Other Expenses" and "Total Operating
Expenses" would be 2.16% and 2.91%, respectively, for the Emerging Growth
Series; 2.33% and 3.08%, respectively, for the Utilities Series; 3.15%
and 3.90%, respectively, for the Research Series; and 20.69% and 21.44%,
respectively, for the Growth With Income Series.
(5) MFS Co. has agreed to bear, subject to reimbursement, until December 31,
2004, expenses of the World Governments Series such that the Series'
aggregate operating expenses do not exceed 1.00%, on an annualized basis,
of its average daily net assets. Absent this expense arrangement, "Other
Expenses" and "Total Operating Expenses" for the World Governments Series
would be 1.24% and 1.99%, respectively.
(6) This is an estimate of expenses for the fiscal year ending December 31,
1996. Morgan Stanley Co. has agreed to a reduction in management fees and
to reimburse each portfolio if necessary, if such fees would cause
the total annual operating expenses to exceed the percentage indicated.
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ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
AVLIC reserves the right, subject to applicable law, and, if necessary, after
notice to and prior approval from the SEC and/or state insurance authorities to
make additions to, deletions from, or substitutions for the shares that are held
in the Account or that the Account may purchase. The Account may, to the extent
permitted by law, purchase other securities for other contracts or permit a
conversion between contracts upon request by the Policyowners.
AVLIC may, in its sole discretion, also establish additional subaccounts of the
Account, each of which would invest in shares corresponding to a new portfolio
of the Funds or in shares of another investment company having a specified
investment objective. AVLIC may, in its sole discretion, establish new
subaccounts or eliminate one or more Subaccounts if marketing needs, tax
considerations or investment conditions warrant. Any new Subaccounts may be made
available to existing Policyowners on a basis to be determined by AVLIC.
If any of these substitutions or changes are made, AVLIC may by appropriate
endorsement change the Policy to reflect the substitution or change. If AVLIC
deems it to be in the best interest of Policyowners, and subject to any
approvals that may be required under applicable law, the Account may be operated
as a management company under the 1940 Act, it may be deregistered under that
Act if registration is no longer required, or it may be combined with other
AVLIC separate accounts. To the extent permitted by applicable law, AVLIC may
also transfer the assets of the Account associated with the Policies to another
separate account. In addition, AVLIC may, when permitted by law, restrict or
eliminate any voting rights of Policyowners or other persons who have voting
rights as to the Account.
The Policyowner will be notified of any material change in the investment policy
of any portfolio in which the Policyowner has an interest.
FIXED ACCOUNT
Policyowners may elect to allocate all or a portion of their Net Premium
payments to the Fixed Account, and they may also transfer monies between the
Account and the Fixed Account. (See Transfers, page 22.)
Payments allocated to the Fixed Account and transferred from the Account to the
Fixed Account are placed in the General Account. The General Account includes
all of AVLIC's assets, except those assets segregated in the separate accounts.
AVLIC has the sole discretion to invest the assets of the General Account,
subject to applicable law. AVLIC bears an investment risk for all amounts
allocated or transferred to the Fixed Account and interest credited thereto,
less any deduction for charges and expenses, whereas the Policyowner bears the
investment risk that the declared rate described below, will fall to a lower
rate after the expiration of a declared rate period. Because of exemptive and
exclusionary provisions, interests in the General Account have not been
registered under the Securities Act of 1933 (the "1933 Act") nor is the General
Account registered as an investment company under the Investment Company Act of
1940. Accordingly, neither the General Account nor any interest therein is
generally subject to the provisions of the 1933 or 1940 Act. We understand that
the staff of the SEC has not reviewed the disclosures in this Prospectus
relating to the Fixed Account portion of the Policy; however, disclosures
regarding the Fixed Account portion of the Policy may be subject to generally
applicable provisions of the Federal Securities Laws regarding the accuracy and
completeness of statements made in prospectuses.
AVLIC guarantees that it will credit interest at a Declared Rate of at least
3.5%. AVLIC may, at its discretion, set a higher Declared Rate(s.) Each month
AVLIC will establish the Declared Rate for the monies transferred or allocated
to the Fixed Account that month. Each month is assumed to have 30 days, and each
year to have 360 days for purposes of crediting interest on the Fixed Account.
The Policyowner will earn interest on the amounts transferred or allocated to
the Fixed Account at the Declared Rate effective for the month in which the
Policy was issued, which rate is guaranteed for the remainder of the Policy
Year. During later Policy Years, all amounts in the Fixed Account will earn
interest at the Declared Rate in effect in the month of the last Policy
Anniversary. Declared interest rates may increase or decrease from previous
periods, but will not fall below 3.5%. AVLIC reserves the right to change the
declaration practice, and the period for which a Declared Rate will apply.
POLICY BENEFITS
The rights and benefits under the Policy are summarized in this prospectus;
however prospectus disclosure regarding the Policy is qualified in its entirety
by the Policy itself, a copy of which is available upon request from AVLIC.
PURPOSES OF THE POLICY
The Policy is designed to provide the Policyowner with both lifetime insurance
protection to the Policy Anniversary nearest the Insured's 100th birthday and
flexibility in connection with the amount and frequency of premium payments and
with the level of life insurance proceeds payable under the Policy.
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The Policyowner is not required to pay scheduled premiums to keep the Policy in
force, but may, subject to certain limitations, vary the frequency and amount of
premium payments. Moreover, the Policy allows a Policyowner to adjust the level
of Death Benefits payable under the Policy without having to purchase a new
Policy by increasing (with evidence of insurability) or decreasing the Specified
Amount. An increase in the Specified Amount will increase the Guaranteed Death
Benefit Premium required. If the Specified Amount is decreased, however, the
Guaranteed Death Benefit Premium will not decrease. Thus, as insurance needs or
financial conditions change, the Policyowner has the flexibility to adjust life
insurance benefits and vary premium payments.
The Death Benefit may, and the Accumulation Value will, vary with the investment
experience of the chosen Subaccounts of the Account. Thus the Policyowner
benefits from any appreciation in value of the underlying assets, but bears the
investment risk of any depreciation in value. As a result, whether or not a
Policy continues in force may depend in part upon the investment experience of
the chosen Subaccounts. The failure to pay a Planned Periodic Premium will not
necessarily cause the Policy to lapse, but the Policy could lapse even if
Planned Periodic Premiums have been paid, depending upon the investment
experience of the Account. AVLIC agrees to keep the Policy in force during the
Guaranteed Death Benefit Period and provide a Guaranteed Death Benefit so long
as Net Policy Funding is equal to or greater than the cumulative monthly pro
rata Guaranteed Death Benefit Premium. In certain instances, this Net Policy
Funding will not, after the payment of Monthly Deductions, generate positive Net
Cash Surrender Values.
DEATH BENEFIT PROCEEDS
As long as the Policy remains in force, AVLIC will, upon Satisfactory Proof of
Death, pay the Death Benefit Proceeds of the Policy in accordance with the Death
Benefit option in effect at the time of the Insured's death. The amount of the
Death Benefits payable will be determined at the end of the valuation period
during which the Insured's death occurred. The Death Benefit Proceeds may be
paid in a lump sum or under one or more of the payment options set forth in the
Policy. (See Payment Options, page 20.)
Death Benefit Proceeds will be paid to the surviving Beneficiary or
Beneficiaries specified in the application or as subsequently changed. If no
Beneficiary is chosen, the proceeds will be paid to the Policyowner or the
Policyowner's estate.
DEATH BENEFIT OPTIONS
The Policy provides two Death Benefit options, unless the Extended Maturity
Option is in effect. If the Extended Maturity Option is in effect, the Death
Benefit will be the Accumulation Value. (See Benefits at Maturity, page 20.) The
Policyowner selects one of the options in the application. The Death Benefit
under either option will never be less than the current Specified Amount of the
Policy as long as the Policy remains in force. (See Policy Lapse and
Reinstatement, page 25.) The minimum initial Specified Amount is generally
$500,000 for Insureds ages 20-49 and $250,000 for those who are 50 or older.
Defined differences, illustrated by graphic illustrations are as follows:
OPTION A.
(Omitted graph illustrates payout under Death Benefit Option A, specifically by
showing the relationships over time, between the Specified Amount and the
Accumulation Value.)
Death Benefit Option A. Pays a Death Benefit equal to the Specified Amount
or the Accumulation Value multiplied by the Death Benefit percentage (as
illustrated at Point A) whichever is greater.
Under Option A, the Death Benefit is the current Specified Amount of the Policy
or, if greater, the applicable percentage of Accumulation Value on the date of
death. The applicable percentage is 250% for Insureds with an attained age 40 or
younger on the policy anniversary prior to the date of death. For Insureds with
an attained age over 40 on that policy anniversary, the percentage declines. For
example, the percentage at age 40 is 250%, at age 50 is 185%, at age 60 is 130%,
ENCORE! 17
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at age 70 is 115%, at age 80 is 105%, and at age 90 is 100%. Accordingly, under
Option A the Death Benefit will remain level at the Specified Amount unless the
applicable percentage of Accumulation Value exceeds the current Specified
Amount, in which case the amount of the Death Benefit will vary as the
Accumulation Value varies. Policyowners who prefer to have favorable investment
performance, if any, reflected in higher Accumulation Value, rather than
increased insurance coverage, generally should select Option A.
OPTION B.
(Omitted graph illustrates payout under Death Benefit Option B, specifically by
showing the relationships over time, between the Specified Amount and the
Accumulation Value.
Death Benefit Option B. Pays a Death Benefit equal to the Specified Amount
plus the Policy's Accumulation Value or the Accumulation Value multiplied
by the Death Benefit percentage, whichever is greater.
Under Option B, the Death Benefit is equal to the current Specified Amount plus
the Accumulation Value of the Policy or, if greater, the applicable percentage
of the Accumulation Value on the date of death. The applicable percentage is the
same as under Option A: 250% for Insureds with an attained age 40 or younger on
the policy anniversary prior to the date of death, and for Insureds with an
attained age over 40 on that policy anniversary the percentage declines.
Accordingly, under Option B the amount of the Death Benefit will always vary as
the Accumulation Value varies (but will never be less than the Specified
Amount.) Policyowners who prefer to have favorable investment performance, if
any, reflected in increased insurance coverage, rather than higher Accumulation
Values, generally should select Option B.
CHANGE IN DEATH BENEFIT OPTION. The Death Benefit Option may be changed once per
year after the first policy year by sending AVLIC a written request. The
effective date of such a change will be the Monthly Activity Date on or
following the date the change is approved by AVLIC. A change may have Federal
Tax consequences.
If the Death Benefit option is changed from Option A to Option B, the Specified
Amount after the change will equal the Specified Amount before the change less
the Accumulation Value as of the date of the change. If the Death Benefit option
is changed from Option B to Option A, the Specified Amount under Option A after
the change will equal the Death Benefit under Option B on the effective date of
change.
No charges will be imposed upon a change in Death Benefit option, nor will such
a change in and of itself result in an immediate change in the amount of a
Policy's Accumulation Value. However, a change in the Death Benefit option may
affect the Cost of Insurance because this charge varies depending on net amount
at risk (i.e. the amount by which the Death Benefit as calculated on a Monthly
Activity Date exceeds the Accumulation Value on that date). Changing from Option
B to Option A will generally decrease the net amount at risk in the future, and
will therefore decrease the Cost of Insurance. Changing from Option A to Option
B will generally result in an increase in the Cost of Insurance over time
because the Cost of Insurance Rate will increase with the Insured's age, and the
net amount at risk will generally remain level. If, however, the change was from
Option B to Option A, the Cost of Insurance Rate may be different for the
increased Death Benefit. On a change from Option A to Option B, the Specified
Amount will decrease so that the Cost of Insurance Rate may be different. (See
Charges and Deductions, page 26 and Federal Tax Matters, page 31.)
CHANGE IN SPECIFIED AMOUNT. Subject to certain limitations, after the first
policy year, a Policyowner may increase or decrease the Specified Amount of a
Policy. A change in Specified Amount may affect the Cost of Insurance rate and
the net amount at risk, both of which may affect a Policyowner's Cost of
Insurance and have Federal Tax consequences. (See Charges and Deductions, page
26 and Federal Tax Matters, page 31.)
18 ENCORE!
<PAGE>
Any increase or decrease in the Specified Amount will become effective on the
Monthly Activity Date on or following the date a written request is approved by
AVLIC. The Specified Amount of a Policy may be changed only once per year and
AVLIC may limit the size of a change in a Policy Year. The Specified Amount
remaining in force after any requested decrease, may not be less than $500,000
for Insureds with an Issue Age of 49 or less and $250,000 for those with an
Issue Age of 50 or more in the first three Policy Years. In later Policy Years,
the Specified Amount remaining in force following a decrease must be at least
$400,000 for Insureds with an Issue Age 20-49 and $200,000 for those with Issue
Ages of 50-80. In addition, if following the decrease in Specified Amount, the
Policy would not comply with the maximum premium limitations required by Federal
Tax Law the decrease may be limited or Accumulation Value may be returned to the
Policyowner at the Policyowner's election, to the extent necessary to meet these
requirements. (See Premiums, page 24.)
Increases in the Specified Amount will be allowed after the first Policy Year.
For an increase in the Specified Amount, a written supplemental application must
be submitted. AVLIC may also require additional evidence of insurability.
Although an increase need not necessarily be accompanied by an additional
premium, in certain cases an additional premium will be required to effect the
requested increase. (See Premiums upon Increases in Specified Amount, page 25.)
The minimum amount of any increase is $25,000, and an increase cannot be made if
the Insured's attained age is over 80. An increase in the Specified Amount
will also increase Surrender Charges. An increase in the Specified Amount during
the time the Guaranteed Death Benefit provision is in effect will increase the
respective premium requirements. (See Charges and Deductions, page 26.)
METHODS OF AFFECTING INSURANCE PROTECTION
A Policyowner may increase or decrease the pure insurance protection provided by
a Policy - the difference between the Death Benefit and the Accumulation Value -
in several ways as insurance needs change. These ways include increasing or
decreasing the Specified Amount of insurance, changing the level of premium
payments, and making a partial withdrawal of the Policy's Accumulation Value.
Certain of these changes may have Federal Tax consequences. The consequences of
each of these methods will depend upon the individual circumstances.
DURATION OF THE POLICY
The duration of the Policy generally depends upon the Accumulation Value. The
Policy will remain in force so long as the Net Cash Surrender Value is
sufficient to pay the Monthly Deduction or if the Guaranteed Death Benefit
provision is in effect. (See Charges from Accumulation Value, page 26.) Where,
however, the Net Cash Surrender Value is insufficient to pay the Monthly
Deduction and the Grace Period expires without an adequate payment by the
Policyowner, the Policy will lapse and terminate without value. (See Policy
Lapse and Reinstatement, page 25.)
ACCUMULATION VALUE
The Accumulation Value will reflect the investment performance of the chosen
Investment Options, the net premiums paid, any partial withdrawals, and the
charges assessed in connection with the Policy. A Policyowner may at any time
Surrender the Policy and receive the Policy's Net Cash Surrender Value. (See
Surrenders, page 22.) There is no guaranteed minimum Accumulation Value.
Accumulation Value is determined on each Valuation Date. On the Issue Date, the
Accumulation Value will equal the portion of any Net Premium allocated to the
Investment Options, reduced by the portion of the first Monthly Deduction
allocated to the Investment Options. (See Allocation of Premiums and
Accumulation Value, page 25.) Thereafter, on each Valuation Date, the
Accumulation Value of a Policy will equal:
(a) The aggregate of the values attributable to the Policy in each of the
Subaccounts on the Valuation Date, determined for each Subaccount by
multiplying the Subaccount's unit value by the number of Subaccount units
allocated to the Policy; plus
(b) The value of the Fixed Account; plus
(c) Any Accumulation Value impaired by Outstanding Policy Debt held in the
General Account; plus
(d) Any Net Premiums received on that Valuation Date; plus
(e) Any amounts credited as Net Cash Surrender Value Bonus; less
(f) Any partial withdrawal, and its charge, made on that Valuation Date; less
ENCORE! 19
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(g) Any Monthly Deduction to be made on that Valuation Date; less
(h) Any federal or state income taxes charged against the Accumulation Value.
In computing the Policy's Accumulation Value, the number of Subaccount units
allocated to the Policy is determined after any transfers among Investment
Options (and deduction of transfer charges) but before any other Policy
transactions, such as receipt of Net Premiums and partial withdrawals, on the
Valuation Date. Because the Accumulation Value is dependent upon a number of
variables, a Policy's Accumulation Value cannot be predetermined.
NET CASH SURRENDER VALUE BONUS
Beginning with the twenty-first Policy Anniversary, a bonus equal to .25% of the
Net Cash Surrender Value will be credited to the Fixed Account and/or the
Subaccounts on each policy anniversary, provided that the Net Cash Surrender
Value of the Policy on the Policy Anniversary is at least $500,000. This bonus
is not guaranteed. The bonus will be credited to the Fixed Account and/or the
Subaccounts based on the premium allocation percentages in effect at that time.
THE UNIT VALUE. The unit value of each Subaccount reflects the investment
performance of that Subaccount. The unit value of each Subaccount shall be
calculated by (i) multiplying the per share net asset value of the corresponding
Fund portfolio on the Valuation Date times the number of shares held by the
Subaccount, before the purchase or redemption of any shares on that Valuation
Date; minus (ii) a charge not exceeding an annual rate of .90% for mortality and
expense risk; minus (iii) a charge not exceeding an annual rate of .25% for
administrative service expenses; and (iv) dividing the result by the total
number of units held in the Subaccount on the Valuation Date, before the
purchase or redemption of any units on that Valuation Date. (See Daily Charges
Against the Account, page 28.)
VALUATION DATE AND VALUATION PERIOD. A Valuation Date is each day on which the
New York Stock Exchange ("NYSE") is open for trading. A Valuation Period is the
period between two successive Valuation Dates, commencing at the close of the
NYSE on each Valuation Date and ending at the close of the NYSE on the next
succeeding Valuation Date.
BENEFITS AT MATURITY
If the Insured is living, AVLIC will pay the Accumulation Value of the Policy,
less Outstanding Policy Debt ("Maturity Benefits") on the Maturity Date to the
Policyowner. The Policy will mature on the Policy Anniversary Date nearest the
Insured's 100th birthday, if living, unless the maturity has been extended by
election of the Extended Maturity Option. The Extended Maturity Option, if
elected, has the effect of continuing the Policy in force for purposes of
providing a benefit at the time of the Insured's death. The Death Benefit will
be the Accumulation Value. The Extended Maturity Option does not, however,
extend the Maturity Date for purposes of determining benefits under any other
option or rider. Once the Extended Maturity Option becomes effective, no further
premium payments will be accepted and no deduction will be made for Cost of
Insurance or riders. As long as the policy continues in force, all other policy
provisions will remain in effect. Interest on policy loans will continue to
accrue and become part of the Outstanding Policy Debt.
There is no extra premium for the Extended Maturity Option, but it must be
elected by submitting a written request to AVLIC during the 90 days prior to
Maturity Date. The Extended Maturity Option is not available in all states.
Further, the Internal Revenue Service has not issued a ruling regarding its tax
consequences.
PAYMENT OF POLICY BENEFITS
Death Benefit Proceeds under the Policy will usually be paid within seven days
after AVLIC receives Satisfactory Proof of Death. Maturity Benefits will
ordinarily be paid within seven days of receipt of a written request. Payments
may be postponed in certain circumstances. (See Postponement of Payments, page
30.) The Policyowner may decide the form in which Death Benefit Proceeds or
Maturity Benefits will be paid. During the Insured's lifetime, the Policyowner
may arrange for the Death Benefit Proceeds to be paid in a lump sum or under one
or more of the optional methods of payment described below. Changes must be in
writing and will revoke all prior elections. If no election is made, AVLIC will
pay Death Benefit Proceeds or Accumulation Value Benefit in a lump sum. When
Death Benefit Proceeds are payable in a lump sum and no election for an optional
method of payment is in force at the death of the Insured, the Beneficiary may
select one or more of the optional methods of payment. Further, if the Policy is
assigned, any amounts due to the assignee will first be paid in one sum. The
balance, if any, may be applied under any payment option. Once payments have
begun, the payment option may not be changed.
PAYMENT OPTIONS FOR DEATH BENEFIT PROCEEDS OR MATURITY BENEFITS ("POLICY
PROCEEDS".) The minimum amount of each payment is $100. If a payment would be
less than $100, AVLIC has the right to make payments less often so that the
amount of each payment is at least $100. Once a payment option is in effect,
Policy Proceeds will be transferred to AVLIC's General
20 ENCORE!
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Account. AVLIC may make other payment options available in the future. For
additional information concerning these options, see the Policy itself. The
following payment options are currently available:
OPTION AI--INTEREST PAYMENT OPTION. AVLIC will hold any amount applied under
this option. Interest on the unpaid balance will be paid or credited each month
at a rate determined by AVLIC.
OPTION AII--FIXED AMOUNT PAYABLE OPTION. Each payment will be for an agreed
fixed amount. Payments continue until the amount AVLIC holds runs out.
OPTION B--FIXED PERIOD PAYMENT OPTION. Equal payments will be made for any
period selected up to 20 years.
OPTION C--LIFETIME PAYMENT OPTION. Equal monthly payments are based on the life
of a named person. Payments will continue for the lifetime of that person.
Variations provide for guaranteed payments for a period of time.
OPTION D--JOINT LIFETIME PAYMENT OPTION. Equal monthly payments are based on the
lives of two named persons. While both are living, one payment will be made each
month. When one dies, the same payment will continue for the lifetime of the
other.
As an alternative to the above payment options, Death Benefits Proceeds or
Maturity Benefits may be paid in any other manner approved by AVLIC. Further,
one of AVLIC's affiliates may make payments under the above payment options. If
an affiliate makes the payment, it will do so according to the request of the
Policyowner using the rules set out above.
POLICY RIGHTS
LOAN BENEFITS
LOAN PRIVILEGES. After the first Policy Anniversary Date, the Policyowner may
borrow an amount up to the current Net Cash Surrender Value less twelve times
the most recent Monthly Deduction, at regular or, as described below, reduced
loan rates. Loans usually are funded within seven days after receipt of a
written request. The loan may be repaid at any time while the Insured is living,
prior to the Maturity Date. Policyowners in certain states may borrow 100% of
the Net Cash Surrender Value after deducting Monthly Deductions and any interest
on policy loans that will be due for the remainder of the Policy Year. Loans may
have a tax consequence. (See Federal Tax Matters, page 31.)
INTEREST. AVLIC charges interest to Policyowners at regular and reduced rates.
Regular loans will accrue interest on a daily basis at a rate of up to 6% per
year; currently the interest rate on regular policy loans is 5.5%. After the
tenth Policy Anniversary Date, the Policyowner may borrow each year a limited
amount of the Net Cash Surrender Value of the Policy at a reduced interest rate.
Interest will accrue on a daily basis at a rate of up to 4% per year; the
current reduced loan rate is 3.5%. The amount available at the reduced loan rate
is 10% of the Net Cash Surrender Value as of the most recent Policy Anniversary
Date, plus any loan previously made at a reduced loan rate. If unpaid when due,
interest will be added to the amount of the loan and bear interest at the same
rate. The Policyowner earns 3.5% interest on the Accumulation Values securing
the loans.
EFFECT OF POLICY LOANS. When a loan is made, Accumulation Value equal to the
amount of the loan will be transferred from the Investment Options to the
General Account as security for the indebtedness. The Accumulation Value
transferred will be allocated from the Investment Options in accordance with the
instructions given when the loan is requested. The minimum amount which can
remain in a Subaccount or the Fixed Account as a result of a loan is $100. If no
instructions are given the amounts will be withdrawn in proportion to the
various Accumulation Values in the Investment Options. If loan interest is not
paid when due in any Policy Year, on the Policy Anniversary thereafter, AVLIC
will add the interest due to the principal amount of the Policy loan. This loan
interest due will be transferred from the Investment Options as set out above.
No charge will be imposed for these transfers. A policy loan will permanently
affect the Accumulation Value and may permanently affect the amount of the Death
Benefits, even if the loan is repaid. Policy loans will also affect Net Policy
Funding for determining whether the Guaranteed Death Benefit provision is met.
Interest earned on amounts held in the General Account will be allocated to the
Investment Options on each Policy Anniversary in the same proportion that Net
Premiums are being allocated to those Investment Options at the time. Upon
repayment of indebtedness, the portion of the repayment allocated in accordance
with the repayment of indebtedness provision (see below) will be transferred to
increase the Accumulation Value in that Investment Option.
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OUTSTANDING POLICY DEBT. The Outstanding Policy Debt equals the total of all
policy loans and accrued interest on policy loans. If the Outstanding Policy
Debt exceeds the Accumulation Value less any Surrender Charge and any Accrued
Expense Charges, the Policyowner must pay the excess. AVLIC will send a notice
of the amount which must be paid. If the Policyowner does not make the required
payment within the 61 days after AVLIC sends the notice, the Policy will
terminate without value ("lapse".) Should the policy lapse while policy loans
are outstanding, the portion of the loans attributable to earnings will become
taxable. A Policyowner may lower the risk of a Policy lapsing while loans are
outstanding as a result of a reduction in the market value of investments in the
Subaccounts by investing in a diversified group of lower risk investment
portfolios and/or transferring the funds to the Fixed Account and receiving a
guaranteed rate of return. Should a substantial reduction be experienced, the
Policyowner may need to lower anticipated withdrawals and loans, repay loans,
make additional premium payments, or take other action to avoid policy lapse. A
lapsed Policy may later be reinstated. (See Policy Lapse and Reinstatement, page
25.)
REPAYMENT OF INDEBTEDNESS. Unscheduled premiums paid while a policy loan is
outstanding are treated as repayment of indebtedness only if the Policyowner so
requests. As indebtedness is repaid, the Accumulation Value in the General
Account securing the indebtedness repaid will be allocated among the Subaccounts
and the Fixed Account in the same proportion that Net Premiums are being
allocated at the time of repayment.
SURRENDERS
At any time during the lifetime of the Insured and prior to the Maturity Date,
the Policyowner may partially withdraw a portion of the Accumulation Value or
Surrender the Policy by sending a written request to AVLIC. The amount available
for Surrender is the Net Cash Surrender Value at the end of the Valuation Period
during which the Surrender request is received at AVLIC's Home Office.
Surrenders will generally be paid within seven days of receipt of the written
request. (See Postponement of Payments, page 30.) Surrenders may have tax
consequences. Once a policy is Surrendered, it may not be reinstated. (See Tax
Treatment of Policy Proceeds, page 32.)
If the Policy is being Surrendered in its entirety, the Policy itself must be
returned to AVLIC along with the request. AVLIC will pay the Net Cash Surrender
Value. Coverage under the Policy will terminate as of the date of a total
Surrender. A Policyowner may elect to have the amount paid in a lump sum or
under a payment option. (See Payment Options, page 20.)
PARTIAL WITHDRAWALS
Partial withdrawals are irrevocable. The amount of a partial withdrawal may not
be less than $500. The Net Cash Surrender Value after a partial withdrawal must
be at least $1,000 or an amount sufficient to maintain the Policy in force for
the remainder of the Policy Year.
The amount paid will be deducted from the Investment Options according to the
instructions of the Policyowner when the withdrawal is requested, provided that
the minimum amount remaining in a Subaccount as a result of the allocation is
$100. If no instructions are given, the amounts will be withdrawn in proportion
to the various Accumulation Values in the Investment Options.
The Death Benefit will be reduced by the amount of any partial withdrawal and
may affect the way in which the cost of insurance charge is calculated and the
amount of pure insurance protection under the Policy. (See Monthly Deduction -
Cost of Insurance, page 26 and Death Benefit Options--Methods of Affecting
Insurance Protection, page 19.) If Option B is in effect, the Specified Amount
will not change, but the Accumulation Value will be reduced.
The Specified Amount remaining in force after a partial withdrawal may not be
less than $500,000 for Insureds with an Issue Age of 49 or less, and $250,000
for those with an Issue Age of 50 or more in the first three Policy Years. In
later Policy Years, the Specified Amount remaining in force following a partial
withdrawal must be at least $400,000 for Insureds with an Issue Age of 20-49 and
$200,000 for those with Issue Ages of 50-80. Any request for a partial
withdrawal that would reduce the Specified Amount below this amount will not be
implemented. A fee not to exceed the lesser of $50 or 2% of the amount withdrawn
is deducted from the Accumulation Value. Currently, the charge is the lesser of
$25 or 2% of the amount withdrawn. (See Partial Withdrawal Charge, page 28.)
Partial withdrawals will also affect Net Policy Funding for determining whether
the Guaranteed Death Benefit provision is met.
TRANSFERS
Accumulation Value may be transferred among the Subaccounts of the Account and
to the Fixed Account as often as desired. Transfers out of the Fixed Account may
only be made during the 30 day period following the Policy Anniversary Date, as
noted below. The transfers may be ordered in person, by mail or by telephone.
The total amount transferred each time must be at least $250, or the balance of
the Subaccount, if less. The minimum amount that may remain in a Subaccount or
the Fixed Account after a transfer is $100. The first fifteen transfers per
Policy Year will be permitted free of charge. Thereafter, a transfer charge of
$10 may be imposed each additional time amounts are transferred and will be
deducted from
22 ENCORE!
<PAGE>
the Accumulation Value on a pro rata basis. (See Transfer Charge, page 28.)
Additional restrictions on transfers may be imposed at the fund level. Transfers
resulting from policy loans or exercise of the exchange privilege will not be
subject to a transfer charge.
Transfers out of the Fixed Account, unless part of the dollar cost averaging
systematic program described below, may be made only during the 30 day period
following the Policy Anniversary Date in any Policy Year. However, transfers out
of the Fixed Account are limited to the greater of (i) 25% of the Fixed Account
attributable to the Policy; (ii) the largest transfer made by the Policyowner
out of the Fixed Account during the last 13 months; or (iii) $1,000.
The privilege to initiate transactions by telephone will be made available to
Policyowners automatically. The registered representative designated on the
application will have the authority to initiate telephone transfers.
Policyowners who do not wish to authorize AVLIC to accept telephone transactions
from their registered representative must so specify on the application. AVLIC
will employ reasonable procedures to confirm that instructions communicated by
telephone are genuine, and if it does not, AVLIC may be liable for any losses
due to unauthorized or fraudulent instructions. The procedures AVLIC follows for
transactions initiated by telephone include, but are not limited to, requiring
the Policyowner to provide the policy number at the time of giving transfer
instructions; AVLIC's tape recording of all telephone transfer instructions; and
the provision, by AVLIC, of written confirmation of telephone transactions.
SYSTEMATIC PROGRAMS
AVLIC may offer systematic programs as discussed below. These programs will be
subject to administrative guidelines established by AVLIC from time to time.
Transfers of Accumulation Value made pursuant to these programs will be counted
in determining whether the transfer fee applies. All other normal transfer
restrictions, as described above, also apply.
PORTFOLIO REBALANCING. Under the Portfolio Rebalancing program, the Policyowner
can instruct AVLIC to reallocate Accumulation Value among the Subaccounts (but
not the Fixed Account) on a systematic basis, in accordance with allocation
instructions specified by the Policyowner.
DOLLAR COST AVERAGING. Under the Dollar Cost Averaging program, the Policyowner
can instruct AVLIC to automatically transfer, on a systematic basis, a
predetermined amount or percentage specified by the Policyowner from the Fixed
Account or the Money Market Subaccount to any other Subaccount(s). When dollar
cost averaging is permitted from the Fixed Account, no more than 1/36th of the
value of the Fixed Account at the time dollar cost averaging is established may
be transferred each month. Transfers under this program may not be made to the
Fixed Account.
EARNINGS SWEEP. Permits systematic redistribution of earnings among Investment
Options.
The Policyowner can request participation in the available programs when
purchasing the Policy or at a later date. The Policyowner can change the
allocation percentage or discontinue any program by sending written notice or
calling the Home Office. Other scheduled programs may be made available. AVLIC
reserves the right to modify, suspend or terminate such programs at any time.
Use of Systematic Programs may not be advantageous, and does not guarantee
success.
FREE-LOOK PRIVILEGE
The Policyowner may cancel the Policy within 10 days after the Policyowner
receives it, within 10 days after AVLIC delivers a notice of the Policyowner's
right of cancellation, or within 45 days of completing Part I of the
application, whichever is later. The amount of the refund is the sum of all
charges deducted from premiums paid, plus the net premiums allocated to the
Investment Options adjusted by investment gains and losses, if allowed by state
law. Otherwise, the amount of the refund will equal the gross premiums paid. To
cancel the Policy, the Policyowner should mail or deliver it to AVLIC at the
Home Office. A refund of premiums paid by check may be delayed until the check
has cleared the Policyowner's bank. (See Postponement of Payments, page 30.)
EXCHANGE PRIVILEGE
During the first 24 Policy Months after the Policy Date of the Policy, the
Policyowner may exchange the Policy for a flexible premium adjustable life
insurance policy approved for exchange and issued by AVLIC or an affiliate. No
new evidence of insurability will be required.
The Policy Date, Issue Age and rate class for the Insured will be the same under
the new Policy as under the old. In addition, the policy provisions and
applicable charges for the new Policy and its riders will be based on the same
Policy Date and Issue Age as under the Policy. Accumulation values for the
exchange and payments will be established after making adjustments
ENCORE! 23
<PAGE>
for investment gains or losses and after recognizing variance, if any, between
payment or charges, dividends or Accumulation Values under the flexible contract
and under the new Policy. The Policyowner may elect either the same Specified
Amount or the same net amount at risk for the new Policy as under the old.
To make the change, the Policy, a completed application for exchange and any
required payment must be received by AVLIC. The exchange will be effective on
the valuation date when all financial and contractual arrangements for the new
Policy have been completed.
PAYMENT AND ALLOCATION OF PREMIUMS
ISSUANCE OF A POLICY
Individuals wishing to purchase a Policy must complete an application and submit
it to AVLIC's Home Office (One Ameritas Way, 5900 "O" Street, P.O. Box 82550,
Lincoln, Nebraska 68501.) A Policy will generally be issued only to individuals
20-80 years of age on their nearest birthday who supply satisfactory evidence of
insurability to AVLIC. Acceptance is subject to AVLIC's underwriting rules, and
AVLIC reserves the right to reject an application for any reason.
The Policy Date is the effective date of coverage for all coverage applied for
in the original application. The Policy Date is used to determine Policy
Anniversary Dates, Policy Years and Policy Months. The Issue Date is the date
that all financial, contractual and administrative requirements have been met
and processed for the Policy. The Policy Date and the Issue Date will be the
same unless: 1) an earlier Policy Date is specifically requested, or 2) when
additional premiums or application amendments are needed. When there are
additional requirements before issue (see below) the Policy Date will be when it
is sent for delivery and the Issue Date will be the date the requirements are
met.
