As filed with the Securities and Exchange Commission on
January 17, 1997
Registration No. 333-15585
======================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pre-Effective Amendment No. 1
-
to
Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
----------------
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
(EXACT NAME OF REGISTRANT)
----------------
AMERITAS VARIABLE LIFE INSURANCE COMPANY
5900 "O" Street
Lincoln, Nebraska 68510
----------------
NORMAN M. KRIVOSHA
Secretary and General Counsel
Ameritas Variable Life Insurance Company
5900 "O" Street
Lincoln, Nebraska 68510
-----------------
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>
RECONCILIATION 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 INSURANCE 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"); the 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. ("
MSAM"): 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............................... 47
Appendices............................................................. 64
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 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. AVLIC's current
minimum limitation is $45, $15 if paid by automatic bank draft. AVLIC currently
has no maximum limitation, other than the current maximum premium limitations
established by federal tax laws. AVLIC reserves the right to change any
limitation. 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. ("MSAM"): 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 47.
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 and the International Magnum
Portfolio of the Morgan Stanley Fund. 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 Emerging Markets Equity and
Asian Equity Portfolios of the Morgan Stanley Fund. The Emerging Markets Equity
Portfolio may also invest in non-investment grade, high risk debt securities and
securities of Russian companies. Investment in Russian companies 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 and the Global Equity
Portfolio of the Morgan Stanley Fund. 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 Seeks to achieve capital appreciation by
both well-known established companies and smaller, investing primarily in common stocks.
less-known companies, although the investments are
not restricted to any one type of security.
Dividend income will only be considered if it might
have an effect on stock values.
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 a dollar weighted average maturity consistent with the preservation of capital.
of less than ten years.
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 foreign and domestic stocks, bonds,
short-term instruments and other investments.
Index 500 2 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 of companies that
compose the Standard & Poor's 500. Also purchases compose the Standard & Poor's 500.
short-term debt securities for cash management
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 FUND
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. Except
during temporary defensive periods, the Portfolio will
invest 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, and except during temporary defensive periods, income to the extent consistent with prudent
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.
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 appear 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 MidCap 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 to 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
the portfolio's adviser believes 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 and emerging market countries, 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
FIDELITY
<S> <C> <C> <C>
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
MFS
<S> <C> <C> <C>
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,
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. MSAM 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.
---------------
ENCORE! 15
<PAGE>
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.
16 ENCORE!
<PAGE>
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
<PAGE>
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
<PAGE>
(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!
<PAGE>
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.
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
ENCORE! 21
<PAGE>
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. No other separate fee is
assessed when one of these options is chosen. 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.
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. AVLIC's current minimum limitation is $45, $15 if paid by
automatic bank draft. AVLIC currently has no maximum limitation, other than the
current maximum premium limitations established by federal tax laws. AVLIC
24 ENCORE!
<PAGE>
reserves the right to change any limitation. 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.)
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;
ENCORE! 25
<PAGE>
c. The Policy cannot be reinstated if it has been Surrendered for its full Net
Cash Surrender Value;
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 $1000
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 MSAM 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*
Director, 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; also serves as officer and/or director of other
affiliates of AmerUs Life Insurance Company.
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 Holdings,
Inc.; 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; also serves as officer and/or director of
other affiliates of AmerUs Life Insurance Company.
JOSEPH K. HAGGERTY, ASSISTANT GENERAL COUNSEL**** Senior Vice President and
General Counsel: AmerUs Life Holdings, Inc.; 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; also serves as officer of other
affiliates of AmerUs Life Insurance Company.
JAMES R. HAIRE, VICE PRESIDENT AND ACTUARY*
Vice President-Corporate Actuary : 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****
Senior 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****
Manager Annuity Services: 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 Holdings,
Inc.; 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; also serves as officer and/or director of other affiliates
of AmerUs Life Insurance Company.
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 (which report on AVLIC expresses an unqualified opinion and
includes an explanatory paragraph referring to a change in a reserving
practice), 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>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
----------------------------------------
SEPARATE ACCOUNT V
------------------
STATEMENT OF NET ASSETS
------------------------
SEPTEMBER 30, 1996
------------------
(UNAUDITED)
ASSETS
INVESTMENTS AT NET ASSET VALUE:
Variable Insurance Products Fund:
Money Market Portfolio - 7,743,563.320 shares at
$1.00 per share (cost $7,743,563) $ 7,743,563
Equity-Income Portfolio - 777,430.918 shares at
$19.72 per share (cost $12,071,439) 15,330,938
Growth Portfolio - 817,224.766 shares at
$30.51 per share (cost $17,490,984) 24,933,528
High Income Portfolio - 526,132.104 shares at
$12.26 per share (cost $5,656,914) 6,450,380
Overseas Portfolio - 560,690.020 shares at
$17.99 per share (cost $8,756,540) 10,086,813
Variable Insurance Products Fund II:
Asset Manager Portfolio - 1,323,342.414 shares at
$15.96 per share (cost $18,073,208) 21,120,545
Investment Grade Bond Portfolio - 191,476.587 shares at
$11.89 per share (cost $2,259,607) 2,276,657
Contrafund Portfolio - 124,964.505 shares at
$15.25 per share (cost $1,814,345) 1,905,709
Index 500 Portfolio - 13,260.424 shares at
$82.31 per share (cost $1,041,414) 1,091,464
Asset Manager: Growth Portfolio - 27,598.720 shares at
$12.68 per share (cost $338,922) 349,952
Alger American Fund:
Small Capitalization Portfolio - 331,916.674 shares at
$42.45 per share (cost $10,843,270) 14,089,863
Growth Portfolio - 212,178.400 shares at
$33.15 per share (cost $5,684,258) 7,033,714
Income and Growth Portfolio - 216,640.738 shares at
$7.83 per share (cost $2,259,434) 1,696,297
Midcap Growth Portfolio - 237,423.652 shares at
$21.00 per share (cost $4,268,578) 4,985,897
Balanced Portfolio - 88,150.169 shares at
$9.04 per share (cost $937,734) 796,878
Leveraged Allcap Portfolio - 43,648.022 shares at
$19.35 per share (cost $824,393) 844,589
Dreyfus Stock Index Fund:
Stock Index Fund Portfolio - 112,723.528 shares at
$18.99 per share (cost $1,606,495) 2,140,620
MFS Variable Insurance Trust:
Emerging Growth Series Portfolio - 117,237.864 shares at
$13.58 per share (cost $1,482,150) 1,592,090
World Governments Series Portfolio - 15,215.708 shares at
$10.34 per share (cost $154,878) 157,330
Utilities Series Portfolio - 19,335.967 shares at
$13.30 per share (cost $250,353) 257,168
------------------
NET ASSETS REPRESENTING EQUITY OF POLICYOWNERS $ 124,883,995
==================
The accompanying notes are an integral part of these financial statements.
44 ENCORE!
<PAGE>
<TABLE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
----------------------------------------
SEPARATE ACCOUNT V
------------------
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
--------------------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
---------------------------------------
(UNAUDITED)
1996 1995 1994
--------------------- -------------------- -------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received $ 1,704,985 $ 1,129,947 $ 675,044
EXPENSE
Charges to policyowners for assuming
mortality and expense risk 772,686 510,590 331,853
--------------------- -------------------- -------------------
INVESTMENT INCOME - NET 932,299 619,357 343,191
--------------------- -------------------- -------------------
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS - NET
Capital gain distributions received 4,074,160 382,368 1,399,228
Unrealized increase/(decrease) 3,375,136 15,004,742 (2,184,207)
--------------------- -------------------- -------------------
NET GAIN/(LOSS) ON INVESTMENTS 7,449,296 15,387,110 (784,979)
--------------------- -------------------- -------------------
NET INCREASE/(DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS 8,381,595 16,006,467 (441,788)
NET INCREASE IN NET ASSETS RESULTING
FROM PREMIUM PAYMENTS AND OTHER
OPERATING TRANSFERS 22,892,737 14,059,343 17,740,888
--------------------- -------------------- -------------------
TOTAL INCREASE IN NET ASSETS 31,274,332 30,065,810 17,299,100
NET ASSETS
Beginning of period 93,609,663 58,116,363 36,944,530
--------------------- -------------------- -------------------
End of period $ 124,883,995 $ 88,182,173 $ 54,243,630
===================== ==================== ===================
The accompanying notes are an integral part of these financial statements.
</TABLE>
ENCORE! 45
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
----------------------------------------
SEPARATE ACCOUNT V
------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
SEPTEMBER 30, 1996
------------------
(UNAUDITED)
A. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT 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 a newly formed holding company, AMAL Corporation, a
majority-owned affiliate 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 September 30, 1996, 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. BASIS OF PRESENTATION OF UNAUDITED INTERIM FINANCIAL STATEMENTS:
----------------------------------------------------------------
Management believes that all adjustments, consisting of only normal
recurring accruals, considered necessary for a fair presentation of
the unaudited interim financial statements have been included. The
results of operations for any interim period are not necessarily
indicative of results for the full year. The unaudited interim
financial statements should be read in conjunction with the audited
financial statements and notes thereto for the years ended December
31, 1995, 1994, and 1993.
46 ENCORE!
<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
ENCORE! 47
<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>
48 ENCORE!
<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>
ENCORE! 49
<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>
50 ENCORE!
<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>
ENCORE! 51
<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.
52 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:
---------------------------------------------------------------------
(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.
ENCORE! 53
<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>
54 ENCORE!
<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>
ENCORE! 55
<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.
56 ENCORE!
<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.
ENCORE! 57
<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.
58 ENCORE!
<PAGE>
<TABLE>
<CAPTION>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
----------------------------------------
BALANCE SHEETS
--------------
(in thousands, except shares)
(UNAUDITED)
September 30, December 31,
1996 1995
---------------- ---------------
ASSETS
Investments:
<S> <C> <C>
Bonds, at amortized cost $ 46,419 $ 38,753
Short-term investments 5,740 4,289
Loans on life insurance policies 3,786 2,639
---------------- ---------------
Total investments 55,945 45,681
Cash 929 1,371
Accrued investment income 877 790
Reinsurance recoverable - affiliates 148 57
Other assets 833 76
Separate Accounts 884,817 682,482
---------------- ---------------
$ 943,549 $ 730,457
================ ===============
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Life and annuity reserves $ 9,290 $ 28,740
Funds left on deposit with the company 114 87
Interest maintenance reserve 41 41
Accounts payables - affiliates 2,515 1,926
Income tax payable-affiliates 2,135 1,221
Accrued professional fees 28 20
Sundry current liabilities -
Cash with applications 1,943 1,305
Other 2,215 662
Valuation reserve 228 193
Separate Accounts 884,817 682,482
---------------- ---------------
903,326 716,677
---------------- ---------------
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 32,370 29,700
Retained Earnings (Deficit) 3,853 (19,920)
---------------- ---------------
40,223 13,780
---------------- ---------------
$ 943,549 $ 730,457
================ ===============
The accompanying notes are an integral part of these financial statements.
</TABLE>
ENCORE! 59
<PAGE>
<TABLE>
<CAPTION>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
----------------------------------------
STATEMENTS OF OPERATIONS
------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
-----------------------------------------------------
(in thousands)
--------------
(UNAUDITED)
1996 1995
------------ ------------
INCOME:
<S> <C> <C>
Premium income $ 206,818 $ 108,212
Less reinsurance:
Yearly renewable term (4,866) (3,780)
------------ ------------
Net premium income 201,952 104,432
Miscellaneous insurance income 4,103 3,389
Net investment income 2,471 2,628
------------ ------------
208,526 110,449
------------ ------------
EXPENSES:
Increase in reserves 3,406 1,279
Benefits to policyowners 34,317 23,313
Commissions 18,137 10,095
General insurance expenses 7,166 4,921
Taxes, licenses and fees 1,123 930
Net premium transferred to
Separate Accounts 140,562 68,609
------------ ------------
204,711 109,147
------------ ------------
Income before income taxes
and realized capital gains 3,815 1,302
Income taxes 2,316 947
------------ ------------
Income before realized capital gains 1,499 355
Realized capital loss, net (8) -
------------ ------------
Net income $ 1,491 $ 355
============ ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
60 ENCORE!
<PAGE>
<TABLE>
<CAPTION>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
----------------------------------------
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
---------------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
--------------------------------------------
AND THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
(in thousands, except shares)
-----------------------------
(UNAUDITED)
Additional Retained
Common Stock Paid in Earnings/
------------------------------
Shares Amount Capital (Deficit) Total
-------------- ------------ -------------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
BALANCE, January 1, 1995 40,000 $ 4,000 $ 29,700 $ (21,085) $ 12,615
Decrease in non-admitted assets - - - 5 5
Transfer to valuation reserve - - - (30) (30)
Change in reserving method - - - 1,618 1,618
Income Tax charged to surplus - - - (409) (409)
Net loss - - - (19) (19)
-------------- ------------ -------------- -------------- ----------------
BALANCE, December 31, 1995 40,000 4,000 29,700 (19,920) 13,780
Increase in non-admitted assets - - - (10) (10)
Transfer to valuation reserve - - - (35) (35)
Capital contribution from
AMAL Corporation - - 17,670 - 17,670
Change in reserving method - - - 22,840 22,840
Income Tax charged to surplus - - - (513) (513)
Return of capital - - (15,000) - (15,000)
Net gain - - - 1,491 1,491
-------------- ------------ -------------- -------------- ----------------
BALANCE, September 30, 1996 40,000 $ 4,000 $ 32,370 $ 3,853 $ 40,223
============== ============ ============== ============== ================
The accompanying notes are an integral part of these financial statements.
</TABLE>
ENCORE! 61
<PAGE>
<TABLE>
<CAPTION>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
----------------------------------------
STATEMENTS OF CASH FLOWS
------------------------
(in thousands)
(UNAUDITED)
Nine months
ended Year ended
9/30/96 12/31/95
---------------- ---------------
OPERATING ACTIVITIES:
<S> <C> <C>
Net premium income received $ 201,786 $ 153,867
Miscellaneous insurance income 4,135 4,201
Net investment income received 2,312 3,405
Net premium transferred to Separate Accounts (141,404) (105,654)
Benefits paid to policyowners (34,091) (31,200)
Commissions (15,412) (12,343)
Expenses and taxes (9,654) (10,664)
Net increase in policy loans (1,147) (1,041)
Income taxes (1,930) (987)
Other operating income and disbursements 1,325 1,978
---------------- ---------------
Net cash provided by (used in) operating activities 5,920 1,562
---------------- ---------------
INVESTING ACTIVITIES:
Maturity of bonds 7,418 3,713
Purchase of investments (14,999) (7,760)
---------------- ---------------
Net cash (used in) provided by investing activities (7,581) (4,047)
---------------- ---------------
FINANCING ACTIVITIES:
Capital contribution 17,670 -
Return of capital (15,000) -
---------------- ---------------
Net cash provided by financing activities 2,670 -
---------------- ---------------
NET INCREASE (DECREASE) IN CASH AND
SHORT TERM INVESTMENTS 1,009 (2,485)
CASH AND SHORT TERM INVESTMENTS -
BEGINNING OF PERIOD 5,660 8,145
---------------- ---------------
CASH AND SHORT TERM INVESTMENTS -
END OF PERIOD $ 6,669 $ 5,660
================ ===============
The accompanying notes are an integral part of these financial statements.
</TABLE>
62 ENCORE!
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY
----------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
--------------------------------------------
(in thousands)
(UNAUDITED)
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 a newly formed holding company, AMAL Corporation, a
majority-owned affiliate 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.
B. BASIS OF PRESENTATION OF UNAUDITED INTERIM FINANCIAL STATEMENTS:
----------------------------------------------------------------
Management believes that all adjustments, consisting of only normal
recurring accruals, considered necessary for a fair presentation of the
unaudited interim financial statements have been included. The results of
operations for any interim period are not necessarily indicative of results
for the full year. The unaudited interim financial statements should be
read in conjunction with the audited financial statements and notes thereto
for the years ended December 31, 1995, 1994, and 1993.
ENCORE! 63
<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 65 through 68 illustrate a Policy issued
to a male, age 45, 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
65 and 67 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 66 and 68 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
.69% of the aggregate average daily net assets of the Fund), the other expenses
incurred by the Fund (.23%), and the daily charge by AVLIC to each Subaccount
for assuming mortality and expense risks (which is equivalent to a charge at an
annual rate of .90% for policy years 1-20 and 0.65% thereafter on pages 65 and
67 and at an annual rate of 1.15% on page 66 and 68 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 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
- -1.82%, 4.18%, and 10.18% respectively, for years 1-20 and -1.57%, 4.43% and
10.43% for the years thereafter respectively, on pages 65 and 67 and -2.07%,
3.93% and 9.93% respectively, on pages 66 and 68.
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.
64 ENCORE!
<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES
AMERITAS VARIABLE LIFE INSURANCE COMPANY
ENDOWMENT AT AGE 100
Male Issue Age: 45 Nontobacco Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $6000
INITIAL SPECIFIED AMOUNT:$500,000
DEATH BENEFIT OPTION: A
USING CURRENT SCHEDULE OF COST OF INSURANCE RATES
0% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(-1.82% Net) (4.18% Net) (10.18% 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 6300 4404 0 500000 4710 0 500000 5016 0 500000
2 12915 8622 1907 500000 9509 2794 500000 10434 3719 500000
3 19861 12655 5940 500000 14398 7683 500000 16292 9577 500000
4 27154 16506 9791 500000 19385 12670 500000 22639 15924 500000
5 34811 20177 13462 500000 24470 17755 500000 29527 22812 500000
6 42852 23672 17628 500000 29662 23619 500000 37015 30972 500000
7 51295 26985 21613 500000 34959 29587 500000 45163 39791 500000
8 60159 30126 25426 500000 40372 35672 500000 54049 49348 500000
9 69467 33090 29061 500000 45902 41873 500000 63748 59719 500000
10 79241 35876 32519 500000 51552 48195 500000 74348 70990 500000
15 135945 47092 47092 500000 81761 81761 500000 144758 144758 500000
20 208316 52818 52818 500000 115017 115017 500000 258248 258248 500000
Ages
60 135945 47092 47092 500000 81761 81761 500000 144758 144758 500000
65 208316 52818 52818 500000 115017 115017 500000 258248 258248 500000
70 300681 47142 47142 500000 148349 148349 500000 450028 450028 522032
75 418565 19808 19808 500000 174525 174525 500000 776358 776358 830703
</TABLE>
1) Assumes an annual $6,000 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! 65
<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES
AMERITAS VARIABLE LIFE INSURANCE COMPANY
ENDOWMENT AT AGE 100
Male Issue Age: 45 Nontobacco Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $6000
INITIAL SPECIFIED AMOUNT:$500000
USING MAXIMUM ALLOWABLE SCHEDULE OF COST OF INSURANCE RATES
0% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(-2.07% Net) (3.93% Net) (9.93% 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 6300 3854 0 500000 4140 0 500000 4427 0 500000
2 12915 7511 796 500000 8323 1608 500000 9171 2456 500000
3 19861 10964 4249 500000 12541 5826 500000 14257 7542 500000
4 27154 14211 7496 500000 16789 10074 500000 19712 12997 500000
5 34811 17238 10523 500000 21053 14338 500000 25560 18845 500000
6 42852 20041 13998 500000 25325 19281 500000 31836 25792 500000
7 51295 22593 17221 500000 29576 24204 500000 38555 33183 500000
8 60159 24866 20166 500000 33776 29075 500000 45736 41036 500000
9 69467 26840 22811 500000 37898 33869 500000 53408 49379 500000
10 79241 28480 25122 500000 41901 38544 500000 61591 58234 500000
15 135945 30737 30737 500000 58949 58949 500000 111616 111616 500000
20 208316 18993 18993 500000 65962 65962 500000 182147 182147 500000
Ages
60 135945 30737 30737 500000 58949 58949 500000 111616 111616 500000
65 208316 18993 18993 500000 65962 65962 500000 182147 182147 500000
70 300681 0* 0* 0* 49247 49247 500000 286274 286274 500000
75 418565 0* 0* 0* 0* 0* 0* 461433 461433 500000
</TABLE>
*In the absence of an additional premium, the Policy would lapse.
1) Assumes an annual $6,000 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.
66 ENCORE!
<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES
AMERITAS VARIABLE LIFE INSURANCE COMPANY
ENDOWMENT AT AGE 100
Male Issue Age: 45 Nontobacco Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $20000
INITIAL SPECIFIED AMOUNT:$500,000
DEATH BENEFIT OPTION: B
USING CURRENT SCHEDULE OF COST OF INSURANCE RATES
0% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(-1.82% Net) (4.18% Net) (10.18% 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 21000 17655 10940 517655 18771 12056 518771 19888 13173 519888
2 43050 34871 28156 534871 38205 31490 538205 41674 34959 541674
3 66203 51650 44935 551650 58323 51608 558323 65546 58831 565546
4 90513 68001 61286 568001 79155 72440 579155 91718 85003 591718
5 116038 83926 77211 583926 100726 94011 600726 120418 113703 620418
6 142840 99433 93389 599433 123067 117023 623067 151903 145860 651903
7 170982 114519 109147 614519 146198 140826 646198 186447 181075 686447
8 200531 129198 124498 629198 170160 165459 670160 224366 219665 724366
9 231558 143467 139438 643467 194975 190946 694975 265993 261964 765993
10 264136 157329 153972 657329 220676 217319 720676 311701 308344 811701
15 453150 220582 220582 720582 363588 363588 863588 617340 617340 1117340
20 694385 272974 272974 772974 532899 532899 1032899 1106697 1106697 1606697
Ages
60 453150 220582 220582 720582 363588 363588 863588 617340 617340 1117340
65 694385 272974 272974 772974 532899 532899 1032899 1106697 1106697 1606697
70 1002269 311508 311508 811508 743120 743120 1243120 1929105 1929105 2429105
75 1395216 324414 324414 824414 981359 981359 1481359 3267079 3267079 3767079
</TABLE>
1) Assumes an annual $20,000 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! 67
<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES
AMERITAS VARIABLE LIFE INSURANCE COMPANY
ENDOWMENT AT AGE 100
Male Issue Age: 45 Nontobacco Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $20000
INITIAL SPECIFIED AMOUNT:$500000
USING MAXIMUM ALLOWABLE SCHEDULE OF COST OF INSURANCE RATES
0% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(-2.07% Net) (3.93% Net) (9.93% 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 21000 16863 10148 516863 17946 11231 517946 19030 12315 519030
2 43050 33245 26530 533245 36461 29746 536461 39809 33094 539809
3 66203 49144 42429 549144 55555 48840 555555 62498 55783 562498
4 90513 64562 57847 564562 75243 68528 575243 87279 80564 587279
5 116038 79489 72774 579489 95526 88811 595526 114336 107621 614336
6 142840 93924 87881 593924 116418 110375 616418 143887 137844 643887
7 170982 107844 102472 607844 137909 132537 637909 176142 170770 676142
8 200531 121225 116525 621225 159984 155284 659984 211333 206633 711333
9 231558 134048 130019 634048 182638 178609 682638 249721 245692 749721
10 264136 146282 142924 646282 205846 202489 705846 291575 288217 791575
15 453150 197816 197816 697816 329703 329703 829703 564739 564739 1064739
20 694385 229858 229858 729858 463402 463402 963402 984431 984431 1484431
Ages
60 453150 197816 197816 697816 329703 329703 829703 564739 564739 1064739
65 694385 229858 229858 729858 463402 463402 963402 984431 984431 1484431
70 1002269 234001 234001 734001 597133 597133 1097133 1625799 1625799 2125799
75 1395216 197099 197099 697099 712810 712810 1212810 2602878 2602878 3102878
</TABLE>
1) Assumes an annual $20,000 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.
68 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! 69
<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.
70 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.
Registrant makes the following representation pursuant to the National
Securities Markets Improvements Act of 1996:
Ameritas Life Insurance Corp. represents that the fees deducted under the
contract, in the aggregate, are reasonable in relation to the services rendered,
the expenses expected to be incurred, and the risks assumed by the insurance
company.
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.
<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 10th day of January, 1997.
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 January 10, 1997
Lawrence J. Arth President and Chief Executive Officer
/s/ Kenneth C. Louis
_______________________ Director, Executive Vice President January 10, 1997
Kenneth C. Louis
/s/ D T Doan
_______________________ Director, Executive Vice President January 10, 1997
D T Doan
/s/ Robert B. Bush
_______________________ Director, Senior Vice President January 10, 1997
Robert B. Bush Variable Operations and Administration
/s/ Thomas C. Godlasky
_______________________ Director January 10, 1997
Thomas C. Godlasky
<PAGE>
SIGNATURE TITLE DATE
/s/ Jon C. Headrick
_______________________ Treasurer January 10, 1997
Jon C. Headrick
/s/ Norman M. Krivosha
_______________________ Secretary and General Counsel January 10, 1997
Norman M. Krivosha
/s/ JoAnn M. Martin
_______________________ Controller January 10, 1997
JoAnn M. Martin
/s/ Michael E. Sproule
_______________________ Director January 10, 1997
Michael E. Sproule
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
The prospectus consisting of 70 pages.
The undertaking to file reports.
The undertaking pursuant to Rule 484.
Representation 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.
(d) Amendment to Principal Underwriting Agreement.
(4) Not applicable.
(5) (a) Proposed form of Policy.
(b) Proposed form of Policy Riders.
(6) (a) Articles of Incorporation of AVLIC.
(b) Bylaws of AVLIC.
(7) Not applicable.
(8) (a) Participation Agreement in the Variable Insurance Products Fund.
(b) Participation Agreement in the Alger American Fund.
(c) Participation Agreement in the MFS Variable Insurance Trust.*
(d) Participation Agreement in the Morgan Stanley 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.
- -------------
* Incorporated by reference to the initial Registration Statement for Ameritas
Variable Life Insurance Company Separate Account V. File No. 333-15585
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
99.A3c Commission Schedule
99.A3d Amendment to Principal Underwriting Agreement
99.A5a Proposed Form of Policy
99.A5b Proposed Form of Policy Riders
99.A6a Articles of Incorporation of AVLIC
99.A6b Bylaws of AVLIC
99.A8a Participation Agreement in the Variable Insurance Products Fund
99.A8b Participation Agreement in the Alger American Fund
99.A10 Application for Policy
99.A12 Memorandum Describing AVLIC's Issuance, Transfer, and
Redemption Procedures for the Policy
99.A3ab Opinion and Consent of Norman M. Krivosha
99.A6ab Opinion and Consent of Thomas P. McArdle
99.A8 Consent of Deloitte & Touche LLP
99.A9 Form of Notice of Withdrawal Right and Refund Pursuant to
Rule 6e-3(T)(b)(13)(viii) Under the Investment Company Act
of 1940
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY PRODUCTS
EXHIBIT A
COMMISSION AND EXPENSE REIMBURSEMENT SCHEDULE
OVERTURE LIFE (Registration No. 33-1576)
Broker/Dealer, for its efforts in soliciting sales of the Policy described as
Policy Form #4001 (Variable Life), shall receive commission as stated below.
Only those premium payments received by AVLIC in the first 12 months of any
Policy are commissionable. The Commission Schedule is as follows:
ALL SALES 5.0%
OVERTURE ANNUITY (Registration No. 33-14774) (CLOSED TO NEW ISSUES)
Broker/Dealer, for its efforts in soliciting sales of the Policy described as
Policy Form #4780 (Variable Annuity), shall receive commission as stated below.
Only those premium payments received by AVLIC in the first 12 months of any
Policy are commissionable.
ATTAINED AGE PERCENT OF PREMIUM PAID
------------ -----------------------
0-70 5.0%
71+ 4.2%
For Policy Form #4780, a service fee of .2% of the total Policy accumulation
value will be paid after the end of each policy year to reimburse the
broker/dealer for administrative costs incurred in servicing the Policy.
OVERTURE ANNUITY II (Registration No. 33-33844) (CLOSED TO NEW ISSUES)
Broker/Dealer, for its efforts in soliciting sales of the Policy described as
Policy Form #4782 (Variable Annuity II), shall receive commission as stated
below:
ATTAINED AGE FIRST YEAR RENEWAL
------------ ---------- -------
0-70 5.0% 5.0%
71+ 4.2% 4.2%
For Policy Form #4782, a service fee of .2% of the total Policy accumulation
value will be paid after the end of each policy year to reimburse the
broker/dealer for administrative costs incurred in servicing the Policy. There
may be a 100% chargeback of commission on policies where the annuitant dies
from non-accidental causes during the first policy year.
OVERTURE ANNUITY III (NON TAX QUALIFIED) (Registration No. 33-58642)
Broker/Dealer, for its efforts in soliciting sales of the Policy described as
Policy Form #4784 (Variable Annuity III), shall receive commission as stated
below:
ATTAINED AGE FIRST YEAR RENEWAL
------------ ---------- -------
0-65 5.25% 5.25%
66-70 5.00% 5.00%
71-80 4.25% 4.25%
81-85 2.45% 2.45%
For Policy Form #4784, an annual service fee of .25% of the total Policy
accumulation value will be paid at the end of each policy quarter after the
first policy year, to reimburse the broker/dealer for administrative costs
incurred in servicing the Policy. There may be a 100% chargeback of commission
on policies where the annuitant dies from non-accidental causes during the first
policy year.
OVERTURE ANNUITY III (TAX QUALIFIED) (Registration No. 33-58642)
Broker/Dealer, for its efforts in soliciting sales of the Policy described as
Policy Form #4784 (Variable Annuity III), shall receive commission as stated
below:
ATTAINED AGE POLICY YEAR BELOW $2000 $2000 & ABOVE
------------ ----------- ----------- -------------
0-65 1 4.25% 5.25%
0-65 2-on 4.25% 5.25%
ATTAINED AGE POLICY YEAR BELOW $2000 $2000 & ABOVE
------------ ----------- ----------- -------------
66-70 1 4.00% 5.00%
66-70 2-on 4.00% 5.00%
ATTAINED AGE POLICY YEAR BELOW $2000 $2000 & ABOVE
------------ ----------- ----------- -------------
71-80 1 3.25% 4.25%
71-80 2-on 3.25% 4.25%
ATTAINED AGE POLICY YEAR BELOW $2000 $2000 & ABOVE
------------ ----------- ----------- -------------
81-85 1 1.45% 2.45%
81-85 2-on 1.45% 2.45%
AG 1571-AVLIC Rev. 12-96
<PAGE>
OVERTURE ANNUITY III (TAX QUALIFIED) (CONTINUED)
A lower commission is paid on all premium received while the cumulative premium
is less than $2,000. When the cumulative premium since issue of the policy,
equals or exceeds $2,000, then a greater commission is paid on that and all
subsequent premiums. For Policy Form #4786, an annual service fee of .25% of the
total policy accumulation value will be paid at the end of each policy quarter
after the first policy year, to reimburse the broker/dealer for administrative
costs incurred in servicing the Policy. There may be a 100% chargeback of
commission on policies where the annuitant dies from non-accidental causes
during the first policy year.
OVERTURE ANNUITY IIIP (Registration No. 33-98848)
Broker/Dealer, for its efforts in soliciting sales of the Policy described as
Policy Form #4786 (Variable Annuity III), shall receive commission as stated
below:
SCHEDULE A
ATTAINED AGES POLICY YEAR BELOW $2000* $2000 & ABOVE
------------- ----------- ----------- -------------
0-75 1 4.25% 5.25%
0-75 2-on 4.25% 5.25%
ATTAINED AGES POLICY YEAR BELOW $2000* $2000 & ABOVE
------------- ---------- ------------ -------------
76-80 1 3.25% 4.25%
76-80 2-on 3.25% 4.25%
ATTAINED AGES POLICY YEAR BELOW $2000* $2000 & ABOVE
------------- ----------- ------------ -------------
81-85 1 1.45% 2.45%
81-85 2-on 1.45% 2.45%
SCHEDULE B
ATTAINED AGES POLICY YEAR BELOW $2000* $2000 & ABOVE
------------- ----------- ------------ -------------
0-85 1 2.0% 2.0%
0-85 2-on 2.0% 2.0%
A lower commission is paid on all premium received while the cumulative premium
is less than $2,000. When the cumulative premium since issue of the policy,
---------
equals or exceeds $2,000, then a greater commission is paid on that and all
- ------------------
subsequent premiums.
For Policy Form #4786, an annual service fee of .25% for Schedule A and .80% for
Schedule B of the total policy accumulation value will be paid at the end of
each policy quarter after the first policy year, to reimburse the broker/dealer
for administrative costs incurred in servicing the Policy. There may be a 100%
chargeback of commission on policies where the annuitant dies from
non-accidental causes during the first policy year.
* Minimum premium less than $2,000 requires prior home office approval if policy
is not Tax Qualified.
---
OVERTURE APPLAUSE! LIFE (Registration No. 33-30019)
Broker/Dealer, for its efforts in soliciting sales of the policy described as
Policy Form #4010 (Flexible Premium Variable Universal Life), shall receive
commission as stated below:
100% of First Year Target Premium. (FYTP) - (A Table of FYTP is included in the
Overture Series Product & Reference Guide.)
In addition, First Year amounts in excess of the FYTP, shall receive a
commission of 4%.
Renewal premiums received after the first year receive compensation of 4%.
OVERTURE APPLAUSE! II (Registration No. 333-14845)
Broker/Dealer, for its efforts in soliciting sales of the policy described as
Policy Form #4016 (Flexible Premium Variable Universal Life), shall receive
commission as stated below:
<TABLE>
<CAPTION>
FIRST ANNUAL
TARGET PREMIUM PLUS PREMIUMS IN EXCESS OF TARGET ANNUAL ASSET
POLICY YEAR RIDERS & SUBSTANDARD PREMIUM PLUS RIDER & SUBSTANDARD PREMIUM BASED ADMINISTRATIVE FEE*
- ----------- ---------------------------- -------------------------------- -------------------------
<S> <C> <C> <C>
1 95% 4% 0%
2-7 4% 4% 0%
8+ 0 0 .25%
</TABLE>
*Writing Representative only
The annual asset based administrative fee will be paid at the end of the policy
quarter and is based on the policy accumulation value, unimpaired by reduced
rate loans, at that time.
OVERTURE ENCORE (Registration No. 333-15585)
Broker/Dealer, for its efforts in soliciting sales of the policy described as
Policy Form #4018 (Flexible Premium Variable Universal Life), shall receive
commission as stated below:
<TABLE>
<CAPTION>
FIRST ANNUAL
TARGET PREMIUM PLUS PREMIUMS IN EXCESS OF TARGET ANNUAL ASSET
POLICY YEAR RIDERS & SUBSTANDARD PREMIUM PLUS RIDER & SUBSTANDARD PREMIUM BASED ADMINISTRATIVE FEE*
- ----------- ---------------------------- -------------------------------- -------------------------
<S> <C> <C> <C>
1 90% 2% 0%
2-4 2% 2% 0%
5+ 0 0 .25%
</TABLE>
*Writing Representative only
The annual asset based administrative fee will be paid at the end of the policy
quarter and is based on the policy accumulation value, unimpaired by reduced
rate loans, at that time.
<PAGE>
AMENDMENT TO PRINCIPAL UNDERWRITING AGREEMENT
WHEREAS, as of this 6th day of December, 1996, Ameritas Investment Corp.,
---
(hereinafter the "Underwriter") and Ameritas Variable Life Insurance Company
(hereinafter the "Insurance Company"), did on October 23, 1996, enter into a
Principal Underwriting Agreement, a copy to which this Amendment is attached;
WHEREAS, the parties now wish to amend that Principal Underwriting
Agreement in the respect as hereinafter set out.
NOW, THEREFORE, in consideration, mutual promises of each of the parties
hereto and other good and valuable consideration, it is hereby agreed by and
between the parties as follows:
1. That beginning January 1, 1997, and on the first day of each and every
month thereafter, during the entire year of 1997, unless sooner terminated by
mutual agreement of the parties, Insurance Company agrees to pay to Underwriter
the sum of $10,000.00 in addition to any other sums required to be paid under
the Principal Underwriting Agreement heretofore executed; which said payment
shall be as additional compensation to Underwriter for performing duties under
the Principal Underwriting Agreement.