When all required premiums and application amendments have been received by
AVLIC in its Home Office, the Issue Date will be the date the Policy is mailed
to the Policyowner or sent to the agent for delivery to the Policyowner. When
application amendments or additional premiums need to be obtained upon delivery
of the Policy, the Issue Date will be when the Policy receipt, Federal Funds
(monies of member banks within the Federal Reserve System which are held on
deposit at a Federal Reserve Bank) are received and available to AVLIC, and the
application amendments are received and reviewed in AVLIC's Home Office. On the
Issue Date, the initial premium payment will be allocated to the Money Market
Subaccount for 13 days. After the expiration of the 13-day period, the
Accumulation Value will be reallocated to the Investment Options as selected by
the Policyowner.
Interim conditional insurance coverage may be issued prior to the Policy Date,
provided that certain conditions are met, upon the completion of an application
and the payment of the required premium at the time of the application. The
amount of the interim coverage is limited to the smaller of (a) the amount of
insurance applied for, (b) $100,000, or (c) $25,000 if the proposed Insured is
over age 60 at his nearest birthday.
PREMIUMS
No insurance will take effect before the initial premium payment is received by
AVLIC in Federal Funds. The initial premium payment must be at least 1/12 of the
first year Guaranteed Death Benefit Premium times the number of months between
the Policy Date and the Issue Date, plus one. Subsequent premiums are payable at
AVLIC's Home Office. A Policyowner has flexibility in determining the frequency
and amount of premiums. However, unless the Policyowner has paid sufficient
premiums to pay the Monthly Deduction and Percent of Premium Charges, the Policy
may have a zero Net Cash Surrender Value and lapse. AVLIC agrees to keep the
Policy in force during the Guaranteed Death Benefit Period and provide a
Guaranteed Death Benefit so long as Net Policy Funding is equal to or greater
than the cumulative monthly pro rata Guaranteed Death Benefit Premium. In
certain instances, this Net Policy Funding will not, after the payment of
Monthly Deductions, generate positive Net Cash Surrender Values.
PLANNED PERIODIC PREMIUMS. At the time the Policy is issued each Policyowner may
determine a Planned Periodic Premium schedule that provides for the payment of
level premiums at selected intervals. The Planned Periodic Premium schedule may
include the Guaranteed Death Benefit Premium. The Policyowner is not required to
pay premiums in accordance with this schedule. The Policyowner has considerable
flexibility to alter the amount and frequency of premiums paid. AVLIC does
reserve the right to limit the number and amount of additional or unscheduled
premium payments.
Policyowners can also change the frequency and amount of Planned Periodic
Premiums by sending a written request to the Home Office, although AVLIC
reserves the right to limit any increase. Premium payment notices will be sent
annually, semi-annually or quarterly, depending upon the frequency of the
Planned Periodic Premiums. Payment of the Planned Periodic Premiums does not
guarantee that the Policy remains in force unless the Guaranteed Death Benefit
provision is in effect. Instead, the duration of the Policy depends upon the
Policy's Net Cash Surrender Value. (See Duration of the Policy, page 19.) Unless
the Guaranteed Death Benefit provision is in effect, even if Planned Periodic
Premiums are paid by the Policyowner, the Policy will lapse any time the Net
Cash Surrender Value is insufficient to pay the Monthly Deduction, and the Grace
Period expires without a sufficient payment. (See Policy Lapse and
Reinstatement, page 25.)
PREMIUM LIMITATIONS. In no event may the total of all premiums paid, both
planned and unscheduled, exceed the current maximum premium limitations
established by federal tax laws. (See Tax Status of the Policy 32.)
24 ENCORE!
<PAGE>
If at any time a premium is paid which would result in total premiums exceeding
the current maximum premium limitation, AVLIC will only accept that portion of
the premium which will make total premiums equal the maximum. Any part of the
premium in excess of that amount will be returned or applied as otherwise agreed
and no further premiums will be accepted until allowed by the current maximum
premium limitations prescribed by law. AVLIC may require additional evidence of
insurability if any premium payment would result in an increase in the Policy's
net amount at risk on the date the premium is received.
PREMIUMS UPON INCREASES IN SPECIFIED AMOUNT. Depending upon the Accumulation
Value of the Policy at the time of an increase in the Specified Amount of the
Policy and the amount of the increase requested by the Policyowner, an
additional premium payment may be required. AVLIC will notify the Policyowner of
any premium required to fund the increase, which premium must be made in a
single payment. The Accumulation Value of the Policy will be immediately
increased by the amount of the payment, less the applicable Percent of Premium
Charge.
ALLOCATION OF PREMIUMS AND ACCUMULATION VALUE
ALLOCATION OF NET PREMIUMS. In the application for a Policy, the Policyowner
allocates Net Premiums to one or more Subaccounts or to the Fixed Account.
Allocations will be automatically allocated to the Money Market Subaccount
unless the Policyowner specifies in the application that allocations are to be
made to other Subaccounts. Allocations must be whole number percentages and must
total 100%. The allocation of future Net Premiums may be changed without charge
by providing proper notification to the Home Office. If there is any Outstanding
Policy Debt at the time of a payment, AVLIC will treat the payment as a premium
payment unless otherwise instructed in proper written notice.
On the Issue Date, the initial premium payment will be allocated to the Money
Market Subaccount for 13 days. Thereafter, the Accumulation Value will be
reallocated to the Investment Options as selected by the Policyowner. Premium
payments received by AVLIC prior to the Issue Date are held in the General
Account until the Issue Date and are credited with interest at a rate determined
by AVLIC for the period from the date the payment has been converted into
Federal Funds and is available to AVLIC. In no event will interest be credited
prior to the Policy Date.
The Accumulation Value of the Subaccounts will vary with the investment
performance of these Subaccounts and the Policyowner bears the entire investment
risk. This will affect the Policy's Accumulation Value, and may affect the Death
Benefit as well. Policyowners should periodically review their allocations of
premiums and values in light of market conditions and overall financial planning
requirements.
POLICY LAPSE AND REINSTATEMENT
LAPSE. Unlike conventional life insurance policies, the failure to make a
Planned Periodic Premium payment will not itself cause the Policy to lapse.
Lapse will occur when the Net Cash Surrender Value is insufficient to cover the
Monthly Deduction and a Grace Period expires without a sufficient payment unless
the Guaranteed Death Benefit provision is in effect. The Grace Period is 61 days
from the date AVLIC mails a notice that the grace period has begun. AVLIC will
notify the Policyowner at the beginning of the Grace Period by mail addressed to
the last known address on file with AVLIC.
The notice will specify the premium required to keep the Policy in force. The
required premium will be equal to the greater of the amount necessary to cover
the Monthly Deductions and Percent of Premium Charges for the three Policy
Months after commencement of the Grace Period, or the amount necessary to raise
the Net Cash Surrender Value as of the date of reinstatement above zero. Failure
to pay the required premium within the Grace Period will result in lapse of the
Policy. If the Insured dies during the Grace Period, any overdue Monthly
Deductions and Outstanding Policy Debt will be deducted from the Death Benefit
Proceeds. (See Charges and Deductions, page 26.)
REINSTATEMENT. A lapsed Policy may be reinstated any time within three years
(five years in Missouri) after the beginning of the Grace Period, but before the
Maturity Date. Reinstatement will be effected based on the Insured's rating
class at the time of the reinstatement.
Reinstatement is subject to the following:
a. Evidence of insurability of the Insured satisfactory to AVLIC (including
evidence of insurability of any person covered by a rider to reinstate the
rider);
b. Any Outstanding Policy Debt on the date of lapse will be reinstated with
interest due and accrued;
c. The Policy cannot be reinstated if it has been Surrendered for its full Net
Cash Surrender Value;
ENCORE! 25
<PAGE>
d. The minimum premium required at reinstatement is the greater of:
(1) the amount necessary to raise the Net Cash Surrender Value as of the
date of reinstatement to equal to or greater than zero; or
(2) three times the current Monthly Deduction.
The amount of Accumulation Value on the date of reinstatement will be equal to
the amount of the Net Cash Surrender Value on the date of lapse, increased by
the premium paid at reinstatement, less the Percent of Premium Charges and the
amounts stated above, plus that part of the Contingent Deferred Sales Charge and
Contingent Deferred Administrative Charge that would apply if the Policy were
Surrendered on the date of reinstatement. The last addition to the Accumulation
Value is designed to avoid duplicate Surrender Charges. The original Policy
Date, and the dates of increases in the Specified Amount (if applicable), will
be used for purposes of calculating the Surrender Charge. If any Outstanding
Policy Debt was reinstated, that debt will be held in AVLIC's General Account.
Accumulation Value calculations will then proceed as described under
"Accumulation Value" on page 19.
The effective date of reinstatement will be the first Monthly Activity Date on
or next following the date of approval by AVLIC of the application for
reinstatement.
CHARGES AND DEDUCTIONS
Charges will be deducted in connection with the Policy to compensate AVLIC for:
(1) providing the insurance benefits set forth in the Policy and any optional
insurance benefits added by rider; (2) administering the Policy and payment of
applicable taxes; (3) assuming certain risks in connection with the Policy; and
(4) incurring expenses in distributing the Policy. The nature and amount of
these charges are described more fully below.
DEDUCTIONS FROM PREMIUM PAYMENTS
SALES CHARGE. There are no sales charges deducted from premium payments in
connection with the Policy. The Policy is, however, subject to a Contingent
Deferred Sales Charge if the Policy is surrendered. (See "Surrender Charge" on
page 27.)
PREMIUM CHARGE FOR TAXES. A deduction of up to 5% of the premium is made from
each premium payment to pay applicable taxes; currently the charge is 3.5%. The
deduction represents an amount AVLIC considers necessary to pay all premium
taxes imposed by the states and their subdivisions, and to defray the tax cost
due to capitalizing certain policy acquisition expenses as required under
applicable Federal tax laws. (See Federal Tax Matters page 31.) AVLIC does not
expect to derive a profit from the Premium Charge for Taxes.
CHARGES FROM ACCUMULATION VALUE
MONTHLY DEDUCTION. Charges will be deducted as of the Policy Date and on each
Monthly Activity Date thereafter from the Accumulation Value of the Policy to
compensate AVLIC for administrative expenses and insurance provided. These
charges will be allocated among the Subaccounts, and the Fixed Account on a pro
rata basis. Each of these charges is described in more detail below.
ADMINISTRATIVE EXPENSE CHARGE. To compensate AVLIC for the ordinary
administrative expenses expected to be incurred in connection with a Policy, the
Monthly Deduction includes a $9.00 per policy charge (currently $5.00.) The
Administrative Expense Charge is levied throughout the life of the Policy and is
guaranteed not to increase above $9.00 per month. AVLIC does not expect to make
any profit from the Administrative Expense Charge.
COST OF INSURANCE. Because the Cost of Insurance depends upon several variables,
the cost for each Policy Month can vary from month to month. AVLIC will
determine the monthly Cost of Insurance by multiplying the applicable Cost of
Insurance Rate by the net amount at risk for each Policy Month. The net amount
at risk on any Monthly Activity Date is based on the amount by which the Death
Benefit which would have been payable on that Monthly Activity Date exceeds the
Accumulation Value on that date.
COST OF INSURANCE RATE. The Annual Cost of Insurance Rate is based on the
Insured's sex, Issue Age, policy duration, Specified Amount, and rating class.
The rate will vary depending upon tobacco use and other risk factors. For the
initial Specified Amount, the Cost of Insurance Rate will not exceed those shown
in the Schedule of Guaranteed Annual Cost of Insurance Rates shown in the
schedule pages of the Policy. These guaranteed rates are based on the Insured's
Attained Age
26 ENCORE!
<PAGE>
and are equal to the 1980 Insurance Commissioners Standard Ordinary Smoker and
Non-Smoker, Male and Female Mortality Tables. The current rates range between
40% and 100% of the rates based on the 1980 Commissioners Standard Ordinary
Tables, based on AVLIC's own mortality experience. Policies issued on a unisex
basis are based upon the 1980 Insurance Commissioners Standard Ordinary Table B
assuming 80% male and 20% female lives. The Cost of Insurance Rates, Surrender
Charges, and payment options for policies issued in Montana and certain other
states are on a sex-neutral (unisex) basis. Any change in the Cost of Insurance
Rates will apply to all persons of the same age, sex, Specified Amount and
rating class and whose policies have been in effect for the same length of time.
If the rating class for any increase in the Specified Amount is not the same as
the rating class at issue, the Cost of Insurance Rate used after such increase
will be a composite rate based upon a weighted average of the rates of the
different rating classes. Decreases may be reflected in the Cost of Insurance
Rate as discussed earlier.
The actual charges made during the Policy Year will be shown in the annual
report delivered to Policyowners.
RATING CLASS. The rating class of an Insured will affect the Cost of Insurance
Rate. AVLIC currently places Insureds into both standard rating classes and
substandard rating classes that involve a higher mortality risk. In an otherwise
identical policy, an Insured in the standard rating class will have a lower Cost
of Insurance Rate than an Insured in a rating class with higher mortality risks.
If, when issued, a Policy is rated with a tabular extra rating, the guaranteed
rate is a multiple of the guaranteed rate for a standard issue. This multiple
factor is shown in the Schedule of Benefits in the Policy, and may be from 1.18
to 4 times the guaranteed rate for a standard issue.
Insureds may also be assigned a Flat Extra Rating Charge if appropriate to
reflect certain additional risks. The Flat Extra Rating Charge will be added to
the Cost of Insurance Rate and thus will be deducted as part of the Monthly
Deduction on each Monthly Activity Date.
SURRENDER CHARGE
If a Policy is Surrendered prior to the 15th Policy Anniversary Date, AVLIC will
assess a Surrender Charge based upon percentages of the premiums actually paid
and a charge per $1,000 of insurance issued based upon sex and Issue Age.
The total Surrender Charge on the initial Specified Amount is made up of two
parts, the Contingent Deferred Administrative Charge and Contingent Deferred
Sales Charge.
The Contingent Deferred Administrative Charge is an amount per $1,000 of
Specified Amount that varies by Issue Age and sex. It is 60% of the maximum
Surrender Charge not to exceed $24 per $1,000 of Specified Amount..
The Contingent Deferred Sales Charge will be based upon the actual premiums
received. It will be calculated as the lesser of (i) 30% of the premiums
received up to the SEC Guideline Premium, plus 10% of the premiums received in
excess of the SEC Guideline, up to an amount equal to twice the SEC Guideline
Premium, plus 9% of the premiums received in excess of the second SEC Guideline
Premium; or (ii) 40% of the maximum Surrender Charge not to exceed $16 per
$1,000 of Specified Amount.
The Surrender Charge, if applicable, will be applied in accordance with the
following schedule. Because the Surrender Charge may be significant upon early
Surrender, prospective Policyowners should purchase a Policy only if they do not
intend to Surrender the Policy for a substantial period.
<TABLE>
<CAPTION>
Policy Year Percent of Surrender Policy Year Percent of Surrender
Charge maximum that Charge maximum that will
will apply during Policy apply during Policy Year
Year
<S> <C> <C> <C>
1-5 100% 11 40%
6 90% 12 30%
7 80% 13 20%
8 70% 14 10%
9 60% 15+ 0%
10 50%
</TABLE>
ENCORE! 27
<PAGE>
No Surrender Charge will be assessed upon decreases in the Specified Amount of
the Policy or partial withdrawals of Accumulation Value. AVLIC will, however,
assess Surrender Charges due to increases in Specified Amount. The Contingent
Deferred Sales Charge component of the Surrender Charge on such increases will
be assessed based on the premiums allocated to the increase, at the lesser of
(i) 15% of the allocated premiums received up to the SEC Guideline Premium, plus
5% of the allocated premiums received in excess of the SEC Guideline Premium for
the increase, up to an amount equal to twice the SEC Guideline Premium for the
increase, plus 4.5% of the allocated premiums received in excess of two SEC
Guideline Premium(s) for the increase; or (ii) 40% of the maximum Surrender
Charge applicable to the increase. The Contingent Deferred Administrative Charge
component of the Surrender Charge on increases in the Specified Amount will be
assessed as noted above with respect to the initial Specified Amount. It will be
based on the Attained Age at the time of the increase and the amount of the
increase in the Specified Amount. Surrender Charges in increases in the initial
Specified Amount will be applied with respect to Surrenders within 15 years of
the date of the increase.
The sales charges applied in any Policy Year are not necessarily related to
actual distribution expenses incurred in that year. Instead, AVLIC expects to
incur the majority of distribution expenses in the early Policy Years and to
recover amounts to pay such expenses over the life of the Policy. To the extent
that sales and distribution expenses exceed sales charges in any year, AVLIC
will pay such expenses from its other assets or surplus in its General Account,
including amounts derived from mortality and expense risk charges, and other
charges made under the Policy. AVLIC believes that this distribution financing
arrangement will benefit the Account and the Policyowners.
TRANSFER CHARGE. A transfer charge of $10 (guaranteed not to increase) may be
imposed for each additional transfer among the Investment Options after fifteen
per Policy Year to compensate AVLIC for the costs of effecting the transfer.
Since the charge reimburses AVLIC for the cost of effecting the transfer only,
AVLIC does not expect to make any profit from the transfer charge. This charge
will be deducted pro rata from each Subaccount (and, if applicable, the Fixed
Account) in which the Policyowner is invested. The transfer charge will not be
imposed on transfers that occur as a result of policy loans or the exercise of
exchange rights.
PARTIAL WITHDRAWAL CHARGE. A charge will be imposed for each partial withdrawal
to compensate AVLIC for the administrative costs in effecting the requested
payment and in making necessary calculations for any reductions in Specified
Amount which may be required by reason of the partial withdrawal. This charge is
currently the lesser of $25 or 2% of the amount withdrawn (guaranteed not to be
greater than the lesser of $50 or 2% of the amount withdrawn). No Surrender
Charge is assessed on a partial withdrawal and a partial withdrawal charge is
not assessed when a Policy is Surrendered.
DAILY CHARGES AGAINST THE ACCOUNT
A daily Mortality and Expense Risk Charge will be deducted from the value of the
net assets of the Account to compensate AVLIC for mortality and expense risks
assumed in connection with the Policy. This daily charge from the Account is
currently at the rate of 0.00245% (equivalent to an annual rate of .90%) for
Policy Years 1-4 and 0.001775% (equivalent to an annual rate of .65%) for Policy
Years 5-20. After the twentieth year the daily charge will be applied at the
rate of 0.001366% (equivalent to an annual rate of .50%) and will not exceed
.90% of the average daily net assets of the Account. The daily charge will be
deducted from the net asset value of the Account, and therefore the Subaccounts,
on each Valuation Date. Where the previous day or days was not a Valuation Date,
the deduction on the Valuation Date will be the applicable daily rate multiplied
by the number of days since the last Valuation Date. No Mortality and Expense
Risk Charges will be deducted from the amounts in the Fixed Account.
AVLIC believes that this level of charge is within the range of industry
practice for comparable flexible premium variable universal life policies. The
mortality risk assumed by AVLIC is that Insureds may live for a shorter time
than assumed, and that an aggregate amount of Death Benefits greater than that
assumed accordingly will be paid. The expense risk assumed is that expenses
incurred in issuing and administering the policies will exceed the
administrative charges provided in the policies.
An Asset Based Administrative Expense Charge will also be deducted from the
value of the net assets of the Account on a daily basis. Currently, there is no
charge applied for Policy Years 1-4. Thereafter, this charge is applied at a
rate of 0.000683% (equivalent to .25% annually) for Policy Years 5-20 and at a
rate of 0.000409% (equivalent to .15% annually) for each Policy Year thereafter.
The rate of this charge will never exceed .25% annually. No Asset Based
Administrative Expense Charge will be deducted from the amounts in the Fixed
Account.
In addition to the charges against the Account described just above, management
fees and expenses will be assessed by Fidelity, Alger, MFS Co. and Morgan
Stanley Co. against the amounts invested in the various portfolios. No portfolio
fees will be assessed against amounts placed in the Fixed Account.
28 ENCORE!
<PAGE>
AVLIC may receive administrative fees from the investment advisers of certain
Funds. AVLIC currently does not assess a separate charge against the Account or
the Fixed Account for any Federal, state or local income taxes. AVLIC may,
however, make such a charge in the future if income or gains within the Account
will incur any Federal, or any significant state or local income tax liability,
or if the Federal, state or local tax treatment of AVLIC changes.
GENERAL PROVISIONS
THE CONTRACT. The Policy, the application, any supplemental applications, and
any riders, amendments or endorsements make up the entire contract. Only the
President, Vice President, Secretary or Assistant Secretary can modify the
Policy. Any changes must be made in writing, and approved by AVLIC. No agent has
the authority to alter or modify any of the terms, conditions or agreements of
the Policy or to waive any of its provisions. The rights and benefits under the
Policy are summarized in this prospectus; however prospectus disclosure
regarding the policy is qualified in its entirety by the policy itself, a copy
of which is available upon request from AVLIC.
CONTROL OF POLICY. The Policyowner is as shown in the application or subsequent
written endorsement. Subject to the rights of any irrevocable beneficiary and
any assignee of record, all rights, options, and privileges belong to the
Policyowner, if living; otherwise to any successor-owner or owners, if living;
otherwise to the estate of the last owner to die.
BENEFICIARY. Policyowners may name both primary and contingent Beneficiaries in
the application. Payments will be shared equally among beneficiaries of the same
class unless otherwise stated. If a Beneficiary dies before the Insured,
payments will be made to any surviving beneficiaries of the same class;
otherwise to any Beneficiary(ies) of the next class; otherwise to the
Policyowner; otherwise to the estate of the Policyowner.
CHANGE OF BENEFICIARY The Policyowner may change the Beneficiary by written
request at any time during the Insured's lifetime unless otherwise provided in
the previous designation of Beneficiary. The change will take effect as of the
date the change is recorded at the Home Office. AVLIC will not be liable for any
payment made or action taken before the change is recorded.
CHANGE OF OWNER OR ASSIGNMENT. In order to change the owner of the Policy or
assign Policy rights, an assignment of the Policy must be made in writing and
filed with AVLIC at its Home Office. Any such assignment is subject to
Outstanding Policy Debt. The change will take effect as of the date the change
is recorded at the Home Office, and AVLIC will not be liable for any payment
made or action taken before the change is recorded. Payment of Death Benefit
Proceeds is subject to the rights of any assignee of record. A collateral
assignment is not a change of ownership.
PAYMENT OF PROCEEDS. The Death Benefit Proceeds are subject first to any
indebtedness to AVLIC and then to the interest of any assignee of record. The
balance of any Death Benefit Proceeds shall be paid in one sum to the designated
beneficiary unless an Optional Method of Payment is selected. If no beneficiary
survives the Insured, the Death Benefit Proceeds shall be paid in one sum to the
Policyowner, if living; otherwise to any successor-owner, if living; otherwise
to the Policyowner's estate. Any Death Benefit Proceeds payable on the Maturity
Date or upon Surrender shall be paid in one sum unless an Optional Method of
Payment is elected.
INCONTESTABILITY. The Policy or reinstated Policy is incontestable after it has
been in force for two years from the Policy Date (or reinstatement effective
date) during the lifetime of the Insured. An increase in the Specified Amount or
addition of a rider after the Policy Date shall be incontestable after such
increase or addition has been in force for two years from its effective date
during the lifetime of the Insured. However, this two year provision shall not
apply to riders with their own contestability provision.
MISSTATEMENT OF AGE AND SEX. If the age or sex of the Insured or any person
insured by rider has been misstated, the amount of the Death Benefit and any
added riders provided will those that would be purchased by the most recent
deduction for the Cost of Insurance and the cost of any additional riders at the
Insured's correct age or sex. The Death Benefit Proceeds will be adjusted
correspondingly.
SUICIDE. Suicide within two years of the Policy Date is not covered by the
Policy unless otherwise provided by a state's Insurance law. If the Insured,
while sane or insane, commits suicide within two years after the Policy Date,
AVLIC will pay only the premiums received less any partial withdrawals, the cost
for riders and any outstanding policy debt. If the Insured, while sane or
insane, commits suicide within two years after the effective date of any
increase in the Specified Amount, AVLIC's liability with respect to such
increase will only be its total cost of insurance applicable to the increase.
The laws of Missouri provide that death by suicide at any time is covered by the
Policy, and further that suicide by an insane person may be considered an
accidental death.
ENCORE! 29
<PAGE>
POSTPONEMENT OF PAYMENTS. Payment of any amount upon Surrender, partial
withdrawal, policy loans, benefits payable at death or maturity, and transfers
may be postponed whenever: (i) the New York Stock Exchange is closed other than
customary weekend and holiday closings, or trading on the New York Stock
Exchange is restricted as determined by the Securities and Exchange Commission;
(ii) the Commission by order permits postponement for the protection of
Policyowners; (iii) an emergency exists, as determined by the Commission, as a
result of which disposal of securities is not reasonably practicable or it is
not reasonably practicable to determine the value of the Account's net assets;
or (iv) Surrenders, loans or partial withdrawals from the Fixed Account may be
deferred for up to 6 months from the date of written request. Payments under the
Policy of any amounts derived from premiums paid by check may be delayed until
such time as the check has cleared the Policyowner's bank.
REPORTS AND RECORDS. AVLIC will maintain all records relating to the Account and
will mail to the Policyowner, at the last known address of record, within 30
days after each Policy Anniversary, an annual report which shows the current
Accumulation Value, Net Cash Surrender Value, Death Benefit , premiums paid,
Outstanding Policy Debt and other information. The Policyowner will also be sent
a periodic report for the Funds and a list of the portfolio securities held in
each portfolio of the Funds.
ADDITIONAL INSURANCE BENEFITS (RIDERS.) Subject to certain requirements, one or
more of the following additional insurance benefits may be added to a Policy by
rider. All riders are not available in all states. The cost, if any, of
additional insurance benefits will be deducted as part of the Monthly Deduction.
(See Charges From Accumulation Value - Monthly Deduction, page 26.)
ACCELERATED BENEFIT RIDER FOR TERMINAL ILLNESS (LIVING BENEFIT RIDER.) Upon
satisfactory proof of terminal illness after the two-year contestable period,
(no waiting period in certain states) AVLIC will accelerate the payment of up to
50% of the lowest scheduled Death Benefit as provided by eligible coverages,
less an amount up to two guideline level premiums.
Future premium allocations after the payment of the benefit must be allocated to
the Fixed Account. Payment will not be made for amounts less than $4,000 or more
than $250,000 on all policies issued by AVLIC or its affiliates. AVLIC may
charge the lesser of 2% of the benefit or $50 as an expense charge to cover the
costs of administration.
Satisfactory proof of terminal illness must include a written statement from a
licensed physician who is not related to the Insured or the Policyowner stating
that the Insured has a non-correctable medical condition that, with a reasonable
degree of medical certainty, will result in the death of the Insured in less
than 12 months (6 months in certain states) from the physician's statement.
Further, the condition must first be diagnosed while the Policy was in force.
The accelerated benefit first will be used to repay any Outstanding Policy Debt,
and will also affect future loans, partial withdrawals, and Surrenders. The
accelerated benefit will be treated as a lien against the policy Death Benefit
and will thus reduce the Death Benefit Proceeds. Interest on the lien will be
charged at the policy loan interest rate. There is no extra premium for this
rider.
ACCIDENTAL DEATH BENEFIT RIDER. Provides additional insurance if the Insured's
death results from accidental death, as defined in the rider. Under the terms of
the rider, the additional benefits provided in the Policy will be paid upon
receipt of proof by AVLIC that death resulted directly and independently of all
other causes from accidental bodily injuries incurred before the rider
terminates and within 91 days after such injuries were incurred.
CHILDREN'S PROTECTION RIDER. Provides for term insurance on the Insured's
children, as defined in the rider. Under the terms of the rider, the Death
Benefit will be payable to the named beneficiary upon the death of any insured
child. Upon receipt of proof of the Insured's death before the rider terminates,
the rider will be considered paid up for the term of the rider.
WAIVER OF MONTHLY DEDUCTIONS ON DISABILITY RIDER. Provides for the waiver of
Monthly Deductions for the Policy and all riders while the Insured is disabled.
GUARANTEED INSURABILITY RIDER. Provides that the Policyowner can purchase
additional insurance for the Insured by increasing the Specified Amount of the
Policy at certain future dates without evidence of insurability.
30 ENCORE!
<PAGE>
DISABILITY BENEFIT PAYMENT RIDER. Provides for the payment by AVLIC of a
disability benefit in the form of premiums while the Insured is disabled. The
benefit amount may be chosen by the Policyowner at the issue of the rider. In
addition, while the Insured is totally disabled, the Cost of Insurance for the
rider will not be deducted from Accumulation Value.
TERM RIDER FOR COVERED INSURED. Provides the rider specified amount of insurance
to the Beneficiary upon receipt of Satisfactory Proof of Death of any Covered
Insured, as identified in the rider.
DISTRIBUTION OF THE POLICIES
The principal underwriter for the policies is AIC, a wholly owned subsidiary of
AMAL Corporation and an affiliate of AVLIC. AIC is registered as a broker-dealer
with the SEC and is a member of the National Association of Securities Dealers
("NASD"). AVLIC pays AIC for acting as the principal underwriter under an
Underwriting Agreement.
The Policies are sold through Registered Representatives of AIC or other
broker-dealers which have entered into selling agreements with AVLIC or AIC.
These Registered Representatives are also licensed by state insurance officials
to sell AVLIC's variable life policies. Each of the broker-dealers with a
selling agreement is registered with the SEC and is a member of the NASD.
Under these selling agreements, AVLIC pays commission to the broker-dealers,
which in turn pay commissions to the Registered Representative who sells this
Policy. During the first Policy Year, the commission may equal an amount up to
95% of the first year target premium paid plus the first year cost of any riders
and 2% for premiums paid in excess of the first year target premium. For Policy
Years two through four, the commission may equal an amount up to 2% of premiums
paid. Broker-dealers may also receive a service fee up to an annualized rate of
.25% of the Accumulation Value beginning in the fifth Policy Year. Compensation
arrangements may vary among broker-dealers. In addition, AVLIC may also pay
override payments, expense allowances, bonuses, wholesaler fees, and training
allowances. Registered Representatives who meet certain production standards may
receive additional compensation. AVLIC may reduce or waive the sales charge
and/or other charges on any Policy sold to directors, officers or employees of
AVLIC or any of its affiliates, employees and registered representatives of any
broker dealer that has entered into a sales agreement with AVLIC or AIC and the
spouses or children of the above persons. In no event will any such reduction or
waiver be permitted where it would be unfairly discriminatory to any person.
FEDERAL TAX MATTERS
The following discussion provides a general description of the federal income
tax considerations associated with the Policy and does not purport to be
complete or cover all situations. This discussion is not intended as tax advice.
No attempt has been made to consider in detail any applicable state or other tax
(except premium taxes, see discussion "Premium Charge for Taxes," page 26 )
laws. This discussion is based upon AVLIC's understanding of the relevant laws
at the time of filing. Counsel and other competent tax advisors should be
consulted for more complete information before a Policy is purchased. AVLIC
makes no representation as to the likelihood of the continuation of present
federal income tax laws nor of the interpretations by the Internal Revenue
Service. Federal tax laws are subject to change and thus tax consequences to the
Insured, Policyowner or Beneficiary may be altered.
(a) TAXATION OF AVLIC. AVLIC is taxed as a life insurance company under Part I
of Subchapter L of the Internal Revenue Code of 1986, (the "Code".) At this
time, since the Account is not an entity separate from AVLIC, and its
operations form a part of AVLIC, it will not be taxed separately as a
"regulated investment company" under Subchapter M of the Code. Net
investment income and realized net capital gains on the assets of the
Account are reinvested and automatically retained as a part of the reserves
of the Policy and are taken into account in determining the Death Benefit
and Accumulation Value of the Policy. AVLIC believes that Account net
investment income and realized net capital gains will not be taxable to the
extent that such income and gains are retained as reserves under the
Policy.
AVLIC does not currently expect to incur any federal income tax liability
attributable to the Account with respect to the sale of the Policies.
Accordingly, no charge is being made currently to the Account for federal
income taxes. If, however, AVLIC determines that it may incur such taxes
attributable to the Account, it may assess a charge for such taxes against
the Account.
AVLIC may also incur state and local taxes (in addition to premium taxes
for which a deduction from premiums is currently made.) At present, they
are not charges against the Account. If there is a material change in state
or local tax laws, charges for such taxes attributable to the Account, if
any, may be assessed against the Account.
ENCORE! 31
<PAGE>
(b) TAX STATUS OF THE POLICY. The Code (Section 7702) includes a definition of
a life insurance contract for federal tax purposes, which places
limitations on the amount of premiums that may be paid for the Policy and
the relationship of the Accumulation Value to the Death Benefit. AVLIC
believes that the Policy meets the statutory definition of a life insurance
contract. If the Death Benefit of a Policy is changed, the applicable
definitional limitations may change. In the case of a decrease in the
Death Benefit , a partial Surrender, a change in Death Benefit option, or
any other such change that reduces future benefits under the Policy during
the first 15 years after a Policy is issued and that results in a cash
distribution to the Policyowners in order for the Policy to continue
complying with the Section 7702 definitional limitations on premiums and
Accumulation Values, such distributions will be taxable as ordinary income
to the Policyowner (to the extent of any gain in the Policy) as prescribed
in Section 7702.
The Code (Section 7702A) also defines a "modified endowment contract" for
federal tax purposes which causes distributions to be taxed as ordinary
income to the extent of any gain. This Policy will become a "modified
endowment contract" if the premiums paid into the Policy fail to meet a
7-pay premium test as outlined in Section 7702A of the Code.
Certain benefits the Insured may elect under this Policy may be material
changes affecting the 7-pay premium test. These include changes in Death
Benefits and changes in the Specified Amount. Should the Policy become a
"modified endowment contract" partial or full Surrenders, assignments,
pledges, and loans (including loans to pay loan interest) under the Policy
will be taxable to the extent of any gain under the Policy. A 10% penalty
tax also applies to the taxable portion of any distribution prior to the
Insured's age 59 1/2. The 10% penalty tax does not apply if the Insured is
disabled as defined under the Code or if the distribution is paid out in
the form of a life annuity on the life of the Insured or the joint lives of
the Insured and Beneficiary. One may avoid a Policy becoming a modified
endowment contract by, among other things, not making excessive payments or
reducing benefits. Should one deposit excessive premiums during a policy
year, that portion that is returned by the insurance company within 60 days
after the policy anniversary will reduce the premiums paid to avoid the
Policy becoming a modified endowment contract. A Policyowner should contact
a competent tax professional before paying additional premiums or making
other changes to the Policy to determine whether such payments or changes
would cause the Policy to become a modified endowment contract.
The Code (Section 817(h)) also authorizes the Secretary of the Treasury
(the "Treasury") to set standards by regulation or otherwise for the
investments of the Account to be "adequately diversified" in order for the
Policy to be treated as a life insurance contract for federal tax purposes.
The Account, through the Funds, intends to comply with the diversification
requirements prescribed by the Treasury in regulations published in the
Federal Register on March 2, 1989, which affect how the Fund's assets may
be invested.
AVLIC does not have control over the Funds or their investments. However,
AVLIC believes that the Funds will be operated in compliance with the
diversification requirements of the Internal Revenue Code. Thus, AVLIC
believes that the Policy will be treated as a life insurance contract for
federal tax purposes.
In connection with the issuance of regulations relating to the
diversification requirements, the Treasury announced that such regulations
do not provide guidance concerning the extent to which owners may direct
their investments to particular divisions of a separate account.
Regulations in this regard may be issued in the future. It is not clear
what these regulations will provide nor whether they will be prospective
only. It is possible that when regulations are issued, the Policy may need
to be modified to comply with such regulations. For these reasons, the
Company reserves the right to modify the Policy as necessary to prevent the
Policyowner from being considered the owner of the assets of the Account or
otherwise to qualify the Policy for favorable tax treatment.
The following discussion assumes that the Policy will qualify as a life
insurance contract for federal tax purposes.
(c) TAX TREATMENT OF POLICY PROCEEDS. AVLIC believes that the Policy will be
treated in a manner consistent with a fixed benefit life insurance policy
for federal income tax purposes. Thus, AVLIC believes that the Death
Benefit payable prior to the original maturity date will be excludable from
the gross income of the beneficiary under Section 101(a)(1) of the Code and
the Policyowner will not be deemed to be in constructive receipt of the
Accumulation Value under the Policy until its actual Surrender. However, in
the event of certain cash distributions under the Policy resulting from any
change which reduces future benefits under the Policy, the distribution
will be taxed in whole or in part as ordinary income (to the extent of gain
in the Policy.) See discussion above, "Tax Status of the Policy."
32 ENCORE!
<PAGE>
AVLIC also believes that loans received under a Policy will be treated as
indebtedness of the Policyowner and that no part of any loan under a Policy
will constitute income to the Policyowner so long as the Policy remains in
force, unless the Policy becomes a Modified Endowment Contract. Should the
policy lapse while policy loans are outstanding the portion of the loans
attributable to earnings will become taxable. Generally, interest paid on
any loan under a Policy owned by an individual will not be tax-deductible.
Except for Policies with respect to a limited number of key persons of an
employer (both as defined in the Internal Revenue Code), and subject to
applicable interest rate caps, the Health Insurance Portability and
Accountability Act of 1996 (the "Health Insurance Act") generally repeals
the deduction for interest paid or accrued after October 13, 1995 on loans
from corporate owned life insurance Policies. Certain transitional rules
for existing indebtedness are included in the Health Insurance Act. The
transitional rules include a phase-out of the deduction for indebtedness
incurred (1) before January 1, 1996, (or) (2) before January 1, 1997, for
Policies entered into in 1994 or 1995. The phase-out of the interest
expense deduction occurs over a transition period between October 13, 1995
and January 1, 1999. There is also a special rule for pre-June 21, 1986
Policies. Policyowners should consult a competent tax advisor concerning
the tax implications of these changes for their Policies.
The right to exchange the Policy for a flexible premium adjustable life
insurance policy (See Exchange Privilege, page 23), the right to change
owners (See General Provisions, page 29), and the provision for partial
withdrawals (See Surrenders, page 22) may have tax consequences depending
on the circumstances of such exchange, change, or withdrawal. Upon complete
Surrender or when Maturity Benefits are paid, if the amount received plus
any Outstanding Policy Debt exceeds the total premiums paid (the "basis"),
that are not treated as previously withdrawn by the Policyowner, the excess
generally will be taxed as ordinary income.
Federal estate and state and local estate, inheritance, and other tax
consequences of ownership or receipt of Death Benefit Proceeds depend on
applicable law and the circumstances of each Policyowner or Beneficiary. In
addition, if the Policy is used in connection with tax-qualified retirement
plans, certain limitations prescribed by the Internal Revenue Service on,
and rules with respect to the taxation of, life insurance protection
provided through such plans may apply.
SAFEKEEPING OF THE ACCOUNT'S ASSETS
AVLIC holds the assets of the Account. The assets are kept physically segregated
and held separate and apart from the General Account assets, except for the
Fixed Account. AVLIC maintains records of all purchases and redemptions of
Funds' shares by each of the Subaccounts.
VOTING RIGHTS
AVLIC is the legal holder of the shares held in the Subaccounts of the Account
and as such has the right to vote the shares; to elect Directors of the Funds,
to vote on matters that are required by the Investment Company Act of 1940 and
upon any other matter that may be voted upon at a shareholders's meeting. To the
extent required by law, AVLIC will vote all shares of each of the Funds held in
the Account at regular and special shareholder meetings of the Funds in
accordance with instructions received from Policyowners based on the number of
shares held as of the record date for such meeting.
The number of Fund shares in a Subaccount for which instructions may be given by
a Policyowner is determined by dividing the Accumulation Value held in that
Subaccount by the net asset value of one share in the corresponding portfolio of
the Fund. Fractional shares will be counted. Fund shares held in each Subaccount
for which no timely instructions from Policyowners are received and Fund shares
held in each Subaccount which do not support Policyowner interests will be voted
by AVLIC in the same proportion as those shares in that Subaccount for which
timely instructions are received. Voting instructions to abstain on any item to
be voted will be applied on a pro rata basis to reduce the votes eligible to be
cast. Should applicable federal securities laws or regulations permit, AVLIC may
elect to vote shares of the Fund in its own right.
DISREGARD OF VOTING INSTRUCTION. AVLIC may, if required by state insurance
officials, disregard voting instructions if those instructions would require
shares to be voted to cause a change in the subclassification or investment
objectives or policies of one or more of the Funds' Portfolios, or to approve or
disapprove an investment adviser or principal underwriter for the Funds. In
addition, AVLIC itself may disregard voting instructions that would require
changes in the investment objectives or policies of any portfolio or in an
investment adviser or principal underwriter for the Funds, if AVLIC reasonably
disapproves those changes in accordance with applicable federal regulations. If
AVLIC does disregard voting instructions, it will advise Policyowners of that
action and its reasons for the action in the next annual report or proxy
statement to Policyowners.
ENCORE! 33
<PAGE>
STATE REGULATION OF AVLIC
AVLIC, a stock life insurance company organized under the laws of Nebraska, is
subject to regulation by the Nebraska Department of Insurance. On or before
March 1 of each year an NAIC convention blank covering the operations and
reporting on the financial condition of AVLIC and the Account as of December 31
of the preceding year must be filed with the Nebraska Department of Insurance.
Periodically, the Nebraska Department of Insurance examines the liabilities and
reserves of AVLIC and the Account and certifies their adequacy.
In addition, AVLIC is subject to the insurance laws and regulations of other
states within which it is licensed or may become licensed to operate. The
policies offered by the Prospectus are available in the various states as
approved. Generally, the Insurance Department of any other state applies the
laws of the state of domicile in determining permissible investments.
EXECUTIVE OFFICERS AND DIRECTORS OF AVLIC
Shows name and position(s) with AVLIC followed by the principal occupations for
the last five years.***
LAWRENCE J. ARTH, DIRECTOR, CHAIRMAN OF THE BOARD, PRESIDENT, AND CHIEF
EXECUTIVE OFFICER*
Director, Chairman of the Board, and Chief Executive Officer: ALIC**, also
serves as officer and/or director of other subsidiaries and/or affiliates of
ALIC.
KENNETH C. LOUIS, DIRECTOR, EXECUTIVE VICE PRESIDENT*
President and Chief Operating Officer: ALIC; also serves as officer and/or
director of other subsidiaries and/or affiliates of ALIC.
D T DOAN, DIRECTOR AND EXECUTIVE VICE PRESIDENT****
Vice Chairman and President-Insurance Operations: AmerUs Life Insurance Company
(formerly known as ("f.k.a.")American Mutual Life Insurance Company, f.k.a.
Central Life Assurance Company *****); also serves as officer and/or director of
other affiliates of AVLIC.
ROBERT B. BUSH, DIRECTOR, SENIOR VICE PRESIDENT VARIABLE OPERATIONS AND
ADMINISTRATION*
Executive Vice President-Individual Insurance: ALIC; also serves as officer
and/or director of other subsidiaries and/or affiliates of ALIC; Senior Vice
President, CUNA Mutual Insurance Group; also served as officer and/or director
of other subsidiaries and/or affiliates of CUNA.
WAYNE E. BREWSTER, SENIOR VICE PRESIDENT-VARIABLE SALES*
Vice President-Variable Sales: ALIC.
ASHOK CHAWLA, VICE PRESIDENT-FIXED ANNUITY INVESTMENTS****
Senior Vice President - Fixed Income Group: AmerUs Life Insurance Company
(f.k.a. American Mutual Life Insurance Company); Director-Risk Management:
Providian Corp.; Assistant Vice President: Lincoln National Corp.
THOMAS C. GODLASKY, DIRECTOR****
Executive Vice President and Chief Investment Officer: AmerUs Life Insurance
Company (f.k.a American Mutual Life Insurance Company); Manager-Fixed Income and
Derivatives Department: Providian Corporation; also serves as director of an
affiliate of AVLIC.
JOSEPH K. HAGGERTY, ASSISTANT GENERAL COUNSEL****
Senior Vice President and General Counsel: AmerUs Life Insurance Company (f.k.a.
American Mutual Life Insurance Company f.k.a. Central Life Assurance
Company*****); Senior Vice President, Deputy General Counsel: I.C.H.
Corporation; also serves as an officer to an affiliate of AVLIC, and served as
officer and/or director of other subsidiaries and/or affiliates of I.C.H.
Corporation.
JAMES R. HAIRE, VICE PRESIDENT AND ACTUARY*
Senior Vice President-Corporate Actuary and Strategic Development: ALIC; also
serves as officer and/or director of other subsidiaries and/or affiliates of
ALIC.
JON C. HEADRICK, TREASURER*
Executive Vice President-Investments and Treasurer: ALIC; also serves as officer
and/or director of other subsidiaries and/or affiliates of ALIC.
SANDRA K. HOLMES, VICE PRESIDENT-FIXED ANNUITY CUSTOMER SERVICE****
Vice President: AmerUs Life Insurance Company (f.k.a. American Mutual Life
Insurance Company, f.k.a. Central Life Assurance Company*****).
34 ENCORE!
<PAGE>
KENNETH R. JONES, VICE PRESIDENT-CORPORATE COMPLIANCE AND ASSISTANT SECRETARY*
Vice President, Corporate Compliance & Assistant Secretary: ALIC; also serves as
officer of other subsidiaries and/or affiliates of ALIC.
NORMAN M. KRIVOSHA, SECRETARY AND GENERAL COUNSEL*
Executive Vice President, Secretary & Corporate General Counsel: ALIC; also
serves as officer and/or director of other subsidiaries and/or affiliates of
ALIC.
JOANN M. MARTIN, CONTROLLER*
Senior Vice President-Controller and Chief Financial Officer: ALIC; also serves
as officer and/or director of other subsidiaries and/or affiliates of ALIC.
SHEILA SANDY, ASSISTANT SECRETARY****
Annuity Manager: AmerUs Life Insurance Company (f.k.a American Mutual Life
Insurance Company).
MICHAEL E. SPROULE, DIRECTOR****
Executive Vice President and Chief Financial Officer: AmerUs Life Insurance
Company (f.k.a. American Mutual Life Insurance Company, f.k.a. Central Life
Assurance Company*****); I.C.H. Corporation; also serves as director of an
affiliate of AVLIC.
LINDA S. STRECK, VICE PRESIDENT-FIXED ANNUITY PRODUCT DEVELOPMENT****
Actuarial Vice President - Product Development and Management: AmerUs Life
Insurance Company (f.k.a. American Mutual Life Insurance Company, f.k.a. Central
Life Assurance Company*****.)
KEVIN WAGONER, ASSISTANT TREASURER****
Director Investment Accounting: AmerUs Life Insurance Company (f.k.a. American
Mutual Life Insurance Company, f.k.a. Central Life Assurance Company*****);
Senior Financial Analyst: Target Stores
*Principal business address: Ameritas Variable Life Insurance Company,
One Ameritas Way, 5900 "O" Street,
P.O. Box 82550, Lincoln, Nebraska 68501.
**Ameritas Life Insurance Corp.
***Where an individual has held more than one position with an organization
during the last 5-year period, the last position held has been given.
**** Principal business address for D T Doan, Joseph Haggerty, Sandra K.
Holmes, Michael E. Sproule, Ashok K. Chawla, Thomas C. Godlasky, Sheila E.
Sandy, Linda S. Streck, and Kevin Wagoner is: AmerUs Life Insurance Company,
611 Fifth Avenue, Des Moines, Iowa 50309.
***** Central Life Assurance Company merged with American Mutual Life
Insurance Company on December 31, 1994. Central Life Assurance Company was
the survivor of the merger. Contemporaneous with the merger, Central Life
Assurance Company changed its name to American Mutual Life Insurance
Company. (American Mutual Life Insurance Company changed its name to AmerUs
Life Insurance Company on July 1, 1996.)
LEGAL MATTERS
All matters of Nebraska law pertaining to the Policy, including the validity of
the Policy and AVLIC's right to issue the Policy under Nebraska Insurance Law,
have been passed upon by Norman M. Krivosha, Secretary and General Counsel of
AVLIC.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Account is a party or to which the
assets of the Account are subject. AVLIC is not involved in any litigation that
is of material importance in relation to its total assets or that relates to the
Account.
EXPERTS
The financial statements of AVLIC as of December 31, 1995, and 1994, and for
each of the three years in the period ended December 31, 1995 and the financial
statements of the Account as of December 31, 1995 and for each of the three
years in the period then ended, included in this Prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports
appearing herein, and are included in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.
ENCORE! 35
<PAGE>
Actuarial matters included in this Prospectus have been examined by Thomas P.
McArdle, Assistant Vice President and Associate Actuary of Ameritas Life
Insurance Corp., as stated in the opinion filed as an exhibit to the
registration statement.
ADDITIONAL INFORMATION
A registration statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, with respect to the
Policy offered hereby. This Prospectus does not contain all the information set
forth in the registration statement and the amendments and exhibits to the
registration statement, to all of which reference is made for further
information concerning the Account, AVLIC and the Policy offered hereby.
Statements contained in this Prospectus as to the contents of the Policy and
other legal instruments are summaries. For a complete statement of the terms
thereof reference is made to such instruments as filed.
FINANCIAL STATEMENTS
The financial statements of AVLIC which are included in this Prospectus should
be considered only as bearing on the ability of AVLIC to meet its obligations
under the Policies. They should not be considered as bearing on the investment
performance of the assets held in the Account.
36 ENCORE!
<PAGE>
Independent Auditors' Report
Board of Directors
Ameritas Variable Life
Insurance Company
Lincoln, Nebraska
We have audited the accompanying statement of net assets of Ameritas Variable
Life Insurance Company Separate Account V as of December 31, 1995, and the
related statements of operations and changes in net assets for each of the three
years in the period then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned at December 31, 1995. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Ameritas Variable Life Insurance Company
Separate Account V as of December 31, 1995, and the results of its operations
and changes in its net assets for each of the three years in the period then
ended, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Lincoln, Nebraska
February 1, 1996
ENCORE! 37
<PAGE>
<TABLE>
<CAPTION>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
ASSETS
INVESTMENTS AT NET ASSET VALUE:
<S> <C>
Variable Insurance Products Fund:
Money Market Portfolio - 5,613,527.070 shares at
$1.00 per share (cost $5,613,527) $ 5,613,527
Equity-Income Portfolio - 652,438.732 shares at
$19.27 per share (cost $9,667,592) 12,572,494
Growth Portfolio - 702,196.341 shares at
$29.20 per share (cost $14,143,041) 20,504,133
High Income Portfolio - 358,988.159 shares at
$12.05 per share (cost $3,703,023) 4,325,807
Overseas Portfolio - 438,914.420 shares at
$17.05 per share (cost $6,616,181) 7,483,491
Variable Insurance Products Fund II:
Asset Manager Portfolio - 1,221,448.421 shares at
$15.79 per share (cost $16,521,707) 19,286,671
Investment Grade Bond Portfolio - 171,189.054 shares at
$12.48 per share (cost $2,013,214) 2,136,439
Contrafund Portfolio - 9,382.665 shares at
$13.78 per share (cost $129,565) 129,293
Index 500 Portfolio - 61.274 shares at
$75.71 per share (cost $4,403) 4,639
Asset Manager: Growth Portfolio - 1,153.239 shares at
$11.78 per share (cost $14,071) 13,585
Alger American Fund:
Small Capitalization Portfolio - 263,321.551 shares at
$39.41 per share (cost $8,012,444) 10,377,502
Growth Portfolio - 150,146.226 shares at
$31.16 per share (cost $3,672,555) 4,678,557
Income and Growth Portfolio - 51,644.863 shares at
$17.79 per share (cost $790,984) 918,762
Midcap Growth Portfolio - 138,005.038 shares at
$19.44 per share (cost $2,229,077) 2,682,818
Balanced Portfolio - 32,000.820 shares at
$13.64 per share (cost $391,329) 436,491
Leveraged Allcap Portfolio - 5,780.602 shares at
$17.43 per share (cost $99,893) 100,756
Dreyfus Stock Index Fund:
Stock Index Fund Portfolio - 127,452.178 shares at
$17.20 per share (cost $1,880,387) 2,192,178
MFS Variable Insurance Trust:
Emerging Growth Series Portfolio -10,355.688 shares at
$11.41 per share (cost $119,796) 118,158
World Governments Series Portfolio - 1,555.043 shares at
$10.17 per share (cost $16,700) 15,815
Utilities Series Portfolio - 1,475.513 shares at
$12.57 per share (cost $19,793) 18,547
---------------
NET ASSETS REPRESENTING EQUITY OF POLICYOWNERS $ 93,609,663
===============
The accompanying notes are an integral part of these financial statements.
</TABLE>
38 ENCORE!
<PAGE>
<TABLE>
<CAPTION>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSET
FOR THE YEARS ENDED DECEMBER 31,
1995 1994 1993
------------ ------------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received $ 1,293,935 $ 799,210 $ 499,740
EXPENSE
Charges to policyowners for assuming
mortality and expense risk (Note B) 723,000 465,706 260,944
----------- ----------- -----------
INVESTMENT INCOME - NET 570,935 333,504 238,796
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS - NET
Capital gain distributions received 403,845 1,403,280 292,625
Unrealized increase/(decrease) 14,755,373 (2,469,056) 3,683,814
----------- ------------ ----------
NET GAIN/(LOSS) ON INVESTMENTS 15,159,218 (1,065,776) 3,976,439
----------- ------------ ----------
NET (DECREASE)/INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS 15,730,153 (732,272) 4,215,235
NET INCREASE IN NET ASSETS RESULTING
FROM PREMIUM PAYMENTS AND OTHER
OPERATING TRANSFERS (Note B) 19,763,147 21,904,104 14,840,992
----------- ----------- -----------
TOTAL INCREASE IN NET ASSETS 35,493,300 21,171,832 19,056,227
NET ASSETS
Beginning of period 58,116,363 36,944,531 17,888,304
----------- ----------- -----------
End of period $ 93,609,663 $ 58,116,363 $ 36,944,531
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
ENCORE! 39
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
A. ORGANIZATION AND ACCOUNTING POLICIES:
-------------------------------------
Ameritas Variable Life Insurance Company Separate Account V (the Account)
was established on August 28, 1985, under Nebraska law by Ameritas Variable
Life Insurance Company (AVLIC), a wholly-owned subsidiary of Ameritas Life
Insurance Corp. (ALIC). The assets of the Account are segregated from
AVLIC's other assets and are used only to support variable life products
issued by AVLIC.
The Account is registered under the Investment Company Act of 1940, as
amended, as a unit investment trust. At December 31, 1995, there are twenty
subaccounts within the Account. Five of the subaccounts invest only in a
corresponding Portfolio of Variable Insurance Products Fund and five invest
only in a corresponding Portfolio of Variable Insurance Products Fund II.
Both funds are diversified open-end management investment companies and are
managed by Fidelity Management and Research Company. Six of the subaccounts
invest only in a corresponding Portfolio of Alger American Fund which is a
diversified open-end management investment company managed by Fred Alger
Management, Inc. One subaccount invests only in a corresponding Portfolio
of Dreyfus Stock Index Fund which is a non-diversified open-end management
investment company managed by Dreyfus Service Corporation. Three of the
subaccounts invest only in a corresponding Portfolio of MFS Variable
Insurance Trust which is a diversified open-end management investment
company managed by Massachusetts Financial Services Company. All five funds
are registered under the Investment Company Act of 1940, as amended. Each
Portfolio pays the manager a monthly fee for managing its investments and
business affairs. The assets of the Account are carried at the net asset
value of the underlying Portfolios of the Funds. The value of the
policyowners' units corresponds to the Account's investment in the
underlying subaccounts. The availability of investment portfolio and
subaccount options may vary between products.
AVLIC currently does not expect to incur any federal income tax liability
attributable to the Account with respect to the sale of the variable life
insurance policies. If, however, AVLIC determines that it may incur such
taxes attributable to the Account, it may assess a charge for such taxes
against the Account.
B. POLICYHOLDER CHARGES:
---------------------
AVLIC charges the Account for mortality and expense risks assumed. A daily
charge is made on the average daily value of the net assets representing
equity of policyowners held in each subaccount per each product's current
policy provisions. Additional charges are made at intervals and in amounts
per each product's current policy provisions. These charges are prorated
against the balance in each investment option of the policyholder,
including the Fixed Account option which is not reflected in this separate
account. The withdrawal of these charges are included as other operating
transfers.
40 ENCORE!
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
C. INFORMATION BY FUND:
<TABLE>
<CAPTION>
Variable Insurance Products Fund
-------------------------------------------------------------------------------
Money Equity- High
Market Income Growth Income Overseas
-------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance 12-31-94 $ 6,247,662 $ 6,295,945 $ 12,362,890 $ 2,970,211 $ 4,954,650
Distributed earnings 330,031 558,647 71,777 214,996 39,788
Mortality risk charge (57,621) (89,161) (160,505) (40,007) (60,098)
Unrealized increase/(decrease) --- 2,148,654 4,664,368 542,261 616,308
Net premium transferred (906,545) 3,658,409 3,565,603 638,346 1,932,843
------------- ------------ ------------- ------------- ------------
Balance 12-31-95 $ 5,613,527 $ 12,572,494 $ 20,504,133 $ 4,325,807 $ 7,483,491
============= ============ ============= ============= ============
Variable Insurance Products Fund II
------------------------------------------------------------------------------
Asset Investment Contrafund Asset Mgr.: Index 500
Manager Grade Bond (1) Growth (2) (3)
------------- ------------- ------------ -------------- -------------
Balance 12-31-94 $ 16,158,059 $ 907,159 $ --- $ --- $ ---
Distributed earnings 346,679 34,269 1,284 564 ---
Mortality risk charge (164,848) (13,893) (119) (25) (7)
Unrealized increase/(decrease) 2,471,611 183,723 (273) (486) 236
Net premium transferred 475,170 1,025,181 128,401 13,532 4,410
------------- ----------- ------------ -------------- ------------
Balance 12-31-95 $ 19,286,671 $ 2,136,439 $ 129,293 $ 13,585 $ 4,639
============= =========== ============ ============== ============
Alger American Fund
------------------------------------------------------------------------------------
Small Income and Midcap Leveraged
Capitalization Growth Growth Growth Balanced Allcap(4)
--------------- ------------ ----------- ----------- ----------- -----------
Balance 12-31-94 $ 4,264,367 $ 2,012,571 $ 307,350 $ 545,887 $ 126,178 $ ---
Distributed earnings --- 34,885 5,186 142 3,039 ---
Mortality risk charge (67,150) (32,981) (5,765) (14,362) (2,251) (57)
Unrealized increase/(decrease) 2,184,006 924,176 146,805 430,138 45,544 863
Net premium transferred 3,996,279 1,739,906 465,186 1,721,013 263,981 99,950
------------- ------------ ----------- ----------- ----------- -----------
Balance 12-31-95 $ 10,377,502 $ 4,678,557 $ 918,762 $ 2,682,818 $ 436,491 $ 100,756
============= ============ =========== =========== =========== ===========
MFS Variable Insurance Trust Dreyfus
---------------------------------------------- -------------
Emerging World (6) Utilities Stock
Growth(5) Governments (7) Index Fund TOTAL
------------- --------------- ------------- ------------- ---------------
Balance 12-31-94 $ --- $ --- $ --- $ 963,434 $ 58,116,363
Distributed earnings 2,634 1,440 1,745 50,674 1,697,780
Mortality risk charge (118) (37) (10) (13,985) (723,000)
Unrealized increase/(decrease) (1,638) (885) (1,246) 401,208 14,755,373
Net premium transferred 117,280 15,297 18,058 790,847 19,763,147
------------- -------------- ------------ ----------- ---------------
Balance 12-31-95 $ 118,158 $ 15,815 $ 18,547 $ 2,192,178 $ 93,609,663
============= ============== ============ =========== ===============
(1) Commenced business 09/05/95. (5) Commenced business 09/12/95.
(2) Commenced business 09/13/95. (6) Commenced business 09/13/95.
(3) Commenced business 10/17/95. (7) Commenced business 10/18/95.
(4) Commenced business 09/13/95.
</TABLE>
ENCORE! 41
<PAGE>
<TABLE>
<CAPTION>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
C. INFORMATION BY FUND:
Alger American Fund
--------------------------------------------------------------------------------
Small Income Midcap
Capitalization Growth and Growth Growth Balanced
--------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Balance 12-31-93 $ 2,431,108 $ 513,578 $ 155,544 $ 91,469 $ 12,416
Distributed earnings 197,447 56,309 12,250 805 1,173
Mortality risk charge (28,810) (10,955) (2,338) (2,777) (667)
Unrealized increase/(decrease) (212,648) 11,388 (27,043) 15,802 (793)
Net premium transferred 1,877,270 1,442,251 168,937 440,588 114,049
--------------- ------------- -------------- ------------- -------------
Balance 12-31-94 $ 4,264,367 $ 2,012,571 $ 307,350 $ 545,887 $ 126,178
=============== ============= ============== ============= =============
Variable Insurance Products Fund
--------------------------------------------------------------------------------
Money Equity- High
Market Income Growth Income Overseas
--------------- ------------- ------------- ------------- -------------
Balance 12-31-93 $ 3,302,391 $ 4,081,214 $ 8,666,232 $ 2,112,409 $ 2,627,460
Distributed earnings 227,947 343,291 540,322 192,676 16,253
Mortality risk charge (53,086) (50,692) (97,597) (24,422) (41,486)
Unrealized increase/(decrease) --- (10,817) (430,322) (216,500) (57,561)
Net premium transferred 2,770,410 1,932,949 3,684,255 906,048 2,409,984
------------- ------------ ------------ ------------ ------------
Balance 12-31-94 $ 6,247,662 $ 6,295,945 $ 12,362,890 $ 2,970,211 $ 4,954,650
============= ============ =========== ============ ============
Variable Insurance
Products Fund II Dreyfus
----------------------------- -------------
Asset Investment Stock
Manager Grade Bond Index Fund TOTAL
-------------- ------------ ------------- -------------
Balance 12-31-93 $ 11,412,386 $ 1,069,216 $ 469,108 $ 36,944,531
Distributed earnings 589,342 2,944 21,731 2,202,490
Mortality risk charge (133,984) (12,468) (6,424) (465,706)
Unrealized increase/(decrease) (1,465,271) (53,875) (21,416) (2,469,056)
Net premium transferred 5,755,586 (98,658) 500,435 21,904,104
------------- ------------- ------------ -------------
Balance 12-31-94 $ 16,158,059 $ 907,159 $ 963,434 $ 58,116,363
============= ============= ============ =============
</TABLE>
42 ENCORE!
<PAGE>
<TABLE>
<CAPTION>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
C. INFORMATION BY FUND:
Alger American Fund
--------------------------------------------------------------------------------
Small Income Midcap
Capitalization Growth and Growth Growth (1) Balanced (2)
--------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Balance 12-31-92 $ 596,677 $ 56,046 $ 37,708 $ --- $ ---
Distributed earnings --- 189 218 922 ---
Mortality risk charge (12,717) (2,485) (775) (191) (42)
Unrealized increase/(decrease) 298,611 64,901 6,462 7,801 411
Net premium transferred 1,548,537 394,927 111,931 82,937 12,047
--------------- ------------- ------------- -------------- ------------
Balance 12-31-93 $ 2,431,108 $ 513,578 $ 155,544 $ 91,469 $ 12,416
=============== ============= ============= ============== ============
Variable Insurance Products Fund
--------------------------------------------------------------------------------
Money Equity- High
Market Income Growth Income Overseas
--------------- ------------- ------------- ------------- -------------
Balance 12-31-92 $ 2,600,260 $ 2,476,762 $ 5,152,469 $ 857,133 $ 586,673
Distributed earnings 84,138 89,586 125,620 82,061 15,219
Mortality risk charge (26,767) (33,306) (67,253) (17,034) (13,317)
Unrealized increase/(decrease) --- 430,027 1,063,056 215,584 333,367
Net premium transferred 644,760 1,118,145 2,392,340 974,665 1,705,518
-------------- -------------- ------------ ----------- -----------
Balance 12-31-93 $ 3,302,391 $ 4,081,214 $ 8,666,232 $ 2,112,409 $ 2,627,460
============== ============== ============ =========== ===========
Variable Insurance
Products Fund II Dreyfus
----------------------------- -------------
Asset Investment Stock
Manager Grade Bond Index Fund TOTAL
-------------- ------------ ------------- -------------
Balance 12-31-92 $ 4,852,263 $ 510,803 $ 161,510 $ 17,888,304
Distributed earnings 237,544 60,677 96,191 792,365
Mortality risk charge (74,672) (9,236) (3,149) (260,944)
Unrealized increase/(decrease) 1,317,267 15,527 (69,200) 3,683,814
Net premium transferred 5,079,984 491,445 283,756 14,840,992
------------- ------------ ------------ -------------
Balance 12-31-93 $ 11,412,386 $ 1,069,216 $ 469,108 $ 36,944,531
============= ============ ============ =============
(1) Commenced business 06/17/93.
(2) Commenced business 06/28/93.
</TABLE>
ENCORE! 43
<PAGE>
Independent Auditors' Report
Board of Directors
Ameritas Variable Life
Insurance Company
Lincoln, Nebraska
We have audited the accompanying balance sheets of Ameritas Variable Life
Insurance Company as of December 31, 1995 and 1994, and the related statements
of operations, changes in stockholder's equity and cash flows for each of the
three years in the period ended December 31, 1995. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Ameritas Variable Life Insurance Company as
of December 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995, in
conformity with statutory accounting principles which are considered generally
accepted accounting principles for mutual life insurance companies and their
insurance subsidiaries.
As discussed in Note A to the financial statements, effective December 31, 1995,
the Company changed a reserving practice.
DELOITTE & TOUCHE LLP
Lincoln, Nebraska
February 1, 1996
44 ENCORE!
<PAGE>
<TABLE>
<CAPTION>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
BALANCE SHEETS
(in thousands, except shares)
December 31,
---------------------------
1995 1994
------------ ------------
ASSETS
<S> <C> <C>
Investments:
Bonds, at amortized cost ( fair value of $40,344
and $34,021) (Note C) $ 38,753 $ 34,607
Short-term investments 4,289 7,714
Loans on life insurance policies 2,639 1,597
------------- -------------
Total investments 45,681 43,918
Cash 1,371 431
Accrued investment income 790 774
Reinsurance recoverable - affiliates (Note E) 57 467
Other assets 76 129
Separate Accounts (Note F) 682,482 462,886
------------- ------------
$ 730,457 $ 508,605
============= ============
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Life and annuity reserves $ 28,740 $ 30,578
Funds left on deposit with the company 87 142
Interest maintenance reserve 41 36
Accounts payables - affiliates (Note E) 1,926 884
Income tax payable-affiliates 1,221 36
Accrued professional fees 20 11
Sundry current liabilities -
Cash with applications 1,305 562
Other 662 692
Valuation reserve 193 163
Separate Accounts (Note F) 682,482 462,886
------------- -----------
716,677 495,990
------------- -----------
STOCKHOLDER'S EQUITY:
Common stock, par value $100 per share; 4,000 4,000
authorized 50,000 shares, issued and
outstanding 40,000 shares
Additional paid-in capital 29,700 29,700
Deficit (19,920) (21,085)
------------- -----------
13,780 12,615
------------- -----------
$ 730,457 $ 508,605
============ ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
ENCORE! 45
<PAGE>
<TABLE>
<CAPTION>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
(in thousands)
Year Ended December 31,
--------------------------------------------------------
1995 1994 1993
-------------- --------------- ---------------
<S> <C> <C> <C>
INCOME:
Premium income $ 158,436 $ 174,085 $ 155,166
Less reinsurance: (Note E)
Yearly renewable term (5,110) (1,333) (843)
-------------- --------------- ---------------
Net premium income 153,326 172,752 154,323
Miscellaneous insurance income 4,482 1,398 459
Net investment income (Note D) 3,507 3,050 2,897
-------------- --------------- ---------------
161,315 177,200 157,679
-------------- --------------- ---------------
EXPENSES:
Increase (decrease) in reserves (296) (637) 1,717
Benefits to policyowners 31,094 19,012 8,128
Commissions 14,813 15,799 13,080
General insurance expenses (Note E) 6,641 6,403 4,216
Taxes, licenses and fees 1,275 1,183 829
Net premium transferred to
Separate Accounts (Note F) 106,053 139,974 136,451
------------- --------------- ---------------
159,580 181,734 164,421
------------- --------------- ---------------
Income(loss) before income taxes
and realized capital gains 1,735 (4,534) (6,742)
Income taxes (benefit)-current 1,752 (611) (1,501)
-------------- --------------- ---------------
(Loss) before realized capital gains (17) (3,923) (5,241)
Realized capital gains(losses) (net of tax
of $12, $11 and $19 and $18, $12 and
$32 transfers to interest maintenance
reserve for 1995, 1994 and 1993,
respectively) (2) (2) 1
-------------- --------------- ---------------
Net (loss) $ (19) $ (3,925) $ (5,240)
============== =============== ===============
The accompanying notes are an integral part of these financial statements.