2. Save and except for said Amendment, all of the terms and conditions of
said Principal Underwriting Agreement shall remain in full force and effect as
fully as though set out herein verbatim except as otherwise specifically amended
herein.
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be
signed, and seals to be affixed, as of the day and year first above written.
AMERITAS INVESTMENT CORP.
Attest:
/s/ Ann D. Diers By: /s/ William R. Giovanni
- ---------------- -------------------------------------
William R. Giovanni,
President & Chief Executive Officer
AMERITAS VARIABLE LIFE INSURANCE COMPANY
Attest:
/s/ Ann D. Diers By: /s/ Kenneth C. Louis
- ---------------- ---------------------------------------
Kenneth C. Louis
Executive Vice President
v:1awnorth\judge\principa.amd
<PAGE>
INSURED FIELD (1)
POLICY NUMBER FIELD (3)
POLICY TYPE ENCORE!
Flexible Premium Variable Life Insurance Policy. Net cash
surrender value, if any, payable at maturity. Death benefit
proceeds payable at death of Insured prior to maturity date.
Flexible premiums payable during lifetime of Insured until maturity date
(age 100). Some benefits reflect investment results. Non-participating.
THIS POLICY'S ACCUMULATION VALUE IN THE SEPARATE ACCOUNT IS BASED ON
THE INVESTMENT EXPERIENCE OF THAT ACCOUNT AND MAY INCREASE OR
DECREASE DAILY. IT IS NOT GUARANTEED AS TO DOLLAR AMOUNT.
SEE SECTION 7.
THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) MAY BE
FIXED OR MAY VARY UNDER THE CONDITIONS DESCRIBED IN SECTIONS 9 AND
10.
Ameritas Variable Life Insurance Company agrees to pay the death
benefit proceeds of this policy to the Beneficiary on receipt of
satisfactory proof of death of the insured while this policy is in
force.
/s/ Lawrence J. Arth /s/ Norman M. Krivosha
President Secretary
"NOTICE OF TEN-DAY RIGHT TO EXAMINE POLICY"
You are urged to read this policy carefully. If, after examination,
you are dissatisfied with it for any reason, you may return it to
the selling agent or to Ameritas Variable Life Insurance Company
at One Ameritas Way, P.O. Box 82550, Lincoln, Nebraska 68501-2550,
for a refund within (1) ten days from the date of delivery of the
policy, (2) ten days after mailing or delivery of a cancellation
notice, or (3) forty-five days after Part I of the application is
signed, whichever is later. If allowed by state law, the amount of
the refund will equal the sum of all charges deducted from
premiums paid, plus the net premiums allocated to the Fixed
Account and to the Separate Account adjusted by investment gains
and losses. Otherwise, the amount of the refund will equal the
gross premiums paid.
Please read and carefully check the copy of the application
attached to this policy. This application is a part of your policy,
and this policy was issued on the basis that the answers to all
questions and the information shown on this application are true
and complete. If any information shown on it is not true and
complete, to the best of your knowledge, or if any past medical
history has been omitted, please notify Ameritas Variable Life
Insurance Company of Lincoln, Nebraska, within ten days from the
date of delivery of the policy to you.
AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO
A STOCK COMPANY
LINCOLN, NEBRASKA
FORM 4018
<PAGE>
POLICY SCHEDULE
INSURED: John D Specimen POLICY NUMBER: 2109002333
INITIAL SPECIFIED POLICY DATE: January 1, 1997
AMOUNT OF INSURANCE: $500,000
*PLANNED ANNUAL
ISSUE AGE - SEX: 35 Male PERIODIC PREMIUM: $3,210.00
OWNER: John D Specimen INITIAL PREMIUM: $3,210.00
INITIAL DEATH BENEFIT OPTION: A
GUARANTEED DEATH BENEFIT PREMIUM: ANNUAL $3,210.00
GUARANTEED DEATH BENEFIT PERIOD:
The Guaranteed Death Benefit Period will expire on January 1, 2022.
RATING CLASS: PREFERRED
LOANS:
The maximum loan interest rate is 6.00%. The interest credited on any
loaned part of the values will be 3.50%.
MODES OF PAYMENT FOR PLANNED PERIODIC PREMIUMS:
Annual Semi-Annual Quarterly Monthly
$3,210.00 $1,605.00 $802.50 $267.50
* This reflects the planned premium and mode you selected at issue. For
further information, see policy Section 3. PREMIUM PAYMENTS.
4018 1-PS
<PAGE>
SCHEDULE OF BENEFITS
INSURED: John D Specimen POLICY NUMBER: 2109002333
INITIAL
SPECIFIED AMOUNT MATURITY OR
BENEFIT OF INSURANCE EXPIRATION DATE*
- ------- ----------------- ----------------
Flexible Premium Variable Life $500,000 January 1, 2062
Form 4018**
* NOTE: It is possible that coverage may not continue to the maturity date
(age 100) if premium payments are not sufficient. Even if coverage
continues to maturity date there may, in fact, be little or no surrender
value to be paid.
** Form number corresponds to form number in the lower left hand corner of
each benefit description.
4018 1.1-SB
<PAGE>
SCHEDULE OF BENEFITS
(Continued)
INSURED: John D Specimen POLICY NUMBER: 2109002333
INITIAL
SPECIFIED AMOUNT ANNUAL MATURITY OR
BENEFIT OF INSURANCE PREMIUM* EXPIRATION YEAR
- ------- ----------------- -------- ----------------
Disability Benefit Rider $3,210.00 $124.23 2022
Form DBR 4096 **
* For any rider, this is the annual rider cost of insurance at issue. (NOTE:
These amounts shown are not additional premiums due but are the amounts
deducted from the accumulation value.) See each rider for futher
information.
** Form number corresponds to form number in the lower left hand corner of
each benefit description.
4018 1.2-SB
<PAGE>
LIST OF SUBACCOUNTS AND PORTFOLIOS
Each subaccount of the Ameritas Variable Life Insurance Company (AVLIC) Separate
Account V invests in a specific portfolio of the following funds:
Fidelity Variable Insurance Products Fund
Fidelity Variable Insurance Products Fund II
(collectively referred to as "Fidelity")
Alger American Fund ("Alger")
MFS Variable Insurance Trust ("MFS")
Morgan Stanley Universal Funds, Inc. ("Morgan Stanley")
INITIAL
ALLOCATION
CORRESPONDING OF NET
FUND PORTFOLIO SUBACCOUNT PREMIUMS
Fidelity Money Market Money Market Subaccount 0%
Equity-Income Equity-Income Subaccount 0%
Growth Growth Subaccount 0%
High Income High Income Subaccount 0%
Overseas Overseas Subaccount 0%
Asset Manager Asset Manager Subaccount 50%
Investment Grade Bond Investment Grade Bond Subaccount 0%
Asset Manger: Growth Asset Manager: Growth Subaccount 0%
Index 500 Index 500 Subaccount 0%
Contrafund Contrafund Subaccount 0%
Alger Growth Growth Subaccount 0%
Income and Growth Income and Growth Subaccount 50%
Small Capitalization Small Capitalization Subaccount 0%
Balanced Balance Subaccount 0%
MidCap Growth MidCap Growth Subaccount 0%
Leveraged AllCap Leveraged AllCap Subaccount 0%
MFS Emerging Growth Emerging Growth Subaccount 0%
Utilities Utilities Subaccount 0%
World Governments World Governments Subaccount 0%
Research Research Subaccount 0%
Growth With Income Growth With Income Subaccount 0%
Morgan Emerging Markets Emerging Markets Equity Subaccount 0%
Stanley Equity
Global Equity Global Equity Subaccount 0%
International Magnum International Magnum Subaccount 0%
Asian Equity Asian Equity Subaccount 0%
U.S. Real Estate U.S. Real Estate Subaccount 0%
Net premiums may also be allocated to the AVLIC Fixed Account.
INITIAL
ALLOCATION OF
NET PREMIUMS
AVLIC Fixed Account 0%
4018 1-LSP
<PAGE>
SCHEDULE OF CHARGES
ASSET BASED DAILY ADMINISTRATIVE CHARGE:
The maximum daily administrative charge is .000683% (.25% annually).
MORTALITY AND EXPENSE RISK DAILY CHARGE:
The maximum daily mortality and expense risk charge is .002459% (.90%
annually).
ADMINISTRATIVE EXPENSE CHARGE:
The maximum annual administrative expense charge is $108.
PERCENT OF PREMIUM CHARGE:
The maximum percent of premium charge is 5% of premiums received.
TRANSFER CHARGE:
The first 15 transfers between Subaccounts and/or the Fixed Account per
policy year are free. Thereafter, there may be a $10 charge for each
transfer.
PARTIAL WITHDRAWAL CHARGE:
The maximum charge for each partial withdrawal is the lesser of $50 or 2%
of the amount withdrawn.
SURRENDER CHARGE:
The following table shows the maximum surrender charge for the initial
specified amount based on the policy year of surrender. The actual
surrender charge may be lower based on actual premiums received to date at
the time of surrender.
For any increase in specified amount, a surrender charge based on the
increase will be imposed in addition to the surrender charges stated
below. See Section 10.4 of the policy and the SCHEDULE OF SURRENDER
CHARGES FOR INCREASES for further information.
POLICY YEAR
OF SURRENDER AMOUNT
------------ ---------
1 $4,010.00
2 $4,010.00
3 $4,010.00
4 $4,010.00
5 $4,010.00
6 $3,609.00
7 $3,208.00
8 $2,807.00
9 $2,406.00
10 $2,005.00
11 $1,604.00
12 $1,203.00
13 $802.00
14 $401.00
15 $0.00
4018 1-SC
<PAGE>
SCHEDULE OF GUARANTEED ANNUAL
COST OF INSURANCE RATES*
INSURED: John D Specimen POLICY NUMBER: 2109002333
ISSUE AGE - SEX 35 Male POLICY DATE: January 1, 1997
POLICY YEAR RATE PER $1,000 POLICY YEAR RATE PER $1,000
BEGINNING OF AMOUNT BEGINNING OF AMOUNT
JANUARY 1 AT RISK JANUARY 1 AT RISK
-------------- ---------------- ------------- ----------------
1997 $1.33 2030 $28.50
1998 $1.77 2031 $31.38
1999 $1.88 2032 $34.63
2000 $2.00 2033 $38.31
2001 $2.14 2034 $42.56
2002 $2.29 2035 $47.44
2003 $2.47 2036 $52.92
2004 $2.65 2037 $58.80
2005 $2.86 2038 $65.06
2006 $3.07 2039 $71.64
2007 $3.32 2040 $78.47
2008 $3.59 2041 $85.72
2009 $3.88 2042 $93.67
2010 $4.19 2043 $102.52
2011 $4.54 2044 $112.52
2012 $4.91 2045 $123.79
2013 $5.35 2046 $136.11
2014 $5.86 2047 $149.20
2015 $6.43 2048 $162.80
2016 $7.09 2049 $176.79
2017 $7.82 2050 $190.89
2018 $8.63 2051 $205.29
2019 $9.49 2052 $220.19
2020 $10.42 2053 $235.84
2021 $11.47 2054 $252.75
2022 $12.64 2055 $271.63
2023 $13.94 2056 $295.65
2024 $15.42 2057 $329.96
2025 $17.11 2058 $384.55
2026 $19.02 2059 $480.20
2027 $21.13 2060 $657.98
2028 $23.40 2061 $1,000.00
2029 $25.86
* The rates shown are annual rates per $1000 of insurance. To calculate the
monthly rate, the annual rate is divided by 12 and rounded to the nearest
five decimal places. These rates apply to the basic policy and do not
include the cost for riders. The rates shown have been adjusted if this
policy was issued with a tabular and/or flat rating as shown on the
schedule page.
4018 1-COI
<PAGE>
SCHEDULE OF SURRENDER CHARGES FOR INCREASES
The additional surrender charge imposed under this policy for each requested
increase in specified amount will be based on the table shown below. The charges
shown in the table are maximum surrender charges. The actual surrender charge
may be lower based on actual premiums received to date at the time of the
surrender.
The maximum surrender charge is determined at the time of the increase and is a
rate per $1000 of increased specified amount based on the attained age at the
time of the increase and sex of the Insured. See Section 10.5 of this policy for
further information.
ISSUE
AGE MALE FEMALE UNISEX
- --------------------------------------------------------------------------------
20 4.68 3.68 4.48
21 4.74 3.75 4.54
22 4.81 3.83 4.61
23 4.88 3.90 4.68
24 4.95 3.98 4.76
- --------------------------------------------------------------------------------
25 5.02 4.05 4.83
26 5.24 4.23 5.04
27 5.48 4.42 5.27
28 5.73 4.61 5.51
29 6.00 4.83 5.77
- --------------------------------------------------------------------------------
30 6.29 5.05 6.04
31 6.59 5.29 6.33
32 6.92 5.54 6.64
33 7.27 5.80 6.98
34 7.63 6.08 7.32
- --------------------------------------------------------------------------------
35 8.02 6.38 7.69
36 8.43 6.69 8.08
37 8.88 7.02 8.51
38 9.34 7.37 8.95
39 9.83 7.74 9.41
- --------------------------------------------------------------------------------
40 10.35 8.12 9.90
41 10.90 8.53 10.43
42 11.48 8.95 10.97
43 12.09 9.39 11.55
44 12.74 9.86 12.16
- --------------------------------------------------------------------------------
45 13.43 10.35 12.81
46 14.17 10.88 13.51
47 14.95 11.43 14.25
48 15.77 12.02 15.02
49 16.65 12.64 15.85
- --------------------------------------------------------------------------------
(continued)
4018 1.1-SSCI
<PAGE>
SCHEDULE OF SURRENDER CHARGES FOR INCREASES
(continued)
ISSUE
AGE MALE FEMALE UNISEX
- --------------------------------------------------------------------------------
50 17.60 13.30 16.74
51 18.60 14.00 17.68
52 19.66 14.74 18.68
53 20.80 15.53 19.75
54 21.20 16.37 20.23
- --------------------------------------------------------------------------------
55 22.28 17.26 21.28
56 23.16 17.72 22.07
57 24.04 18.18 22.87
58 24.91 18.63 23.65
59 25.79 19.09 24.45
- --------------------------------------------------------------------------------
60 26.66 19.55 25.24
61 28.31 20.75 26.80
62 30.07 22.04 28.46
63 31.95 23.42 30.24
64 33.97 24.91 32.16
- --------------------------------------------------------------------------------
65 36.12 26.50 34.20
66 38.44 28.22 36.40
67 40.00 30.09 38.75
68 40.00 32.13 40.00
69 40.00 34.37 40.00
- --------------------------------------------------------------------------------
70 40.00 36.83 40.00
71 40.00 39.55 40.00
72 40.00 40.00 40.00
73 40.00 40.00 40.00
74 40.00 40.00 40.00
- --------------------------------------------------------------------------------
75 40.00 40.00 40.00
76 40.00 40.00 40.00
77 40.00 40.00 40.00
78 40.00 40.00 40.00
79 40.00 40.00 40.00
80 40.00 40.00 40.00
- --------------------------------------------------------------------------------
4018 1.2-SSCI
<PAGE>
TABLE OF CONTENTS
POLICY SCHEDULE PAGES
SECTION 1. DEFINITIONS............................................4
SECTION 2. GENERAL PROVISIONS.....................................6
2.1 Meaning of In Force...........................6
2.2 When This Policy Terminates...................6
2.3 Guaranteed Death Benefit......................6
2.4 Extended Maturity Date Option.................7
2.5 The Policy and its Parts......................7
2.6 Representations and Contestability............7
2.7 Misstatement of Age or Sex....................8
2.8 Suicide.......................................8
2.9 The Owner.....................................8
2.10 The Beneficiary...............................8
2.11 Changing the Beneficiary......................8
2.12 Assigning the Policy..........................9
2.13 Non-Participating.............................9
SECTION 3. PREMIUM PAYMENTS.......................................9
3.1 Initial Premium...............................9
3.2 Guaranteed Death Benefit Premium..............9
3.3 Planned Periodic Premiums.....................9
3.4 Unscheduled Premiums.........................10
3.5 Premium Limits...............................10
3.6 Where to Pay Premiums........................10
3.7 Net Premium..................................10
3.8 Percent of Premium Charge....................10
3.9 Allocation of Net Premiums...................10
SECTION 4. GRACE PERIOD AND REINSTATEMENT........................11
4.1 Grace Period.................................11
4.2 Continuation of Insurance....................11
4.3 Reinstating the Policy.......................11
SECTION 5. SEPARATE ACCOUNT......................................12
5.1 The Account..................................12
5.2 The Subaccounts..............................12
5.3 Valuation of Assets..........................12
5.4 Transfer Among Subaccounts...................12
5.5 The Funds....................................13
5.6 Portfolio Changes............................13
SECTION 6. THE FIXED ACCOUNT.....................................13
6.1 The Fixed Account............................13
6.2 Transfers Among the Fixed Account
and the Subaccounts..........................14
4018
2
<PAGE>
SECTION 7. ACCUMULATION VALUE....................................14
7.1 How Accumulation Value of the Policy
is Determined.................................14
7.2 Accumulation Value of the Subaccounts.........14
7.3 Net Asset Value...............................15
7.4 Subaccount Unit Value.........................15
7.5 Accumulation Value of the Fixed Account.......16
7.6 Net Cash Surrender Value Bonus................16
7.7 Interest Credits..............................16
7.8 Administrative Expense Charge.................17
7.9 Cost of Insurance.............................17
7.10 Cost of Insurance Rates.......................17
7.11 Monthly Deduction.............................17
7.12 Annual Report.................................18
7.13 Illustrative Reports..........................18
SECTION 8. POLICY SURRENDER
AND PARTIAL WITHDRAWAL................................18
8.1 Surrender of the Policy.......................18
8.2 Net Cash Surrender Value......................19
8.3 Surrender Charge..............................19
8.4 Partial Withdrawal............................19
8.5 Postponement of Payments......................20
SECTION 9. DEATH BENEFIT.........................................20
9.1 Death Benefit Proceeds........................20
9.2 Interest on Proceeds..........................20
9.3 Death Benefit.................................21
9.4 Postponement of Payment.......................22
SECTION 10. POLICY CHANGES
AND EXCHANGE OF POLICY................................22
10.1 Change in Death Benefit Options...............22
10.2 Change in the Specified Amount................22
10.3 Decreasing the Specified Amount...............22
10.4 Increasing the Specified Amount...............23
10.5 Surrender Charge for Increase.................23
10.6 Time Period for Exchange......................24
SECTION 11. LOAN BENEFITS.........................................25
11.1 Making a Policy Loan..........................25
11.2 Interest......................................25
11.3 Reduced Loan Interest Rate....................25
11.4 Other Borrowing Rules.........................25
11.5 Repaying a Policy Debt........................26
SECTION 12. PAYMENT OPTIONS.......................................26
12.1 Payment Option Rules..........................26
12.2 Description of Options........................27
SECTION 13. NOTES ON OUR COMPUTATIONS.............................27
13.1 Basis of Computations.........................27
13.2 Methods of Computing Values...................27
TABLES OF SETTLEMENT OPTIONS......................................28
4018 3
<PAGE>
SECTION 1. DEFINITIONS
"ACCUMULATION VALUE" means the total amount of value held in your accounts at
any time. It is equal to the total of the accumulation value held in the
Account, the Fixed Account, and the accumulation value held in the general
account which secures policy loans.