</TABLE>
46 ENCORE!
<PAGE>
<TABLE>
<CAPTION>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(in thousands, except shares)
Additional
Common Stock Paid in
Shares Amount Capital Deficit Total
------------ ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
BALANCE, January 1, 1993 40,000 $ 4,000 $ 18,200 $ (11,793) $ 10,407
Transfer to valuation reserve - - - (62) (62)
Capital contribution from
Ameritas Life Insurance Corp. - - 5,500 - 5,500
Net (loss) - - - (5,240) (5,240)
------------ ----------- ------------- ------------ ------------
BALANCE, December 31, 1993 40,000 4,000 23,700 (17,095) 10,605
Increase in non-admitted assets (2) (2)
Transfer to valuation reserve - - - (63) (63)
Capital contribution from
Ameritas Life Insurance Corp. - - 6,000 - 6,000
Net (loss) - - - (3,925) (3,925)
------------ ------------ ------------- ------------ ------------
BALANCE, December 31, 1994 40,000 4,000 29,700 (21,085) 12,615
Decrease in non-admitted assets - - - 5 5
Transfer to valuation reserve - - - (30) (30)
Release of reserves (Note A) - - - 1,618 1,618
Settlement/intercompany taxes - - - (409) (409)
Net (loss) - - - (19) (19)
----------- ----------- ------------- ------------ ------------
BALANCE, December 31, 1995 40,000 $ 4,000 $ 29,700 $ (19,920) $ 13,780
=========== =========== ============= ============ ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
ENCORE! 47
<PAGE>
<TABLE>
<CAPTION>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
---------------------------------------------------------
1995 1994 1993
-------------- --------------- -----------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net premium income received $ 153,867 $ 172,701 $ 154,408
Miscellaneous insurance income 4,201 1,398 459
Net investment income received 3,405 2,899 2,848
Net premium transferred to Separate Accounts (105,654) (140,161) (136,451)
Benefits paid to policyowners (31,200) (18,944) (8,207)
Commissions (12,343) (15,799) (13,080)
Expenses and taxes (10,664) (7,547) (4,939)
Net increase in policy loans (1,041) (576) (592)
Income taxes (987) 527 1,630
Other operating income and disbursements 1,978 (2,222) 270
-------------- --------------- -----------------
Net cash provided by (used in) operating activities 1,562 (7,724) (3,654)
-------------- --------------- -----------------
INVESTING ACTIVITIES:
Maturity of bonds 3,713 5,108 8,266
Purchase of investments (7,760) (15,673) (1,460)
-------------- --------------- -----------------
Net cash (used in) provided by investing activities (4,047) (10,565) 6,806
-------------- --------------- -----------------
FINANCING ACTIVITIES:
Capital contribution - 6,000 5,500
-------------- --------------- -----------------
NET (DECREASE) INCREASE IN CASH AND
SHORT TERM INVESTMENTS (2,485) (12,289) 8,652
CASH AND SHORT TERM INVESTMENTS -
BEGINNING OF PERIOD 8,145 20,434 11,782
-------------- --------------- -----------------
CASH AND SHORT TERM INVESTMENTS -
END OF PERIOD $ 5,660 $ 8,145 $ 20,434
============== =============== =================
The accompanying notes are an integral part of these financial statements.
</TABLE>
48 ENCORE!
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(in thousands)
A. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
---------------------------------------------------------------------
Ameritas Variable Life Insurance Company (the Company), a stock life
insurance company domiciled in the State of Nebraska, is a wholly-owned
subsidiary of Ameritas Life Insurance Corp.(ALIC), a mutual life insurance
company. The Company began issuing variable life insurance and variable
annuity policies in 1987. The variable life and variable annuity policies
are not participating with respect to dividends.
The accompanying financial statements have been prepared in accordance with
life insurance accounting practices prescribed by the Insurance Department
of the State of Nebraska. While appropriate for mutual life insurance
companies, such accounting practices differ in certain respects from
generally accepted accounting principles followed by other business
enterprises. The Financial Accounting Standards Board (FASB) has undertaken
consideration of changing those methods constituting generally accepted
accounting principles applicable to mutual life insurance companies. In
accordance with pronouncements issued by the FASB in 1993 and 1994,
financial statements prepared on the basis of statutory accounting practices
will no longer be described as prepared in conformity with generally
accepted accounting principles for fiscal years beginning after December 15,
1995.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
The principal accounting and reporting practices followed are:
INVESTMENTS - Bonds and short-term investments earning interest are carried
at amortized cost which, for short-term investments, approximates market.
Separate account assets are carried at market. Realized gains and losses are
determined on the basis of specific identification.
ACQUISITION COSTS - Commissions, reinsurance ceded allowances, underwriting
and other costs of issuing new policies as well as maintenance and
settlement costs are reported as costs of insurance operations in the period
incurred.
PREMIUMS - Premiums are reported as income when collected over the premium
paying periods of the policies. Premium income consists of:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------
1995 1994 1993
-------------- -------------- --------------
<S> <C> <C>
Life $ 32,020 $ 31,980 $ 20,591
Annuity 126,416 142,105 134,575
-------------- -------------- --------------
$ 158,436 $ 174,085 $ 155,166
============== ============== ==============
</TABLE>
POLICY RESERVES - Generally, reserves for variable life and annuity policies
are established and maintained on the basis of each policyholder's interest
in the account values of Separate Accounts V and VA-2. However, reserves
established for certain annuity products are determined on the basis of the
Commissioner's Annuity Reserve Valuation Method (CARVM) reserving method
which approximates surrender values. The account values are net of
applicable cost of insurance and other expense charges. The cost of
insurance has been developed by actuarial methods. The Company uses the
mortality rates from the Commissioners 1980 Standard Ordinary Smoker and
Non- Smoker, Male and Female Mortality Tables in computing minimum values
and reserves. Policy reserves are also provided for amounts held in the
general accounts consistent with requirements of the Nebraska Department of
Insurance.
ENCORE! 49
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(in thousands)
A. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
---------------------------------------------------------------------
(Continued)
-----------
INTEREST MAINTENANCE RESERVE - The interest maintenance reserve is
calculated based on the prescribed methods developed by the NAIC. This
reserve is used to accumulate realized gains and losses resulting from
interest rate changes on fixed income investments. These gains and losses
are then amortized into investment income over what would have been the
remaining years to maturity of the underlying investment.
VALUATION RESERVE - Valuation reserves are a required appropriation of
Stockholder's Equity to provide for possible losses that may occur on
certain investments held by the Company. The appropriation (Asset Valuation
Reserve) is based on the holdings of bonds, stocks, mortgages, real estate
and short-term investments. Realized and unrealized gains and losses, other
than those resulting from interest rate changes, are added or charged to the
reserve (subject to certain maximums).
INCOME TAXES - The Company files a consolidated life/non-life tax return
with Ameritas Life Insurance Corp. and its subsidiaries. An agreement among
the members of the consolidated group provides for distribution of
consolidated tax results as if filed on a separate return basis. The current
income tax expense or benefit (including effects of capital gains and losses
and net operating losses) is apportioned generally on a sub-group
(life/non-life) basis. As a result of differences in accounting between book
and tax purposes for certain items, primarily deferred acquisition costs and
certain reserve calculations, taxes are provided in excess of the 35%
statutory corporate rate.
CHANGE IN ACCOUNTING - Effective December 31, 1995 the Company released the
voluntary mortality fluctuation reserve through a credit to stockholder's
equity. The increase in reserve included in the statements of operations for
the years ended 1995, 1994 and 1993 were $659, $421 and $135, respectively.
B. FINANCIAL INSTRUMENTS:
----------------------
The following methods and assumptions were used to estimate the fair value
of each class of financial instrument for which it is practicable to
estimate a value:
Bonds
For publicly traded securities, fair value is determined using an
independent pricing source. For securities without a readily ascertainable
fair value, fair value has been determined using an interest rate spread
matrix based upon quality, weighted average maturity, and Treasury yields.
Short-term Investments
The carrying amount approximates fair value because of the short maturity of
these instruments.
Loans on Life Insurance Policies
Fair values for policy loans are estimated using discounted cash flow
analyses at interest rates currently offered for similar loans. Policy loans
with similar characteristics are aggregated for purposes of the
calculations.
Cash
The carrying amounts reported in the balance sheet equals fair value.
Accrued Investment Income
Fair value on accrued investment income equals book value.
Funds left on Deposit
Funds on deposit which do not have fixed maturities are carried at the
amount payable on demand at the reporting date.
50 ENCORE!
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(in thousands)
B. FINANCIAL INSTRUMENTS: (Continued)
----------------------------------
The estimated fair values, as of December 31, 1995 and 1994, of the
Company's financial instruments are as follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------------- --------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
--------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Financial Assets:
Bonds $ 38,753 $ 40,344 $ 34,607 $ 34,021
Short-term investments 4,289 4,289 7,714 7,714
Loans on life insurance policies 2,639 2,346 1,597 1,190
Cash 1,371 1,371 431 431
Accrued investment income 790 790 774 774
Financial Liabilities:
Funds left on deposit 87 87 142 142
These fair values do not necessarily represent the value for which the financial instrument could be sold.
</TABLE>
C. BONDS:
------
The table below provides additional information relating to bonds held by
the Company as of December 31, 1995:
<TABLE>
<CAPTION>
Gross Gross
Amortized Fair Unrealized Unrealized Carrying
Cost Value Gains Losses Value
-------------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
LONG TERM BONDS:
Corporate-U.S. $ 20,667 $ 21,597 $ 930 $ - $ 20,667
Mortgage-Backed 3,628 3,742 114 - 3,628
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies 14,458 15,005 551 4 14,458
-------------- ------------- ------------ ------------- ------------
$ 38,753 $ 40,344 $ 1,595 4 $ 38,753
============== ============= ============ ============= ============
</TABLE>
The comparative data as of December 31, 1994 is summarized as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Fair Unrealized Unrealized Carrying
Cost Value Gains Losses Value
-------------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
LONG TERM BONDS:
Corporate-U.S. $ 19,634 $ 19,396 $ 160 $ 398 $ 19,634
Corporate-Foreign 1,000 1,008 8 - 1,000
Mortgage-Backed 1,149 1,184 35 - 1,149
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies 12,824 12,433 47 438 12,824
-------------- ------------- ------------ ------------- -------------
$ 34,607 $ 34,021 $ 250 $ 836 $ 34,607
============== ============= ============ ============= =============
</TABLE>
ENCORE! 51
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(in thousands)
C. BONDS: (Continued)
------------------
The carrying value and fair value of bonds at December 31, 1995 by
contractual maturity are shown below:
<TABLE>
<CAPTION>
Fair Carrying
Value Value
--------------- ----------------
<S> <C> <C>
Due in one year or less $ 10,731 $ 10,429
Due after one year through five years 25,368 24,200
Due after five years through ten years 503 496
Due after ten years - -
Mortgage-Backed Securities 3,742 3,628
--------------- ----------------
$ 40,344 $ 38,753
=============== ================
Investments in securities of one issuer other than United States Government
and United States Government Agencies which exceed 10% of total
stockholder's equity as of December 31, 1995 are as follows:
</TABLE>
<TABLE>
<CAPTION>
Included in Bonds: Carrying
ISSUER Value
------ --------------
<S> <C>
Leggett & Platt Inc Medium Term Notes $ 1,500
Sears, Roebuck & Co 1,499
Included in Short-Term Investments:
ISSUER
------
GTE Northwest Inc Discount Note $ 1,500
Goldman Sachs Money Market Treasury Obligations 1,539
Investments in securities of one issuer other than United States Government
and United States Government Agencies which exceed 10% of total
stockholder's equity as of December 31, 1994 are as follows:
Included in Bonds: Carrying
ISSUER Value
------ -------------
Leggett & Platt Inc Medium Term Notes $ 1,500
Sears, Roebuck & Co 1,499
Included in Short-Term Investments:
ISSUER
------
GTE Northwest Inc Discount Note $ 1,397
Potomac Electric Power Co Disc Note 1,499
AT&T Corp Disc Note 1,299
Cargill Inc Disc Note 1,496
At December 31, 1995, the Company had securities with a market value of $3,356
on deposit with various State Insurance Departments.
</TABLE>
52 ENCORE!
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(in thousands)
D. INVESTMENT INCOME:
------------------
Net investment income for the years ended December 31, 1995, 1994 and 1993
is comprised as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------
1995 1994 1993
--------------- --------------- ----------------
<S> <C> <C> <C>
Bonds $ 2,819 $ 2,410 $ 2,384
Short-term investments 597 609 529
IMR amortization 15 5 1
Loans on life insurance policies 128 82 39
--------------- ---------------- ---------------
Gross investment income 3,559 3,106 2,953
Less investment expenses 52 56 56
--------------- ---------------- ---------------
Net investment income $ 3,507 $ 3,050 $ 2,897
=============== ================ ===============
</TABLE>
E. RELATED PARTY TRANSACTIONS:
---------------------------
Ameritas Life Insurance Corp. provides technical, financial and legal
support to the Company under an administrative service agreement. The cost
of these services to the Company for years ended December 31, 1995, 1994 and
1993 was $4,858, $4,029 and $1,915, respectively. The Company also leases
office space and furniture and equipment from Ameritas Life Insurance Corp.
The cost of these leases to the Company for the years ended December 31,
1995, 1994 and 1993 was $37, $40 and $54, respectively.
Under the terms of an investment advisory agreement, the Company paid $44,
$43 and $44 for the years ended December 31, 1995, 1994 and 1993 to Ameritas
Investment Advisors Inc., an indirect wholly-owned subsidiary of Ameritas
Life Insurance Corp.
The Company entered into a reinsurance agreement (yearly renewable term)
with Ameritas Life Insurance Corp. Under this agreement, Ameritas Life
Insurance Corp. assumes life insurance risk in excess of the Company's $50
retention limit. The Company recorded $5,085 of gross reinsurance premiums
for the year ended December 31, 1995 which includes reinsurance ceded
commission allowances of $2,805 resulting in net reinsurance ceded premiums
of $2,280. In 1994 and 1993 the Company reported reinsurance ceded premiums
net of reinsurance ceded commission allowances. The Company paid $1,333 and
$843 of net reinsurance premiums for the years ended December 31, 1994 and
1993, respectively.
The Company has entered into a guarantee agreement with Ameritas Life
Insurance Corp., whereby, Ameritas Life Insurance Corp. guarantees the full,
complete and absolute performance of all duties and obligations of the
Company.
The Company's products are distributed through Ameritas Investment Corp., an
indirect wholly-owned subsidiary of Ameritas Life Insurance Corp. The
Company received $192, $272 and $23 for the years ended December 31, 1995,
1994 and 1993, respectively, from this affiliate to partially defray the
costs of materials and prospectuses. Policies placed by this affiliate
generated commission expense of $14,028, $15,223 and $12,621 for the years
ended December 31, 1995, 1994 and 1993, respectively.
ENCORE! 53
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(in thousands)
F. SEPARATE ACCOUNTS:
------------------
The Company is currently marketing variable life and variable annuity
products which have separate accounts as an investment option. Separate
Account V (Account V) was formed to receive and invest premium receipts from
variable life insurance policies issued by the Company. Separate Account
VA-2 (Account VA-2) was formed to receive and invest premium receipts from
variable annuity policies issued by the Company. Both Separate Accounts are
registered under the Investment Company Act of 1940, as amended, as unit
investment trusts. Account V and VA-2's assets and liabilities are
segregated from the other assets and liabilities of the Company.
Amounts in the Separate Accounts are:
December 31,
---------------------------
1995 1994
------------ ------------
Separate Account V $ 93,610 $ 58,117
Separate Account VA-2 588,872 404,769
------------ ------------
$ 682,482 $ 462,886
============ ============
The assets of Account V are invested in shares of the Variable Insurance
Products Fund, the Variable Insurance Products Fund II, Alger American Fund,
Dreyfus Stock Index Fund and MFS Variable Insurance Trust. Each fund is
registered with the SEC under the Investment Company Act of 1940, as
amended, as an open-end diversified management investment company.
The Variable Insurance Products Fund and the Variable Insurance Products
Fund II are managed by Fidelity Management and Research Company. Variable
Insurance Products Fund has five portfolios: the Money Market Portfolio, the
High Income Portfolio, the Equity Income Portfolio, the Growth Portfolio and
the Overseas Portfolio. The Variable Insurance Fund II has five portfolios:
the Investment Grade Bond Portfolio, Asset Manager Portfolio, Contrafund
Portfolio (effective August 25, 1995), Asset Manager Growth Portfolio(
effective September 15, 1995) and the Index 500 Portfolio (September 21,
1995). The Alger American Fund is managed by Fred Alger Management, Inc. and
has six portfolios: Income and Growth Portfolio, Small Capitalization
Portfolio, Growth Portfolio, MidCap Growth Portfolio (effective June 17,
1993), Balanced Portfolio (effective June 28, 1993) and the Leveraged Allcap
Portfolio (effective August 30, 1995). The Dreyfus Stock Index Fund is
managed by Wells Fargo Nikko Investment Advisors and has the Stock Index
Fund Portfolio. The MFS Variable Insurance Trust is managed by Massachusetts
Financial Services Company. The MFS Variable Insurance Trust has three
portfolios: the Emerging Growth Portfolio (effective August 25, 1995), World
Governments Portfolio (effective August 24, 1995) and the Utilities
Portfolio (effective September 18, 1995)
Separate Account VA-2 allows investment in the Variable Insurance Products
Fund, Variable Insurance Products Fund II, Alger American Fund, Dreyfus
Stock Index Fund and the MFS Variable Insurance Trust with the same
portfolios as described above.
54 ENCORE!
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
(in thousands)
G. BENEFIT PLANS:
--------------
The Company is included in the noncontributory defined-benefit pension plan
that covers substantially all full-time employees of Ameritas Life Insurance
Corp. and its subsidiaries. Pension costs include current service costs,
which are accrued and funded on a current basis, and past service costs,
which are amortized over the average remaining service life of all employees
on the adoption date. The assets and liabilities of this plan are not
segregated. The Company had no full time employees during 1995. Total
Company contributions for the years ended December 31, 1994 and 1993 were
$47 and $51, respectively.
The Company's employees also participate in a defined contribution thrift
plan that covers substantially all full-time employees of Ameritas Life
Insurance Corp. and its subsidiaries. Company matching contributions under
the plan range from 1% to 3% of the participant's compensation. The Company
had no full time employees during 1995. Total Company contributions for the
years ended December 31, 1994 and 1993 were $20 and $22, respectively.
The Company is also included in the postretirement benefit plan providing
group medical coverage to retired employees of Ameritas Life Insurance Corp.
and its subsidiaries. These benefits are a specified percentage of premium
until age 65 and a flat dollar amount thereafter. Employees become eligible
for these benefits upon the attainment of age 55, 15 years of service and
participation in the plan for the immediately preceding 5 years. Benefit
costs include the expected cost of postretirement benefits for newly
eligible employees, interest cost, and gains and losses arising from
differences between actuarial assumptions and actual experience. The assets
and liabilities of this plan are not segregated. The Company had no full
time employees during 1995. Total Company contributions for the years ended
December 31, 1994 and 1993 were $7 and $2, respectively.
Expenses for the defined benefit pension plan and postretirement group
medical plan are allocated to the Company based on a percentage of payroll.
H. REGULATORY MATTERS:
-------------------
Under statutes of the Insurance Department of the State of Nebraska, the
Company is limited in the amount of dividends it can pay to its stockholder.
No dividends are to be paid in 1996 without approval of the Insurance
Department.
ENCORE! 55
<PAGE>
APPENDIX A
ILLUSTRATIONS OF DEATH BENEFITS AND CASH VALUES
The following tables illustrate how the cash values and death benefits of a
Policy may change with the investment experience of the Fund. The tables show
how the cash values and death benefits of a Policy issued to an Insured of a
given age and specified underwriting risk classification who pays the given
premium at issue would vary over time if the investment return on the assets
held in each portfolio of the Funds were a uniform, gross, after-tax annual rate
of 0%, 6%, or 12%. The tables on pages 57 through 60 illustrate a Policy issued
to a male, age 35, under a Preferred rate non-tobacco underwriting risk
classification. This policy provides for a standard tobacco use and non-tobacco
use, and preferred non-tobacco classification and different rates for certain
specified amounts. The cash values and death benefits would be different from
those shown if the gross annual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above and below those averages for
individual policy years, or if the Insured were assigned to a different
underwriting risk classification.
The second column of the tables shows the accumulated value of the premiums paid
at 5%. The following columns show the death benefits and the cash values for
uniform hypothetical rates of return shown in these tables. The tables on pages
57 and 59 are based on the current cost of insurance rates, current expense
deductions and the maximum percent of premium loads. These reflect the basis on
which AVLIC currently sells its Policies. The maximum allowable cost of
insurance rates under the Policy are based upon the 1980 Commissioner's Standard
Ordinary Smoker and Non-Smoker, Male and Female Mortality Tables (Smoker is
referenced for tobacco use rates; Non-Smoker is referenced for non-tobacco use
rates). Since these are recent tables and are split to reflect tobacco use and
sex, the current cost of insurance rates used by AVLIC are at this time equal to
the maximum cost of insurance rates for many ages. AVLIC anticipates reflecting
future improvements in actual mortality experience through adjustments in the
current cost of insurance rates actually applied. AVLIC also anticipates
reflecting any future improvements in expenses incurred by applying lower
percent of premiums of loads and other expense deductions. The death benefits
and cash values shown in the tables on pages 58 and 60 are based on the
assumption that the maximum allowable cost of insurance rates as described above
and maximum allowable expense deductions are made throughout the life of the
Policy.
The amounts shown for the death benefits, surrender values and accumulation
values reflect the fact that the net investment return of the Subaccounts is
lower than the gross, after-tax return of the assets held in the Funds as a
result of expenses paid by the Fund and charges levied against the Subaccounts.
The values shown take into account an average of the daily management fee paid
by each portfolio available for investment (the equivalent to an annual rate of
___% of the aggregate average daily net assets of the Fund), the other expenses
incurred by the Fund (___%), and the daily charge by AVLIC to each Subaccount
for assuming mortality and expense risks and administrative expenses (which is
equivalent to a charge at an annual rate of .90% for policy years 1-20 and 0.65%
thereafter on pages 57 and 59 and at an annual rate of 1.15% on page 58 and 60
of the average net assets of the Subaccounts). The Investment Advisor or other
affiliates of the various funds have agreed to reimburse the portfolios to the
extent that the aggregate operating expenses (certain portfolio's may exclude
certain items) were in excess of an annual rate of 1.00% for the High Income,
Contrafund and Asset Manager: Growth Portfolios, 1.50% for the Equity-Income,
Growth and Overseas Portfolios, .80% for the Investment Grade Bond Portfolio,
1.25% for the Asset Manager Portfolio, .28% for the Index 500 Portfolio, 1.25%
for the Alger American Income and Growth and Alger American Balanced Portfolio;
1.50% for the Alger American Small Capitalization, Alger American Mid-Cap
Growth, Alger American Leveraged All Cap, and Alger American Growth Portfolios,
1.00% for the MFS Emerging Growth, MFS Utilities, MFS World Governments, MFS
Research, and MFS Growth With Income Portfolios; 1.75% for the Morgan Stanley
Emerging Markets Equity, 1.20% for the Morgan Stanley Asian Equity, 1.15% for
the Morgan Stanley Global Equity and Morgan Stanley International Magnum, 1.10%
for the Morgan Stanley U.S. Real Estate Portfolios of daily net assets. These
agreements are expected to continue in future years. As long as the expense
limitations continue for a portfolio, if a reimbursement occurs, it has the
effect of lowering the portfolio's expense ratio and increasing its total
return. The illustrated gross annual investment rates of return of 0%, 6%, and
12% were computed after deducting fund expenses and correspond to approximate
net annual rates of _____%, ____%, and _____% respectively, for years 1-20 and
_____%, ____% and _____% for the years thereafter respectively, on pages 57 and
59 and _____%, ____% and _____% respectively, on pages 58 and 60.
The hypothetical values shown in the tables do not reflect any charges for
Federal Income tax burden attributable to the Account, since AVLIC is not
currently making such charges. However, such charges may be made in the future
and, in that event, the gross annual investment rate of return would have to
exceed 0 percent, 6 percent, or 12 percent by an amount sufficient to cover the
tax charges in order to produce the death benefits and values illustrated. (See
Federal Tax Matters, page 31).
The tables illustrate the policy values that would result based upon the
hypothetical investment rates of return if premiums are paid as indicated, if
all net premiums are allocated to the Account, and if no policy loans have been
made. The tables are also based on the assumptions that the policyowner has not
requested an increase or decrease in the initial Specified Amount, that no
partial withdrawals have been made, and that no more than fifteen transfers have
been made in any policy year so that no transfer charges have been incurred.
Illustrated values would be different if the proposed Insured were female, a
tobacco user, in substandard risk classification, or were another age, or if a
higher or lower premium was illustrated.
Upon request, AVLIC will provide comparable illustration based upon the proposed
Insured's age, sex and underwriting classification, the Specified Amount, the
death benefit option, and planned periodic premium schedule requested, and any
available riders requested. In addition, upon client request, illustrations may
be furnished reflecting allocation of premiums to specified Subaccounts. Such
illustrations will reflect the expenses of the portfolio in which the Subaccount
invests. In addition, upon client request, illustrations may be furnished
reflecting allocation of premiums to specified Subaccounts. Such illustrations
will reflect the expenses of the portfolio in which the Subaccount invests.
56 ENCORE!
<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES
AMERITAS VARIABLE LIFE INSURANCE COMPANY
ENDOWMENT AT AGE 95
Male Issue Age: 35 Non-Smoker Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $______
INITIAL SPECIFIED AMOUNT: $500,000
DEATH BENEFIT OPTION: A
USING CURRENT SCHEDULE OF COST OF INSURANCE RATES
O% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(_____% net) (_____% net) (_____% net)
--------------------------------- -------------------------------- ----------------------------
Accumulated
End Of Premiums At Accumu- Cash Accumu- Cash Accumu- Cash
Policy 5% Interest lation Surrender Death lation Surrender Death lation Surrender Death
Year Per Year Value Value Benefit Value Value Benefit Value Value Benefit
- ------- -------------- -------- ------------ ------- ---------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
Ages
60
65
70
75
</TABLE>
1) Assumes an annual $____ premium is paid at the beginning of each policy year.
Values would be different if premiums with a different frequency or in different
amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals may
cause this policy to lapse because of insufficient cash value.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH
VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS
CAN BE MADE BY AVLIC OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
ENCORE! 57
<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES
AMERITAS VARIABLE LIFE INSURANCE COMPANY
ENDOWMENT AT AGE 95
Male Issue Age: 35 Non-Smoker Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $______
INITIAL SPECIFIED AMOUNT: $500,000
DEATH BENEFIT OPTION: A
USING MAXIMUM ALLOWABLE SCHEDULE OF COST OF INSURANCE RATES
O% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(_____% net) (_____% net) (_____% net)
--------------------------------- -------------------------------- ----------------------------
Accumulated
End Of Premiums At Accumu- Cash Accumu- Cash Accumu- Cash
Policy 5% Interest lation Surrender Death lation Surrender Death lation Surrender Death
Year Per Year Value Value Benefit Value Value Benefit Value Value Benefit
- ------- -------------- -------- ------------ ------- ---------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
Ages
60
65
70
75
</TABLE>
*In the absence of an additional premium, the Policy would lapse.
1) Assumes an annual $____ premium is paid at the beginning of each policy year.
Values would be different if premiums with a different frequency or in different
amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals may
cause this policy to lapse because of insufficient cash value.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH
VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS
CAN BE MADE BY AVLIC OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
58 ENCORE!
<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES
AMERITAS VARIABLE LIFE INSURANCE COMPANY
ENDOWMENT AT AGE 95
Male Issue Age: 35 Non-Smoker Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $______
INITIAL SPECIFIED AMOUNT: $500,000
DEATH BENEFIT OPTION: B
USING CURRENT SCHEDULE OF COST OF INSURANCE RATES
O% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(_____% net) (_____% net) (_____% net)
--------------------------------- -------------------------------- ----------------------------
Accumulated
End Of Premiums At Accumu- Cash Accumu- Cash Accumu- Cash
Policy 5% Interest lation Surrender Death lation Surrender Death lation Surrender Death
Year Per Year Value Value Benefit Value Value Benefit Value Value Benefit
- ------- -------------- -------- ------------ ------- ---------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
Ages
60
65
70
75
</TABLE>
1) Assumes an annual $____ premium is paid at the beginning of each policy year.
Values would be different if premiums with a different frequency or in different
amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals may
cause this policy to lapse because of insufficient cash value.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH
VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS
CAN BE MADE BY AVLIC OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
ENCORE! 59
<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES
AMERITAS VARIABLE LIFE INSURANCE COMPANY
ENDOWMENT AT AGE 95
Male Issue Age: 35 Non-Smoker Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $______
INITIAL SPECIFIED AMOUNT: $500,000
DEATH BENEFIT OPTION: B
USING MAXIMUM ALLOWABLE SCHEDULE OF COST OF INSURANCE RATES
O% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(_____% net) (_____% net) (_____% net)
--------------------------------- -------------------------------- ----------------------------
Accumulated
End Of Premiums At Accumu- Cash Accumu- Cash Accumu- Cash
Policy 5% Interest lation Surrender Death lation Surrender Death lation Surrender Death
Year Per Year Value Value Benefit Value Value Benefit Value Value Benefit
- ------- -------------- -------- ------------ ------- ---------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
Ages
60
65
70
75
</TABLE>
1) Assumes an annual $____ premium is paid at the beginning of each policy year.
Values would be different if premiums with a different frequency or in different
amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals may
cause this policy to lapse because of insufficient cash value.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH
VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED 0%, 6%, AND 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS
CAN BE MADE BY AVLIC OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
60 ENCORE!
<PAGE>
APPENDIX B
LONG TERM MARKET TRENDS
The information below covering the period of 1926-1995 is an examination of the
basic relationship between risk and return among the different asset classes,
and between nominal and real (inflation adjusted) returns. The information is
provided because the Policyowners have varied investment portfolios available
which have different investment objectives and policies. The chart generally
demonstrates how different classes of investments have performed during the
period. The study of asset returns provides a period long enough to include most
of the major types of events that investors have experienced in the past. This
is a historical record and is not intended as a projection of future
performance.
The graph depicts the growth of a dollar invested in common stocks, small
company stocks, long-term government bonds, Treasury bills, and a hypothetical
asset returning the inflation rate over the period from the end of 1925 to the
end of 1995. All results assume reinvestment of dividends on stocks or coupons
on bonds and no taxes. Transaction costs are not included, except in the small
stock index starting in 1982. Charges associated with a variable insurance
policy are not reflected in the chart.
Each of the cumulative index values is initiated at $1.00 at year-end 1925. The
graph illustrates that common stocks and small stocks gained the most over the
entire 70-year period: investments of one dollar would have grown to $1,113.92
and $3,822.40 respectively, by year-end 1995. This growth, however, was earned
by taking substantial risk. In contrast, long-term government bonds (with an
approximate 20-year maturity), which exposed the holder to less risk, grew to
only $34.04. Note that the return and principal value of an investment in stocks
will fluctuate with changes in market conditions. Prices of small company stocks
are generally more volatile than those of large company stocks. Government bonds
and Treasury Bills are guaranteed by the U.S. Government and, if held to
maturity, offer a fixed rate of return and a fixed principal value.
The lowest risk strategy over the past 70 years was to buy U.S. Treasury bills.
Since Treasury bills tended to track inflation, the resulting real
(inflation-adjusted) returns were near zero for the entire 1926-1995 period.
(Omitted graph illustrates long term market trends as described in the narrative
above.)
ENCORE! 61
<PAGE>
APPENDIX C
STANDARD & POOR'S 500
The Standard and Poor's (S & P 500) is a weighted index of 500 widely held
stocks: 400 Industrials, 40 Financial Company Stocks, 40 Public Utilities, and
20 Transportation stocks, most of which are traded on the New York Stock
Exchange. This information is provided because the Policyowners have varied
investment options available. The investment options, except the Fixed Account
and the Money Market Account, involve investments in the stock market. The S & P
500 is generally regarded as an accurate composite of the overall stock market.
PERCENT CHANGE OF TOTAL RETURN
STANDARD & POOR'S 500 INDEX
%
Year Change
- -----------------------------------------
1 1971 14.56
2 1972 18.90
3 1973 -14.77 (Omitted graph depicts the
4 1974 -26.39 activity of the S&P 500 Index
5 1975 37.16 for the years 1970-1995.)
6 1976 23.57
7 1977 -7.42
8 1978 6.38
9 1979 18.20
10 1980 32.27
11 1981 -5.01
12 1982 21.44
13 1983 22.38
14 1984 6.10
15 1985 31.57
16 1986 18.56
17 1987 5.10
18 1988 16.61
19 1989 31.69
20 1990 -3.14
21 1991 30.45
22 1992 7.61
23 1993 10.08
24 1994 1.32
25 1995 37.58
THE CHART ASSUMES THE RETURN EXPERIENCED BY THE STANDARD & POOR'S 500 INDEX FOR
THE LAST 25 YEARS. FUTURE RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS
MADE BY AN OWNER. THE INFORMATION IN THE CHART IS NOT NECESSARILY INDICATIVE OF
FUTURE PERFORMANCE.
INDEX PERFORMANCE IS NOT ILLUSTRATIVE OF POLICY SUBACCOUNT PERFORMANCE, AND
INVESTMENTS ARE NOT MADE IN THE INDEX.
62 ENCORE!
<PAGE>
INCORPORATION BY REFERENCE
The Registrant, AVLIC Separate Account V purchases or will purchase units from
the portfolios of four funds at the direction of its policyholders. The
prospectuses of these funds will be distributed with this prospectus and are
hereby incorporated by reference. The prospectuses incorporated by reference are
as follows:
The Variable Insurance Products Fund
Registration No. 2-75010
The Variable Insurance Products Fund II
Registration No. 33-20773
The Alger American Fund
Registration No. 33-21722
The Dreyfus Stock Index Fund
Registration No. 33-27172
MFS Variable Insurance Trust
Registration No. 33-74668
Morgan Stanley Universal Funds, Inc.
Registration No. 333-3013
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore, or hereafter duly adopted pursuant to authority conferred
in that section.
RULE 484 UNDERTAKING
AVLIC's By-laws provide as follows:
The Company shall indemnify any person who was, or is a party, or is threatened
to be made a party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative by reason
of the fact that he is or was a director, officer, or employee of the Company or
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses including attorney's fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding to the full extent authorized by the laws of
Nebraska.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
REPRESENTATIONS PURSUANT TO RULE 6E-3(T)
This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment
Company Act of 1940.
Registrant elects to be governed by Rule 6e-3(T)(b)(13)(i)(A) under the
Investment Company Act of 1940 with respect to the policy described in this
Prospectus.
Registrant makes the following representations:
1. Section 6e(T)(b)(13)(iii)(F) has been relied upon.
2. The level of the mortality and expense risk charges is reasonable in relation
to the risk assumed by the life insurer under the contract. The methodology
used to support this representation is based on an analysis of the mortality
and expense risks inherent in the contracts, including a new distribution
method, use of outside funds, use of a simplified application with modified
underwriting approach, flexibility of premiums and insurance features, and a
variety of other possible scenarios which may cause actual mortality and
expense experience to be greater than anticipated. Registrant undertakes to
keep and make available to the Commission on request the memorandum used to
support this representation.
3. Registrant has concluded that there is a reasonable likelihood that the
distribution financing arrangement of the Account will benefit the Account
and policyowners and will keep and make available to the Commission on
request a memorandum setting forth the basis for the representation.
4. The Account will invest only in management investment companies which have
undertaken to have a board of directors, a majority of whom are not
interested persons of the company, formulate and approve any plan under Rule
12b-1 to finance distribution expenses.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Ameritas Variable Life Insurance Company Separate Account V, certifies that it
has duly caused this Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized in the City of Lincoln, County of
Lancaster, State of Nebraska on this 1st day of November, 1996.
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V, Registrant
AMERITAS VARIABLE LIFE INSURANCE COMPANY, Depositor
/s/ Norman M. Krivosha /s/ Lawrence J. Arth
Attest: ________________________ By:________________________________
Secretary Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the Directors and Officers of Ameritas Variable
Life Insurance Company of Nebraska on the dates indicated.
SIGNATURE TITLE DATE
/s/ Lawrence J. Arth
_______________________ Director, Chairman of the Board November 1, 1996
Lawrence J. Arth President and Chief Executive Officer
/s/ Kenneth C. Louis
_______________________ Director, Executive Vice President November 1, 1996
Kenneth C. Louis
/s/ D T Doan
_______________________ Director, Executive Vice President November 1, 1996
D T Doan
/s/ Robert B. Bush
_______________________ Director, Senior Vice President November 1, 1996
Robert B. Bush Variable Operations and Administration
/s/ Wayne E. Brewster
_______________________ Senior Vice President-Variable November 1, 1996
Wayne E. Brewster Sales
<PAGE>
SIGNATURE TITLE DATE
_______________________ Director November 1, 1996
Thomas C. Godlasky
/s/ Jon C. Headrick
_______________________ Treasurer November 1, 1996
Jon C. Headrick
/s/ Norman M. Krivosha
_______________________ Secretary and General Counsel November 1, 1996
Norman M. Krivosha
/s/ JoAnn M. Martin
_______________________ Controller November 1, 1996
JoAnn M. Martin
/s/ Michael E. Sproule
_______________________ Director November 1, 1996
Michael E. Sproule
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
The prospectus consisting of 62 pages. The undertaking to file reports. The
undertaking pursuant to Rule 484. Representations pursuant to Rule 6e-3(T).
The signatures.
Written consents of the following:
(a) Thomas P. McArdle
(b) Norman M. Krivosha
(c) Deloitte & Touche LLP Independent Auditors
The following exhibits:
1. The following exhibits correspond to those required by paragraph A of the
instructions as to exhibits in Form N-8B-2.
(1) Resolution of the Board of Directors of AVLIC Authorizing
Establishment of the Account.
(2) Not applicable.
(3) (a) Principal Underwriting Agreement.
(b) Proposed form of Selling Agreement.
(c) Commission Schedule.*
(4) Not applicable.
(5) (a) Proposed form of Policy.*
(6) (a) Articles of Incorporation of AVLIC.*
(b) Bylaws of AVLIC.*
(7) Not applicable.
(8) (a) Participation Agreement in the Variable Insurance Products.*
(b) Participation Agreement in the Alger American Fund*
(c) Participation Agreement in the MFS Variable Insurance Trust.
(d) Participation Agreement in the Morgan Stanely Universal Funds,
Inc.
(9) Not applicable.
(10) Application for Policy.*
(11) Memorandum describing AVLIC's exchange procedure.
(12) Memorandum describing AVLIC's issuance, transfer, and redemption
procedures for the Policy.*
2. See Exhibit 1(5)
3. (a)(b) Opinion and Consent of Norman M. Krivosha, Secretary
4. No financial statements will be omitted from the final Prospectus pursuant
to Instruction 1(b) or (c) of Part I.
5. Not applicable.
6. (a)(b) Opinion and Consent of Thomas P. McArdle.*
7. Not applicable.
8. Consent of Deloitte & Touche LLP.
9. Form of Notice of Withdrawal Right and Refund pursuant to
Rule 6e-3(T)(b)(13)(viii) under the Investment Company Act of 1940.*
10. Undertaking to guarantee performance of obligations of principal
underwriter. Rule 270-27 d-2*
- -------------
* To be filed by amendment.
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
99.A1 Resolution of the Board of Directors of AVLIC Authorizing
Establishment of the Account
99.A3a Principal Underwriting Agreement
99.A3b Proposed Form of Selling Agreement
99.A8c Participation Agreement in the MFS Variable Insurance Trust
99.A8d Participation Agreement in the Morgan Stanley Universal
Trust, Inc.
99.A11 Memorandum Describing AVLIC's Exchange Procedure
99.A3ab Opinion and Consent of Norman M. Krivosha
99.A8 Consent of Deloitte & Touche LLP
<PAGE>
CERTIFICATION
I, Norman M. Krivosha, duly elected and qualified Secretary of Ameritas
Variable Life Insurance Company, Lincoln, Nebraska, hereby certify that the
attached minutes are a true and exact copy of a relevant portion of the minutes
adopted by the Board of Directors of Ameritas Variable Life Insurance Company,
on August 28, 1985. I further certify that the attached minutes are in full
force and effect.
IN WITNESS WHEREOF, I have affixed my name as Secretary and have caused the
corporate seal of said corporation to be hereunto affixed this 15th day of
October, 1996.
(CORPORATE SEAL)
/s/ Norman M. Krivosha
------------------------
Norman M. Krivosha
Secretary
<PAGE>
BE IT RESOLVED, That the Board of Directors of Bankers Life
Assurance Company of Nebraska ("Company"), pursuant to the provisions of Section
44-402.01 of the Nebraska Insurance Code, hereby establishes a separate account
designated "Bankers Life Assurance Company of Nebraska Separate Account V"
(hereinafter "Separate Account") for the following use and purposes, and subject
to such conditions as hereinafter set forth:
FURTHER RESOLVED, That Separate Account is established for the purpose
of providing for the issuance by the Company of flexible premium variable life
insurance policies ("Policies"), or other insurance contracts, and shall
constitute a separate account into which are allocated amounts paid to or held
by the Company under such Policies;
FURTHER RESOLVED, That the income, gains and losses, whether or not
realized, from assets allocated to Separate Account shall, in accordance with
the Policies, be credited to or charged against such account without regard to
other income, gains, or losses of the Company; and
FURTHER RESOLVED, That Separate Account shall be divided into
Investment Subdivisions, each Investment Subdivision in Separate Account shall
invest in the shares of a designated mutual fund portfolio and net premiums
under the Policies shall be allocated to the eligible portfolios set forth in
the Policies in accordance with instructions received from owners of the
Policies; and
FURTHER RESOLVED, That the Board of Directors expressly reserves the
right to add or remove any Investment Subdivision of Separate Account as it may
hereafter deem necessary or appropriate; and
<PAGE>
FURTHER RESOLVED, That the President and Chief Executive Officer, any
vice President, the Treasurer, the Secretary, or any Assistant Vice President,
and each of them, with full power to act without the others, be, and they hereby
are, severally authorized to invest such amount or amounts of the Company's cash
in Separate Account or in any Investment Subdivision thereof as may be deemed
necessary or appropriate to facilitate the commencement of Separate Account's
operations and/or to meet any minimum capital requirements under the Investment
Company Act of 1940; and
FURTHER RESOLVED, That the President and Chief Executive Officer, any
Vice President, the Treasurer, the Secretary, or any Assistant Vice President,
and each of them, with full power to act without the others, be, and they hereby
are, severally authorized to transfer cash from time to time between the
company's general account and Separate Account as deemed necessary or
appropriate and consistent with the terms of the Policies; and
FURTHER RESOLVED, That the Board of Directors of the Company reserves
the right to change the designation of Separate Account hereafter to such other
designation as it may deem necessary or appropriate; and
FURTHER RESOLVED, That the President and Chief Executive Officer, any
Vice President, the Treasurer, the Secretary, or any Assistant Vice President,
and each of them, with full power to act without the others, with such
assistance from the Company's independent certified public accountants, legal
counsel and independent consultants or others as they may require, be and they
hereby are, severally authorized and, directed to take all action necessary to:
(a) Register Separate Account as a unit investment trust under the Investment
Company Act of 1940, as amended; (b) Register the Policies in such amounts,
which may be an indefinite amount, as the said officers of the Company shall
from time to time deem appropriate under the Securities Act of 1933; and (c)
Take all other actions which are necessary in connection with the offering of
said Policies for sale and the operation of Separate account in order to comply
with the Investment Company Act of 1940, the Securities Exchange Act of 1934,
the Securities Act of 1933, and other federal laws, including the filing of any
amendments to registration statements, any undertakings, and any applications
for exemptions from the Investment Company Act of 1940 or other applicable
federal laws as the said officers of the Company shall deem necessary or
appropriate; and
<PAGE>
FURTHER RESOLVED, That the President and Chief Executive Officer, any
Vice President, the Treasurer, the Secretary, or any Assistant Vice President,
and each of them, with full power to act without the others, hereby are
severally authorized and empowered to prepare, execute and cause to be filed
with the securities and Exchange Commission on behalf of Separate Account and by
the Company as sponsor and depositor a Form of Notification of Registration
Statement under the Securities Act of 1933 registering the Policies any and all
amendments to the foregoing on behalf of Separate Account and the Company and on
behalf of and as attorneys-in-fact for the principal executive officer and/or
the principal financial officer and/or the principal accounting officer and/or
any other officer of the Company; and
FURTHER RESOLVED, That Julian H. Hopkins, VicePresident, and Paul J.
Mason, Esquire, are duly appointed as agents for service under any such
registration statement, duly authorized to receive communications and notices
from the Securities and Exchange Commission with respect thereto; and
FURTHER RESOLVED, That the President and Chief Executive officer, any
Vice President, the Treasurer, the Secretary, or any Assistant Vice President,
and each of them, with full power to act without the others, hereby is severally
authorized on behalf of Separate Account and on behalf of the Company to take
any and all action that each of them may deem necessary or advisable in order to
offer and sell the Policies, including any registrations, filings and
qualifications both of the Company, its officers, agents and employees, and of
the policies, under the insurance and securities laws of any of the states of
the United States of America or other jurisdictions, and in connection therewith
to prepare, execute, deliver and file all such applications, reports, covenants,
resolutions, applications for exemptions, consents to service or process and
other papers and instruments as may be required under such laws, and to take any
and all further action which the said officers or legal counsel of the Company
may deem necessary or desirable (including entering into whatever agreements and
contracts may be necessary) in order to maintain such registrations or
qualifications for as long as the said officer or legal counsel deem it to be in
the best interests of Separate Account and the Company; and
FURTHER RESOLVED, That the President and Chief Executive Officer, any
Vice President, the Treasurer, the Secretary, or any Assistant vice President,
and each of them, with full power to act without the others, be, and
<PAGE>
they hereby are, severally authorized in the names and on behalf of Separate
Account and the company to execute and file irrevocable written consents on the
part of Separate Account and of the Company to be used in such states wherein
such consents to service of process may be requisite under the insurance or
securities laws therein in connection with said registration or qualification of
the Policies and to appoint the appropriate state official, or such other person
as may be allowed by said insurance or securities laws, agent of Separate
Account and of the Company for the purpose of receiving and accepting process;
and
FURTHER RESOLVED, That the President and Chief Executive Officer, any
Vice President, the Treasurer, the Secretary, or any Assistant Vice President,
and each of them, with full power to act without the others, be, and hereby is,
severally authorized to establish procedures under which the-Company will
institute procedures for providing voting-rights for owners of the Policies with
respect to securities owned by Separate Account; and
FURTHER RESOLVED, That the President and Chief Executive Officer, any
Vice President, the Treasurer, the Secretary, or any Assistant Vice President,
and each of them, with full power to act without the others, is hereby severally
authorized to execute such agreement or agreements as deemed necessary and
appropriate (i) with sower securities Corp. ("Sower Securities") or other
qualified entity under which Sower Securities or such other entity will be
appointed principal underwriter and distributor for the Policies and (ii) with
one or more qualified banks or other qualified entities to provide
administrative and/or custodial services in connection with the establishment
and maintenance of Separate Account and the design, issuance, and administration
of the Policies.
FURTHER RESOLVED, That because Separate Account will invest solely in
the securities issued by a specific mutual fund corporation registered under the
Investment Company Act of 1940, the President and Chief Executive officer, any
Vice President, the Treasurer, the Secretary, or any Assistant Vice President,
and each of them, with full power to act without the others, are hereby
severally authorized (i) to instruct legal counsel to incorporate such a mutual
fund corporation and (ii) to execute whatever agreements as may be necessary or
appropriate to enable such investments to be made.
FURTHER RESOLVED, That the President and Chief Executive Officer, any
Vice President, the Treasurer, the Secretary, or any Assistant Vice President,
and each of
<PAGE>
them, with full power to act without the others are hereby severally authorized
to execute and deliver such agreements and other documents and do such acts and
things as each of them may deem necessary or desirable to carry out the
foregoing resolutions and the intent and purposes thereof.
<PAGE>
PRINCIPAL UNDERWRITING AGREEMENT
UNDERWRITING AGREEMENT made this 23rd day of October, 1996, by and
between Ameritas Investment Corp., (hereinafter the "Underwriter") and Ameritas
Variable Life Insurance Company hereinafter the "Insurance Company"), on its own
behalf and on behalf of Ameritas Variable Life Insurance Company Separate
Account V (hereinafter the "Account"), separate account of the
Insurance Company, as follows:
WHEREAS, the Account was established under authority of resolution of
the Insurance Company's Board of Directors on August 28, 1985, in order to set
aside and invest assets attributable to certain variable life insurance
contracts (hereinafter "Contracts") issued by the Insurance Company;
WHEREAS, the Insurance Company has registered or will register the
Account as a unit investment trust under the Investment Company Act of 1940 (the
"Investment Company Act") and has registered or will register the Contracts
under the Securities Act of 1933 (the "1933 Act").
WHEREAS, the Insurance Company has filed or will file the Contract for
approval by the state insurance departments in those jurisdictions where it is
authorized to transact business.
WHEREAS, the Underwriter is registered as a broker-dealer with the
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and is a member of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Insurance Company and the Account desire to have Contracts
sold and distributed through the Underwriter and the Underwriter is willing to
sell and distribute such Contracts under the terms stated herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Insurance Company grants to the Underwriter the right to
be, and the Underwriter agrees to serve as distributor and
principal underwriter of the Contracts during the term of this
Agreement. The Underwriter agrees to use its best efforts to
solicit applications for the Contracts at its own expense, and
otherwise to perform all duties and functions which are
necessary and proper for the distribution of the Policies.
2. All premiums for Contracts shall be remitted promptly in full
together with such application, forms, and any other documents
required by the Insurance Company. Checks or money orders in
payment of premiums shall be drawn to the order of "Ameritas
Variable Life Insurance Company".
3. The Underwriter agrees to offer the Contracts for sale in
accordance with the prospectuses in effect. The Underwriter is
not authorized to give any information or to make any
representations concerning the Contracts other than those
contained in the current prospectuses filed with the SEC or in
such sales literature as may be developed and authorized by
the Insurance Company in conjunction with the Underwriter.
4. The Underwriter shall be responsible for any filings of
advertisements or sales literature required to be made with
the NASD.
5. The Underwriter agrees to join Insurance Company, upon
Insurance Company's request and after independent review of
such matters, in any joint applications required to be filed
with the SEC under the "1934 Act," the "1933 Act" and the
Investment Company Act.
1
<PAGE>
6. The Insurance Company shall be responsible for any filings of
advertising and sales literature required to be made with
state insurance regulators.
7. On behalf of the Account, the Insurance Company shall furnish
the Underwriter with copies of all prospectuses, financial
statements and other documents which the Underwriter
reasonably requests for use in connection with the
distribution of the Contracts.
8. Insurance Company represents to Underwriter that the
prospectus included in Insurance Company's Registration
Statement, post-effective amendments thereto and any
supplements thereto, as filed or to be filed with the SEC, as
of their effective dates, contain or will contain, all
statements and information which are required to be stated
therein by the 1933 Act and in all respects conform or will
conform to the requirements thereof. Neither any prospectus,
nor any supplement thereof, includes or will include, any
untrue statement of a material fact, or omits or will omit to
state any material fact required to be stated therein or
necessary to make the statement therein not misleading,
provided, however, that the foregoing representations shall
not apply to information contained in or omitted from any
prospectus or supplement in reliance upon, and in conformity
with, written information furnished to Insurance Company by
Underwriter specifically for use in the preparation thereof.
The foregoing representation also shall not apply to
information contained in or omitted from any prospectus or
supplement of any underlying mutual fund.
9. The Underwriter represents that it is duly registered as a
broker-dealer under the 1934 Act and is a member in good
standing of the NASD and, to the extent necessary to offer
the Contracts, shall be duly registered or otherwise qualified
under the securities laws and insurance laws of any state or
other jurisdiction. The Underwriter shall be responsible
itself, or through contracts with others, including Insurance
Company, for carrying out its sales and underwriting
obligations hereunder in continued compliance with the NASD
Rules of Fair Practice and federal and state securities laws
and regulations. Without limiting the generality of the
foregoing, the Underwriter agrees that it shall be fully
responsible for:
(a) ensuring that no person shall offer or sell the
Contracts on its behalf until such person is duly
registered as a representative of the Underwriter,
duly licensed and appointed by the Insurance Company,
and appropriately licensed, registered or otherwise
qualified to offer and sell such Contracts under the
federal securities laws and any applicable securities
laws and insurance laws of each state or other
jurisdiction in which such Contracts may be lawfully
sold, in which the Insurance Company is licensed to
sell the Contracts and in which such persons shall
offer or sell the Contracts; and
(b) training, supervising, and controlling all such
persons for purposes of complying on a continuous
basis with the NASD Rules of Fair Practice and with
federal and state securities law requirements
applicable in connection with the offer and sale of
the Contracts. Underwriter is responsible for all
costs associated with this undertaking. In connection
with this undertaking, the Underwriter shall:
(1) conduct such training (including the
preparation and utilization of training
materials) as in the opinion of the
Underwriter is necessary to accomplish the
purposes of this Agreement;
(2) establish and implement reasonable written
procedures for supervision of sales
practices of agents, representatives or
brokers selling the Contracts; and
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<PAGE>
(3) take reasonable steps to ensure that its
associated persons shall not make
recommendations to an applicant to purchase
a Contract and shall not sell a Contract in
the absence of reasonable grounds to believe
that the purchase of the Contract is
suitable for such applicant.
10. The Underwriter is hereby authorized to enter into sales
agreements with other independent broker-dealers for the sale
of the Contracts. All such sales agreements entered into by
the Underwriter shall provide that each independent broker-
dealer will assume full responsibility for continued
compliance by itself and its associated persons with the NASD
Rules of Fair Practice and applicable federal and state
securities laws. All associated persons of such independent
broker-dealers soliciting applications for the Contracts shall
be duly and appropriately licensed or appointed for the sale
of the Contracts under the Federal and state securities laws
and the insurance laws of the applicable states or
jurisdictions in which such Contracts may be lawfully sold.
11. The Insurance Company shall apply for the proper insurance
licenses in the appropriate states or jurisdictions for the
designated persons associated with the Underwriter or with
other independent broker-dealers which have entered into
agreements with the Underwriter for the sale of the Contracts,
provided that the Insurance Company reserves the right to
refuse to appoint any proposed registered representative as an
agent or broker, and to terminate an agent or broker once
appointed. The cost of licensing for a designated person will
be paid by the party designating such person for licensing.
The Insurance Company will pay the cost of appointing all
designated persons.
12. The Insurance Company and the Underwriter shall cause to be
maintained and preserved for the periods prescribed such
accounts, books, and other documents as are required of them
by the Investment Company Act of 1940, the 1934 Act, and any
other applicable laws and regulations. The books, accounts and
records of the Insurance Company, the Account, and the
Underwriter as to all transactions hereunder shall be
maintained so as to disclose clearly and accurately the nature
and details of the transactions. The Insurance Company shall
maintain such books and records of the Underwriter pertaining
to the sale of the Contracts and required by the 1934 Act
as may be mutually agreed upon from time to time by the
Insurance Company and the Underwriter; provided that such
books and records shall be the property of the Underwriter,
and shall at all times be subject to such reasonable periodic,
special or other examination by the SEC and all other
regulatory bodies having jurisdiction. The Insurance Company
shall be responsible for sending all required confirmations on
customer transactions in compliance with applicable
regulations, as modified by any exemption or other relief
obtained by the Insurance Company. The Underwriter shall cause
the Insurance Company to be furnished with such reports as the
Insurance Company may reasonably request for the purpose of
meeting its reporting and recordkeeping requirements under the
insurance laws of the State of Nebraska and any other
applicable states or jurisdictions.
13. The Insurance Company shall have the responsibility for paying
(i) all commissions or other fees to associated persons of the
Underwriter which are due for the sale of the Contracts and
(ii) any compensation to other independent broker-dealers and
their associated persons due under the terms of any sales
agreements between the Underwriter, Insurance Company, and
such broker-dealers. Notwithstanding the preceding sentence,
no associated person or broker-dealer shall have an interest
in any deductions or other fees payable to the Underwriter
pursuant to the terms of this Agreement.
14. If Insurance Company is required to refund premiums or return
accumulation values and waive surrender charges on any Policy
for any reason; then no commission will be
3
<PAGE>
payable on such payments, and previously paid commissions, to
the extent they are refunded by the Insurance Company, must be
refunded by the Underwriter.
15. The Insurance Company shall reimburse the Underwriter for all
reasonable and necessary costs and expenses incurred by the
Underwriter in furnishing the services, materials, and
supplies required by the terms of this Agreement and may pay
Underwriter a concession for sales of the policies as may be
agreed by the parties in writing from time to time. The
Underwriter agrees to obtain the prior written approval by
Insurance Company of any agreements it may pursue with third
party providers of such services, materials and supplies.
16. Insurance Company shall indemnify Underwriter for any losses
to which Underwriter may become subject, insofar as such
losses result from negligent, fraudulent or unauthorized acts
or omissions by Insurance Company or its employees.
17. Underwriter agrees to indemnify the Insurance Company for any
losses to which Insurance Company may be subject if the losses
arise out of or result from negligent, improper, fraudulent or
unauthorized acts or omissions by Underwriter, its employees,
sales personnel, agents or principals, including but not
limited to improper solicitations of applications for
Policies, unauthorized use of sales materials or
advertisements, or any oral or written misrepresentations or
unlawful sales practices.
18. (a) Except as provided by paragraph 18(b) through (e),
this Agreement may be terminated by either party
hereto upon 180 days' written notice to the other
party.
(b) This Agreement may be terminated immediately upon
written notice of one party to the other party hereto
in the event of bankruptcy or insolvency of the party
to which notice is given.
(c) This Agreement may be terminated immediately, at the
option of Insurance Company, in the event that formal
administrative proceedings are instituted against the
Underwriter by the NASD, SEC, any state Insurance
Commissioner or any other regulatory body regarding
Underwriter's duties under this Agreement or related
to the sale of Policies, and that Insurance Company
determines in its sole judgment exercised in good
faith, that any such administrative proceedings will
have a material adverse effect upon the ability of
the Underwriter to perform its obligations under this
Agreement.
(d) This Agreement may be terminated immediately, at the
option of Underwriter, in the event that any of the
underlying funds are not registered, issued or sold
in accordance with applicable state and/or federal
law or such law precludes the use of such shares as
the underlying investment media of the Policies
issued or to be issued by Insurance Company.
(e) This Agreement may be terminated immediately, at the
option of Underwriter, if the underlying fund(s)
ceases to qualify as a Regulated Investment Company
under Subchapter M of the Internal Revenue Code of
1954, as amended.
(f) This Agreement may be terminated, at the option of
Insurance Company, if (a) Insurance Company shall
determine in its sole judgment exercised in good
faith that Underwriter has suffered a material
adverse change in its business or financial condition
or is subject to material adverse publicity and such
material adverse change or material adverse publicity
will have a material adverse impact upon the business
and operations of Insurance Company, (b) Insurance
Company shall notify Underwriter in writing of such
determination and its intent to terminate this
Agreement and (c) after considering the actions taken
by Underwriter and any other changes in circumstances
since the giving of such
4
<PAGE>
notice, such determination of Insurance Company shall
continue to apply on the sixtieth (60th) day
following the giving of such notice, which sixtieth
day shall be the effective day of termination.
(g) This Agreement may be terminated at any time upon the
mutual written consent of the parties thereto.
(h) The Underwriter shall not assign or delegate its
responsibilities under this Agreement without the
written consent of the Insurance Company.
(i) Upon termination of this Agreement, all
authorizations, right and obligations shall cease
except the obligations to settle accounts hereunder,
including payments of premiums or contributions
subsequently received for Contracts in effect at the
time of termination or issued pursuant to
applications received by the Insurance Company prior
to termination.
19. This Agreement is subject to and its terms are to be
interpreted and construed in accordance with the provisions of
the Investment Company Act and the 1934 Act, and the rules,
regulations, and rulings thereunder and is subject to the
provisions of the NASD Rules of Fair Practice. Without
limiting the generality of the foregoing, the term "assigned"
shall not include any transaction exempted from section
15(b)(2) of the Investment Company Act.
The Underwriter shall submit to all regulatory and
administrative entities having jurisdiction over the
operations of the Accounts, present or future; and will
provide any information, reports or other material which any
such entity by reason of this Agreement may request or require
pursuant to applicable laws or regulations.
20. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
21. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Nebraska.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed, and seals to be affixed, as of the day and year first above written.
AMERITAS INVESTMENT CORP.
Attest:
/s/ Kathy Sieckmeyer /s/ William R. Giovanni
___________________________ By: _________________________________________
Kathy Sieckmeyer William R. Giovanni,
President & Chief Executive Officer
AMERITAS VARIABLE LIFE INSURANCE COMPANY
Attest:
/s/ Kathy Sieckmeyer /s/ Kenneth C. Louis
___________________________ By: __________________________________________
Kathy Sieckmeyer Kenneth C. Louis,
Executive VicePresident
5
<PAGE>
SELLING AGREEMENT
AGREEMENT, made on this ________ day of __________________, 19___, by and
between Ameritas Variable Life Insurance Company ("AVLIC"), a Nebraska
Corporation,; Ameritas Life Insurance Corp.; ("Ameritas"), a Nebraska
Corporation; Ameritas Investment Corp., a Nebraska Corporation, and
________________________ ("Broker/Dealer") a _________________ Corporation.
WHEREAS, AVLIC issues certain variable insurance policies ("Policies"),
described in this Agreement, which are deemed securities under the Securities
Act of 1933, ("1993 Act"); and
WHEREAS, Ameritas issues traditional life insurance and annuity policies
(also referred to as "Policies"); and a listing of such policies is attached
hereto as Exhibit B, and is incorporated herein by this reference: and
WHEREAS, Ameritas Investment Corp. is duly licensed as a Broker/Dealer with
the National Association of Securities Dealers, Inc. ("NASD") and the Securities
and Exchange Commission ("SEC") and,
WHEREAS, Broker/Dealer is duly licensed as a Broker/Dealer with the NASD
and the SEC, and
WHEREAS, AVLIC has appointed Ameritas Investment Corp. as the Underwriter
of the Policies and has vested Ameritas Investment Corp. with the authority and
responsibility for training and supervising its registered representatives, and
WHEREAS, AVLIC proposes to have Broker/Dealers representatives
("Representative(s)") who are also duly licensed insurance agents solicit sales
of the Policies, and
WHEREAS, Ameritas Investment Corp. delegates to Broker/Dealer, to the
extent legally permitted, training and certain administrative responsibilities
and duties,
NOW, THEREFORE, in consideration of the premises and mutual promises
contained herein, the parties hereto agree as follows:
A. APPOINTMENT
AVLIC, Ameritas, and Ameritas Investment Corp. hereby appoint Broker/Dealer
to supervise solicitations of the Policies, and to facilitate solicitations of
sales of the Policies which are described in Exhibit A and Exhibit B, which are
attached hereto and incorporated by reference.
B. REPRESENTATIONS
1. Ameritas Investment Corp., AVLIC, Ameritas, and Broker/Dealer each
represents to the other, that it and the undersigned officers have full power
and authority to enter into this Agreement.
2. Ameritas Investment Corp. represents to Broker/Dealer that it is
registered as a Broker/Dealer under the Securities Exchange Act of 1934 ("1934
Act") and under the Blue Sky Laws of each jurisdiction in which such
registration is required for the sale of the Policies; and, that Ameritas
Investment Corp. is a member of the NASD.
3. Broker/Dealer represents to Ameritas Investment Corp. that it is
registered as a Broker/Dealer under the 1934 Act and under the Blue Sky Laws of
each jurisdiction in which such registration is required for the sale of the
Policies; and, that Broker/Dealer is a member of the NASD.
4. AVLIC presents to Broker/Dealer that the Policies, including related
separate accounts, shall comply with the registration and all other applicable
requirements of the 1933 Act and the Investment Company Act of 1940, and the
rules and regulations thereunder, including the terms of any order of the SEC
with respect thereto.
5. Ameritas represents to Broker/Dealer that it is licensed to issue
insurance in certain states, a listing of said states to be provided to
Broker/Dealer with this Agreement.
6. Ameritas represents to Broker/Dealer that the Policies it issues have
been duly filed and approved by the state insurance departments in those
jurisdictions where it is authorized to transact business.
7. AVLIC represents to Broker/Dealer that the Policy prospectus included
in AVLIC's Registration Statement as described in Exhibit A and in post-
effective amendments thereto, and any supplements thereto, as filed or to be
filed with the SEC, as of their respective effective dates, contain or will
contain, all statements and information which are required to be stated therein
by the 1933 Act and in all respects conform or will conform, to the
requirements thereof, and neither any prospectus, nor any supplement thereof,
includes or will include, any untrue statement of a material fact, or omits or
will omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that the
foregoing representations shall not apply to information contained in or omitted
from any prospectus or supplement in reliance upon, and in conformity with,
written information furnished to AVLIC by Broker/Dealer specifically for use in
the preparation thereof. The foregoing representations also shall not apply to
information contained in or omitted from any prospectus or supplement of any
underlying mutual fund.
C. COMPLIANCE WITH NASD RULES OF FAIR PRACTICE AND FEDERAL AND STATE
SECURITIES AND STATE INSURANCE LAWS
Broker/Dealer agrees to abide by all rules and regulations of the NASD,
including its Rules of Fair Practice, and to comply with all applicable state
and federal laws and the rules and regulations of authorized regulatory agencies
affecting the sale of the Policies.
D. LICENSING AND/OR APPOINTMENT OF REPRESENTATIVES
Broker/Dealer shall assist AVLIC, Ameritas, and Ameritas Investment Corp.
in the licensing and/or appointment of Representatives under applicable
insurance laws to sell the Policies. Broker/Dealer shall fulfill all
requirements set forth below in conjunction with the submission of
licensing/appointment papers for all applicants as insurance agents of AVLIC and
Ameritas. All such licensing/appointment papers should be submitted by the
Broker/Dealer to AVLIC or Ameritas as it may from time to time request.
Broker/Dealer understands that AVLIC and Ameritas reserves the right to refuse
to appoint any Representative or, once appointed, to thereafter terminate the
same.
Further, Broker/Dealer hereby certifies and represents to AVLIC, Ameritas
Investment Corp., and Ameritas that all the following requirements will be
fulfilled by the Broker/Dealer in conjunction with the submission of
licensing/appointment papers for all applicants as agents of AVLIC and/or
Ameritas. Broker/Dealer will, upon request, forward proof of compliance with
same to AVLIC or Ameritas Investment Corp., or Ameritas in a timely manner.
1. Broker/Dealer has made a thorough and diligent inquiry and investigation
relative to each applicant's identity, residence and business reputation and
declares that each applicant is personally known to the Broker/Dealer, has been
examined by it, is known to be of good moral character, has a good business
reputation, is reliable, is financially responsible and is worthy of a
securities and a life insurance license. Each individual is trustworthy,
competent and qualified to act as an agent for AVLIC and/or Ameritas and to hold
himself or herself out in good faith to the general public. The Broker/Dealer
vouches for each applicant.
2. Broker/Dealer has on file all forms required by the NASD, state
insurance, and securities licensing authorities, which forms have been completed
by each applicant. Broker/Dealer has fulfilled all the necessary investigative
requirements for the registration of each applicant as a registered
representative through the Broker/Dealer, and each applicant is presently
registered as an NASD registered representative and licensed with applicable
state licensing authorities. The above information in the Broker/Dealer files
indicates no fact or condition which would disqualify the applicant from
receiving or maintaining a securities or life insurance license and all the
findings of all investigative information are favorable.
3. Broker/Dealer certifies that all educational requirements have been met
for all states for which the applicant is requesting a securities or life
insurance license, and that all such persons have fulfilled the appropriate
examination, education and training requirements.
4. If the applicant is required to submit his picture, his signature, and
securities registration in the state in which he is applying for a securities
or life insurance license, Broker/Dealer certifies that those items forwarded to
AVLIC, Ameritas Investment Corp, or Ameritas are those of the applicant and the
securities registration is a true copy of the original.
<PAGE>
5. Broker/Dealer hereby warrants that the applicant is not applying for
a securities or life insurance license with AVLIC in order to place insurance
chiefly and solely on his life or lives of his relatives.