"BENEFICIARY" means the person to whom the death benefit proceeds are payable
upon the death of the Insured. The beneficiary is named by the Owner in the
application. If changed, the beneficiary is as shown in the latest change filed
and recorded with us. If no beneficiary survives the Insured, the Owner or the
Owner's estate will be the beneficiary. The interest of any beneficiary is
subject to that of any assignee.
"DEATH BENEFIT" means the total amount of insurance coverage provided under the
selected death benefit option of this policy.
"DEATH BENEFIT PROCEEDS" means the proceeds payable to the beneficiary upon
receipt by us of the satisfactory proof of the death of the Insured while this
policy is in force. It is equal to: (1) the death benefit; plus (2) any
additional life insurance proceeds provided by any riders; minus (3) any
outstanding policy debt; minus (4) any overdue monthly deductions, including the
deduction for the month of death.
"GUARANTEED DEATH BENEFIT PERIOD" is the period during which the Guaranteed
Death Benefit is in effect and will end on the earliest of the following dates:
a. The expiration date shown on the schedule pages of this policy or any
revised schedule pages.
b. The date that the net policy funding is less than the Guaranteed Death
Benefit requirement. See Section 2.3.
c. The date on which this policy first terminates even if this policy is
reinstated.
"INSURED" means the person upon whose life this policy is issued.
"ISSUE AGE" means the age at the Insured's nearest birthday on the policy date.
"ISSUE DATE" means the date that all financial, contractual, and administrative
requirements have been completed and processed. The issue date will be shown in
a confirmation notice sent to you.
"MATURITY DATE" means the date we pay any net cash surrender value, if the
Insured is still living. This date is shown on the schedule pages.
"MONTHLY ACTIVITY DATE" means the same date in each succeeding month as the
policy date except that whenever the monthly activity date falls on a date other
than a valuation date, the monthly activity date will be deemed the next
valuation date.
"MONTHLY DEDUCTIONS" means the deductions taken from the accumulation value on
the monthly activity date. These deductions are equal to: 1) the current cost of
insurance
4018 4
<PAGE>
for the basic policy plus the cost for any riders; and 2) the administrative
expense charge.
"NET CASH SURRENDER VALUE" means the accumulation value on any valuation date,
less any surrender charges and less any outstanding policy debt.
"NET PREMIUM" means the premium paid less the percent of premium charge.
"OUTSTANDING POLICY DEBT" means the sum of all unpaid policy loans and accrued
interest on policy loans.
"OWNER" means the Owner of this policy, as designated in the application or as
subsequently changed. If a policy has been absolutely assigned, the assignee is
the Owner. A collateral assignee is not the Owner. See Section 2.9 for the
rights and privileges of the Owner.
"PERCENT OF PREMIUM CHARGE" is an amount deducted from each premium received to
cover certain expenses. This charge is a percentage of the premium. The
applicable percentage can be found on the schedule pages.
"PLANNED PERIODIC PREMIUM" means a selected scheduled premium of a level amount
at a fixed interval. The initial planned periodic premium you selected is shown
on the schedule pages. See Section 3.3 of this policy.
"POLICY DATE" means 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) additional premiums or
application amendments are required at the time of delivery, in which case the
policy date will be earlier.
"POLICY YEAR" means the period from one policy anniversary date until the next
policy anniversary date.
"SEC" means the Securities and Exchange Commission.
"SATISFACTORY PROOF OF DEATH" means all of the following must be submitted:
a. A certified copy of the death certificate;
b. A Notice of Death Claim;
c. This policy; and
d. Any other information that we may reasonably require to establish the
validity of the claim.
"SPECIFIED AMOUNT" means the minimum death benefit under the policy while this
policy remains in force. The initial specified amount is shown on the schedule
pages. Adjustments and changes to the specified amount can occur as discussed in
Section 10.
4018 5
<PAGE>
"SURRENDER CHARGE" means the charge subtracted from the accumulation value on
the surrender of this policy. Refer to the SCHEDULE OF CHARGES and the SCHEDULE
OF SURRENDER CHARGES FOR INCREASES on the schedule pages.
"SURRENDER" means this policy may be terminated by you before the maturity date
during the Insured's life for its net cash surrender value. See Section 8 of
this policy.
"VALUATION DATE" is any day on which the New York Stock Exchange is open for
trading.
"YOU" AND "YOUR" refer to the Owner of this policy. The Insured may or may not
be the Owner.
"WE", "US" AND "OUR" refer to Ameritas Variable Life Insurance Company. Our
Home Office means our administrative office at One Ameritas Way, P.O. Box 82550,
Lincoln, Nebraska 68501-2550.
SECTION 2. GENERAL PROVISIONS
2.1 MEANING OF IN FORCE
This policy will remain in force as long as on each monthly activity date the
net cash surrender value is sufficient to cover monthly deductions.
However, this policy will remain in force if the Guaranteed Death Benefit is in
effect on this policy, even if the net cash surrender value is insufficient to
cover monthly deductions. See Section 2.3.
2.2 WHEN THIS POLICY TERMINATES
This policy will terminate on the earliest of:
a. Any monthly activity date when the net cash surrender value is
insufficient to cover monthly deductions and the grace period ends
without sufficient premium being paid. However, this policy will not
terminate if the Guaranteed Death Benefit is in effect, even if the net
cash surrender value is insufficient to cover monthly deductions.
b. The Insured dies;
c. You request the coverage be terminated and you return this policy; or
d. This policy matures.
2.3 GUARANTEED DEATH BENEFIT
The Guaranteed Death Benefit is a benefit which applies to the policy at issue.
This benefit will ensure that the policy will remain in force as long as the net
policy
4018 6
<PAGE>
funding meets or exceeds the Guaranteed Death Benefit requirement and the policy
is within the Guaranteed Death Benefit Period. The net policy funding is the sum
of all premiums paid, less any partial withdrawals and less any outstanding
policy debt. The Guaranteed Death Benefit requirement is the cumulative
Guaranteed Death Benefit Premium to the monthly activity date. The Guaranteed
Death Benefit Premium is shown on the schedule page. Any changes in the
Guaranteed Death Benefit Premium due to increases in specified amount or
additions of riders will be reflected in the requirement from the effective date
of the change.
If the net policy funding is less than the Guaranteed Death Benefit requirement,
the benefit is no longer in effect. You will be notified by mail and will have
61 days from the date we mail the notice to meet the Guaranteed Death Benefit
requirement. The Guaranteed Death Benefit can not be reinstated once the policy
has lapsed.
2.4 EXTENDED MATURITY DATE OPTION
The Maturity Date may be extended beyond the date shown on the schedule pages by
your written election. The election must be made during the 90-day period prior
to the Maturity Date.
During the extension period:
a. We will not accept further premium payments.
b. We will not deduct for the cost of insurance for the policy, nor for any
riders, from your accumulation value.
c. The new Maturity Date will be the date of death of the Insured.
d. The death benefit will be the accumulation value.
e. This extension provision will not extend rider benefits past the original
Maturity Date.
All other provisions of your policy not noted above will remain in effect while
your policy continues in force.
This extension provision will terminate on your written request.
2.5 THE POLICY AND ITS PARTS
This policy is a legal contract between you and us. It is issued in return for
the application and payment in advance of the initial premium as described in
Section 3.1. This policy, the application, any supplemental applications,
riders, endorsements, and amendments are the entire contract. No change in this
policy will be valid unless it is in writing, attached to this policy, and
approved by either the president or secretary of the company. No agent may
change this policy or waive any of its provisions.
2.6 REPRESENTATIONS AND CONTESTABILITY
We rely on statements made in the application. In the absence of fraud, they are
considered representations and not warranties. We can contest this policy for
any
4018 7
<PAGE>
material misrepresentation of fact. The misrepresentation must have been made in
the application attached to this policy when issued or in a supplemental
application made a part of this policy when a change in coverage or
reinstatement went into effect.
We cannot contest this policy after it has been in force during the Insured's
life for two years from the policy date. Nor can we contest any increased
benefits later than two years after the effective date of the increased benefits
during the Insured's life. Any increase or reinstatement will be contestable,
within the two year period, only with regard to statements made in the
supplemental application. This provision does not apply to riders with their own
contestability provision.
2.7 MISSTATEMENT OF AGE OR SEX
If the age or sex of the Insured or any person insured by rider has been
misstated on the application, the death benefit and any additional benefits
provided will be those which would be purchased by the most recent deduction for
the cost of insurance and the cost of any additional benefits at the insured
person's correct age or sex.
2.8 SUICIDE
If the Insured commits suicide while sane or insane, within two years from the
policy date, we will limit the proceeds. The limited amount will equal all
premiums paid for this policy, less outstanding policy debt, partial
withdrawals, and the cost for riders.
If the Insured commits suicide, while sane or insane, within two years from the
effective date of any increase in the specified amount, we will limit the
proceeds payable with respect to the increase. The proceeds thus limited will
equal the total cost of insurance applicable to the increase. This provision
does not apply to riders with their own suicide provision.
2.9 THE OWNER
While the Insured is living you have all the benefits, rights and privileges
under this policy. These include naming a successor-owner, changing the
beneficiary, assigning this policy, enjoying all policy benefits, and exercising
all policy options.
If you are not the Insured, you should name a successor-owner who will become
the Owner if you die before the Insured. If you die before the Insured and there
is no successor-owner, ownership will pass to your estate.
2.10 THE BENEFICIARY
You can name primary and contingent beneficiaries. Your original beneficiary
choice is shown in the attached application.
Unless a payment plan is chosen, the proceeds payable at the Insured's death
will be paid in a lump sum to the primary beneficiary. If the primary
beneficiary dies before the Insured, the proceeds will be paid to the contingent
beneficiary. If no beneficiary survives the Insured, the proceeds will be paid
to your estate.
2.11 CHANGING THE BENEFICIARY
You may change the beneficiary during the Insured's lifetime. We do not limit
the number of changes that may be made. To make the change, we must receive a
4018 8
<PAGE>
completed Change of Beneficiary form and any other forms required by the Home
Office. The change will take effect as of the date we record it at the Home
Office, even if the Insured dies before we do so. Each change will be subject to
any payment we made or any other action we took before the change is recorded.
2.12 ASSIGNING THE POLICY
You may assign this policy. For an assignment to bind us, we must receive a
signed copy in the Home Office. We are not responsible for the validity of any
assignment.
An assignment is subject to any policy debt. Policy debt is discussed in Section
11.
2.13 NON-PARTICIPATING
This policy is non-participating. In other words, no dividends will be paid
under this policy.
SECTION 3. PREMIUM PAYMENTS
3.1 INITIAL PREMIUM
An initial premium of at least 1/12th of the Guaranteed Death Benefit Premium
must be paid on or before delivery of this policy. The initial premium shown on
the schedule pages is the amount received with the application or 1/12th of the
Guaranteed Death Benefit Premium if no money is received with the application.
3.2 GUARANTEED DEATH BENEFIT PREMIUM
You have the option to pay a planned premium based on the annual Guaranteed
Death Benefit Premium. This premium is shown on the schedule pages.
During the Guaranteed Death Benefit Period, also shown on the schedule pages, if
net policy funding meets or exceeds the Guaranteed Death Benefit requirement,
the policy will remain in force, even if the net cash surrender value is
insufficient to cover monthly deductions. Net policy funding is premiums paid
less any partial withdrawals and less any outstanding policy debt.
3.3 PLANNED PERIODIC PREMIUM
This is a flexible premium policy. You may choose to pay planned periodic
premiums, and as indicated in Section 3.2, you may elect to base your planned
periodic premiums on the Guaranteed Death Benefit Premium. However, planned
periodic premiums are not required. The amount and frequency of the planned
periodic premiums you selected when this policy was issued is shown on the
schedule pages. You may change the frequency of the payments or the amount by
sending a written request to the Home Office. Premiums may not be paid after the
4018 9
<PAGE>
maturity date. We reserve the right to limit the amount and frequency of the
planned periodic premiums you choose to pay.
3.4 UNSCHEDULED PREMIUMS
Any premium we receive under this policy in an amount different from the planned
periodic premiums will be considered an unscheduled premium. Unscheduled
premiums can be made at any time while this policy is in force.
3.5 PREMIUM LIMITS
We reserve the right to limit the amount and frequency of premium payments. We
will not accept that portion of a premium payment which affects the tax
qualifications of this policy as described in Section 7702 of the Internal
Revenue Code, as amended. This excess amount will be returned to you.
3.6 WHERE TO PAY PREMIUMS
Each premium after the first one is payable at our Home Office. Upon request, a
receipt signed by our Secretary or an Assistant Secretary will be given for any
premium payment.
3.7 NET PREMIUM
Before the premiums paid are allocated to the Subaccounts and/or Fixed Account,
a percent of premium charge is deducted. The amount of premium then allocated is
called the net premium.
3.8 PERCENT OF PREMIUM CHARGE
The percent of premium charge is deducted from each premium payment received.
The maximum percent of premium charge is shown on the schedule pages. We have
the option of charging a current percent of premium charge, which can be less
than the maximum.
3.9 ALLOCATION OF NET PREMIUMs
As of the issue date, net premiums then received will be allocated to a money
market Subaccount. On the 13th day after the issue date, the accumulation value
will be reallocated to the Subaccounts and/or the Fixed Account as you have
selected on the application. Any additional premium received will be allocated
in accordance with your instructions. You may change the allocation of later net
premiums without charge. The allocation will apply to future net premiums after
we receive the change. The Subaccounts and the Fixed Account are discussed in
Sections 5 and 6.
4018 10
<PAGE>
SECTION 4. GRACE PERIOD
AND REINSTATEMENT
4.1 GRACE PERIOD
This policy will begin a 61 day grace period when:
a. the net cash surrender value on any monthly activity date is not sufficient
to cover monthly deductions; and
b. the Guaranteed Death Benefit is no longer in effect.
The 61 day grace period will begin on the day we mail a notice of the premium
necessary to keep your policy in force. We will mail this notice to you at your
last known address and to any assignee of record. If sufficient premium is not
paid by the end of the grace period, this policy will terminate without value.
If the Insured dies during the grace period, the overdue monthly deductions will
be deducted from the death proceeds.
4.2 CONTINUATION OF INSURANCE
Insurance coverage under this policy and any benefits provided by any rider(s)
will be continued through the grace period.
4.3 REINSTATING THE POLICY
If the Insured is living and application is made within three years from the
beginning of any grace period, this policy can be considered for reinstatement
if it terminated because a grace period ended without sufficient premium being
paid.
To apply for reinstatement, you must send evidence satisfactory to us that the
Insured is insurable. The effective date of the reinstatement will be the first
monthly activity date on or next following the date the application for
reinstatement is approved.
To reinstate the policy, you will have to pay a premium equal to the greater of:
a. a premium sufficient to bring the net cash surrender value to an amount
above zero; or
b. three times the current month's monthly deductions.
We will accept a premium larger than the applicable amount described above.
This policy cannot be reinstated if it has been surrendered for its net cash
surrender value, nor can it be reinstated after the maturity date. Any policy
debt will be reinstated.
4018 11
<PAGE>
SECTION 5. SEPARATE ACCOUNT
5.1 THE ACCOUNT
The word Account, where we use it in this policy without qualification, means
the Ameritas Variable Life Insurance Company Separate Account V. This is a unit
investment trust registered with the SEC under the Investment Company Act of
1940. It is also subject to the laws of Nebraska. We own the assets of the
Account and keep them separate from the assets of our general account.
The Account is used only to fund the variable benefits provided under this
policy and any other variable life policies supported by the Account.
The assets of the Account will be available to cover the liabilities of our
general account only to the extent that the assets of the Account exceed the
liabilities of the Account arising under the variable life policies supported by
the Account.
5.2 THE SUBACCOUNTS
The Account has several Subaccounts. We list those available on the policy date
on the schedule pages. The available Subaccounts may change after the policy
date. Any changes will be disclosed by the Prospectus. You determine, using
percentages, how the net premium will be allocated among the Subaccounts. You
may choose to allocate nothing to a particular Subaccount. You may not choose a
fractional percent. The allocations to the Subaccounts along with allocations to
the Fixed Account must total 100%. The assets of each Subaccount will be used to
buy shares in a corresponding portfolio of the funding vehicles designated on
the schedule pages. See Section 5.5. Income and realized and unrealized gains or
losses from the assets of each Subaccount of the Account are credited to or
charged against that Subaccount without regard to income, gains or losses in the
other Subaccounts of the Account, our general account or any other separate
accounts.
5.3 VALUATION OF ASSETS
We will determine the value of the assets of each Subaccount at the end of each
valuation date.
5.4 TRANSFER AMONG SUBACCOUNTS
You may transfer amounts among Subaccounts as often as you wish in a policy
year. The transfer will take effect on the later of the date designated in the
request or on the valuation date following receipt of the written request at our
Home Office.
Each transfer must be for a minimum of $250 or the balance in the Subaccount, if
less. The first 15 transfers per policy year will be allowed free of charge.
Thereafter, a $10 transfer charge may be deducted from the accumulation value.
The minimum amount which can remain in a Subaccount and/or in the Fixed Account
as a result of a transfer is $100. Any amount below this minimum must be
included in the amount transferred.
Transfers may be subject to additional restrictions by the Funds.
4018 12
<PAGE>
5.5 THE FUNDS
The word Funds, where we use it in this policy without qualification, means the
funding vehicles designated on the schedule pages. The available Funds may
change. Any changes will be disclosed in the Prospectus. The Funds are
registered with the SEC under the Investment Company Act of 1940 as diversified
open-end management investment companies. The Funds bear their own expenses. The
Funds have several portfolios; there is a portfolio that corresponds to each of
the Subaccounts of the Account. We list those available on the policy date on
the schedule pages.
5.6 PORTFOLIO CHANGES
A portfolio of the Funds might, in our judgment, become unsuitable for
investment by a Subaccount. This might happen because of a change in investment
policy, because of a change in laws or regulations, because the shares are no
longer available for investment, or for some other reason. If that occurs, we
have the right to substitute another portfolio of the Funds, or to invest in
another fund. But we would first notify and receive approval from the SEC and
the Nebraska Insurance Department. This approval process is on file with the
insurance commissioner of the state where this policy is delivered. Any
portfolio changes will be disclosed in the Prospectus. If the SEC requires that
such action receive approval from a majority of the policyholders in the
Account, then you will be notified of your right to vote. You will be notified
of any material change in the investment policy of any portfolio in which you
have an interest. If you are dissatisfied with any change, you always have the
option to transfer all or a portion of your accumulation value to the Fixed
Account (See Section 6.2) or to one of the other available Subaccounts (See
Section 5.4).
SECTION 6. THE FIXED ACCOUNT
6.1 THE FIXED ACCOUNT
Net premiums allocated to and transfers to the Fixed Account under this policy
become part of the general account assets of Ameritas Variable Life Insurance
Company which support annuity and insurance obligations. The Fixed Account
includes all of Ameritas Variable Life Insurance Company's assets, except those
assets segregated in separate accounts. Ameritas Variable Life Insurance Company
maintains the sole discretion to invest the assets of the Fixed Account, subject
to applicable law.
You determine, using percentages, how the premium will be allocated to the Fixed
Account. You may choose to allocate nothing to the Fixed Account. The minimum
allocation must be at least 1%; you may not choose a fractional percentage. The
allocations to the Fixed Account along with allocations to the Subaccounts must
total 100%.
4018 13
<PAGE>
6.2 TRANSFERS AMONG THE FIXED ACCOUNT AND THE SUBACCOUNTS
You may transfer into the Fixed Account from the Subaccounts at any time during
the policy year.
You may make one transfer out of the Fixed Account to any of the other
Subaccounts only during the 30 day period following each policy anniversary.
----
The allowable transfer amount out of the Fixed Account is limited to the greater
of:
a. 25% of the Fixed Account balance; or
b. any Fixed Account transfer which occurred during the prior 13 months; or
c. $1,000.
Transfers into or from the Fixed Account will be subject to the same transfer
charges and minimums that are applied to transfers among the Subaccounts. See
Section 5.4.
SECTION 7. ACCUMULATION VALUE
7.1 HOW ACCUMULATION VALUE OF THE POLICY IS DETERMINED
The accumulation value of this policy on the issue date is:
a. The net premiums received by us on or before the issue date; minus
b. Any monthly deductions due on or before the issue date.
The accumulation value of this policy on a valuation date is equal to the total
of the values in each Subaccount and the Fixed Account, plus the accumulation
value impaired by policy debt which is held in the general account, plus any net
premium received on that valuation date but not yet allocated.
7.2 ACCUMULATION VALUE OF THE SUBACCOUNTS
To compute the accumulation value held in the Subaccounts on any valuation date,
we multiply each Subaccount's unit value (defined in Section 7.4 below) by the
number of Subaccount units allocated to this policy.
The number of Subaccount units will increase when:
a. Net premiums are credited to that Subaccount;
b. Transfers from other Subaccounts are credited to that Subaccount;
4018 14
<PAGE>
c. Policy debt (principal or interest) is repaid and allocated to the
Subaccount, or interest is credited from the amount held in the general
account to secure the policy debt; or
d. that portion of the net cash surrender value bonus, if any, is credited
to that Subaccount.
The number of Subaccount units will decrease when:
a. A policy loan is taken from that Subaccount;
b. A partial withdrawal is taken from that Subaccount;
c. A portion of the monthly deduction is taken from that Subaccount;
d. A transfer, and its charge, is made from that Subaccount to other
Subaccounts;
e. Policy loan interest not paid when due is taken from that Subaccount; or
f. A portion of any transfer charge is taken from that Subaccount.
Each transaction above will increase or decrease the number of Subaccount units
allocated to this policy by an amount equal to the dollar value of the
transaction divided by the current unit value.
7.3 NET ASSET VALUE
The net asset value of the shares of each portfolio of the Fund is determined
once daily as of the close of business of the New York Stock Exchange on days
when the Exchange is open for business. The net asset value is determined by
adding the values of all securities and other assets of the portfolio,
subtracting liabilities and expenses and dividing by the number of outstanding
shares of the portfolio. Expenses, including the investment advisory fee, are
accrued daily.
7.4 SUBACCOUNT UNIT VALUE
For each Subaccount, the value of an accumulation unit (unit value) was set when
the Subaccount was established. The unit value of each Subaccount reflects the
investment performance of that Subaccount. The unit value may increase or
decrease from one valuation date to the next.
The unit value of each Subaccount on any valuation date shall be calculated as
follows:
a. 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 date; minus
b. A daily charge for administrative expenses, called the asset based daily
administrative charge, shown on the schedule page; minus
c. A daily charge for mortality and expense risk shown on the schedule page;
minus
d. Any taxes payable by the Separate Account; divided by
4018 15
<PAGE>
e. The total number of units held in the Subaccount on the valuation date
before the purchase or redemption of any units on that date.
When transactions are made, the actual dollar amounts are converted to
accumulation units. The number of accumulation units for a transaction is found
by dividing the dollar amount of the transaction by the current unit value.
7.5 ACCUMULATION VALUE OF THE FIXED ACCOUNT
The accumulation value of the Fixed Account on a valuation date is equal to:
a. The net premiums credited to the Fixed Account; plus
b. Any transfers from the Subaccounts credited to the Fixed Account; plus
c. Any policy debt (principal or interest) repaid and allocated to the Fixed
Account, or interest credited from the amount held in the general account
to secure the policy debt; minus
d. Any policy loan taken from the Fixed Account; minus
e. Any partial withdrawal and its charge taken from the Fixed Account; minus
f. The portion of the monthly deduction taken from the Fixed Account; minus
g. Any transfer made from the Fixed Account; minus
h. The portion of any transfer charge taken from the Fixed Account; minus
i. Any policy loan interest not paid when due taken from the Fixed Account;
plus
j. that portion of the net cash surrender value bonus, if any, that is
credited to the Fixed Account; plus
k. Interest credits.
7.6 NET CASH SURRENDER VALUE BONUS
We may credit an additional amount (bonus) to your accumulation value each
policy year if the policy has been in force at least 21 years and if the net
cash surrender value is at least $500,000. The bonus will be a percentage of
your net cash surrender value. The policy must be in force for the bonus to be
credited. This bonus will be credited to the Subaccounts and/or the Fixed
Account based on the premium allocation percentages in effect at that time. We
reserve the right to change the bonus from time to time.
7.7 INTEREST CREDITS
We guarantee that the accumulation value in the Fixed Account will be credited
with an effective annual interest rate of at least 3.5%. We may, at our
discretion, credit a higher current rate of interest.
4018 16
<PAGE>
7.8 ADMINISTRATIVE EXPENSE CHARGE
On each monthly activity date, one-twelfth of an annual charge called the
administrative expense charge will be deducted from the accumulation value. The
maximum administrative expense charge is shown on the schedule pages. We have
the option of charging a current administrative expense charge, which can be
less than the maximum.
7.9 COST OF INSURANCE
The cost of insurance will be figured each month. It is the cost of insurance
for the basic policy (including any increases in the specified amount) plus the
cost for any riders. The cost for this policy is equal to:
a. the death benefit on the monthly activity date, discounted at the
guaranteed rate of interest for the Fixed Account for one month;
b. less the accumulation value on the monthly activity date, after all
monthly deductions have been taken except for the cost of insurance;
c. the above result multiplied by the monthly cost per $1,000 of insurance
(as described below in the Cost of Insurance Rates section);
d. divided by $1,000.
The charge made during the policy year will be shown on the annual report.
7.10 COST OF INSURANCE RATES
For the initial specified amount, the cost of insurance rates will not exceed
those shown on the SCHEDULE OF GUARANTEED ANNUAL COST OF INSURANCE RATES in the
schedule pages. To calculate the monthly rates, divide by 12 and round to the
nearest five decimal places.
Each year, the annual cost of insurance rates will be declared for the next
policy year. These rates will be based on the Insured's issue age and sex, the
Insured's tobacco usage, the specified amount and policy year. The rates will be
adjusted for any table rating and/or flat extra rating.
If this policy is rated at issue with extra premiums, the guaranteed rates shown
are a multiple of the guaranteed rates for a standard issue. This multiple
factor is shown on the schedule pages. Any flat extra rating is shown on the
schedule pages and has been included in the cost of insurance rates.
Any change in the current cost of insurance rates will apply to all policies
having the same issue age, specified amount, policy year, sex, plan, issue
month, issue year, rating class and guaranteed cost of insurance rates as this
policy.
7.11 MONTHLY DEDUCTION
The monthly deduction is made each policy month against the accumulation value
allocated to the Account and to the Fixed Account. Monthly deductions will be
deducted from the Subaccounts and the Fixed Account in the same proportion as
the
4018 17
<PAGE>
balances held in the Subaccounts and the Fixed Account. The monthly deduction
is equal to:
a. The administrative expense charge; plus
b. The cost of insurance for the current policy month, including the cost
for any rider.
Refer to the SCHEDULE OF GUARANTEED ANNUAL COST OF INSURANCE RATES and the
SCHEDULE OF CHARGES on the schedule pages for further details.
7.12 ANNUAL REPORT
Each year the Owner will be mailed an annual report that shows the progress of
this policy. This report will show for the last policy year:
a. premiums paid;
b. expense charges;
c. investment gains/losses; and
d. cost of insurance.
As of the date of the report, the following values will be shown:
a. accumulation value;
b. specified amount of insurance;
c. death benefit; and
d. outstanding debt, if any.
7.13 ILLUSTRATIVE REPORTS
The Owner may request a report illustrating future values of this policy under
both guaranteed and current assumptions at any time. The first report requested
in a policy year is free. If allowed by state law, a reasonable fee not to
exceed $50 may be charged for each report after the first report.
SECTION 8. POLICY SURRENDER
AND PARTIAL WITHDRAWALS
8.1 SURRENDER OF THE POLICY
This policy may be surrendered before the maturity date at any time during the
Insured's life for its net cash surrender value.
4018 18
<PAGE>
8.2 NET CASH SURRENDER VALUE
The amount payable upon surrender is the accumulation value on the valuation
date we receive your written request, less any surrender charges, and less any
outstanding policy debt. The net cash surrender value is payable in one lump sum
or under one of the payment options. See Section 12.
8.3 SURRENDER CHARGE
The maximum surrender charge is based on the initial specified amount of
insurance at issue and any increase in specified amount. We may charge an amount
less than the maximum surrender charge amount.
Refer to the SCHEDULE OF CHARGES on the schedule pages for the maximum surrender
charge on the initial specified amount of insurance.
If the specified amount is increased, the surrender charge will be a composite
of all charges which apply for each year. Refer to the SCHEDULE OF SURRENDER
CHARGES FOR INCREASES on the schedule pages for further details.
8.4 PARTIAL WITHDRAWAL
A partial withdrawal of this policy may be made for any amount of at least $500
subject to the following rules:
a. The net cash surrender value remaining after a partial withdrawal must be
at least $1,000 or an amount sufficient to maintain this policy in force
for the next 12 months.
b. A partial withdrawal is irrevocable.
c. The request must be made to us in writing on a form approved by us.
d. A partial withdrawal will not be allowed if the resulting specified
amount after the withdrawal is less than:
i. In the first three policy years:
(1) $500,000 for Insureds issue age 20 through 49; and
(2) $250,000 for Insureds issue age 50 and older.
ii. After the first three policy years:
(1) $400,000 for Insureds issue age 20 through 49; and
(2) $200,000 for Insureds issue age 50 and older.
e. A withdrawal charge will be deducted from the amount withdrawn. The
charge will not exceed the lesser of $50 or 2% of the amount withdrawn.
Partial withdrawals will affect other policy values. The accumulation value will
be reduced by the amount of the partial withdrawal. If Death Benefit Option A is
in effect on the date of a partial withdrawal, the specified amount will be
reduced by the amount of the partial withdrawal. These reductions will also
reduce the death benefits. See Section 9. The withdrawal will affect the net
policy funding used to determine if the Guaranteed Death Benefit is to remain in
effect. See Section 2.3.
4018 19
<PAGE>
You may tell us how to allocate the partial withdrawal among the Subaccounts
and/or the Fixed Account, provided that the minimum amount remaining in a
Subaccount and/or the Fixed Account as a result of the allocation is $100. If
you do not, or if there is not enough value in any Subaccount or in the Fixed
Account, the partial withdrawal will be allocated among the Subaccounts and the
Fixed Account in the same proportion as the balances held in each Subaccount and
the Fixed Account on the date we receive the request in our Home Office.
8.5 POSTPONEMENT OF PAYMENTS
We will usually pay any amounts payable from the Subaccounts as a result of
surrender, partial withdrawals, and policy loans within seven (7) days after we
receive written request in our Home Office on a form satisfactory to us. We can
postpone such payments or any transfers of amounts between Subaccounts if:
a. 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 SEC; or
b. The SEC by order permits the postponement for the protection of
policyowners; or
c. An emergency exists as determined by the SEC, as a result of which
disposal of securities is not reasonable, practicable, or it is not
reasonable or practicable to determine the value of the net assets of
the Account.
We may defer the payment of a full surrender, partial withdrawals and policy
loans from the Fixed Account for up to six months from the date we receive your
written request.
SECTION 9. DEATH BENEFIT
9.1 DEATH BENEFIT PROCEEDS
The death benefit proceeds payable to the beneficiary upon our receipt of
satisfactory proof of the death of the Insured while this policy is in force
will equal:
a. The death benefit; plus
b. Any additional life insurance proceeds provided by any rider; minus
c. Any outstanding policy debt; minus
d. Any overdue monthly deductions including the deduction for the month of
death.
9.2 INTEREST ON PROCEEDS
Death benefit proceeds that are paid in one lump sum will include interest if we
do not pay the proceeds within 30 days of receiving satisfactory proof of death.
The rate of interest will be the greater of:
a. 3% per annum.
4018 20
<PAGE>
b. the current rate of interest payable on death benefit proceeds.
c. the rate required by state law.
Interest will accrue from the date we receive satisfactory proof of death to the
date of payment of the death benefit proceeds.
9.3 DEATH BENEFIT
Subject to the provisions of this policy, the death benefit at any time prior to
the maturity date shall be either Option A or Option B. The initial death
benefit option is shown on the schedule pages. It may be changed as described in
Section 10.1.
Option A: Basic Coverage
The death benefit will be the greater of:
a. The current specified amount; or
b. A percentage of the accumulation value on the date of death, where the
applicable percentage is determined from the table shown below.
Option B: Basic Coverage Plus Accumulation Value
The death benefit will be the greater of:
a. The current specified amount plus the accumulation value on the date of
death; or
b. A percentage of the accumulation value on the date of death, where the
applicable percentage is determined from the table shown below.
Insured's Applicable Insured's Applicable
Age * Percentage Age * Percentage
--------- ---------- --------- ----------
40 or less 250% 60 130%
41 243 61 128
42 236 62 126
43 229 63 124
44 222 64 122
45 215 65 120
46 209 66 119
47 203 65 118
48 197 68 117
49 191 69 116
50 185 70 115
51 178 71 113
52 171 72 111
53 164 73 109
54 157 74 107
55 150 75-90 105
56 146 91 104
57 142 92 103
58 138 93 102
59 134 95-100 100
*Insured's Age means the attained age at the beginning of the policy year.
4018 21
<PAGE>
9.4 POSTPONEMENT OF PAYMENT
We will usually pay any death benefit proceeds within seven (7) days after we
receive satisfactory proof of death.
SECTION 10. POLICY CHANGES
AND EXCHANGE OF POLICY
10.1 CHANGE IN DEATH BENEFIT OPTIONS
You may change the death benefit option which is shown on the schedule pages and
is referred to in Section 9. The death benefit option may not be changed in the
first policy year and may only be changed once a year thereafter. The change
will become effective on the first monthly activity date on or next following
the date we approve your requested change.
If you change from Option A to Option B, the specified amount after the change
will equal the death benefit prior to the change, less the accumulation value as
of the date of change. A change from Option B to Option A will change the
specified amount to an amount equal to the death benefit as of the date of
change.
10.2 CHANGE IN THE SPECIFIED AMOUNT
After this policy has been in effect for one year, you can increase or decrease
the specified amount. To make a change, send a written request to our Home
Office. Any change will be effective on the monthly activity date on or next
following the date we approve the request, unless you specify a later date. You
may only change the specified amount once a year.
10.3 DECREASING THE SPECIFIED AMOUNT
A decrease in the specified amount is subject to the following conditions:
a. A decrease may not be made during the first policy year nor during the
first 12 policy months following an increase in specified amount except
for a decrease which was the result of a partial withdrawal.
b. The specified amount in effect after any decrease may not be less than:
i. In the second and third policy years:
(1) $500,000 for Insureds issue age 20 through 49; and
(2) $250,000 for Insureds issue age 50 and older.
ii. After the third policy year:
(1) $400,000 for Insureds issue age 20 through 49: and
(2) $200,000 for Insureds issue age 50 and older.
4018 22
<PAGE>
c. The resulting specified amount after a decrease may not affect the tax
qualifications of this policy as described in Section 7702 of the
Internal Revenue Code, as amended.
d. A decrease in the specified amount will not lower the Guaranteed Death
Benefit Premium that was in effect prior to the decrease.