6. Broker/Dealer certifies that each applicant will receive close and
adequate supervision in connection with the sale of policies issued by Ameritas,
and/or AVLIC, and that the Broker/Dealer will make inspections when needed of
any or all risks written by these applicants, to the end that the insurance
interest of the public will be properly protected.
7. Broker/Dealer will not permit any applicant to act as a life insurance
agent until duly licensed therefore. No applicants have been given a contact or
furnished supplies, nor have any applicants been permitted to write, solicit
business, or act as an agent in any capacity, and they will not be so permitted
until they have met the licensing and appointment requirements of relevant
states' laws.
E. SUPERVISION OF REPRESENTATIVE
Broker/Dealer, shall have full responsibility for the training and
supervision of all Representatives associated with Broker/Dealer who are engaged
directly or indirectly in the offer or sale of the Policies and all such persons
shall be subject to the control of Broker/Dealer with respect to such persons'
activities in connection with the sale of the Policies. Broker/Dealer shall
comply with the administrative procedures of AVLIC and/or Ameritas involving
federal securities law and state insurance law. Before Representatives engage in
the solicitation of applications for the Policies, the Broker/Dealer will cause
(1) the Representatives to be trained in the sale of the Policies: (2) the
Representatives to qualify under applicable federal and state laws to engage
in the sale of the Policies; (3) the Representatives to be registered
representatives of Broker/Dealer and (4) will cause such Representatives to
limit solicitation of applications for the Policies to jurisdictions where
AVLIC or Ameritas has authorized such solicitation. Broker/Dealer shall cause
such Representatives' qualifications to be certified to the satisfaction of
Ameritas Investment Corp. or AVLIC , or Ameritas and shall notify Ameritas
Investment Corp. if such Representative ceases to be a registered representative
of Broker/Dealer. Broker/Dealer shall also cause all sales of the policies to
be reviewed for suitability as provided for in the rules of the NASD.
Broker/Dealer is specifically charged with the responsibility of supervising
and reviewing Representative's use of sales literature and advertising and all
other communications with the public in connection with the Policies. Upon
request by Ameritas Investment Corp., Broker/Dealer shall furnish appropriate
records or other documentation to evidence Broker/Dealer's diligent supervision.
F. NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE
In the event a Representative fails or refuses to submit to supervision of
Broker/Dealer or otherwise fails to meet the rules and standards imposed by
Broker/Dealer or its Representatives, Broker/Dealer shall certify such fact to
Ameritas Investment Corp. and shall immediately notify such Representative that
he or she is no longer authorized to sell the Policies, and Broker/Dealer shall
take whatever additional action may be necessary to terminate the sales
activities of such Representative relating to the Policies.
G. PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING
Broker/Dealer shall be provided, without any expense to Broker/Dealer, with
prospectuses for AVLIC's 1933 Act Registration Statement as described in Exhibit
A, any post-effective amendments or supplements thereto, and the 1933 Act
Registration Statement for the underlying mutual funds and any post-effective
amendments or supplements thereto, or other such prospectuses as may be needed
to properly solicit the Policies and such other material as Ameritas Investment
Corp. determines to be necessary or desirable for use in connection with sales
of the Policies. No sales promotion materials or advertising relating to the
Policies shall be used by Broker/Dealer unless the specific item has been
approved in writing by Ameritas Investment Corp. No representations in
connection with the sales of the Policies, other than those contained in the
Prospectus, sales promotion materials or advertising applicable to the Policies
which have been preapproved in writing by Ameritas Investment Corp., shall be
made by the Broker/Dealer or its Representatives.
H. SECURING APPLICATIONS
All applications for Policies shall be made on application forms supplied
by AVLIC or Ameritas. Broker/Dealer will review all sales for suitability and
all applications for completeness and correctness as to form. Broker/Dealer will
cause all complete and correct applications for suitable transactions to be
promptly forwarded to AVLIC or Ameritas, together with any payments received
with the applications, without deduction for compensation. AVLIC or Ameritas
reserves the right to reject any Policy application and turn any payment made in
connection with an application which is rejected. Policies issued on accepted
applications by AVLIC and/or Ameritas will be forwarded to the owner of the
policy ("Policyowner") in accordance with the administrative procedures of
AVLIC.
I. PAYMENTS RECEIVED BY BROKER/DEALER
All premium payments (hereinafter collectively referred to as ("Payments")
are the property of AVLIC and shall be transmitted to AVLIC or Ameritas by
Broker/Dealer immediately in accordance with the administrative procedures of
AVLIC and/or Ameritas, without any deduction or offset for any reason, including
by example but not limitation, any deduction or offset for compensation claimed
by Broker/Dealer. CHECKS SHALL BE MADE PAYABLE TO THE ORDER OF "AMERITAS
VARIABLE LIFE INSURANCE COMPANY" or "AMERITAS LIFE INSURANCE CORP," as
applicable.
J. COMMISSIONS PAYABLE
Commissions payable in connection with the policies shall be paid to the
Broker/Dealer or, at the request and with the permission of the Broker/Dealer,
in the states listed on Schedule E, to the Broker/Dealer or to a Compensation
Administrator on behalf of the Broker/Dealer's Registered Representative.
Broker/Dealer's request and permission must be in writing. In those instances
where the Broker/Dealer or a Compensation Administrator receives commissions on
behalf of the Registered Representative or shares commissions with the
Registered Representative, the Broker/Dealer will remain responsible as set out
herein, for recordkeeping, training, state licensing, and supervising the
Registered Representative's activities for compliance with the Federal and State
Securities Laws, State Insurance Laws, and the NASD Rules. These commissions
will be paid as a percentage of payments received in cash or other legal tender
and accepted by AVLIC and/or Ameritas on applications obtained by the
Representatives of the Broker/Dealer. Upon termination of this Agreement,
all compensation to the Broker/Dealer hereunder shall cease; however,
Broker/Dealer shall continue to be liable for any chargebacks pursuant to
Sections M and N of this Agreement or for any other amounts advanced by or
otherwise due Ameritas Investment Corp., AVLIC, or Ameritas. We reserve the
right to pay reduced commission if a new policy is issued and an existing
policy on the same life is terminated or lapses (a) within six months prior to
the date of the application for the new policy; or (b) within twelve months
after the issue date of the new policy.
K. TIME OF PAYMENT
Ameritas Investment Corp. or Ameritas shall pay any compensation due
Broker/Dealer in a timely manner.
L. CHANGE OF COMMISSION SCHEDULE
AVLIC or Ameritas may, upon at least sixty (60) days prior written notice
to Broker/Dealer, change the Commission Schedules. Any such change shall be by
written amendment of the particular schedule or schedules and shall apply to
compensation due on applications received by AVLIC or Ameritas on or after the
effective date of such change.
M. FINANCIAL PLANNING OR OTHER FEES
Neither Broker/Dealer nor any Representative associated with Broker/Dealer
may accept from any individual or entity any share of financial planning or
other fee income, either directly or indirectly derived from the sale of
Policies sold pursuant to this Agreement, unless permitted to do so by Federal
law and State law of the State in which the Broker/Dealer or Representative(s)
is/are licensed to do business. It shall be the sole responsibility of
Broker/Dealer to ensure that all Representatives associated with Broker/Dealer
do not accept such income.
If Federal law and the State law of the State in which the Broker/Dealer or
Representative(s) is/are licensed to do business permits an insurance agent to
accept commission payments and financial planning or other fee income from the
sale of a Policy it shall be the sole responsibility of Broker/Dealer, before
accepting such a fee or permitting Representative to accept such fees, to ensure
that Broker/Dealer and each Representative associated with it have
<PAGE>
secured any and all licenses necessary to charge fees as may be required by
Federal law, by Ameritas, or by the laws of the State or States in which
Broker/Dealer or Representative is licensed to solicit insurance.
N. CANCELLATION OF POLICY
If AVLIC or Ameritas is required to refund premiums or return accumulation
values and waive surrender charges on any Policy for any reason; then, no
commission will be payable with respect to said Payments and any commission
previously paid for said Payments must be refunded to Ameritas Investment Corp.
If AVLIC or Ameritas is required to pay a death benefit on an annuity policy
(the greater of the premiums paid or the accumulation value to the policy
beneficiary without surrender or withdrawal charges) within one year of the
policy date and the death was not accidental, AVLIC, AIC or Ameritas may, in its
sole discretion, require the refund of the commission paid. Ameritas Investment
Corp. agrees to notify Broker/Dealer within thirty (30) days after it receives
notice from AVLIC or Ameritas of any premium refund or a commission chargeback.
Any refund of commission which Broker/Dealer must make under this Section shall
be netted (charged back) against Broker/Dealer's next month's commissions.
Broker/Dealer shall be liable for any commission refund in excess of commissions
payable to Broker/Dealer.
0. HOLD HARMLESS AND INDEMNIFICATION PROVISIONS
1. AVLIC will indemnify and hold harmless Broker/Dealer from any and all
losses, claims, damages or liabilities for actions in respect thereof, to which
Broker/Dealer may become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement of any material fact contained in the prospectus or AVLIC
prepared sales or advertising material for any of the Policies or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and will provide
Broker/Dealer with appropriate legal representation in connection with
investigating or defending against such loss, claim, damage, liability or action
in respect thereof; provided, however, that AVLIC shall not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or omission or alleged omission made
in the prospectus for any of the Policies or any amendment or supplement or the
related mutual fund prospectus and statement of additional information or any
amendment or supplement of the related mutual fund prospectus and statement of
additional information or any amendment of supplement in reliance upon and in
conformity with information furnished by Broker/Dealer specifically for use in
the preparation thereof.
AVLIC shall not indemnify Broker/Dealer for any action where an applicant
for any of the Policies was not furnished or sent or given, at or prior to
written confirmation of the sale of the Policies, a copy of the appropriate
prospectus together with the related mutual fund prospectus, the fund statement
or additional information if requested, and any supplements or amendments to
either furnished to Broker/Dealer by AVLIC.
The foregoing indemnities shall, upon the same terms and conditions.,
extend to and insure to the benefit of each director and officer of
Broker/Dealer and any person controlling Broker/Dealer.
2. Ameritas, AVLIC and Ameritas Investment Corp. shall indemnify and hold
harmless Broker/Dealer against any losses, claims, damages or liabilities (or
actions in respect thereof), to which Broker/Dealer may become subject, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
result from negligent, fraudulent or unauthorized acts or omissions by Ameritas,
AVLIC and Ameritas Investment Corp. or their employees.
The foregoing indemnities shall, upon the same terms and conditions, extend
to and inure to the benefit of each director and officer of Broker/Dealer and
any person controlling Broker/Dealer.
3. Broker/Dealer shall indemnify and hold harmless Ameritas Investment
Corp., AVLIC and Ameritas from any and all losses, claims, damages or
liabilities (or actions in respect thereof) to which Ameritas Investment Corp.,
AVLIC or Ameritas may be subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or result from
negligent, improper, fraudulent or unauthorized acts or omissions by
Broker/Dealer, its employees or sales personnel or principals, including but not
limited to improper solicitations of applications for the Policies.
Broker/Dealer shall indemnify and hold harmless Ameritas Investment
Corp., AVLIC or Ameritas for any losses, claims, damages or liabilities (or
actions in respect thereof) to which Ameritas Investment Corp., AVLIC or
Ameritas may become subject, insofar as the losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
unauthorized use of sales materials or advertisements or any oral or written
misrepresentations or any unlawful sales practices concerning the Policies or
underlying mutual fund shares, by Broker/Dealer.
The foregoing indemnities shall, upon the same terms and conditions, extend
to and inure to the benefit of each director and officer of Ameritas Investment
Corp., AVLIC and Ameritas and any person controlling Ameritas Investment Corp.,
AVLIC or Ameritas. The foregoing indemnities shall not extend to losses, claims,
damages or liabilities (or actions in respect thereto) arising out of death
claims related to the mortality risks of the Policies.
4. Promptly after receipt by an indemnified party of notice of the
commencement of any action, such indemnified party shall, if a claim is to be
made against the indemnifying party, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may otherwise have to any
indemnified party. In case any such action shall be brought against any
indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party, similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party. After notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expense subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
P. NON-ASSIGNABILITY PROVISION
This Agreement may not be assigned by any party except by mutual consent.
Q. NON-WAIVER PROVISION
Failure of any party to terminate this Agreement for any of the causes set
forth in this Agreement will not institute a waiver, of the right to terminate
this Agreement at a later time for any of these causes.
R. AMENDMENTS
No amendment to this Agreement will be effective unless it is in writing
and signed by all the parties hereto.
S. INDEPENDENT CONTRACTORS
Broker/Dealer and its Representatives are independent contractors with
respect to AVLIC, Ameritas and Ameritas Investment Corp.
T. NOTIFICATION OF DISCIPLINARY PROCEEDINGS
Broker/Dealer agrees to notify Ameritas Investment Corp. in a timely
fashion of any disciplinary proceedings against any of Broker/Dealer's
Representatives soliciting sales of the Policies or any threatened or filed
arbitration action or civil litigation arising out of Broker/Dealer's
solicitation of the Policies.
U. BOOKS AND RECORDS
AVLIC, Ameritas Investment Corp., Ameritas and Broker/Dealer agree to
maintain the books, accounts and records so as to clearly and accurately
disclose the nature and details of transactions and to assist each other in the
timely preparation of records. Ameritas Investment Corp. and Broker/Dealer shall
each submit such records to the regulatory and administrative bodies which have
jurisdiction over AVLIC, Ameritas or the underlying mutual fund shares. Each
party to this Agreement shall promptly furnish to the other party any reports
and information which the other party may request for the purpose of meeting its
reporting and recordkeeping requirements under the insurance laws of any state,
and under the federal and state securities laws or the rules of the NASD.
<PAGE>
V. CONFIRMATIONS
Upon or prior to completion of each transaction for which the issuance of
a confirmation is legally required, a confirmation reflecting the fact of the
transaction and those items required under SEC Rule 10b-10 will be promptly
forwarded to the Policyowner by AVLIC on Ameritas Investment Corp.'s behalf. A
copy of such confirmations will be made available to Broker/Dealer upon request.
W. REPLACEMENTS OR ROLLOVERS
Broker/Dealer expressly agrees that neither it nor its agents will engage
in any course of conduct to replace policies issued by AVLIC or Ameritas or
recommend or cause the surrenders of cash sales of the Policies sold under the
contract to purchase or exchange for insurance policies or contracts issued by
other insurance companies.
X. CONFIDENTIALITY OF INFORMATION
AVLIC, Ameritas, Ameritas Investment Corp. and Broker/Dealer respectively
agree that all Policyowner facts or information received by an party hereto
shall remain confidential as to all parties unless such information is required
by any regulatory authority or court of competent jurisdiction.
Y. LIMITATIONS
No party other than AVLIC or Ameritas shall have the authority on behalf of
AVLIC or Ameritas to make, alter, or discharge any Policy issued by AVLIC or
Ameritas, to waive any forfeiture or to grant, permit, or to extend the time of
making any Payments, or to alter, the forms which AVLIC or Ameritas may
prescribe or substitute other forms in place of those prescribed by AVLIC or
Ameritas; or to enter into any proceeding in a court of law or before a
regulatory agency in the name of or on behalf of AVLIC or Ameritas.
Z. TERMINATION
This Agreement maybe terminated:
1. At the option of any party upon one (1) months' written notice to the
other parties.
2. At the option of Ameritas Investment Corp. in the event that formal
administrative proceedings are instituted against the Broker/Dealer by the NASD,
SEC, any state Insurance Commissioner or any other regulatory body regarding
Broker/Dealer duties under this Agreement or related to the sale of the
Policies, and that Ameritas Investment Corp. determines in its sole judgment
exercised in good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Broker/Dealer to perform its
obligations under this Agreement.
3. At the option of Broker/Dealer in the event that any of the underlying
funds are not registered, issued or sold in accordance with applicable state
and/or federal law or such law precludes the use of such shares as the
underlying investment media of the Policies issued or to be issued by AVLIC.
4. At the option of Broker/Dealer if the underlying fund(s) ceases to
qualify as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1954, as amended.
5. At the option of AVLIC, Ameritas Investment Corp., or Ameritas if (a)
AVLIC, Ameritas Investment Corp., Ameritas, shall determine in their sole
judgment exercised in good faith that Broker/Dealer has suffered a material
adverse change in its business or financial condition or is subject to material
adverse publicity and such material adverse change or material adverse publicity
will have a material adverse impact upon the business and operations of either
AVLIC or Ameritas Investment Corp., (b) AVLIC, Ameritas Investment Corp., or
Ameritas shall notify Broker/Dealer in writing of such determination and their
intent to terminate this Agreement and (c) after considering the actions taken
by Broker/Dealer and any other changes in circumstances since the giving of such
notice, such termination of AVLIC, Ameritas Investment Corp., or Ameritas shall
continue to apply on the sixtieth (60th) day following the giving of such
notice, which sixtieth day shall be the effective day of termination.
6. At the option of any party hereto upon the breach by any party of the
covenants and terms of this Agreement.
ZZ. SEVERABILITY
Should any provision of this Agreement be held unenforceable, those
provisions not affected by the determination of unenforceability shall remain in
full force and effect.
ZZZ. NET REMIT PROGRAM
a) PREREQUISITES. This program is only available in Variable Annuity sales
for carrying or clearing Broker/Dealers. Broker/Dealers must have specific
written authorization to hold customer funds in brokerage accounts. They must
also have the customer's authorization to forward amounts due AVLIC from the
funds in the brokerage accounts. Broker/Dealer participating in this program
represent that they meet the prerequisites by having the necessary written
customer authorizations, and agreeing to adhere to the terms of Part b) of this
Section ZZZ. AVLIC authorizes Broker/Dealer to take part in the Net Remit
Program based upon these representations.
b) THE PROGRAM. Broker/Dealer participating in the Net Remit Program must
always identify both the gross and net amounts on each payment forwarded to
AVLIC. Payments received without such designations will be applied as gross
payments with commissions to be paid. All payments received by the Broker/Dealer
are the property of AVLIC and must be transmitted immediately in accordance with
the administrative procedures of AVLIC, subject only to the deduction by
Broker/Dealer of the appropriate commission from such payments.
This Agreement will be construed in accordance with the laws of the State
of Nebraska.
Ameritas Variable Life Insurance Company
by ___________________________________________________
Ameritas Investment Corp.
by ___________________________________________________
Ameritas Life Insurance Corp.
by ___________________________________________________
Broker/Dealer
by ___________________________________________________
<PAGE>
PARTICIPATION AGREEMENT
AMONG
MFS VARIABLE INSURANCE TRUST,
AMERITAS VARIABLE LIFE INSURANCE COMPANY
AND
MASSACHUSETTS FINANCIAL SERVICES COMPANY
THIS AGREEMENT, made and entered into this 21st day of June 1995, by
and among MFS VARIABLE INSURANCE TRUST, a Massachusetts business trust (the
"Trust"), AMERITAS VARIABLE LIFE INSURANCE COMPANY, a Nebraska corporation (the
"Company") on its own behalf and on behalf of each of the segregated asset
accounts of the Company set forth in Schedule A hereto, as may be amended from
time to time (the "Accounts"), and MASSACHUSETTS FINANCIAL SERVICES COMPANY, a
Delaware corporation ("MFS").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and its shares are registered or will be registered under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, shares of beneficial interest of the Trust are divided into
several series of shares, each representing the interests in a particular
managed pool of securities and other assets;
WHEREAS, the series of shares of the Trust offered by the Trust to the
Company and the Accounts are set forth on Schedule A attached hereto (each, a
"Portfolio," and, collectively, the "Portfolios");
WHEREAS, MFS is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
law, and is the Trust's investment adviser;
WHEREAS, the Company will issue certain variable annuity and/or
variable life insurance contacts (individually, the "Policy" or, collectively,
the "Policies") which, if required by applicable law, will be registered under
the 1933 Act;
WHEREAS, the Accounts are duly organized, validly existing segregated
asset accounts, established by resolution of the Board of Directors of the
Company, to set aside and invest assets attributable to the aforesaid variable
annuity and/or variable life insurance contracts that are allocated to the
Accounts (the Policies and the Accounts covered by this Agreement, and each
corresponding Portfolio covered by this Agreement in which the Accounts invest,
is specified in Schedule A attached hereto as may be modified from time to
time);
WHEREAS, the Company has registered or will register the Accounts as
unit investment trusts under the 1940 Act (unless exempt therefrom);
WHEREAS, MFS Fund Distributors, Inc. (the "Underwriter") is registered
as a broker-dealer with the Securities and Exchange Commission (the "SEC") under
the Securities Exchange Act of 1934, as amended (hereinafter the "1934 Act"),
and is a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD");
WHEREAS, Ameritas Investment Corp. ("AIC") the underwriter for the
individual variable annuity and the variable life policies, is registered as a
broker-dealer with the SEC under the 1934 Act and is a member in good standing
of the NASD; and
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<PAGE>
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in one or more of the
Portfolios specified in Schedule A attached hereto (the "Shares") on behalf of
the Accounts to fund the Policies, and the Trust intends to sell such Shares to
the Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Trust,
MFS, and the Company agree as follows:
ARTICLE I. SALE OF TRUST SHARES
--------------------
1.1. The Trust agrees to sell to the Company those Shares which the
Accounts order (based on orders placed by Policy holders on that
Business Day, as defined below) and which are available for purchase by
such Accounts, executing such orders on a daily basis at the net asset
value next computed after receipt by the Trust or its designee of the
order for the Shares. For purposes of this Section 1.1, the Company
shall be the designee of the Trust for receipt of such orders from
Policy owners and receipt by such designee shall constitute receipt by
the Trust; provided that the Trust receives notice of such orders by
9:30 a.m. New York time on the next following Business Day, or such
additional time as provided for pursuant to Section 1.9. "Business Day
shall mean any day on which the New York Stock Exchange, Inc. (the
"NYSE") is open for trading and on which the Trust calculates its net
asset value pursuant to the rules of the SEC.
1.2. The Trust agrees to make the Shares available indefinitely for
purchase at the applicable net asset value per share by the Company and
the Accounts on those days on which the Trust calculates its net asset
value pursuant to rules of the SEC and the Trust shall calculate such
net asset value on each day which the NYSE is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the Trust (the
"Board") may refuse to sell any Shares to the Company and the Accounts,
or suspend or terminate the offering of the Shares if such action is
required by law or by regulatory authorities having jurisdiction or is,
in the sole discretion of the Board acting in good faith and in light
of its fiduciary duties under federal and any applicable state laws,
necessary in the best interest of the Shareholders of such Portfolio.
1.3. The Trust and MFS agree that the Shares will be sold only to
insurance companies which have entered into participation agreements
with the Trust and MFS (the "Participating Insurance Companies") and
their separate accounts, qualified pension and retirement plans and MFS
or its affiliates. The Trust and MFS will not sell Trust shares to any
insurance company or separate account unless and agreement containing
provisions substantially the same as Articles III and VII of this
Agreement is in effect to govern such sales. The Company will not
resell the Shares except to the Trust or its agents.
1.4. The Trust agrees to redeem for cash, on the Company's request, any
full or fractional Shares held by the Accounts (based on orders placed
by Policy holders on that Business Day), executing such requests on a
daily basis at the net asset value next computed after receipt by the
Trust or its designee of the request for redemption. For purposes of
this Section 1.4, the Company shall be the designee of the Trust for
receipt of requests for redemption from Policy owners and receipt by
such designee shall constitute receipt by the Trust; provided that the
Trust receives notice of such request for redemption by 9:30 a.m. New
York time on the next following Business Day, or such additional time
as provided for pursuant to Section 1.9.
1.5. Each purchase, redemption and exchange order placed by the Company
shall be placed separately for each Portfolio and shall not be netted
with respect to any Portfolio. However, with respect to payment of the
purchase price by the Company and of redemption proceeds by the Trust,
the Company and the Trust shall net purchase and redemption orders with
respect to each Portfolio and shall transmit one net payment for all of
the Portfolios in accordance with Section 1.6.
1.6. In the event of net purchases, the Company shall pay for the
Shares by 2:00 p.m. New York time on the next Business Day after an
order to purchase the Shares is made in accordance with the provisions
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<PAGE>
of Section 1.1. hereof. In the event of net redemptions, the Trust
shall pay the redemption proceeds by 2:00 p.m. New York time on the
next Business Day after an order to redeem the shares is made in
accordance with the provisions of Section 1.4. hereof All such payments
shall be in federal funds transmitted by wire.
1.7. Issuance and transfer of the Shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts.
The Shares ordered from the Trust will be recorded in an appropriate
title for the Accounts or the appropriate subaccounts of the Accounts.
1.8. The Trust shall furnish same day notice (by wire or telephone
followed by written confirmation) to the Company of any dividends or
capital gain distributions payable on the Shares. The Company hereby
elects to receive all such dividends and distributions as are payable
on a Portfolio's Shares in additional Shares of that Portfolio. The
Trust shall notify the Company of the number of Shares so issued as
payment of such dividends and distributions.
1.9. The Trust or its custodian shall make the net asset value per
share for each Portfolio available to the Company on each Business Day
as soon as reasonably practical after the net asset value per share is
calculated and shall use its best efforts to make such net asset value
per share available by 6:30 p.m. New York time. In the event that the
Trust is unable to meet the 6:30 p.m. time stated herein, it shall
provide additional time for the Company to place orders for the
purchase and redemption of Shares pursuant to Sections 1.1 and 1.4,
respectively. Such additional time shall be equal to the additional
time which the Trust takes to make the net asset value available to the
Company. If the Trust provides materially incorrect share net asset
value information, the Trust shall make an adjustment to the number of
shares purchased or redeemed for the Accounts to reflect the correct
net asset value per share. Any material error in the calculation or
reporting of net asset value per share, dividend or capital gains
information shall be reported promptly upon discovery to the Company.
ARTICLE II. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
-------------------------------------------------
2.1. The Company represents and warrants that the Policies are or will
be registered under the 1933 Act or are exempt from or not subject to
registration thereunder, and that the Policies will be issued, sold,
and distributed in compliance in all material respects with all
applicable state and federal laws, including without limitation the
1933 Act, the Securities Exchange Act of 1934, as amended (the "1934
Act"), and the 1940 Act. The Company further represents and warrants
that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established
the Account as a segregated asset account under applicable law and has
registered or, prior to any issuance or sale of the Policies, will
register the Accounts as unit investment trusts in accordance with the
provisions of the 1940 Act (unless exempt therefrom) to serve as
segregated investment accounts for the Policies, and that it will
maintain such registration for so long as any Policies are outstanding.
The Company shall amend the registration statements under the 1933 Act
for the Policies and the registration statements under the 1940 Act for
the Accounts from time to time as required in order to effect the
continuous offering of the Policies or as may otherwise be required by
applicable law. The Company shall register and qualify the Policies for
sales accordance with the securities laws of the various states only if
and to the extent deemed necessary by the Company.
2.2. The Company represents and warrants that the Policies are
currently and at the time of issuance will be treated as life
insurance, endowment or annuity contract under applicable provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), that it
will maintain such treatment and that it will notify the Trust or MFS
immediately upon having a reasonable basis for believing that the
policies have ceased to be so treated or that they might not be so
treated in the future.
2.3. The Company represents and warrants that AIC, the underwriter for
the individual variable annuity and the variable life policies, is a
member in good standing of the NASD and is a registered broker-dealer
with the SEC. The Company represents and warrants that the Company and
AIC will sell and distribute
3
<PAGE>
such policies in accordance in all material respects with all
applicable state and federal securities laws, including without
limitation the 1933 Act, the 1934 Act, and the 1940 Act.
2.4. The Trust and MFS represent and warrant that the Shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of The
Commonwealth of Massachusetts and all applicable federal and state
securities laws and that the Trust is and shall remain registered under
the 1940 Act. The Trust shall amend the registration statement for its
Shares under the 1933 Act and the 1940 Act from time to time as
required in order to effect the continuous offering of its Shares. The
Trust shall register and qualify the Shares for sale in accordance with
the laws of the various states only if and to the extent deemed
necessary by the Trust.
2.5. MFS represents and warrants that the Underwriter is a member in
good standing of the NASD and is registered as a broker-dealer with the
SEC. The Trust and MFS represent that the Trust and the Underwriter
will sell and distribute the Shares in accordance in all material
respects with all applicable state and federal securities laws,
including without limitation the 1933 Act, the 1934 Act, and the 1940
Act.
2.6. The Trust represents that it is lawfully organized and validly
existing under the laws of The Commonwealth of Massachusetts and that
it does and will comply in all material respects with the 1940 Act and
any applicable regulations thereunder.
2.7. MFS represents and warrants that it is and shall remain duly
registered under all applicable federal securities laws and that it
shall perform its obligations for the Trust in compliance in all
material respects with any applicable federal securities laws and with
the securities laws of 'Me Commonwealth of Massachusetts. MFS
represents and wan-ants that it is not subject to state securities laws
other than the securities laws of The Commonwealth of Massachusetts and
that it is exempt from registration as an investment adviser under the
securities laws of The Commonwealth of Massachusetts.
2.8. No less frequently than annually, the Company shall submit to the
Board such reports, material or data as the Board may reasonably
request so that it may carry out fully the obligations imposed upon it
by the conditions contained in the exemptive application pursuant to
which the SEC has granted exemptive relief to permit mixed and shared
funding (the "Mixed and Shared Funding Exemptive Order").
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS: VOTING
---------------------------------------
3.1. At least annually, the Trust or its designee shall provide the
Company, free of charge, with as many copies of the current prospectus
(describing only the Portfolios listed in Schedule A hereto) for the
Shares as the Company may reasonably request for distribution to
existing Policy owners whose Policies are funded by such Shares. The
Trust or its designee shall provide the Company, at the Company's
expense, with as many copies of the current prospectus for the Shares
as the Company may reasonably request for distribution to prospective
purchasers of Policies. If requested by the Company in lieu thereof,
the Trust or its designee shall provide such documentation (including a
"camera ready" copy of the new prospectus as set in type or, at the
request of the Company, as a diskette in the form sent to the financial
printer) and other assistance as is reasonably necessary in order for
the parties hereto once each year (or more frequently if the prospectus
for the Shares is supplemented or amended) to have the prospectus for
the Policies and the prospectus for the Shares printed together in one
document; the expenses of such printing to be apportioned between (a)
the Company and (b) the Trust or its designee in proportion to the
number of pages of the Policy and Shares' prospectuses, taking account
of other relevant factors affecting the expense of printing, such as
covers, columns, graphs and charts; the Trust or its designee to bear
the cost of printing the Shares' prospectus portion of such document
for distribution to owners of existing Policies funded by the Shares
and the Company to bear the expenses of printing the portion of such
document relating to the Accounts; provided, however, that the Company
shall bear all printing expenses of such combined documents where used
for distribution to prospective purchasers or to owners of existing
Policies not funded by the Shares. In the event
4
<PAGE>
that the Company requests that the Trust or its designee provides the
Trust's prospectus in a "camera ready" or diskette format, the Trust
shall be responsible for providing the prospectus in the format in
which it or MFS is accustomed to formatting prospectuses and shall bear
the expense of providing the prospectus in such format (e.g.
typesetting expenses), and the Company shall bear the expense of
adjusting or changing the format to conform with any of its
prospectuses.
3.2. The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the Trust or
its designee. The Trust or its designee, at its expense, shall print
and provide such statement of additional information to the Company (or
a master of such statement suitable for duplication by the Company) for
distribution to any owner of a Policy funded by the Shares. The Trust
or its designee, at the Company's expense, shall print and provide such
statement to the Company (or a master of such statement suitable for
duplication by the Company) for distribution to a prospective purchaser
who requests such statement or to an owner of a Policy not funded by
the Shares.
3.3. The Trust or its designee shall provide the Company free of charge
copies, if and to the extent applicable to the Shares, of the Trust's
proxy materials, reports to Shareholders and other communications to
Shareholders in such quantity as the Company shall reasonably require
for distribution to Policy owners.
3.4. Notwithstanding the provisions of Sections 3.1, 3.2, and 3.3
above, or of Article V below, the Company shall pay the expense of
printing or providing documents to the extent such cost is considered a
distribution expense. Distribution expenses would include by way of
illustration, but are not limited to, the printing of the Shares'
prospectus or prospectuses for distribution to prospective purchasers
or to owners of existing Policies not funded by such Shares.
3.5. The Trust hereby notifies the Company that it may be appropriate
to include in the prospectus pursuant to which a Policy is offered
disclosure regarding the potential risks of mixed and shared funding.
3.6. If and to the extent required by law, the Company shall:
(a) solicit voting instructions from Policy owners;
(b) vote the Shares in accordance with instructions
received from Policy owners; and
(c) vote the Shares for which no instructions have been
received in the same proportion as the Shares of such
Portfolio for which instructions have been received
from Policy owners;
so long as and to the extent that the SEC continues to interpret the
1940 Act to require pass through voting privileges for variable
contract owners. The Company will in no way recommend action in
connection with or oppose or interfere with the solicitation of proxies
for the Shares held for such Policy owners. The Company reserves the
right to vote shares held in any segregated asset account in its own
right to, the extent permitted by law. Participating Insurance
Companies shall be responsible for assuring that each of their separate
accounts holding Shares calculates voting privileges in the manner
required by the Mixed and Shared Funding Exemptive Order. The Trust and
MFS will notify the Company of any changes of interpretations or
amendments to the Mixed and Shared Funding Exemptive Order.
ARTICLE IV. SALES MATERIAL AND INFORMATION
------------------------------
4.1. The Company shall furnish, or shall cause to be furnished, to the
Trust or its designee, each piece of sales literature or other
promotional material in which the Trust, MFS, any other investment
adviser to the Trust, or any affiliate of MFS are named, at least three
(3) Business Days prior to its use. No such material shall be used if
the Trust, MFS, or their respective designees reasonably objects to
such use within three (3) Business Days after receipt of such material.
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<PAGE>
4.2. The Company shall not give any information or make any
representations or statement on behalf of the Trust, MFS, any other
investment adviser to the Trust, or any affiliate of MFS or concerning
the Trust or any other such entity in connection with the sale of the
Policies other than the information or representations contained in the
registration statement, prospectus or statement of additional
information for the Shares, as such registration statement, prospectus
and statement of additional information may be amended or supplemented
from time to time, or in reports or proxy statements for the Trust, or
in sales literature or other promotional material approved by the
Trust, MFS or their respective designees, except with the permission of
the Trust, MFS or their respective designees. The Trust, MFS or their
respective designees each agrees to respond to any request for approval
on a prompt and timely basis. The Company shall adopt and implement
procedures reasonably designed to ensure that information concerning
the Trust, MFS or any of their affiliates which is intended for use
only by brokers or agents selling the Policies (i.e. information that
is not intended for distribution to Policy holders or prospective
Policy holders) is so used, and neither the Trust, MFS nor any of their
affiliates shall be liable for any losses, damages or expenses relating
to the improper use of such broker only materials.