A decrease in the specified amount will reduce the specified amount in the
following order:
a. The specified amount provided by the most recent increase;
b. the next most recent increases successively; and
c. the initial specified amount.
10.4 INCREASING THE SPECIFIED AMOUNT
Any increase of the specified amount is subject to the following conditions:
a. An increase may not be made in the first policy year.
b. A supplemental application for the increase and satisfactory evidence of
insurability of the Insured must be received.
c. The minimum amount of any increase is $25,000.
d. An increase cannot be made if the Insured's age nearest birthday is over
80.
e. If an increase occurs during the Guaranteed Death Benefit Period, an
additional premium may be required on the date of change in order to meet
the new Guaranteed Death Benefit Premium. The Guaranteed Death Benefit
requirement will reflect the change in the Guaranteed Death Benefit
premium from the date of change.
f. At the time of the increase, the accumulation value, less any surrender
charges less any outstanding policy debt must be at least equal to 12
times the current month's monthly deduction reflecting the increase in
specified amount. If this value is not sufficient to support these
monthly deductions for at least one year beyond the effective date of the
increase, additional premiums may be required. You will be notified of
any additional premium due.
g. If the increase is approved by us but in a rating class different than
the original specified amount or any prior increase, the Guaranteed Death
Benefit Period may be adjusted. The expiration date will be shown on a
new schedule page provided to you.
10.5 SURRENDER CHARGE FOR INCREASES
An additional surrender charge will be imposed under this policy in the event of
each requested increase in specified amount. The maximum surrender charge is an
amount per $1000 of increased specified amount based on the attained age and sex
of the Insured at the time of the increase. We may charge an amount less than
the maximum
4018 23
<PAGE>
surrender charge amount. The additional surrender charge will be deducted upon
the surrender of this policy at any time during the 15 years following the
increase. This maximum surrender charge will be determined at the time of each
increase and will grade down to zero at the end of 15 years based on the
following schedule:
YEAR FROM DATE % OF MAXIMUM SURRENDER CHARGE
OF INCREASE AT TIME OF INCREASE
----------- -------------------
1 100%
2 100%
3 100%
4 100%
5 100%
6 90%
7 80%
8 70%
9 60%
10 50%
11 40%
12 30%
13 20%
14 10%
15 0
See the SCHEDULE OF SURRENDER CHARGES FOR INCREASES on the schedule pages for
further information.
10.6 TIME PERIOD FOR EXCHANGE
You may exchange this 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 pages. The new policy will be
issued on the following basis:
a. The policy date, issue age, specified amount, and rating class of the
Insured will be the same as for this policy.
b. It will be a flexible premium adjustable life insurance policy available
for exchange issued by Ameritas Variable Life Insurance Company or an
affiliate on the exchange date.
c. 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.
d. Any outstanding policy debt must be repaid.
e. It will be subject to:
i. any assignments;
ii. any partial withdrawals;
iii. any accumulation value adjustment required; and
iv. any cost or credit of exchange.
4018 24
<PAGE>
To make the change, you must send this policy, a completed application for
exchange, and any required payment to our Home Office.
The change will be effective on the valuation date when all financial and
contractual arrangements for the new policy have been completed.
SECTION 11. LOAN BENEFITS
This policy has loan benefits that are described below. The amount of
outstanding loans plus accrued interest is called outstanding policy debt. Any
outstanding policy debt will be deducted from proceeds payable at the Insured's
death, on maturity, or on surrender.
11.1 MAKING A POLICY LOAN
After the first policy anniversary, you may obtain a policy loan from us. This
policy is the only security required. The maximum available loan amount is equal
to the net cash surrender value at the time of the loan less the guaranteed
monthly deductions remaining for the balance of the policy year, less interest
on the policy debt including the requested loan to the next policy anniversary
date.
11.2 INTEREST
The maximum interest rate on any loan is 6% per year. We have the option of
charging less. Interest accrues daily and becomes a part of the policy debt.
Interest payments are due on each anniversary date. If interest is not paid when
due, it will be added to the policy debt and will bear interest at the rate
charged on the loan.
11.3 REDUCED LOAN INTEREST RATE
The loan interest rate will be reduced to a maximum of 4% for eligible loan
amounts. This reduced loan interest rate is available on and after the 10th
policy anniversary. During each policy year, the eligible loan amount for a
reduced loan interest rate will be 10% of the net cash surrender value as of the
most recent policy anniversary. If a regular loan is in effect on the policy
anniversary, it will be converted to a loan with the reduced loan interest rate
up to the eligible amount. Loan interest accrued on loans with a reduced loan
interest rate will also accrue at the reduced loan rate.
11.4 OTHER BORROWING RULES
When a policy loan is made, or when interest is not paid when due, an amount
sufficient to secure the policy debt is transferred out of the Account and the
Fixed Account and into our general account. You may tell us how to allocate that
accumulation value among the Subaccounts and/or the Fixed Account provided that
the amount remaining in a Subaccount or the Fixed Account as a result of the
allocation is $100. Without specific direction, the accumulation value will be
allocated among the Subaccounts and/or the Fixed Account in the same proportion
that the policy's accumulation value in each Subaccount and the Fixed
4018 25
<PAGE>
Account bears to the total accumulation value in all Subaccounts and the Fixed
Account on the date we make the loan.
Accumulation value transferred into the general account to secure policy debt
will be credited with 3.5% interest annually. The interest earned will be
allocated to the Subaccounts and/or the Fixed Account in the same manner as net
premiums.
If the policy debt exceeds the accumulation value less any accrued expenses and
charges, you must pay the excess. We will send you a notice of the amount you
must pay. If you do not pay this amount within 61 days after we send notice,
this policy will terminate without value unless the Guaranteed Death Benefit is
in effect. We will send the notice to you and to any assignee of record at our
Home Office.
Any loan transaction will permanently affect the values of this policy.
11.5 REPAYING A POLICY DEBT
You can repay a policy debt in part or in full anytime during the Insured's life
prior to the maturity date while this policy is in force. Repayment must be
specifically identified as such by you. When a loan repayment is made,
accumulation value in the general account related to that payment will be
transferred into the Subaccounts and/or the Fixed Account in the same proportion
that net premiums are being allocated.
SECTION 12. PAYMENT OPTIONS
Life insurance proceeds, the net cash surrender value, or benefits at maturity
will be paid in one lump sum if no option is chosen. Subject to the rules stated
below, all or part of the proceeds can be paid under a payment option. During
the Insured's life, you can choose a payment option. A beneficiary can choose a
payment option if you have not chosen one at the Insured's death.
12.1 PAYMENT OPTION RULES
There are several important payment option rules:
a. An association, corporation, partnership or fiduciary can only receive a
lump sum payment or a payment under Option b.
b. If this policy is assigned, any amount due to the assignee will first be
paid in one sum. The balance, if any, may be applied under any payment
option.
c. If the payments under any option come to less than $100 each, we have the
right to make payments at less frequent intervals.
d. The rate of interest payable under Options ai, aii and b is guaranteed at
3% compounded annually. Payments under Option c and d are based on the
1983 Individual Annuity Tables projected 17 years with an interest rate
of 3 1/2%.
To choose an option, you must send a written request satisfactory to us to our
Home Office.
4018 26
<PAGE>
12.2 DESCRIPTION OF OPTIONS
Option ai
Interest Payment Option. We 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 us.
Option aii
Fixed Amount Payable Option. Each payment will be for an agreed fixed amount.
Payments continue until the amount we hold 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 or a lump sum refund.
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, payments will continue for the lifetime of the other. Variations
provide for a reduced amount of payment during the lifetime of the surviving
person.
SECTION 13. NOTES ON OUR COMPUTATIONS
13.1 BASIS OF COMPUTATION
In our computations, we assume that the minimum values and reserves held for
benefits guaranteed in the Fixed Account will earn interest at an annual rate of
3.5%. We use mortality rates from the Commissioners 1980 Standard Ordinary
Smoker and Nonsmoker, Male and Female Continuous Function Mortality Tables in
computing minimum values and reserves for this policy. The nonsmoker values from
these Tables are used when the Insured is a non-tobacco user and the smoker
values from these Tables are used when the Insured is a tobacco user. The male
values from these Tables are used when the Insured is a male. The female values
from these Tables are used when the Insured is a female.
13.2 METHODS OF COMPUTING VALUES
We have filed a detailed statement of the method we use to compute policy values
and benefits with the state where this policy was delivered. All these values
and benefits are not less than those required by the laws of that state.
Reserves are calculated in accordance with the Standard Non-Forfeiture Law and
Valuation Law of the state in which this policy is delivered. In no instance
will reserves be less than the net cash surrender values.
4018 27
<PAGE>
<TABLE>
<CAPTION>
TABLES OF SETTLEMENT OPTIONS
TABLE B (OPTION B) TABLE D (OPTION D)
Monthly Installments for Monthly Installments for each $1,000 of Net Proceeds
each $1,000 of Net Proceeds
MALE & MALE & MALE & MALE& MALE &
YEARS MONTHLY YEARS MONTHLY AGE FEMALE AGE FEMALE AGE FEMALE AGE FEMALE AGE FEMALE
- ------------------------------ ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 84.47 11 8.86 40 3.56 50 3.94 60 4.60 70 5.88 80 8.76
2 42.86 12 8.24 41 3.59 51 3.99 61 4.69 71 6.07 81 9.21
3 28.99 13 7.71 42 3.62 52 4.04 62 4.78 72 6.27 82 9.71
4 22.06 14 7.26 43 3.65 53 4.10 63 4.89 73 6.50 83 10.25
5 17.91 15 6.87 44 3.69 54 4.16 64 5.00 74 6.74 84 10.81
- -------------------------------- ---------------------------------------------------------------------------
6 15.14 16 6.53 45 3.72 55 4.22 65 5.12 75 7.01 85 11.51
7 13.16 17 6.23 46 3.76 56 4.29 66 5.25 76 7.30
8 11.68 18 5.96 47 3.80 57 4.36 67 5.39 77 7.62
9 10.53 19 5.73 48 3.84 58 4.43 68 5.54 78 7.96
10 9.61 20 5.51 49 3.89 59 4.51 69 5.70 79 8.34
- --------------------------------- -----------------------------------------------------------
</TABLE>
Income for payments other than monthly will be furnished by the Home Office
upon request.
Table D values for combinations of ages not shown and values for 2 males or
2 females will be furnished by the Home Office upon request.
TABLE C (OPTION C) Monthly Installments for each $1,000 of Net Proceeds
<TABLE>
<CAPTION>
MALE FEMALE
- ---------------------------------------------------- ----------------------------------------------------
LIFE MONTHS CERTAIN CASH LIFE MONTHS CERTAIN CASH
AGE ONLY 60 120 180 240 REF. AGE ONLY 60 120 180 240 REF.
- ---------------------------------------------------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.84 3.84 3.83 3.82 3.80 3.77 40 3.64 3.64 3.63 3.63 3.62 3.60
41 3.88 3.88 3.87 3.86 3.83 3.81 41 3.67 3.67 3.66 3.66 3.65 3.63
42 3.93 3.93 3.92 3.90 3.87 3.84 42 3.70 3.70 3.70 3.69 3.68 3.66
43 3.98 3.97 3.96 3.94 3.91 3.88 43 3.74 3.74 3.73 3.73 3.71 3.70
44 4.02 4.02 4.01 3.99 3.95 3.92 44 3.78 3.78 3.77 3.76 3.75 3.73
- ----------------------------------------------------- --------------------------------------------------
45 4.08 4.07 4.06 4.03 3.99 3.97 45 3.82 3.82 3.81 3.80 3.78 3.77
46 4.13 4.13 4.11 4.08 4.04 4.01 46 3.86 3.86 3.85 3.84 3.82 3.80
47 4.19 4.18 4.16 4.13 4.09 4.06 47 3.90 3.90 3.89 3.88 3.86 3.84
48 4.25 4.24 4.22 4.18 4.13 4.11 48 3.95 3.95 3.94 3.93 3.90 3.88
49 4.31 4.30 4.28 4.24 4.18 4.16 49 4.00 4.00 3.99 3.97 3.95 3.93
- ----------------------------------------------------- --------------------------------------------------
50 4.37 4.37 4.34 4.30 4.23 4.21 50 4.05 4.05 4.04 4.02 3.99 3.97
51 4.44 4.43 4.40 4.36 4.29 4.27 51 4.10 4.10 4.09 4.07 4.04 4.02
52 4.51 4.50 4.47 4.42 4.34 4.32 52 4.16 4.16 4.15 4.12 4.09 4.07
53 4.59 4.58 4.54 4.48 4.40 4.38 53 4.22 4.22 4.20 4.18 4.14 4.12
54 4.67 4.66 4.62 4.55 4.45 4.45 54 4.29 4.28 4.26 4.23 4.19 4.17
- ----------------------------------------------------- --------------------------------------------------
55 4.76 4.74 4.70 4.62 4.51 4.52 55 4.35 4.35 4.33 4.30 4.24 4.23
56 4.85 4.83 4.78 4.70 4.57 4.59 56 4.42 4.42 4.40 4.36 4.30 4.29
57 4.94 4.92 4.87 4.77 4.64 4.66 57 4.50 4.49 4.47 4.43 4.36 4.35
58 5.04 5.02 4.96 4.85 4.70 4.74 58 4.58 4.57 4.54 4.50 4.42 4.42
59 5.15 5.13 5.06 4.94 4.76 4.82 59 4.67 4.66 4.62 4.57 4.48 4.48
- ----------------------------------------------------- --------------------------------------------------
60 5.27 5.24 5.16 5.02 4.83 4.90 60 4.76 4.74 4.71 4.65 4.55 4.56
61 5.39 5.36 5.27 5.11 4.89 4.99 61 4.85 4.84 4.80 4.73 4.62 4.63
62 5.52 5.49 5.38 5.20 4.95 5.08 62 4.95 4.94 4.89 4.81 4.68 4.71
63 5.66 5.62 5.50 5.30 5.02 5.18 63 5.06 5.05 4.99 4.90 4.75 4.80
64 5.81 5.77 5.63 5.39 5.08 5.29 64 5.18 5.16 5.10 4.99 4.82 4.89
- ----------------------------------------------------- --------------------------------------------------
65 5.98 5.92 5.76 5.49 5.14 5.39 65 5.30 5.28 5.21 5.08 4.89 4.98
66 6.15 6.09 5.90 5.59 5.20 5.51 66 5.44 5.41 5.33 5.18 4.96 5.08
67 6.33 6.26 6.04 5.69 5.26 5.62 67 5.58 5.55 5.45 5.28 5.03 5.19
68 6.53 6.45 6.19 5.79 5.32 5.75 68 5.73 5.70 5.59 5.39 5.10 5.30
69 6.74 6.64 6.34 5.89 5.37 5.88 69 5.90 5.86 5.73 5.50 5.17 5.42
- ----------------------------------------------------- --------------------------------------------------
70 6.96 6.85 6.50 5.99 5.42 6.02 70 6.07 6.03 5.87 5.61 5.24 5.54
71 7.20 7.06 6.66 6.09 5.46 6.16 71 6.26 6.21 6.03 5.72 5.30 5.67
72 7.46 7.29 6.83 6.18 5.51 6.31 72 6.47 6.40 6.19 5.83 5.36 5.81
73 7.73 7.53 7.00 6.28 5.54 6.47 73 6.69 6.62 6.36 5.94 5.42 5.96
74 8.02 7.79 7.17 6.36 5.58 6.63 74 6.94 6.84 6.54 6.05 5.47 6.11
- ----------------------------------------------------- --------------------------------------------------
75 8.32 8.05 7.34 6.45 5.61 6.81 75 7.20 7.08 6.72 6.16 5.51 6.28
76 8.66 8.34 7.52 6.53 5.64 6.99 76 7.48 7.34 6.91 6.27 5.56 6.45
77 9.01 8.63 7.69 6.60 5.66 7.19 77 7.78 7.61 7.10 6.37 5.59 6.64
78 9.39 8.94 7.87 6.67 5.68 7.39 78 8.11 7.90 7.30 6.46 5.63 6.83
79 9.80 9.27 8.04 6.74 5.70 7.60 79 8.47 8.21 7.50 6.55 5.65 7.03
- ----------------------------------------------------- --------------------------------------------------
80 10.23 9.61 8.20 6.79 5.71 7.83 80 8.85 8.54 7.70 6.63 5.68 7.25
81 10.70 9.96 8.37 6.85 5.72 8.06 81 9.27 8.89 7.90 6.71 5.70 7.48
82 11.20 10.32 8.52 6.89 5.73 8.31 82 9.72 9.26 8.09 6.78 5.71 7.72
83 11.72 10.69 8.67 6.93 5.74 8.57 83 10.21 9.64 8.28 6.84 5.73 7.98
84 12.29 11.07 8.81 6.97 5.75 8.84 84 10.74 10.05 8.46 6.89 5.74 8.25
85 12.89 11.46 8.95 7.00 5.75 9.13 85 11.32 10.47 8.63 6.94 5.74 8.53
- ----------------------------------------------------- --------------------------------------------------
</TABLE>
Income for payments other than monthly will be furnished by the Home Office upon
request.
Table C values for ages below 40 and above 85, and values for 300 and 360 months
certain will be furnished by the Home Office upon request.
4018 28
<PAGE>
This page left intentionally blank.
4018 29
<PAGE>
Flexible Premium Variable Life Insurance Policy. Net cash surrender value
if any, payable at maturity. Death benefit proceeds payable at
death of Insured prior to maturity date. Flexible
premiums payable during lifetime of Insured
until maturity date (age 100).
Some benefits reflect investment results. Non-participating.
FORM 4018
AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO
WAIVER OF MONTHLY DEDUCTIONS ON
DISABILITY
CONSIDERATION
This rider is issued in return for the application and payment of its cost of
insurance. A copy of the application is attached to the policy. The cost of
insurance for this rider is deducted from the accumulation value at the same
time and in the same manner as the cost of insurance for the policy.
COST OF INSURANCE
The calculation of the monthly cost of insurance for this rider is described in
the attached table.