4.3. The Trust or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company and/or
the Accounts is named, at least three (3) Business Days prior to its
use. No such material shall be used if the company or its designee
reasonably objects to such use within three (3) Business Days after
receipt of such material.
4.4. The Trust and MFS shall not give, and agree that the Underwriter
shall not give, any information or make any representations on behalf
of the Company or concerning the Company, the Accounts, or the Policies
in connection with the sale of the Policies other than the information
or representations contained in a registration statement, prospectus,
or statement of additional information for the Policies, as such
registration statement, prospectus and statement of additional
information may be amended or supplemented from time to time, or in
reports for the Accounts, or in sales literature or other promotional
material approved by the Company or its designee, except with the
permission of the Company. The Company or its designee agrees to
respond to any request for approval on a prompt and timely basis. The
parties hereto agree that this Section 4.4. is neither intended to
designate nor otherwise imply that MFS is an underwriter or distributor
of the Policies.
4.5. The Company and the Trust (or its designee in lieu of the Company
or the Trust, as appropriate) will each provide to the other at least
one complete copy of all registration statements, prospectuses,
statements of additional information, reports, proxy statements, sales
literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any
of the above, that relate to the Policies, or to the Trust or its
Shares, prior to or contemporaneously with the filing of such document
with the SEC or other regulatory authorities. The Company and the Trust
shall also each promptly inform the other or the results of any
examination by the SEC (or other regulatory authorities) that relates
to the Policies, the Trust or its Shares, and the party that was the
subject of the examination shall provide the other party with a copy of
relevant portions of any "deficiency letter" or other correspondence or
written report regarding any such examination.
4.6. The Trust and MFS will provide the Company with as much notice as
is reasonably practicable of any proxy solicitation for any Portfolio,
and of any material change in the Trust's registration statement,
particularly any change resulting in change to the registration
statement or prospectus or statement of additional information for any
Account. The Trust and MFS will cooperate with the Company so as to
enable the Company to solicit proxies from Policy owners or to make
changes to its prospectus, statement of additional information or
registration statement, in an orderly manner. The Trust and MFS will
make reasonable efforts to attempt to have changes affecting Policy
prospectuses become effective simultaneously with the annual updates
for such prospectuses.
6
<PAGE>
4.7. For Purpose of this Article IV and Article VIII, the phrase "sales
literature or other promotional material" includes but is not limited
to advertisements (such as material published, or designed for use in,
a newspaper, magazine, or other periodical, radio, television,
telephone or tape recording, videotape display, signs or billboards,
motion pictures, or other public media), and sales literature (such as
brochures, circulars, reprints or excerpts or any other advertisement,
sales literature, or published articles), distributed or made generally
available to customers or the public, educational or training materials
or communications distributed or made generally available to some or
all agents or employees.
ARTICLE V. FEES AND EXPENSES
-----------------
5.1. The Trust shall pay no fee or other compensation to the Company
under this Agreement, and the Company shall pay no fee or other
compensation to the Trust, except that if the Trust or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 under the 1940 Act
to finance distribution and Shareholder servicing expenses, then,
subject to obtaining any required exemptive orders or regulatory
approvals, the Trust may make payments to the Company or to the
underwriter for the Policies if and in amounts agreed to by the Trust
in writing. Each party, however, shall, in accordance with the
allocation of expenses specified in Articles III and V hereof,
reimburse other parties for expense initially paid by one party but
allocated to another party. In addition, nothing herein shall prevent
the parties hereto from otherwise agreeing to perform, and arranging
for appropriate compensation for, other services relating to the Trust
and/or to the Accounts.
5.2. The Trust or its designee shall bear the expenses for the cost of
registration and qualification of the Shares under all applicable
federal and state laws, including preparation and filing of the Trust's
registration statement, and payment of filing fees and registration
fees; preparation and filing of the Trust's proxy materials and reports
to Shareholders; setting in type and printing its prospectus and
statement of additional information (to the extent provided by and as
determined in accordance with Article III above); setting in type and
printing the proxy materials and reports to Shareholders (to the extent
provided by and as determined in accordance with Article III above);
the preparation of all statements and notices required of the Trust by
any federal or state law with respect to its Shares; all taxes on the
issuance or transfer of the Shares; and the costs of distributing the
Trust's prospectuses and proxy materials to owners of Policies funded
by the Shares and any expenses permitted to be paid or assumed by the
Trust pursuant to a plan, if any, under Rule 12b-1 under the 1940 Act.
The Trust shall not bear any expenses of marketing the Policies.
5.3. The Company shall bear the expenses of distributing the Shares'
prospectus or prospectuses in connection with new sales of the Policies
and of distributing the Trust's Shareholder reports and proxy materials
to Policy owners. The Company shall bear all expenses associated with
the registration, qualification, and filing of the Policies under
applicable federal securities and state insurance laws; the cost of
preparing, printing and distributing the Policy prospectus and
statement of additional information; and the cost of preparing,
printing and distributing annual individual account statements for
Policy owners as required by state insurance laws.
5.4. MFS will quarterly reimburse Ameritas certain of the
administrative costs and expenses incurred by Ameritas as a result of
operations necessitated by shareholder ownership of the Portfolios in
the Trust, computed as follows:
(a) 0.05% of the aggregate net assets of the Trust up to
$50 million that Ameritas Policy holders allocate to
the Portfolios;
(b) 0.10% of the aggregate net assets of the Trust from
$50 million but not exceeding $100 million that
Ameritas Policy holders allocate to the Portfolios;
(c) 0.20% of the aggregate net assets of the Trust over
$100 million that Ameritas Policy holders allocate to
the Portfolios.
7
<PAGE>
In no event shall such fee be paid by the Trust, its shareholders or
by the Policy holders.
ARTICLE VI. DIVERSIFICATION AND RELATED LIMITATIONS
---------------------------------------
6.1. The Trust and MFS represent and warrant that each Portfolio of the
Trust will meet the diversification requirements of Section 817(h)(1)
of the Code and Treas. Reg. 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance
contracts, as they may be amended from time to time (and any revenue
rulings, revenue procedures, notices, and other published announcements
of the Internal Revenue Service interpreting these sections), as if
those requirements applied directly to each such Portfolio. In the
event that any Portfolio is not so diversified at the end of any
applicable quarter, the Trust and MFS will make every effort to (a)
adequately diversify the Portfolio so as to achieve compliance within
the grace period afforded by Treas. Reg. 1.817.5 and (b) notify the
Company.
ARTICLE VII. POTENTIAL MATERIAL CONFLICTS
----------------------------
7.1. The Trust agrees that the Board, constituted with a majority of
disinterested trustees, will monitor each Portfolio of the Trust for
the existence of any material irreconcilable conflict between the
interests of the variable annuity contract owners and the variable life
insurance policy owners of the Company and/or affiliated companies
("contract owners") investing in the Trust. The Board shall have the
sole authority to determine if a material irreconcilable conflict
exists, and such determination shall be binding on the Company only if
approved in the form of a resolution by a majority of the Board, or a
majority of the disinterested trustees of the Board. The Board will
give prompt notice of any such determination to the Company.
7.2. The Company agrees that it will be responsible for assisting the
Board in carrying out its responsibilities under the conditions set
forth in the Trusts' exemptive application pursuant to which the SEC
has granted the Mixed and Shared Funding Exemptive Order by providing
the Board, as it may reasonably request, with all information necessary
for the Board to consider any issues raised and agrees that it will be
responsible for promptly reporting any potential or existing conflicts
of which it is aware to the Board including, but not limited to, an
obligation by the Company to inform the Board whenever contract owner
voting instructions are disregard. The Company also agrees that, if a
material irreconcilable conflict arises, it will at is own cost remedy
such conflict up to an including (a) withdrawing the assets allocable
to some or all of the Accounts from the Trust or any Portfolio and
reinvesting such assets in a different investment medium, including
(but not limited to) another Portfolio of the Trust, or submitting to a
vote of all affected contract owners whether to withdraw assets from
the Trust or any Portfolio and reinvesting such assets in a different
investment medium and, as appropriate, segregating the assets
attributable to any appropriate group of contract owners that votes in
favor of such segregation, or offering to any of the affected contract
owners the option of segregating the assets attributable to their
contracts or policies, and (b) establishing a new registered management
investment company and segregating the assets underlying the Policies,
unless a majority of Policy owners materially adversely affected by the
conflict have voted to decline the offer to establish a new registered
management investment company.
7.3. A majority of the disinterested trustees of the Board shall
determine whether any proposed action by the Company adequately
remedies any material irreconcilable conflict. In the event that the
Board determines that any proposed action does not adequately remedy
any material irreconcilable conflict, the Company will withdraw from
investment in the Trust each of the Accounts designated by the
disinterested trustees and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination
shall be limited to the extent required to remedy any such material
irreconcilable conflict as determined by a majority of the
disinterested trustees of the Board.
8
<PAGE>
7.4. If and to the extent that rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision
of the 1940 Act or the rules promulgated thereunder with respect to
mixed or shares funding (as defined in the Mixed and Shared Funding
Exemptive Order) on terms and conditions materially different from
those contained in the Mixed Shared Funding Exemptive Order, then (a)
the Trust and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rule 6e-2 and
6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable; and (b) Sections 3.5, 3.6, 7.1, 7.2, 7.3 and 7.4
of this Agreement shall continue in effect only to the extent that
terms and conditions substantially identical to such Sections are
contained in such Rule(s) as so amended or adopted. .
ARTICLE VIII. INDEMNIFICATION
---------------
8.1. Indemnification by the Company
The Company agrees to indemnify and hold harmless the Trust, MFS, any
affiliates of MFS, and each of their respective directors/trustees,
officers and each person, if any, who controls the Trust or MFS within
the meaning of Section 15 of the 1933 Act, and any agents or employees
of the foregoing (each an "Indemnified Party," or collectively, the
"Indemnified Parties" for purposes of this Section 8. 1) against any
and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company) or expenses
(including reasonable counsel fees) to which an Indemnified Party may
become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to
the sale or acquisition of the Shares or the Policies and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, prospectus or statement of additional
information for the Policies or contained in the Policies or
sales literature or other promotional material for the
Policies (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the commission
or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading provided that this agreement
to indemnify shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or
omission was made in reasonable reliance upon and in
conformity with information furnished to the Company or its
designee by or on behalf of the Trust or MFS for use in the
registration statement, prospectus or statement of additional
information for the Policies or in the Policies or sales
literature or other promotional material (or any amendment or
supplement) or otherwise for use in connection with the sale
of the Policies or Shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional material
of the Trust not supplied by the Company or this designee, or
persons under its control and on which the Company has
reasonably relied) or wrongful conduct of the Company or
persons under its control, with respect to the sale or
distribution of the Policies or Shares; or
(c) arise out of any untrue statement or alleged untrue statement
of a material fact contained in the registration statement,
prospectus, statement of additional information, or sales
literature or other promotional literature of the Trust, or
any amendment thereof or supplement thereto, or the omission
or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement or
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to
the Trust by or on behalf of the Company; or
9
<PAGE>
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company; or
(e) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this
Agreement;
as limited by and in accordance with the provisions of this
Article VIII.
8.2. Indemnification by the Trust
----------------------------
The Trust agrees to indemnify and hold harmless the company,
any of its affiliates and each of its directors and officers and each
person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act, and any agents or employees of the foregoing (each
an "Indemnified Party," or collectively, the "Indemnified Parties" for
purposes of this Section 8.2) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the
written consent of the Trust) or expenses (including reasonable counsel
fees) to which any Indemnified Party may become subject under any
statute, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Shares or the
Policies and:
(a) arise out of or are based upon any untrue statement or,
alleged untrue statement of any material fact contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional material
of the Trust (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement
therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reasonable reliance upon and in conformity with
information furnished to the Trust, MFS, the Underwriter or
their respective designees by or on behalf of the Company for
use in the registration statement, prospectus or statement of
additional information for the Trust or in sales literature or
other promotional material for the Trust (or any amendment or
supplement) or otherwise for use in connection with the sale
of the Policies or Shares; or
(b) arise out of or as a result of statements or representations
(other than statement or representations contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional material
for the Policies not supplied by the Trust, MFS the
Underwriter or any of their respective designees or persons
under their respective control and on which any such entity
has reasonably relied) or wrongful conduct of the Trust or
persons under its control, with respect to the sale or
distribution of the Policies or Shares; or
(c) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement (including a failure, whether unintentional or in
good faith or otherwise, to comply with the diversification
requirements specified in Article VI of this Agreement) or
arise out of or result from any other material breach of this
Agreement by the Trust; or
(d) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset value
per share or dividend or capital gain distribution rate; or
10
<PAGE>
(e) arise as a result of any failure by the Trust to provide the
services and furnish the materials under the terms of the
Agreement;
as limited by and in accordance with the provisions of this
Article VIII.
8.3. In no event shall the Trust be liable under the indemnification
provisions contained in this Agreement to any individual or entity,
including without limitation, the Company, or any Participating
Insurance Company or any Policy holder, with respect to any losses,
claims, damages, liabilities or expenses that arise out of or result
from (i) a breach of any representation, warranty, and/or covenant made
by the Company hereunder or by any Participating Insurance Company
under an agreement containing substantially similar representations,
warranties and covenants; (ii) the failure by the Company or any
Participating Insurance Company to maintain its segregated asset
account (which invests in any Portfolio) as a legally and validly
established segregated asset account under applicable state law and as
a duly registered unit investment trust under the provisions of the
1940 Act (unless exempt therefrom); or (iii) the failure by the Company
or any Participating Insurance Company to maintain its variable annuity
and/or variable life insurance contracts (with respect to which any
Portfolio serves as an underlying funding vehicle) as life insurance,
endowment or annuity contracts under applicable provisions of the Code.
8.4. Neither the Company nor the Trust shall be liable under the
indemnification provisions contained in this Agreement with respect to
any losses, claims, damages, liabilities or expenses to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, willful misconduct, or gross
negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations
and duties under this Agreement.
8.5. Promptly after receipt by an Indemnified Party under this Section
8.5. of commencement of action, such Indemnified Party will, if a claim
in respect thereof is to be made against the indemnifying party under
this section, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any Indemnified
Party otherwise than under this section. In case any such action is
brought against any Indemnified Party, and it notified the indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish,
assume the defense thereof, with counsel satisfactory to such
Indemnified Party. After notice from the indemnifying party of its
intention to assume the defense of an action, the Indemnified Party
shall bear the expenses of any additional counsel obtained by it, and
the indemnifying party shall not be liable to such Indemnified Party
under this section for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation.
8.6. Each of the parties agrees promptly to notify the other parties of
the commencement of any litigation or proceeding against it or any of
its respective officers, directors, trustees, employees or 1933 Act
control persons in connection with the Agreement, the issuance or sale
of the Policies, the operation of the Accounts, or the sale or
acquisition of Shares.
8.7. A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Article VIII. The indemnification provisions contained in this Article
VIII shall survive any termination of this Agreement.
ARTICLE IX. APPLICABLE LAW
--------------
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
11
<PAGE>
9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant and the terms hereof shall be
interpreted and construed in accordance therewith.
ARTICLE X. NOTICE OF FORMAL PROCEEDINGS
----------------------------
The Trust, MFS, and the Company agree that each such party shall
promptly notify the other parties to this Agreement, in writing, of the
institution of any formal proceedings brought against such party or its
designees by the NASD, the SEC, or any insurance department or any other
regulatory body regarding such party's duties under this Agreement or related to
the sale of the Policies, the operation of the Accounts, or the purchase of the
Shares.
ARTICLE XI. TERMINATION
-----------
11.1. This Agreement shall terminate with respect to the Accounts,
or one, some, or all Portfolios:
(a) at the option of any party upon six (6) months'
advance written notice to the other parties; or
(b) at the option of the Company at such time as
specified by the Company to the extent that the
Shares of Portfolios are not reasonably available to
meet the requirements of the Policies or are not
"appropriate funding vehicles" for the Policies, as
reasonably determined by the Company. Without
limiting the generality of the foregoing, the Shares
of a Portfolio would not be "appropriate funding
vehicles" if, for example, such Shares did not meet
the diversification or other requirements referred to
in Article VI hereof; or if the Company would be
permitted to disregard Policy owner voting
instructions pursuant to Rule 6e-2 or 6e-3(T) under
the 1940 Act. Prompt notice of the election to
terminate for such cause and an explanation of such
cause shall be furnished to the Trust by the Company;
or
(c) at the option of the Trust or MFS upon institution of
formal proceedings against the Company by the NASD,
the SEC, or any insurance department or any other
regulatory body regarding the Company's duties under
this Agreement or related to the sale of the
Policies, the operation of the Accounts, or the
purchase of the Shares; or
(d) at the option of the Company upon institution of
formal proceedings against the Trust by the NASD, the
SEC, or any state securities or insurance department
or any other regulatory body regarding the Trust's or
MFS' duties under this Agreement or related to the
sale of the shares; or
(e) at the option of the Company, the Trust or MFS upon
receipt of any necessary regulatory approvals and/or
the vote of the Policy owners having an interest in
the Accounts (or any subaccounts) to substitute the
shares of another investment company for the
corresponding Portfolio Shares in accordance with the
terms of the Policies for which those Portfolio
Shares had been selected to serve as the underlying
investment media. The Company will give thirty (30)
day's prior written notice to the Trust of the Date
of any proposed vote or other action taken to replace
the Shares; or
(f) termination by either the Trust or MFS by written
notice to the Company, if either one or both of the
Trust or MFS respectively, shall determine, in their
sole judgment exercised in good faith, that the
Company has suffered a material adverse change in its
business, operations, financial condition, or
prospects since the date of this Agreement or is the
subject of material adverse publicity; or
12
<PAGE>
(g) termination by the Company by written notice to the
Trust and MFS, if the Company shall determine, in its
sole judgment exercised in good faith, that the Trust
or MFS has suffered a material adverse change in this
business, operations, financial condition or
prospects since the date of this Agreement or is the
subject of material adverse publicity; or
(h) at the option of any party to this Agreement, upon
another party's material breach of any provision of
this Agreement; or
(i) upon assignment of this Agreement, unless made with
the written consent of the parties hereto; provided
however, that an assignment by the Company to a
wholly-owned subsidiary of the Company or to the
parent of the Company shall not be deemed to be an
assignment for purposes of this paragraph and shall
not require the consent of the parties hereto.
11.2. The notice shall specify the Portfolio or Portfolios, Policies
and, if applicable, the Accounts as to which the Agreement is to be
terminated.
11.3. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 11.1 (a) may be exercised
for cause or for no cause.
11.4. Except as necessary to implement Policy owner initiated
transactions, or as required by state insurance laws or regulations,
the Company shall not redeem the Shares attributable to the Policies
(as opposed to the Shares attributable to the Company's assets held in
the Accounts), and the Company shall not prevent Policy owners from
allocating payments to a Portfolio that was otherwise available under
the Policies, until thirty (30) days after the Company shall have
notified the Trust of its intention to do so.
11.5. Notwithstanding any termination of this Agreement, the Trust and
MFS shall, at the option of the Company, continue to make available
additional shares of the Portfolios pursuant to the terms and
conditions of this Agreement, for all Policies in effect on the
effective date of termination of this Agreement (the "Existing
Policies"), except as otherwise provided under Article VII of this
Agreement. Specifically, without limitation, the owners of the Existing
Policies shall be permitted to transfer or reallocate investment under
the Policies, redeem investments in any Portfolio and/or invest in the
Trust upon the making of additional purchase payments under the
Existing Policies.
ARTICLE XII. NOTICES
-------
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
13
<PAGE>
If to the Trust:
MFS VARIABLE INSURANCE TRUST
500 Boylston Street
Boston, Massachusetts 02116
Attn: Stephen E. Cavan, Secretary
If to the Company:
AMERITAS VARIABLE LIFE INSURANCE COMPANY
One Ameritas Way
P.O. Box 81889
5900 "O" Street
Lincoln, Nebraska 68510
Attn: Kenneth L. Louis, President and Chief Operating Officer
If to MFS:
MASSACHUSETTS FINANCIAL SERVICES COMPANY
500 Boylston Street
Boston, Massachusetts 02116
Attn: Stephen E. Cavan, General Counsel
ARTICLE XIII. MISCELLANEOUS
-------------
13.1. Subject to the requirement of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the owners of the Policies and all information reasonably
identified as confidential in writing by any other party hereto and,
except as permitted by this Agreement or as otherwise required by
applicable law or regulation, shall not disclose, disseminate or
utilize such names and addresses and other confidential information
without the express written consent of the affected party until such
time as it may come into the public domain.
13.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
13.3. This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together shall constitute one and the
same instrument.
13.4. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
13.5. The Schedule attached hereto, as modified from time to time, is
incorporated herein by reference and is part of this Agreement.
13.6. Each party hereto shall cooperate with each other party in
connection with inquiries by appropriate governmental authorities
(including without limitation the SEC, the NASD, and state insurance
regulators) relating to this Agreement or the transactions contemplated
hereby.
14
<PAGE>
13.8. A copy of the Trust's Declaration of Trust is on file with the
Secretary Of State of The Commonwealth of Massachusetts. The Company
acknowledges that the obligations of or arising out of this instrument
are not binding upon any of the Trust's trustees, officers, employees,
agents or shareholders individually, but are binding solely upon the
assets and property of the Trust in accordance with its proportionate
interest hereunder. The Company further acknowledges that the assets
and liabilities of each Portfolio are separate and distinct and that
the obligations of or arising out of this instrument are binding solely
upon the assets or property of the Portfolio on whose behalf the Trust
has executed this instrument. The Company also agrees that the
obligations of each Portfolio hereunder shall be several and not joint,
in accordance with its proportionate interest hereunder, and the
Company agrees not to proceed against any Portfolio for the obligations
of another Portfolio.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified above.
AMERITAS VARIABLE LIFE INSURANCE COMPANY
By its authorized officer,
/s/ Lawrence J. Arth
By: ____________________________
Title: Chairman of the Board
MFS VARIABLE INSURANCE TRUST, on behalf of
the Portfolios
By its authorized officer and not
individually,
/s/ A. Keith Brodkin
By: _______________________________
A. Keith Brodkin, Chairman
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By its authorized officer,
/s/ Arnold D. Scott
By: _______________________________
Arnold D. Scott
Senior Executive Vice President
15
<PAGE>
<TABLE>
<CAPTION>
As of _____________________
SCHEDULE A
ACCOUNTS, POLICIES AND PORTFOLIOS
SUBJECT TO THE PARTICIPATION AGREEMENT
Name of Separate Policies Funded MFS Portfolios
Account and Date by Separate Account Applicable to Policies
Established by Board of Directors
---------------------------------- -------------------- -----------------------
<S> <C> <C>
Ameritas Variable Life Insurance Univar* MFS Utilities
Company Separate Account V Overture Life (4001) MFS Emerging Growth
(est. 8-28-85) Overture Applause! (4010) MFS World Governments
Ameritas Variable Life Insurance Overture Annuity (4780) MFS Utilities
Company Separate Account VA-2 Overture Annuity II (4782) MFS Emerging Growth
(est. 5-28-87) Overture Annuity III (4784) MFS World Governments
* Univar policyholders will not be given the option of MFS Series portfolios in
their policies.
16
</TABLE>
<PAGE>
PARTICIPATION AGREEMENT
Among
MORGAN STANLEY UNIVERSAL FUNDS, INC.,
MORGAN STANLEY ASSET MANAGEMENT INC.
MILLER ANDERSON & SHERRERD, LLP
and
AMERITAS VARIABLE LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of the 7th day of October,
1996 by and among AMERITAS VARIABLE LIFE INSURANCE COMPANY (hereinafter the
"Company"), a corporation, on its own behalf and on behalf of each segregated
asset account of the Company set forth on Schedule A hereto as may be amended
from time to time (each such account hereinafter referred to as the "Account"),
and MORGAN STANLEY UNIVERSAL FUNDS, INC. (hereinafter the "Fund"), a Maryland
corporation, and MORGAN STANLEY ASSET MANAGEMENT INC. and MILLER ANDERSON &
SHERRERD, LLP (hereinafter collectively the "Advisers" and individually the
"Adviser"), a Delaware corporation and a Pennsylvania limited partnership,
respectively.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as (i) the investment vehicle for
separate accounts established for variable life insurance policies and variable
annuity contracts (collectively, the "Variable Insurance Products") to be
offered by insurance companies which have entered into participation agreements
with the Fund and the Advisers (hereinafter "Participating Insurance Companies")
and (ii) the investment vehicle for certain qualified pension and retirement
plans ("Qualified Plans"); and
WHEREAS, shares of the Fund are divided into several series of shares,
each representing the interest in a particular managed portfolio of securities
and other assets, any one or more of which may be made available under this
Agreement, as may be amended from time to time by mutual agreement of the
parties hereto (each such series hereinafter referred to as a "Portfolio"); and
compl/benej/particip.doc
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WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission (File No. 812-10118) granting Participating Insurance
Companies and variable annuity and variable life insurance separate accounts
exemptions from the provisions of Sections 9(a), 13(a), 15(a), and 15(b) of the
Investment Company Act of 1940, as amended (hereinafter the "1940 Act"), and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Fund to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
life insurance companies and Qualified Plans (hereinafter the "Shared Funding
Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, each Adviser is duly registered as an investment advisers
under the Investment Advisers Act of 1940, as amended, and any applicable state
securities laws; and
WHEREAS, each Adviser manages certain Portfolios of the Fund; and
WHEREAS, Morgan Stanley & Co. Incorporated (the "Underwriter") is
registered as a broker/dealer under the Securities Exchange Act of 1934, as
amended (hereinafter the "1934 Act"), is a member in good standing of the
National Association of Securities Dealers, Inc. (hereinafter "NASD") and serves
as principal underwriter of the shares of the Fund; and
WHEREAS, the Company has registered or will register certain Variable
Insurance Products under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to the aforesaid variable annuity contracts; and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on behalf
of each Account to fund certain of the aforesaid Variable Insurance Products and
the Underwriter is authorized to sell such shares to unit investment trusts such
as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Advisers agree as follows:
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<PAGE>
ARTICLE 1. Purchase of Fund Shares
-----------------------
1.1. The Fund agrees to make available for purchase by the Company
shares of the Fund and shall execute orders placed for each Account on a daily
basis at the net asset value next computed after receipt by the Fund or its
designee of such order. For purposes of this Section 1.1, the Company shall be
the designee of the Fund for receipt of such orders from each Account and
receipt by such designee shall constitute receipt by the Fund; provided that the
Company shall use its best efforts to notify the Fund of such order not later
than 10:00 a.m. Eastern time on the next following Business Day. "Business Day"
shall mean any day on which the New York Stock Exchange is open for trading and
on which the Fund calculates its net asset value pursuant to the rules of the
Securities and Exchange Commission.
1.2. The Fund, so long as this Agreement is in effect, agrees to make
its shares available indefinitely for purchase at the applicable net asset value
per share by the Company and its Accounts on those days on which the Fund
calculates its net asset value pursuant to rules of the Securities and Exchange
Commission and the Fund shall use reasonable efforts to calculate such net asset
value on each day which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Directors of the Fund (hereinafter
the "Board") may refuse to permit the Fund to sell shares of any Portfolio to
any person, or suspend or terminate the offering of shares of any Portfolio if
such action is required by law or by regulatory authorities having jurisdiction
or is, in the sole discretion of the Board acting in good faith and in light of
their fiduciary duties under federal and any applicable state laws, necessary in
the best interests of the shareholders of such Portfolio.
1.3. The Fund agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts and to certain
Qualified Plans. No shares of any Portfolio will be sold to the general public.
1.4. The Fund will not make its shares available for purchase by any
insurance company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VII and Section 2.5 of Article II
of this Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's request, any
full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.5, the Company shall be the
3
<PAGE>
designee of the Fund for receipt of requests for redemption from each Account
and receipt by such designee shall constitute receipt by the Fund; provided that
the Fund receives notice of such request for redemption on the next following
Business Day.
1.6. The Company agrees that purchases and redemptions of Portfolio
shares offered by the then current prospectus of the Fund shall be made in
accordance with the provisions of such prospectus. The variable annuity
contracts and/or variable life insurance policies issued by the Company, under
which amounts may be invested in the Fund (the "Contracts"), are listed on
Schedule A attached hereto and incorporated herein by reference, as such
Schedule A may be amended from time to time by mutual written agreement of all
of the parties hereto. The Company will give the Fund and the Adviser 45 days
written notice of its intention to make available in the future, as a funding
vehicle under the Contracts, any other investment company.
1.7. The Company shall pay for Fund shares on the next Business Day
after an order to purchase Fund shares is made in accordance with the provisions
of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire.
For purposes of Section 2.10 and 2.11, upon receipt by the Fund of the federal
funds so wired, such funds shall cease to be the responsibility of the Company
and shall become the responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Fund's shares. The Company hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio. The
Company reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Fund shall notify
the Company of the number of shares so issued as payment of such dividends and
distributions.
1.10. The Fund or its custodian shall make the net asset value per
share for each Portfolio available to the Company on such business day as soon
as reasonably practical after the net asset value per share is calculated and
shall use its best efforts to make such net asset value per share available by
6:30 p.m. New York time. In the event that the Fund is unable to meet the 6:30
p.m. time stated herein, it shall provide additional time for the Company to
place orders for the purchase and redemption of Shares pursuant to Sections 1.1
and 1.5, respectively. Such additional time shall be equal to the additional
time which the Fund takes to make the net asset value available to the Company.
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<PAGE>
ARTICLE II. Representations and Warranties
------------------------------
2.1. The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established each
Account prior to any issuance or sale thereof as a segregated asset account
under NEB REV STAT ss.ss.44-402.01 and 44-402.05 and has registered or, prior to
any issuance or sale of the Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts.
2.2. The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Maryland and all
applicable federal and state securities laws and that the Fund is and shall
remain registered under the 1940 Act. The Fund shall amend the registration
statement for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its shares. The Fund
shall register and qualify the shares for sale in accordance with the laws of
the various states only if and to the extent deemed advisable by the Fund.
2.3. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.
2.4. The Company represents that the Contracts are currently treated as
life insurance policies or annuity contracts, under applicable provisions of the
Code and that it will make every effort to maintain such treatment and that it
will notify the Fund immediately upon having a reasonable basis for believing
that the Contracts have ceased to be so treated or that they might not be so
treated in the future.
2.5. The Fund represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, the Fund
undertakes to have a board of directors, a majority of whom are not interested
persons of the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
5
<PAGE>
2.6. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Fund represents that the Fund's investment policies, fees and
expenses are and shall at all times remain in compliance with the laws of the
State of Maryland and the Fund represents that their respective operations are
and shall at all times remain in material compliance with the laws of the State
of Maryland to the extent required to perform this Agreement.
2.7. The Fund represents that it is lawfully organized and validly
existing under the laws of the State of Maryland and that it does and will
comply in all material respects with the 1940 Act.
2.8. Each Adviser represents and warrants that it is and shall remain
duly registered in all material respects under all applicable federal and state
securities laws and that it will perform its obligations for the Fund in
compliance in all material respects with the laws of its state of domicile and
any applicable state and federal securities laws.
2.9. The Fund represents and warrants that its directors, officers,
employees, and other individuals/entities dealing with the money and/or
securities of the Fund are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the Fund in an
amount not less than the minimal coverage as required currently by Rule 17g-(1)
of the 1940 Act or related provisions as may be promulgated from time to time.
The aforesaid blanket fidelity bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
2.10. The Company represents and warrants that all of its directors,
officers, employees, dealing with the money and/or securities of the Fund are
(or at the time the Fund's Registration Statement is granted effectiveness will
be) and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage, in an amount not less than the minimal coverage as required
currently by entities subject to the requirements of Rule 17g-1 of the 1940 Act
or related provisions as may be promulgated from time to time. The aforesaid
Bond shall include coverage for larceny and embezzlement and shall be issued by
a reputable bonding company.
ARTICLE III. Prospectuses, Reports to Shareholders and Proxy Statements; Voting
------------------------------------------------------------------
3.1. The Fund or its designee shall provide the Company with as many
printed copies of the Fund's current prospectus and statement of additional
information as the Company may reasonably request. If requested by the Company,
in lieu of providing printed copies the Fund shall provide camera-ready film or
computer diskettes containing the Fund's prospectus and statement of additional
information, and such
6
<PAGE>
other assistance as is reasonably necessary in order for the Company once each
year (or more frequently if the prospectus and/or statement of additional
information for the Fund is amended during the year) to have the prospectus for
the Contracts and the Fund's prospectus printed together in one document, and to
have the statement of additional information for the Fund and the statement of
additional information for the Contracts printed together in one document.
Alternatively, the Company may print the Fund's prospectus and/or its statement
of additional information in combination with other fund companies' prospectuses
and statements of additional information.
3.2. Except as provided in this Section 3.2., all expenses of printing
and distributing Fund prospectuses and statements of additional information
shall be the expense of the Company. For prospectuses and statements of
additional information provided by the Company to its existing owners of
Contracts in order to update disclosure as required by the 1933 Act and/or the
1940 Act, the cost of printing shall be borne by the Fund. If the Company
chooses to receive camera-ready film or computer diskettes in lieu of receiving
printed copies of the Fund's prospectus, the Fund will reimburse the Company in
an amount equal to the product of A and B where A is the number of such
prospectuses distributed to owners of the Contracts, and B is the Fund's per
unit cost of typesetting and printing the Fund's prospectus. The same procedures
shall be followed with respect to the Fund's statement of additional
information. The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the Fund's
expenses do not include the cost of printing any prospectuses or statements of
additional information other than those actually distributed to existing owners
of the Contracts.
3.3. The Fund's prospectus shall state that the statement of
additional information for the Fund is obtainable from the Fund, the Company or
such other person as the Fund may designate.
3.4. The Fund, at its expense, shall provide the Company with copies of
its proxy statements, reports to shareholders, and other communications (except
for prospectuses and statements of additional information, which are covered in
section 3.1) to shareholders in such quantity as the Company shall reasonably
require for distributing to Contract owners.