DEFINITIONS
DISABILITY BENEFIT: For purposes of this rider, the disability benefit refers to
the monthly deduction on each monthly activity date for the base policy and any
riders and is equal to:
1. the current cost of insurance for the base policy and any riders;
2. the expense charges; and
3. the charges for specified amount increases, if any.
TOTAL DISABILITY: Total disability must begin after the effective date and
before the expiration date of this rider. It must result from bodily injury
which occurs or sickness which first manifests itself while this rider is in
force.
Total Disability means:
1. Total loss of the sight of both eyes. This loss must be irrecoverable;
or
2. Total loss of the use of both hands, both feet, or one hand and one foot.
This loss must be irrecoverable; or
3. The incapacity of the Insured to engage in any substantial duties of his
or her occupation for at least six consecutive months. (Substantial
duties includes managerial or supervisory functions.)
During the first 24 months of total disability, occupation means the
usual work, employment, business or profession in which the Insured was
engaged immediately before the date of disability. This includes
attendance at school or college as a full-time student. After 24 months
of total disability, an Insured who is engaged in any occupation for
remuneration or profit will not be considered totally disabled.
EFFECTIVE DATE: The effective date of coverage under this rider shall be as
follows:
1. The policy date shall be the effective date for all coverage provided in
the original application.
WDIS 4096
<PAGE>
2. For any rider issued after the policy date, the effective date shall be
the date shown on a supplement to the schedule pages.
3. For any insurance that has been reinstated, the effective date shall be
the monthly activity date on or next following the date we approve the
reinstatement.
EXPIRATION DATE: This date is also shown on the schedule pages. It is the date
on which this rider is no longer effective.
BENEFITS
While the Insured is totally disabled, the disability benefit will not be
deducted from the accumulation value. During this time, the policy and any
rider(s) will continue to be in force.
Monthly deductions falling due before we approve a claim for benefits will
continue to be deducted from the accumulation value. However, after total
disability has continued for six (6) consecutive months and we approve the
claim, any disability benefit which otherwise could have been paid under the
provisions of this rider will be credited to the accumulation value.
If total disability begins after the grace period, no benefit under this rider
will be paid.
GENERAL PROVISIONS
NOTICE OF DISABILITY: To receive this benefit, written notice of claim must be
received at the Home Office. It must be received: (a) while the Insured is
living; (b) while the Insured is totally disabled; and (c) not later than 9
months after the Insured has become totally disabled.
If such notice is not furnished in the required time limit, the claim will not
be accepted. But a late claim will be accepted if it can be shown that it was
not reasonably possible to meet the requirements and that notice was given as
soon as was reasonably possible. In no event, however, will the Insured receive
any benefit under this rider for a period beyond one year before the date on
which notice was received.
PROOF OF TOTAL DISABILITY: The disability benefit will commence once we receive
satisfactory written proof that the Insured is totally disabled. Proof must be
presented at the Home Office: (a) while the Insured is living; (b) before total
disability has ended or been interrupted; and (c) within 12 months after we
receive the notice of total disability. Forms approved by us must be used.
Similar proof that the total disability is continuing may be required at
reasonable intervals. If the Insured fails to furnish such proof, the disability
benefit will cease.
INCONTESTABILITY: While the Insured is alive, the validity of this rider cannot
be contested after it has been in force for a period of 2 years from the
effective date of this rider.
REINSTATEMENT: Coverage under this rider may be reinstated with the policy
subject to the policy reinstatement provision. Reinstatement must occur before
the expiration date of this rider. Such reinstatement may occur any time before
the policy anniversary nearest the Insured's 60th birthday. The requirements for
reinstatement are:
1. Receipt of satisfactory evidence of insurability.
2. Payment of the minimum cost of insurance sufficient to keep this rider in
force for 3 months.
WDIS 4096
<PAGE>
EXCLUSIONS: The insured will not be eligible for the disability benefit if the
total disability on which the claim is based results from:
1. Self-inflicted bodily injury while sane or insane, other than
accidental injury; or
2. War or any act of war, whether declared or not, regardless of whether the
Insured is in the military, naval or air service.
TERMINATION OF RIDER: This rider will automatically terminate on the earliest of
these conditions:
1. On the expiration date of this rider;
2. On the monthly activity date on or next following the date we receive
your written request;
3. On surrender of this rider to us;
4. On termination of this policy; or
5. On the policy maturity date.
TERM RIDERS: If a renewable and convertible term rider is attached to the policy
during a benefit period, the cost of insurance for that rider will be waived
until the expiration date. If the Owner elects to convert that term rider, no
benefits will be paid under this rider on the conversion policy.
CHANGE OF POLICY: Once the disability benefit commences, you cannot change the
specified amount of insurance (except for any increase(s) which result from
exercising options under any Guaranteed Insurability Rider), the death benefit
option, the mode of the planned periodic premium payments, or change the policy
to another form of insurance.
NONPARTICIPATING: This rider is nonparticipating.
COST OF INSURANCE PAYMENTS AFTER THE RIDER HAS TERMINATED: We will not be liable
for the cost of insurance payments on this rider after it terminates except to
return them.
INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of the policy are
hereby referred to and made a part of this rider.
AMERITAS VARIABLE LIFE INSURANCE COMPANY
/s/ Norman M. Krivosha /s/ Lawrence J. Arth
Secretary President
WDIS 4096
<PAGE>
COST OF INSURANCE TABLE
On each monthly activity date, the monthly cost of insurance for this rider is
equal to the product of A times B where:
A is a factor based on the attained age, sex and tobacco use of the Insured
and is shown in the table below. (Note: If this rider is issued with a
special rating, this factor will be increased based on that rating. Any
special rating will be shown on the schedule pages).
B is the monthly deduction for the policy, including any table ratings and
any riders attached to the policy except for this rider.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MALE RATES FEMALE RATES MALE RATES FEMALE RATES
AGES NON-TOBACCO TOBACCO NON-TOBACCO TOBACCO AGES NON-TOBACCO TOBACCO NON-TOBACCO TOBACCO
USE USE USE USE USE USE USE USE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15 0.0487 0.0434 0.0583 0.0558 40 0.0655 0.0523 0.0652 0.0552
16 0.0463 0.0405 0.0573 0.0547 41 0.0679 0.0535 0.0670 0.0558
17 0.0445 0.0384 0.0563 0.0535 42 0.0708 0.0552 0.0691 0.0571
18 0.0434 0.0370 0.0554 0.0522 43 0.0735 0.0567 0.0716 0.0586
19 0.0422 0.0357 0.0543 0.0510 44 0.0765 0.0584 0.0742 0.0603
20 0.0413 0.0346 0.0530 0.0498 45 0.0794 0.0602 0.0770 0.0622
21 0.0403 0.0332 0.0516 0.0482 46 0.0825 0.0625 0.0801 0.0645
22 0.0419 0.0352 0.0526 0.0495 47 0.0866 0.0656 0.0838 0.0676
23 0.0427 0.0361 0.0528 0.0496 48 0.0915 0.0696 0.0881 0.0713
24 0.0437 0.0370 0.0523 0.0492 49 0.0974 0.0745 0.0935 0.0760
25 0.0448 0.0382 0.0525 0.0493 50 0.1054 0.0812 0.1000 0.0817
26 0.0458 0.0394 0.0521 0.0487 51 0.1148 0.0892 0.1082 0.0893
27 0.0466 0.0402 0.0521 0.0484 52 0.1266 0.0994 0.1187 0.0987
28 0.0475 0.0411 0.0518 0.0482 53 0.1405 0.1112 0.1305 0.1095
29 0.0481 0.0416 0.0517 0.0478 54 0.1579 0.1258 0.1465 0.1238
30 0.0487 0.0419 0.0514 0.0471 55 0.1778 0.1428 0.1649 0.1404
31 0.0489 0.0420 0.0513 0.0469 56 0.2034 0.1647 0.1896 0.1626
32 0.0492 0.0423 0.0512 0.0466 57 0.2234 0.1818 0.2106 0.1816
33 0.0492 0.0421 0.0512 0.0464 58 0.2460 0.2007 0.2362 0.2046
34 0.0492 0.0419 0.0506 0.0457 59 0.2684 0.2211 0.2633 0.2295
35 0.0492 0.0420 0.0509 0.0460
36 0.0507 0.0427 0.0524 0.0468
37 0.0562 0.0467 0.0573 0.0505
38 0.0593 0.0486 0.0600 0.0522
39 0.0624 0.0506 0.0627 0.0539
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
WDIS 4096
<PAGE>
COST OF INSURANCE TABLE
On each monthly activity date, the monthly cost of insurance for this rider is
equal to the product of A times B where:
A is a factor based on the attained age and tobacco use of the Insured and
is shown in the table below. (Note: If this rider is issued with a
special rating, this factor will be increased based on that rating. Any
special rating will be shown on the schedule pages).
B is the monthly deduction for the policy, including any table ratings and
any riders attached to the policy except for this rider.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNISEX RATES UNISEX RATES
AGES NON-TOBACCO TOBACCO AGES NON-TOBACCO TOBACCO
USE USE USE USE
<S> <C> <C> <C> <C> <C>
15 0.0506 0.0459 40 0.0654 0.0529
16 0.0485 0.0433 41 0.0677 0.0540
17 0.0469 0.0414 42 0.0705 0.0556
18 0.0458 0.0400 43 0.0731 0.0571
19 0.0446 0.0388 44 0.0760 0.0588
20 0.0436 0.0376 45 0.0789 0.0606
21 0.0426 0.0362 46 0.0820 0.0629
22 0.0440 0.0381 47 0.0860 0.0660
23 0.0447 0.0388 48 0.0908 0.0699
24 0.0454 0.0394 49 0.0966 0.0748
25 0.0463 0.0404 50 0.1043 0.0813
26 0.0471 0.0413 51 0.1135 0.0892
27 0.0477 0.0418 52 0.1250 0.0993
28 0.0484 0.0425 53 0.1385 0.1109
29 0.0488 0.0428 54 0.1556 0.1254
30 0.0492 0.0429 55 0.1752 0.1423
31 0.0494 0.0430 56 0.2006 0.1643
32 0.0496 0.0432 57 0.2208 0.1818
33 0.0496 0.0430 58 0.2440 0.2015
34 0.0495 0.0427 59 0.2674 0.2228
35 0.0495 0.0428
36 0.0510 0.0435
37 0.0564 0.0475
38 0.0594 0.0493
39 0.0625 0.0513
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
WDIS 4096 (UNI)
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO
DISABILITY BENEFIT RIDER
CONSIDERATION
This rider is issued in consideration of the application and payment of its cost
of insurance. A copy of the application is attached to the policy. The cost of
insurance for this rider is deducted from the accumulation value at the same
time and in the same manner as the cost of insurance for the policy.
DEFINITIONS
DISABILITY BENEFIT: For purposes of this rider, the disability benefit is an
amount shown on the schedule pages, selected by you on the application.
EFFECTIVE DATE: The effective date of all coverage under this rider shall be as
follows:
1. The policy date shall be the effective date for all coverage provided in
the original application.
2. For any rider issued after the policy date, the effective date shall be
the date shown on a supplement to the schedule pages.
3. For any insurance that has been reinstated, the effective date shall be
the monthly activity date on or next following the date we approve the
reinstatement.
EXPIRATION DATE: This date is also shown on the schedule pages. It is the date
on which this rider is no longer effective.
TOTAL DISABILITY: Total disability must begin after the effective date of this
rider as shown in the schedule pages and before the policy anniversary nearest
the Insured's 60th birthday. It must result from bodily injury which occurs or
sickness which first manifests itself while this rider is in force.
Total Disability means:
1. Total loss of the sight of both eyes. This loss must be irrecoverable; or
2. Total loss of the use of both hands, both feet, or one hand and one foot.
This loss must be irrecoverable; or
3. The incapacity of the Insured to engage in any substantial duties of his
or her occupation for at least six consecutive months. (Substantial
duties includes managerial or supervisory functions.)
During the first 24 months of total disability, occupation means the
usual work, employment, business or profession in which the Insured was
engaged immediately before the date of disability. This includes
attendance at school or college as a full-time student. After 24 months
of total disability an Insured who is engaged in any occupation for
remuneration or profit will not be considered totally disabled.
DBR 4096
<PAGE>
BENEFITS
While the Insured is totally disabled, the disability benefit will be applied as
premium. The premium will be credited as of the last monthly activity date,
prior to the approval date of the claim and will be credited annually
thereafter, during continuance of total disability. In addition, while the
Insured is totally disabled, the cost of insurance for this rider will not be
deducted from the accumulation value. All other monthly deductions will apply.
If total disability begins after the grace period, no benefits under this rider
will be paid.
GENERAL PROVISION
NOTICE OF DISABILITY: To receive this benefit, written notice of claim must be
received at the Home Office. It must be received: (a) while the Insured is
living; (b) while the Insured is totally disabled; and (c) not later than 9
months after the Insured has become totally disabled.
If such notice is not furnished in the required time limit, the claim will not
be accepted. But a late claim will be accepted if it can be shown that it was
not reasonably possible to meet the requirements and that notice was given as
soon as was reasonably possible. In no event, however, will the Insured receive
any benefit under this rider for a period prior to one year before the date on
which notice was received.
PROOF OF TOTAL DISABILITY: Approval of the initial notice of claim will be
granted after we receive satisfactory written proof that the Insured is totally
disabled. Proof must be presented at the Home Office: (a) while the Insured is
living; (b) before total disability has ended or been interrupted; and (c)
within 12 months after we receive the notice of total disability. Forms approved
by us must be used.
Similar proof that the total disability is continuing may be required at
reasonable intervals. If the Insured fails to furnish such proof, the disability
benefit will cease.
INCONTESTABILITY: While the Insured is alive, the validity of this rider cannot
be contested after it has been in force for a period of 2 years from the
effective date of this rider.
REINSTATEMENT: Coverage under this rider may be reinstated with the policy if no
more than 3 years have passed since the date of termination. Reinstatement must
occur before the expiration date of this rider. Such reinstatement may occur any
time before the policy anniversary nearest the Insured's 60th birthday. The
requirements for reinstatement are:
1. Receipt of evidence of insurability satisfactory to us.
2. Payment of the minimum cost of insurance sufficient to keep the rider in
force for 3 months.
DBR 4096
<PAGE>
EXCLUSIONS: The Insured will not be eligible for the disability benefit if the
total disability on which the claim is based results from:
1. Self-inflicted bodily injury while sane or insane; other than accidental
injury; or
2. War or any act of war, whether declared or not, regardless of whether the
Insured is in the armed forces.
TERMINATION OF RIDER: This rider will automatically terminate on the earliest of
these conditions:
1. On the expiration date of this rider;
2. On the monthly activity date on or next following the date we receive
your written request;
3. On surrender of this rider to us;
4. On termination of this policy; or
5. On the policy maturity date.
CHANGE OF POLICY: Once the disability benefit commences, you cannot change the
specified amount of insurance (except for any increase(s) which result from
exercising options under any Guaranteed Insurability Rider), the death benefit
option, the mode of the planned periodic premium payments, or change the policy
to another form of insurance.
NONPARTICIPATING: This rider is nonparticipating.
COST OF INSURANCE DEDUCTIONS AFTER THE RIDER HAS TERMINATED: We will not be
liable for the cost of insurance deductions on this rider after it terminates
except to return them.
INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of the policy are
hereby referred to and made a part of this rider.
AMERITAS VARIABLE LIFE INSURANCE COMPANY
/s/ Norman M. Krivosha /s/ Lawrence J. Arth
Secretary President
DBR 4096
<PAGE>
This page intentionally left blank.
DBR 4096
<PAGE>
CERTIFICATION
I, W. D. Marting, duly elected and qualified Secretary of Ameritas
Variable Life Insurance Company, Lincoln, Nebraska, hereby certify that the
attached Amended Articles of Incorporation is a true and exact copy of the
Amended Articles of Incorporation adopted by the Board of Directors of
Bankers Life Assurance Company of Nebraska (renamed Ameritas Variable Life
Insurance Company, effective July 1, 1988) on February 26, 1988, and
approved by the Sole Shareholder on May 2, 1988. I further certify that
said Amended Articles of Incorporation 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 20th day
----
of June, 1989.
----
/s/ W D Marting
-----------------------------
Secretary
CORPORATE SEAL
<PAGE>
ARTICLES OF INCORPORATION
OF
AMERITAS VARIABLE LIFE INSURANCE COMPANY
(as amended July 1, 1988)
We, the undersigned natural persons of the age of eighteen years or more, acting
as incorporators of a corporation under the Incorporation for such corporation:
ARTICLE I
Name
----
The name of the Corporation is Ameritas Variable Life Insurance Company.
ARTICLE II
Duration
--------
The period of its duration is perpetual.
ARTICLE III
Purposes
--------
The purposes for which the Corporation is organized are:
(a) To transact a life, including variable life, accident and health
insurance business to the extent and in the manner permitted by law
and in accordance with such licenses, certificates of authority and
permits as the regulatory agencies of the states and jurisdictions
in which the Corporation may transact business, shall issue to it;
(b) To issue policies, certificates, bonds and other contracts of
insurance conforming in all particulars with the laws and
regulations relating thereto;
(c) To enter into reinsurance contracts and treaties: and
(d) To do everything necessary, proper, advisable or convenient for the
accomplishment of the purposes hereinabove set forth, and to do all
other things incidental thereto or connected therewith which are
not forbidden by the laws of the State of Nebraska or by these
Articles of Incorporation.
ARTICLE IV
Authorized Shares
-----------------
The total number of shares which the Corporation has authority to issue is fifty
thousand (50,000) shares of common stock with a par value of one hundred dollars
($100.00) each.
<PAGE>
ARTICLE V
Registered Office and Registered Agent
--------------------------------------
The street address of the present registered office of the Corporation is 5900 0
Street in the City of Lincoln, County of Lancaster, State of Nebraska and the
name of the present registered agent at such address is Julian H. Hopkins.