3.5. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
7
<PAGE>
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of
such Portfolio for which instructions have been
received,
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund shares
held in any segregated asset account in its own right, to the extent permitted
by law. The Fund and the Company shall follow the procedures, and shall have the
corresponding responsibilities, for the handling of proxy and voting instruction
solicitations, as set forth in Schedule B attached hereto and incorporated
herein by reference. Participating Insurance Companies shall be responsible for
ensuring that each of their separate accounts participating in the Fund
calculates voting privileges in a manner consistent with the standards set forth
on Schedule B, which standards will also be provided to the other Participating
Insurance Companies.
3.6. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the Securities and Exchange Commission's interpretation of the
requirements of Section 16(a) with respect to periodic elections of directors
and with whatever rules the Commission may promulgate with respect thereto.
3.7. The Fund shall use reasonable efforts to provide Fund
prospectuses, reports to shareholders, proxy materials and other Fund
communications (or camera-ready equivalents) to the Company sufficiently in
advance of the Company's mailing dates to enable the Company to complete, at
reasonable cost, the printing, assembling and/or distribution of the
communications in accordance with applicable laws and regulations.
ARTICLE IV. Sales Material and Information
------------------------------
4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material in which the Fund or the Adviser(s) is named, at least ten Business
Days prior to its use. No such material shall be used if the Fund or its
designee reasonably objects to such use within ten Business Days after receipt
of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of
8
<PAGE>
the Contracts other than the information or representations contained in the
registration statement or prospectus for the Fund shares, as such registration
statement and prospectus may be amended or supplemented from time to time, or in
reports or proxy statements for the Fund, or in sales literature or other
promotional material approved by the Fund or its designee, except with the
permission of the Fund.
4.3. The Fund or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material in which the Company and/or its separate account(s)
is named at least ten Business Days prior to its use. No such material shall be
used if the Company or its designee reasonably objects to such use within ten
Business Days after receipt of such material.
4.4. The Fund and the Advisers shall not give any information or make
any representations on behalf of the Company or concerning the Company, each
Account, or the Contracts, other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Fund or its shares, contemporaneously
with the filing of such document with the Securities and Exchange Commission or
other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy of
all registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the investment
in the Fund under the Contracts, contemporaneously with the filing of such
document with the Securities and Exchange Commission or other regulatory
authorities.
4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars,
9
<PAGE>
research reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, and registration
statements, prospectuses, statements of additional information, shareholder
reports, and proxy materials.
ARTICLE V. Fees and Expenses
-----------------
5.1. The Fund shall pay no fee or other compensation to the Company
under this Agreement, except that if the Fund or any Portfolio adopts and
implements a plan pursuant to Rule 12b-1 to finance distribution expenses, then
the Underwriter may make payments to the Company or to the underwriter for the
Contracts if and in amounts agreed to by the Underwriter in writing.
5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state law,
and all taxes on the issuance or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of distributing the Fund's
prospectus, proxy statements, shareholder reports and other communications, and
reports to such Contract owners, except that the Fund shall bear the cost of
distributing any proxy materials initiated by the Fund or th Adviser.
ARTICLE IV. Diversification
---------------
6.1. The Fund will at all times invest money from the Contracts in such
a manner as to ensure that the Contracts will be treated as variable contracts
under the Code and the regulations issued thereunder. Without limiting the scope
of the foregoing, the Fund will at all times comply with Section 817(h) of the
Code and Treasury Regulation 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts and
any amendments or other modifications to such Section or Regulations. In the
event of a breach of this Article VI by the Fund, it will take all
10
<PAGE>
reasonable steps (a) to notify Company of such breach and (b) to adequately
diversify the Fund so as to achieve compliance within the grace period afforded
by Regulation 817-5.
ARTICLE VII. Potential Conflicts
-------------------
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by a Participating Insurance Company to disregard the voting
instructions of contract owners. The Board shall promptly inform the Company if
it determines that an irreconcilable material conflict exists and the
implications thereof.
7.2. The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order, by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.
7.3. If it is determined by a majority of the Board, or a majority of
its disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested directors), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account.
11
<PAGE>
7.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the Fund and terminate this Agreement with respect to such Account
(at the Company's expense); provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Until the end of the foregoing six month period, the Underwriter and Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies,
as appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of
this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
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<PAGE>
ARTICLE VIII. Indemnification
---------------
8.1. Indemnification By The Company
------------------------------
8.1(a) The Company agrees to indemnify and hold harmless the Fund and
each member of the Board and officers, and each Adviser and each director and
officer of each Adviser, and each person, if any, who controls the Fund or the
Adviser within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" and individually, "Indemnified Party," for purposes of
this Section 8.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Company)
or litigation (including legal and other expenses), to which the Indemnified
Parties may become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact contained in
the registration statement or prospectus for the Contracts or
contained in the Contracts or sales literature for the
Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the
Fund for use in the registration statement or prospectus for
the Contracts or in the Contracts or sales literature (or
any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares;
or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus or sales
literature of the Fund not supplied by the Company, or persons
under its control and other than statements or representations
authorized by the Fund or an Adviser) or unlawful conduct of
the Company or persons under its control, with respect to
the sale or distribution of the Contracts or Fund shares;
or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature of the
Fund or any amendment thereof or
13
<PAGE>
supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading
if such a statement or omission was made in reliance upon
and in conformity with information furnished to the Fund
by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials under the terms
of this Agreement; or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company, as limited by and in
accordance with the provisions of Sections 8.1(b) and 8.1(c)
hereof.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party
14
<PAGE>
independently in connection with the defense thereof other than reasonable
costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund shares or the Contracts or the operation
of the Fund.
8.2. Indemnification by the Advisers
-------------------------------
8.2(a). Each Adviser agrees, with respect to each Portfolio that it
manages, to indemnify and hold harmless the Company and each of its directors
and officers and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
and individually, "Indemnified Party," for purposes of this Section 8.2) against
any and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Adviser) or litigation (including
legal and other expenses) to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of shares of the Portfolio that it
manages or the Contracts and:
(i) arise out of or are
based upon any untrue statement or alleged
untrue statement of any material fact
contained in the registration statement or
prospectus or sales literature of the Fund
(or any amendment or supplement to any of
the foregoing), or arise out of or are based
upon the omission or the alleged omission to
state therein a material fact required to be
stated therein or necessary to make the
statements therein not misleading, provided
that this agreement to indemnify shall not
apply as to any Indemnified Party if such
statement or omission or such alleged
statement or omission was made in reliance
upon and in conformity with information
furnished to the Fund by or on behalf of the
Company for use in the registration
statement or prospectus for the Fund or in
sales literature (or any amendment or
supplement) or otherwise for use in
connection with the sale of the Contracts or
Portfolio shares; or
15
<PAGE>
(ii) arise out of or as a
result of statements or representations
(other than statements or representations
contained in the registration statement,
prospectus or sales literature for the
Contracts not supplied by the Fund or
persons under its control and other than
statements or representations authorized by
the Company) or unlawful conduct of the
Fund, Adviser(s) or Underwriter or persons
under their control, with respect to the
sale or distribution of the Contracts or
Portfolio shares; or
(iii) arise out of any
untrue statement or alleged untrue statement
of a material fact contained in a
registration statement, prospectus, or sales
literature covering the Contracts, or any
amendment thereof or supplement thereto, or
the omission or alleged omission to state
therein a material fact required to be
stated therein or necessary to make the
statement or statements therein not
misleading, if such statement or omission
was made in reliance upon information
furnished to the Company by or on behalf of
the Fund; or
(iv) arise as a result of
any failure by the Fund to provide the
services and furnish the materials under the
terms of this Agreement; or
(v) arise out of or result
from any material breach of any
representation and/or warranty made by the
Adviser in this Agreement or arise out of or
result from any other material breach of
this Agreement by the Adviser; as limited by
and in accordance with the provisions of
Sections 8.2(b) and 8.2(c) hereof.
8.2(b). An Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
8.2(c). An Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing
16
<PAGE>
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Adviser to such party of the Adviser's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Adviser will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.2(d). The Company agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.
8.3. Indemnification by the Fund
---------------------------
8.3(a). The Fund agrees to indemnify and hold harmless the Company,
and each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" and individually, "Indemnified Party," for purposes of
this Section 8.3) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Fund) or
litigation (including legal and other expenses) to which the Indemnified Parties
may become subject under any statute, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements result from the gross negligence, bad faith or willful
misconduct of the Board or any member thereof, are related to the operations of
the Fund and:
17
<PAGE>
(i) arise as a result of any failure by the Fund to
provide the services and furnish the materials under the terms
of this Agreement; or
(ii) arise out of or result from any material breach
of any representation and/or warranty made by the Fund in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Fund.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d). The Company agrees promptly to notify the Fund of the
commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the issuance
or sale of the Contracts, with respect to the operation of either Account, or
the sale or acquisition of shares of the Fund.
18
<PAGE>
ARTICLE IX. Applicable Law
--------------
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission may grant (including, but not limited to, the
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE X. Termination
-----------
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason by sixty
(60) days advance written notice delivered to
the other parties; or
(b) termination by the Company by written notice to
the Fund and the Adviser with respect to any
Portfolio based upon the Company's determination
that shares of such Portfolio is not reasonably
available to meet the requirements of the
Contracts; or
(c) termination by the Company by written notice to
the Fund and the Adviser with respect to any
Portfolio in the event any of the Portfolio's
shares are not registered, issued or sold in
accordance with applicable state and/or federal
law or such law precludes the use of such shares
as the underlying investment media of the
Contracts issued or to be issued by the Company;
or
(d) termination by the Company by written notice to
the Fund and the Adviser with respect to any
Portfolio in the event that such Portfolio
ceases to qualify as a Regulated Investment
Company under Subchapter M of the Code or under
any successor or similar provision, or if the
Company reasonably believes that the Fund may
fail to so qualify; or
19
<PAGE>
(e) termination by the Company by written notice to
the Fund and the Adviser with respect to any
Portfolio in the event that such Portfolio falls
to meet the diversification requirements
specified in Article VI hereof; or
(f) termination by either the Fund by written notice
to the Company if the Fund shall determine,
in its sole judgment exercised in good faith,
that the Company and/or its affiliated companies
has suffered a material adverse change in its
business, operations, financial condition or
prospects since the date of this Agreement or is
the subject of material adverse publicity, or
(g) termination by the Company by written notice to
the Fund and the Adviser, if the Company shall
determine, in its sole judgment exercised in
good faith, that either the Fund or the Adviser
has suffered a material adverse change in its
business, operations, financial condition or
prospects since the date of this Agreement or is
the subject of material adverse publicity; or
(h) termination by the Fund or the Adviser by written
notice to the Company, if the Company gives the
Fund and the Adviser the written notice specified
in Section 1.6 hereof and at the time such notice
was given there was no notice of termination
outstanding under any other provision of this
Agreement; provided, however any termination
under this Section 10.1(h) shall be effective
forty five (45) days after the notice specified
in Section 1.6 was given.
10.2. Effect of Termination. Notwithstanding any termination of this
Agreement, the Fund shall at the option of the Company, continue to make
available additional shares of the Fund pursuant to the terms and conditions of
this Agreement, for all Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing, Contracts").
Specifically, without limitation, the owners of the Existing Contracts shall be
permitted to direct reallocation of investments in the Fund, redemption of
investments in the Fund and/or investment in the Fund upon the making of
additional purchase payments under the Existing Contracts. The parties agree
that this Section 10.2 shall not apply to any terminations under Article VII and
the effect of such Article VII terminations shall be governed by Article VII of
this Agreement.
10.3. The Company shall not redeem Fund shares attributable to
the Contracts (as distinct from Fund shares attributable to the Company's assets
held in the Account) except (I) as necessary to implement Contract
20
<PAGE>
Owner initiated or approved transactions, or (ii) as required by state and/or
federal laws or regulations or judicial or other legal precedent of general
application (hereinafter referred to as a "Legally Required Redemption") or
(iii) as permitted by an order of the Securities and Exchange Commission
pursuant to Section 26(b) of the 1940 Act. Upon request, the Company will
promptly furnish to the Fund the opinion of counsel for the Company (which
counsel shall be reasonably satisfactory to the Fund) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the Contracts,
the Company shall not prevent Contract Owners from allocating payments to a
Portfolio that was otherwise available under the Contracts without first giving
the Fund 90 days prior written notice of its intention to do so.
compl/benej/particip.doc
21
<PAGE>
ARTICLE XI. Notices
-------
Any notice shall be sufficiently given when sent by registered or certified mail
to the other party at the address of such party set forth below or at such other
address as such party may from time to time specify in writing to the other
party.
If to the Fund:
Morgan Stanley Universal Funds, Inc.
1221 Avenue of the Americas
New York, New York 10020
Attention: Secretary
If to Adviser:
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
Attention: General Counsel
If to Adviser:
Miller Anderson & Sherrerd, LLP
One Tower Bridge
West Conshohocken, Pennsylvania 19428
Attention: Vice President, Morgan Stanley Universal
Funds, Inc.
If to the Company:
Ameritas Variable Life Insurance Company
5900 O Street
Lincoln, Nebraska 68510
Attention: Treasurer
ARTICLE XII. Miscellaneous
-------------
12.1. All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Board, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund.
22
<PAGE>
12.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.
12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the National Association of Securities
Dealers and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with the California
Insurance Regulations and any other applicable law or regulations.
12.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.8. This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto; provided, however, that an Adviser may
23
<PAGE>
assign this Agreement or any rights or obligations hereunder to any affiliate of
or company under common control with the Adviser, if such assignee is duly
licensed and registered to perform the obligations of the Adviser under this
Agreement.
12.9. The Company shall furnish, or shall cause to be furnished, to
the Fund or its designee copies of the following reports:
(a) the Company's annual statement (prepared under
statutory accounting principles) and annual report (prepared
under generally accepted accounting principles ("GAAP"), if
any), as soon as practical and in any event within 90 days
after the end of each fiscal year;
(b) the Company's quarterly statements (statutory) (and
GAAP, if any), as soon as practical and in any event within
45 days after the end of each quarterly period:
(c) any financial statement, proxy statement, notice or
report of the Company sent to stockholders and/or
policyholders, as soon as practical after the delivery
thereof to stockholders;
(d) any registration statement (without exhibits) and
financial reports of the Company filed with the Securities
and Exchange Commission or any state insurance regulator, as
soon as practical after the filing thereof;
(e) any other report submitted to the Company by
independent accountants in connection with any annual,
interim or special audit made by them of the books of the
Company, as soon as practical after the receipt thereof.
12.10. No provisions of this Agreement may be amended or modified in
any manner except by a written agreement properly executed by both parties. The
Company shall not unreasonably withhold consent to any such amendment requested
or required by the SEC.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified above.
24
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
By: ______________________________
/s/ Wayne Brewster
Name: ______________________________
Sr. VP. Var. Ins.
Title: ______________________________
MORGAN STANLEY UNIVERSAL FUNDS, INC.
/s/ Warren Olsen
By: ______________________________
Name: ______________________________
Title: ______________________________
MORGAN STANLEY ASSET MANAGEMENT INC.
/s/ Warren Olsen
By: ______________________________
Warren Olsen
Name: ______________________________
Principal
Title: ______________________________
MILLER ANDERSON & SHERRERD, LLP
/s/ Marne C. Whittington
By: ______________________________
Marne C. Whittington
Name: ______________________________
Managing Director
Title: _____________________________
compl/benej/particip.doc
25
<PAGE>
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS AND POLICIES
-------------------------------------------------------
Name of Separate Account and Form Number and Name of Contract or
Date Established by Board of Directors Policy Funded by Separate Account
- -------------------------------------- -----------------------------------
26
<PAGE>
SCHEDULE B
PROXY VOTING PROCEDURE
----------------------
The following is a list of procedures and corresponding responsibilities for the
handling of proxies and voting instructions relating to the Fund. The defined
terms herein shall have the meanings assigned in the Participation Agreement
except that the term "Company" shall also include the department or third party
assigned by the Company to perform the steps delineated below.
. The proxy proposals are given to the Company by the Fund as early as
possible before the date set by the Fund for the shareholder meeting
to enable the Company to consider and prepare for the solicitation of
voting instructions from owners of the Contracts and to facilitate the
establishment of tabulation procedures. At this time the Fund will
inform the Company of the Record, Mailing and Meeting dates. This will
be done verbally approximately two months before meeting.
Promptly after the Record Date, the Company will perform a "tape run",
or other activity, which will generate the names, addresses and number
of units which are attributed to each contract owner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for
account adjustments made after this date that could affect the status
of the Customers' accounts as of the Record Date.
Note:The number of proxy statements is determined by the activities
described in this Step #2. The Company will use its best efforts to
call in the number of Customers to the Fund , as soon as possible, but
no later than two weeks after the Record Date.
. The Fund's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of voting,
instruction solicitation material. The Fund will provide the last
Annual Report to the Company pursuant to the terms of Section 3.3 of
the Agreement to which this Schedule relates.
The text and format for the Voting Instruction Cards ("Cards" or
"Card") is provided to the Company by the Fund. The Company, at its
expense, shall produce and personalize the Voting Instruction Cards.
The Fund or its affiliate must approve the Card before it is printed.
Allow approximately 2-4 business days for printing information on
the Cards. Information commonly found on the Cards includes:
27
<PAGE>
. name (legal name as found on account registration)
. address
. fund or account number
. coding to state number of units
. individual Card number for use in tracking and verification of
votes (already on Cards as printed by the Fund).
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
. During this time, the Fund will develop, produce and pay for the Notice
of Proxy and the Proxy Statement (one document). Printed and folded
notices and statements will be sent to Company for insertion into
envelopes (envelopes and return envelopes are provided and paid for by
the Company). Contents of envelope sent to Customers by the Company
will include:
. Voting Instruction Card(s)
. One proxy notice and statement (one document)
. return envelope (postage pre-paid by Company) addressed to the
Company or its tabulation agent
. "urge buckslip" - optional, but recommended. (This is a small,
single sheet of paper that requests Customers to vote as
quickly as possible and that their vote is important. One
copy will be supplied by the Fund.)
. cover letter - optional, supplied by Company and reviewed and
approved in advance by the Fund.
The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company
reviews and approves the contents of the mailing package to ensure
correctness and completeness. Copy of this approval sent to the Fund.
Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
including,) the meeting, counting backwards.
Collection and tabulation of Cards begins. Tabulation usually takes
place in another department or another vendor depending on process
used. An often used procedure is to sort Cards on arrival by proposal
into vote categories of all yes, no, or mixed replies, and to begin
data entry.
28
<PAGE>
Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal procedure
and has not been required by the Fund in the past.
Signatures on Card checked against legal name on account registration
which was printed on the Card. Note: For Example, if the account
registration is under "John A. Smith, Trustee," then that is the exact
legal name to be printed on the Card and is the signature needed on the
Card.
If Cards are mutilated, or for any reason are illegible or are not
signed properly, they are sent back to Customer with an explanatory
letter and a new Card and return envelope. The mutilated or illegible
Card is disregarded and considered to be not received for purposes of
vote tabulation. Any Cards that have been "kicked out" (e.g. mutilated,
illegible) of the procedure are "hand verified," i.e., examined as to
why they did not complete the system. Any questions on those Cards are
usually remedied individually.
There are various control procedures used to ensure proper tabulation
of votes and accuracy of that tabulation. The most prevalent is to sort
the Cards as they first arrive into categories depending upon their
vote; an estimate of how the vote is progressing may then be
calculated. If the initial estimates and the actual vote do not
coincide, then an internal audit of that vote should occur. This may
entail a recount.
The actual tabulation of votes is done in units which is then converted
to shares. (It is very important that the Fund receives the tabulations
stated in terms of a percentage and the number of shares.) The Fund
must review and approve tabulation format.
Final tabulation in shares is verbally given by the Company to the Fund
on the morning of the meeting not later than 10:00 a.m. Eastern time.
The Fund may request an earlier deadline if reasonable and if required
to calculate the vote in time for the meeting.
A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final
vote. The Fund will provide a standard form for each Certification.
The Company will be required to box and archive the Cards received from
the Customers. In the event that any vote is challenged or if
otherwise necessary for legal, regulatory, or accounting purposes, the
Fund will be permitted reasonable access to such Cards.
29
<PAGE>
All approvals and "signing-off' may be done orally, but must always be
followed up in writing.
compl/benej/particip.doc
30
<PAGE>
SCHEDULE C
PORTFOLIO AND ADVISER NAMES
Asian Equity Portfolio Morgan Stanley Asset Management Inc.
Global Equity Portfolio Morgan Stanley Asset Management Inc.
International Magnum Portfolio Morgan Stanley Asset Management Inc.
U.S. Real Estate Portfolio Morgan Stanley Asset Management Inc.
Emerging Markets Equity Portfolio
31
<PAGE>
DESCRIPTION OF AMERITAS VARIABLE LIFE INSURANCE COMPANY'S (AVLIC'S)
METHOD OF COMPUTING EXCHANGE ADJUSTMENTS PURSUANT
TO RULE 6e-3(T)(B)(13)(V)(b) UNDER THE INVESTMENT
COMPANY ACT OF 1940
This document explains the method that AVLIC will use to compute cash values and
payments due when a flexible premium variable life insurance policy (the Policy)
is exchanged for a flexible premium adjustable life insurance policy (the new
policy) issued by AVLIC or one of its affiliated companies.
The policyowner may exchange the Policy while it is in force for a new policy on
the life of the Insured, without new evidence of insurability, at any time
within 24 months of the policy date shown on the schedule page of the Policy. To
make the exchange, the policyowner must send the Policy, a completed application
for exchange and any required payment to AVLIC's Home Office.
To make this exchange, no monthly deduction under the Policy can be unpaid
beyond a grace period; any outstanding debt on the policy must be repaid or
liquidated; any assignment must be released or continued on the new policy; and
any amount required to pay the first premium on the new policy and any cost for
exchange must be paid.
The new policy will have the same policy date, issue age and risk class of the
Insured as the Policy. The new policy will be a flexible premium adjustable life
insurance policy issued by AVLIC or its affiliates at the time of exchange. The
policy provisions and applicable charges for the new policy and its riders will
be the same as those which would have applied had the new policy been issued
originally.
The accumulation value of the new policy on the exchange date will equal the net
cash surrender value of the Policy on the valuation date immediately prior to
the exchange date plus the accumulation value provided by any net premium
credited to the new policy on the exchange date, less monthly deductions under
the new policy. If any loan was liquidated (i.e. remained unpaid at the time of
the exchange), the specified amount of the new policy will be reduced by the
amount of such liquidated loan.
The change will be effective on the valuation date next following the date all
financial and contractual arrangements for the new policy have been completed
and processed.
No further adjustments are made in values and payments upon an exchange.
<PAGE>
Ameritas Variable Life Insurance Company
5900 "O" Street, Lincoln, Nebraska
November 5, 1996
Ameritas Variable Life Insurance Company
5900 "O" Street
P.O. Box 81889
Lincoln, Nebraska 68501
Gentlemen:
With reference to the Registration Statement on Form S-6 filed by Ameritas
Variable Life Insurance Company and Ameritas Variable Life Insurance Company
Separate Account V with the Securities & Exchange Commission covering flexible
premium life insurance policies, I have examined such documents and such laws as
I considered necessary and appropriate, and on the basis of such examination, it
is my opinion that:
1. Ameritas Variable Life Insurance Company is duly organized and validly
existing under the laws of the State of Nebraska and has been duly
authorized by the Insurance Department of the State of Nebraska to
issue variable life policies.
2. Ameritas Variable Life Insurance Company Separate Account V is a duly
authorized and existing separate account established pursuant to the
provisions of Section 44-402.01 of the Statutes of the State of
Nebraska.
3. The flexible premium variable life policies, when issued as
contemplated by said Form S-6 Registration Statement, will constitute
legal, validly issued and binding obligations of Ameritas Variable Life
Insurance Company.
I hereby consent to the filing of this opinion as an exhibit to said Form S-6
Registration Statement and to the use of my name under the caption "Legal
Matters" in the Prospectus contained in the Registration Statement.
Sincerely,
/s/ Norman Krivosha
Norman Krivosha
Secretary and General Counsel
<PAGE>
Independent Auditors' Consent
We consent to the use in this Registration Statement on Form S-6 of Ameritas
Variable Life Insurance Company Separate Account V, of our reports dated
February 1, 1996 on the financial statements of Ameritas Variable Life Insurance
Company Separate Account V and Ameritas Variable Life Insurance Company
appearing in the Prospectus, which is a part of such registration statement, and
to the related reference to us under the heading "Experts." Our report on the
financial statements of Ameritas Variable Life Insurance Company refers to a
change in accounting method.
Deloitte & Touche LLP
/s/ Deloitte & Touche LLP
Lincoln, Nebraska
November 4, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 20
<NAME> V - MONEY MARKET
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 5,613,527
<INVESTMENTS-AT-VALUE> 5,613,527
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 5,613,527
<SHARES-COMMON-PRIOR> 6,247,662
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 5,613,527
<DIVIDEND-INCOME> 330,031
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 57,621
<NET-INVESTMENT-INCOME> 272,410
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 272,410
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 26,559,607
<NUMBER-OF-SHARES-REDEEMED> 27,193,742
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (634,135)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 21
<NAME> V - EQUITY INCOME
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 9,667,592
<INVESTMENTS-AT-VALUE> 12,572,494
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 652,439
<SHARES-COMMON-PRIOR> 410,159
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,904,902
<NET-ASSETS> 12,572,494
<DIVIDEND-INCOME> 223,698
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 89,161
<NET-INVESTMENT-INCOME> 134,537
<REALIZED-GAINS-CURRENT> 334,949
<APPREC-INCREASE-CURRENT> 2,148,655
<NET-CHANGE-FROM-OPS> 2,618,140
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 404,273
<NUMBER-OF-SHARES-REDEEMED> 161,993
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 242,279
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 22
<NAME> V - GROWTH
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 14,143,041
<INVESTMENTS-AT-VALUE> 20,504,133
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 702,196
<SHARES-COMMON-PRIOR> 569,981
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,361,092
<NET-ASSETS> 20,504,133
<DIVIDEND-INCOME> 71,778
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 160,505
<NET-INVESTMENT-INCOME> (88,728)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 4,664,368
<NET-CHANGE-FROM-OPS> 4,575,641
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 482,583
<NUMBER-OF-SHARES-REDEEMED> 350,368
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 132,215
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERNCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 23
<NAME> V - HIGH INCOME
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 3,703,023
<INVESTMENTS-AT-VALUE> 4,325,807
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 358,988
<SHARES-COMMON-PRIOR> 276,042
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 622,784
<NET-ASSETS> 4,325,807
<DIVIDEND-INCOME> 214,996
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 40,007
<NET-INVESTMENT-INCOME> 174,990
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 542,260
<NET-CHANGE-FROM-OPS> 717,250
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 659,795
<NUMBER-OF-SHARES-REDEEMED> 576,849
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 82,946
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 24
<NAME> V - OVERSEAS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 6,616,181
<INVESTMENTS-AT-VALUE> 7,483,491
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 438,914
<SHARES-COMMON-PRIOR> 316,187
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 867,310
<NET-ASSETS> 7,483,491
<DIVIDEND-INCOME> 19,894
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 60,098
<NET-INVESTMENT-INCOME> (40,204)
<REALIZED-GAINS-CURRENT> 19,894
<APPREC-INCREASE-CURRENT> 616,309
<NET-CHANGE-FROM-OPS> 595,999
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 535,442
<NUMBER-OF-SHARES-REDEEMED> 412,715
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 122,727
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 25
<NAME> V - INDEX 500
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 4,403
<INVESTMENTS-AT-VALUE> 4,639
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 61
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 236
<NET-ASSETS> 4,639
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 7
<NET-INVESTMENT-INCOME> (7)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 236
<NET-CHANGE-FROM-OPS> 229
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 292
<NUMBER-OF-SHARES-REDEEMED> 231
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 61
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 26
<NAME> V - CONTRAFUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 129,565
<INVESTMENTS-AT-VALUE> 129,293
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 9,383
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (272)
<NET-ASSETS> 129,293
<DIVIDEND-INCOME> 428
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 119
<NET-INVESTMENT-INCOME> 309
<REALIZED-GAINS-CURRENT> 856
<APPREC-INCREASE-CURRENT> (272)
<NET-CHANGE-FROM-OPS> 892
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,843
<NUMBER-OF-SHARES-REDEEMED> 1,460
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 9,383
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 27
<NAME> V - ASSET MANAGER GROWTH
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 14,071
<INVESTMENTS-AT-VALUE> 13,585
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,153
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (486)
<NET-ASSETS> 13,585
<DIVIDEND-INCOME> 117
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 25
<NET-INVESTMENT-INCOME> 92
<REALIZED-GAINS-CURRENT> 447
<APPREC-INCREASE-CURRENT> (486)
<NET-CHANGE-FROM-OPS> 53
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,233
<NUMBER-OF-SHARES-REDEEMED> 80
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,153
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 28
<NAME> V - ASSET MANAGER
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 16,521,707
<INVESTMENTS-AT-VALUE> 19,286,671
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,221,448
<SHARES-COMMON-PRIOR> 1,171,723
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,764,964
<NET-ASSETS> 19,286,671
<DIVIDEND-INCOME> 346,679
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 164,848
<NET-INVESTMENT-INCOME> 181,831
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 2,471,610
<NET-CHANGE-FROM-OPS> 2,653,441
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 546,123
<NUMBER-OF-SHARES-REDEEMED> 496,398
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 49,725
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 29
<NAME> V - INVESTMENT GRADE BOND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 2,013,214
<INVESTMENTS-AT-VALUE> 2,136,439
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 171,189
<SHARES-COMMON-PRIOR> 82,319
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 123,226
<NET-ASSETS> 2,136,439
<DIVIDEND-INCOME> 34,269
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 13,893
<NET-INVESTMENT-INCOME> 20,376
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 183,724
<NET-CHANGE-FROM-OPS> 204,100
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 128,356
<NUMBER-OF-SHARES-REDEEMED> 39,486
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 88,870
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 30
<NAME> V - SMALL CAPITALIZATION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 8,012,444
<INVESTMENTS-AT-VALUE> 10,377,502
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 263,322
<SHARES-COMMON-PRIOR> 156,147
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,365,058
<NET-ASSETS> 10,377,502
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 67,150
<NET-INVESTMENT-INCOME> (67,150)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 2,184,007
<NET-CHANGE-FROM-OPS> 2,116,857
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 194,346
<NUMBER-OF-SHARES-REDEEMED> 87,171
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 107,175
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 31
<NAME> V - ALGER GROWTH
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 3,672,555
<INVESTMENTS-AT-VALUE> 4,678,556
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 150,146
<SHARES-COMMON-PRIOR> 87,011
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,006,001
<NET-ASSETS> 4,678,556
<DIVIDEND-INCOME> 7,679
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 32,981
<NET-INVESTMENT-INCOME> (25,302)
<REALIZED-GAINS-CURRENT> 27,206
<APPREC-INCREASE-CURRENT> 924,176
<NET-CHANGE-FROM-OPS> 926,080
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 128,233
<NUMBER-OF-SHARES-REDEEMED> 65,098
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 63,135
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 32
<NAME> V - ALGER INCOME & GROWTH
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 790,984
<INVESTMENTS-AT-VALUE> 918,762
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 51,645
<SHARES-COMMON-PRIOR> 23,109
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 127,778
<NET-ASSETS> 918,762
<DIVIDEND-INCOME> 5,186
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 5,765
<NET-INVESTMENT-INCOME> (579)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 146,805
<NET-CHANGE-FROM-OPS> 146,226
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 39,661
<NUMBER-OF-SHARES-REDEEMED> 11,125
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 28,536
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENT AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 33
<NAME> V - ALGER MIDCAP GROWTH
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 2,229,077
<INVESTMENTS-AT-VALUE> 2,682,818
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 138,005
<SHARES-COMMON-PRIOR> 40,556
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 453,740
<NET-ASSETS> 2,682,818
<DIVIDEND-INCOME> 142
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 14,362
<NET-INVESTMENT-INCOME> (14,220)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 430,138
<NET-CHANGE-FROM-OPS> 415,918
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 132,197
<NUMBER-OF-SHARES-REDEEMED> 34,748
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 97,449
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 34
<NAME> V - ALGER BALANCED
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 391,329
<INVESTMENTS-AT-VALUE> 436,491
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 32,001
<SHARES-COMMON-PRIOR> 11,683
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 45,162
<NET-ASSETS> 436,491
<DIVIDEND-INCOME> 3,040
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,251
<NET-INVESTMENT-INCOME> 788
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 45,543
<NET-CHANGE-FROM-OPS> 46,332
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 36,086
<NUMBER-OF-SHARES-REDEEMED> 15,769
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 20,318
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 35
<NAME> V - ALGER LEVERAGED ALLCAP
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 99,893
<INVESTMENTS-AT-VALUE> 100,756
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 5,781
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 863
<NET-ASSETS> 100,756
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 57
<NET-INVESTMENT-INCOME> (57)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 863
<NET-CHANGE-FROM-OPS> 806
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,369
<NUMBER-OF-SHARES-REDEEMED> 589
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,781
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 36
<NAME> V - MFS EMERGING GROWTH
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 119,796
<INVESTMENTS-AT-VALUE> 118,158
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 10,356
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,638)
<NET-ASSETS> 118,158
<DIVIDEND-INCOME> 48
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 118
<NET-INVESTMENT-INCOME> (71)
<REALIZED-GAINS-CURRENT> 2,587
<APPREC-INCREASE-CURRENT> (1,638)
<NET-CHANGE-FROM-OPS> 878
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 18,376
<NUMBER-OF-SHARES-REDEEMED> 8,020
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 10,356
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 37
<NAME> V - MFS UTILITIES
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 19,793
<INVESTMENTS-AT-VALUE> 18,547
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,476
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,246)
<NET-ASSETS> 18,547
<DIVIDEND-INCOME> 518
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 10
<NET-INVESTMENT-INCOME> 508
<REALIZED-GAINS-CURRENT> 1,227
<APPREC-INCREASE-CURRENT> (1,246)
<NET-CHANGE-FROM-OPS> 489
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,867
<NUMBER-OF-SHARES-REDEEMED> 1,392
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,476
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORAMTION EXTRACTED FROM AMERITAS
VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 38
<NAME> V - MFS WORLD GOVERNMENT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 16,700
<INVESTMENTS-AT-VALUE> 15,815
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,555
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (886)
<NET-ASSETS> 15,815
<DIVIDEND-INCOME> 1,440
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 37
<NET-INVESTMENT-INCOME> 1,404
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (886)
<NET-CHANGE-FROM-OPS> 518
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,625
<NUMBER-OF-SHARES-REDEEMED> 70
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,555
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