ARTICLE VI
Incorporators
-------------
The business and affairs of the Corporation shall be managed by the following
incorporators until the first meeting of shareholders and thereafter by the
Board of Directors elected by the shareholders:
Harold W. Booth 5900 0 Street
Lincoln, NE 68510
Richard P. Day 5900 0 Street
Lincoln, NE 68510
Julian H. Hopkins 5900 0 Street
Lincoln, NE 68510
James L. Kowalke 5900 0 Street
Lincoln, NE 68510
W. D. Marting 5900 0 Street
Lincoln, NE 68510
Donald C. Morris 5900 0 Street
Lincoln, NE 68510
Robert E. Swett 5900 0 Street
Lincoln, NE 68510
Neal E. Tyner 5900 0 Street
Lincoln, NE 68510
Richard W. Vautravers 5900 0 Street
Lincoln, NE 68510
<PAGE>
CERTIFICATION
I, W. D. Marting, duly elected and qualified Secretary of Ameritas
Variable Life Insurance Company, Lincoln, Nebraska, hereby certify that the
attached resolution is a true and exact copy of a resolution adopted by the
Board of Directors of Ameritas Variable Life Insurance Company on August 12,
1988. I further certify that the attached resolution is 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 20th day of
----
June, 1989.
- ----
/s/ W D Marting
---------------------------------------
Secretary
Corporate Seal
<PAGE>
RESOLUTION
BE IT RESOLVED, that the Registered Agent for Ameritas Variable Life
Insurance Company shall be Norman M. Krivosha.
AVLIC Board of Directors
August 12, 1988
<PAGE>
Judge Norman Krivosha Ameritas Financial Services Logo
Executive Vice President- 5900 O Street/P.O. Box 81889/Lincoln, NE 68501/
Administration and General (402) 467-7176
Counsel
(Record of Filing With State of Nebraska)
September 15, 1988
Allen J. Beermann
Secretary of State
Corporations Division
2300 State Capitol
Lincoln, NE 68509
ATTENTION: LINDA MURPHY
RE: CHANGE IN REGISTERED AGENT
Dear Mr. Beermann:
On behalf of the corporations listed below, we are requesting the following
change to our Resident Agent.
The current Resident Agent and address is:
Julian H. Hopkins
5900 "O" Street
P.O. Box 81889
Lincoln, NE 68510
The Resident Agent should be changed to:
Norman M. Krivosha
5900 "O' Street
P.O. Box 81889
Lincoln, NE 68510
This change in Resident Agent should be made for the following corporations:
Ameritas Marketing Corp.
Ameritas Variable Life Insurance Company
Bankers Life Nebraska Company
Pathmark Assurance Company
A check in the amount of $50 to cover the required filing fees was sent in our
original filing letter of September 7, 1988.
<PAGE>
Allen J. Beerman
September 15, 1988
Page two
If you need additional information, please feel free to call me at 467-7176. I
would appreciate receiving an acknowledgment of this filing, and have enclosed a
duplicate copy of this letter and a return envelope for your convenience. Thanks
for your assistance.
Sincerely,
/s/ Norman M. Krivosha
Norman M. Krivosha
Executive Vice President - Administration
and General Counsel
NMK:cb
Enclosures
E:44
<PAGE>
EXHIBIT L
to Joint Venture Agreement dated as of March 8, 1996 (the "Agreement")
---
between Ameritas Life Insurance Corp. and
American Mutual Life Insurance Company
AMENDED BYLAWS OF
-----------------
AMERITAS VARIABLE LIFE INSURANCE COMPANY
----------------------------------------
ARTICLE I
OFFICES
Section 1. Principal Office. The principal office of the Corporation in
----------------
the State of Nebraska shall be located in the City of Lincoln, County of
Lancaster. The Corporation may have such other offices, either within or without
the State of Nebraska, as the Board of Directors may designate or as the
business of the Corporation may require from time to time.
Section 2. Registered Office. The registered office of the Corporation
------------------
may be, but need not be, identical with the principal office in the State of
Nebraska, and the address of the registered office may be changed from time to
time by the Board of Directors.
ARTICLE II
SHAREHOLDER
Section 1. Annual Meeting. The annual meeting of the shareholders shall
--------------
be held on the first Monday in April of each year, or when otherwise determined
by the Board of Directors from time to time, beginning in the year 1997, at the
hour specified in the notice of such meeting for the purpose of electing
Directors and for the transaction of such business as may come before the
meeting. If the day fixed for the annual meeting shall be on a legal holiday in
the State of Nebraska, such meeting shall be held on the next succeeding
business day.
Section 2. Special Meetings. Special meetings of the shareholders, for
----------------
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the Chairman of the Board or the President or by the Board of Directors, and
shall be called by the Chairman of the Board, the President or the Secretary at
the request of the holders of not less than one-tenth of all the outstanding
shares of the Corporation entitled to vote at the meeting.
L-1 of 12
<PAGE>
Section 3. Place of Meeting. Written or printed notice stating the
-----------------
place (either within or without the State of Nebraska), day and hour of the
meeting and, in case of a special meeting. the purpose(s) for which the meeting
is called, shall be delivered not less than ten nor more than fifty days before
the date of the meeting, either personally or by mail, by or at the direction of
the Chairman or the Secretary, or the officer or persons calling the meeting, to
each shareholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at its address as it appears on the stock transfer
books of the Corporation, with postage thereon prepaid.
Section 4. Quorum. Three-fourths of the outstanding shares of the
------
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders: If less than three-fourths of
the outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time with notice to all
shareholders. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed.
Section 5. Proxies. At all meetings of shareholders, a shareholder may
-------
vote by proxy executed in writing by the shareholder or by its duly authorized
attorney in fact. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
eleven (11) months from the date of its execution, unless otherwise provided in
the proxy. All solicitation of proxies shall comply with the laws and
regulations to stock insurance companies now or hereafter in effect.
Section 6. Voting of Shares. Each outstanding share entitled to vote
----------------
shall be entitled to one vote upon each matter submitted to a vote at a meeting
of shareholders.
Section 7. Voting of Shares by Certain Holders.
-----------------------------------
(a) Shares standing in the name of another corporation may be voted by
such officer, agent or proxy as the Board of Directors of such corporation may
prescribe.
(b) Shares of its own stock belonging to the Corporation or held by it
in a fiduciary capacity shall not be voted, directly or indirectly, at any
meeting, and shall not be counted in determining the total number of outstanding
shares at any given time.
Section 8. Informal Action by Shareholders. Any action required to be
--------------------------------
taken at a meeting of the shareholders, or any other action which may be taken
at a meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof.
L-2 of 12
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the Corporation
--------------
shall be managed by its Board of Directors.
Section 2. Number, Tenure and Qualifications. The number of Directors
----------------------------------
of the Corporation shall be six (6). Each shareholder (or, in the event there is
a single shareholder, each of the shareholders of such shareholder) shall, each
year, nominate three (3) Directors, and the shareholder(s) shall thereupon
together vote all of its (their) shares in favor of the persons so nominated.
Directors shall serve for a term of one (1) year and until their successors are
elected and qualified, and need not be shareholders. No shareholder shall have a
right to cumulative voting in the election of Directors.
Section 3. Regular Meetings. A regular meeting of the Board of
-----------------
Directors shall be held on the first Monday in April of each year, or when
otherwise determined by the Board of Directors from time to time, beginning in
the year 1997, at the place and hour, within or without the State of Nebraska,
specified in the Notice of such meeting. The Board of Directors may provide, by
resolution, the time and place, either within or without the State of Nebraska,
for the holding of additional regular meetings without other notice than such
resolution.
Section 4. Special Meetings. Special meetings of the Board of Directors
----------------
may be called by or at the request of the Chairman of the Board or the President
or any two Directors. The person or persons authorized to call special meetings
of the Board of Directors may fix any place, either within or without the State
of Nebraska, as the place for holding any special meeting of the Board of
Directors called by them.
Section 5. Notice of Special Meetings. Notice of any special meeting
---------------------------
shall be given at least two days prior thereto by written notice delivered
personally or by overnight courier, or at least ten days prior thereto by mail,
to each Director and to the Secretary at his or her business address. If mailed,
such notice shall be deemed to be delivered when deposited in the United States
mail so addressed, with postage thereon prepaid. Appearance of any Director at a
meeting shall constitute a waiver of notice of such meeting to such Director,
except where a Director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
Section 6. Quorum. Four (4) Directors shall constitute a quorum for the
------
transaction of business at any meeting of the Board of Directors, whether or not
all Directors are present and/or eligible to vote on such matter and whether or
not any vacancy exists.
L-3 of 12
<PAGE>
Section 7. Manner of Acting. The act of at least four (4) of the
------------------
Directors shall be the act of the Board of Directors, whether or not all
Directors are present and/or eligible to vote on such matter and whether or not
any vacancy exists. Members of the Board of Directors or of any committee
appointed by the Board may participate in a meeting by means of conference
telephone or similar communications equipment whereby all members participating
in the meeting are able to hear each other, and participation in such meeting in
such manner shall constitute presence in person at such meeting. Any two members
of the Board of Directors may, upon written request directed to the Chairman or
the Secretary of the Corporation, (I) place any matter on the agenda for any
meeting of the Board of Directors and/or (ii) call for a vote on any agenda item
during any meeting of the Board of Directors. Any action required or permitted
to be taken at a meeting of the Board of Directors may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all-the Directors.
Section 8. Removal. At any time, in the discretion of the shareholder
-------
(or, in the event there is a single shareholder, then upon the express written
direction of a shareholder of such shareholder to such shareholder), the
shareholder(s) shall take such actions, without prior notice or delay, and with
or without cause, as may be necessary to remove any director or committee member
nominated as provided in Section 2 of this Article III by the shareholder making
such written direction.
Section 9. Vacancies. Any vacancy occurring in the Board of Directors
---------
shall be filled as follows: the shareholder (or, in the event there is a single
shareholder, the shareholder of such shareholder) which nominated the Director
whose position is vacated shall nominate a Director to be elected in the place
and stead of such vacating Director, and the shareholder(s) of the Corporation
shall promptly thereupon vote all of its (their) shares in favor of the person
so nominated. A Director elected to fill a vacancy shall be elected for the
unexpired term of his or her predecessor in office.
Section 10. Compensation. By resolution of the Board of Directors, the
------------
Directors who are not employed by or serving as officers of the Corporation may
be paid their expenses, if any, of attendance at each meeting of the Board of
Directors, and may be paid a fixed sum for attendance at each meeting of the
Board of Directors or a stated salary as Director. No such payment shall
preclude any Director from serving the Corporation in any other capacity and
receiving compensation therefor; provided, however, that no such Director
employed by or serving as an officer of the Corporation shall receive any
compensation as a Director.
Section 11. Indemnification. The Corporation 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 or she is or was a
director, office or employee of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses including
L-4 of 12
<PAGE>
attorney's fees, judgments, fines and amounts paid in settlement actually and
reasonable incurred in connection with such action, suit or proceeding to the
full extent authorized by the laws of Nebraska.
Section 12. Non-exclusive Provision. The foregoing right of indemnity
------------------------
and reimbursement shall not be deemed exclusive of any other rights to which any
officer, director or employee may be entitled under any other bylaw, agreement,
vote of shareholders or otherwise.
Section 13. Amount of Indemnity. The amount of indemnity or
----------------------
reimbursement to which any of the foregoing indemnities may be entitled shall be
fixed by the Board of Directors, except that in any case where there is no
disinterested majority of the Board of Directors available (whether a quorum or
not) the amount shall be fixed by a committee of arbitrators appointed by the
Board of Directors.
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the Corporation shall be a Chairman
------
of the Board, a Chief Executive Officer, a President, one or more Vice
Presidents (the number thereof to be determined by the Board of Directors), a
Secretary, and a Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as may be deemed necessary
may be elected or appointed by the Board of Directors. Any two or more offices
may be held by the same person, except that the President cannot also hold the
office of Secretary, Treasurer or Vice President.
Section 2. Election and Term of Office. The officers of the Corporation
---------------------------
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the first meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
conveniently may be. The term of office for each officer shall be one year, and
each such officer shall hold office only until the expiration of such one-year
period unless otherwise determined by the Board of Directors. Each officer shall
hold office until the earliest of (i) the expiration of his or her term, (ii)
the due election and qualification of his or her successor, (iii) his or her
death, or (iv) his or her resignation or removal in the manner hereinafter
provided.
Section 3. Removal. Any officer or agent elected or appointed by the
-------
Board of Directors may be removed by the Board of Directors, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
L-5 of 12
<PAGE>
Section 4. Vacancies. A vacancy in an office because of death,
---------
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
Section 5. The Chairman. The Chairman shall preside over all meetings
------------
of the shareholders and of the Board of Directors and shall perform such duties
as may be prescribed and delegated to him or her by the Board of Directors.
Section 6. The Chief Executive Officer. The Chief Executive Officer
----------------------------
shall be the principal executive officer of the Corporation and, subject to the
control of the Board of Directors and its Executive Committee, shall in general
supervise and control all of the business and affairs of the Corporation. He or
she may sign, with the Secretary or any other proper officer of the Corporation
thereunto authorized by the Board of Directors, certificates for shares of the
Corporation, any deeds, mortgages, bonds, contracts, or other instruments which
the Board of Directors has authorized to be executed, except in cases where the
signing and execution thereof shall be expressly delegated by the Board of
Directors or by these Bylaws to some other officer or agent of the Corporation,
or shall be required by law to be otherwise signed or executed; and in general
shall perform all duties incident to the office of the Chairman of the Board and
such other duties as may be prescribed by the Board of Directors from time to
time.
Section 7. The President. The President shall have general control and
-------------
management of the business affairs of the Corporation subject to the direction
of the Chairman of the Board and Chief Executive Officer and the Board of
Directors. He or she may delegate such duties and responsibilities and authority
to other officers as he or she may deem proper.
Section 8. The Vice Presidents. In the absence of the President or in
--------------------
the event of his or her death, inability or refusal to act, the Vice President
(or in the event there be more than one Vice President, the Vice Presidents in
the order designated at the time of their election, or in the absence of any
designation, then in the order of their election) shall perform the duties of
the President, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the President. Any Vice President may sign, with
the Secretary or an Assistant Secretary, certificates for shares of the
Corporation; and shall perform such other duties as from time to time may be
assigned to him or her by the Chairman, the President or by the Board of
Directors.
Section 9. The Secretary. The Secretary shall: (a) keep the minutes of
-------------
the shareholder's and of the Board of Directors' meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these Bylaws or as required by law; (c) be custodian of
the corporate records and of the seal of the Corporation and see that the seal
of the Corporation is affixed to all documents the execution of which on behalf
of the Corporation under its seal is duly authorized; (d) keep a register of the
post office address of each shareholder which shall be furnished to the
Secretary by such shareholders; (e) sign, with the Chief Executive Officer or a
Vice President, certificates for
L-6 of 12
<PAGE>
shares of the Corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of the stock
transfer books of the Corporation; and (g) in general perform all duties
incident to the office of Secretary and such other duties as from time to time
may be assigned to him or her by the Chairman, the President or by the Board of
Directors.
Section 10. The Treasurer. If required by the Board of Directors, the
-------------
Treasurer shall give a bond for the faithful discharge of his or her duties in
such sum and with such surety or sureties as the Board of Directors shall
determine. He or she shall: (a) have charge and custody of and be responsible
for all funds and securities of the Corporation; (b) receive and give receipts
for moneys due and payable to the Corporation from any source whatsoever, and
deposit all such moneys in the name of the Corporation in such banks, trust
companies or other depositories as shall be selected in accordance with
provisions of Article V of these Bylaws; and (c) in general perform all of the
duties incident to the office of Treasurer and such other duties as from time to
time may be assigned to him or her by the Chairman, the President or by the
Board of Directors.
Section 11. Other Officers. The powers, authority, duties and
---------------
responsibilities of other executive officers shall be delegated and defined by
the Board of Directors, or if no such delegation and definition be made, then by
the Chief Executive Officer.
Section 12. Salaries. The salaries of the officers, if any, shall be
--------
fixed from time to time by the Board of Directors and no officer shall be
prevented from receiving such salary by reason of the fact that he or she is
also a Director of the Corporation.
Section 13. Delegation of Duties. The Board of Directors may at its
---------------------
discretion designate such administrative officers as it may deem proper and
delegate such duties, responsibilities and authority to them as it may
determine.
ARTICLE V
COMMITTEES
Section 1. Executive Committee.
-------------------
(a) At each annual meeting, the Board of Directors shall elect two of
its members (who shall be nominated by the shareholders of the Corporation (or,
in the event there is a single shareholder, by the respective shareholders of
such shareholder, each of whom shall nominate one such member)) to serve as the
Executive Committee for the ensuing year or until their successors are elected
and qualified. Any vacancy in the Executive Committee occurring during the year
may be filled for the unexpired term by the Board of Directors, at the direction
of the shareholder (or the shareholder of the shareholder) which nominated such
member.
L-7 of 12
<PAGE>
(b) The Executive Committee shall meet at the call of either member of
the Committee and at a time and place fixed by the Committee at a previous
meeting or in the notice of call of the meeting by a member of the Committee.
Notice of call of meetings may be written or by telephone and shall be given to
each member in sufficient time to permit convenient travel by usual means to the
meeting. Call and notice of meetings may be waived before or after the meeting
and attendance at any meeting shall constitute a waiver of call and notice of
call thereof by the attending member.
(c) Any action by the Executive Committee shall require the unanimous
vote of both of its members. If one member is not present or is unable to vote
on such matter, or in the event of a vacancy, then the Executive Committee shall
not take any action until two members selected in accordance with this Article
V, Section I are able to vote.
(d) Except as limited by the laws of the State of Nebraska, the
Executive Committee shall possess and exercise all of the powers of the Board of
Directors in the interim between meetings of the Board of Directors. The
Executive Committee shall carry into practical effect all orders and directions
of the Board of Directors and shall in such interim decide all questions of
current business policy. The Secretary shall promptly forward a copy of the
minutes of each meeting of the Executive Committee to each Director. It may
appoint, employ or remove, or authorize the appointment, employment or removal
of such supervisory and administrative officers and employees as it shall deem
necessary for the conduct of the Company's business, including one or more
Assistant Secretaries and one or more Assistant Treasurers with full authority
to perform the duties of Secretary and Treasurer respectively and fix and
authorize payment of the compensation of such officers and employees. It may, at
its discretion, adjust the compensation of such officers and employees so
appointed or employed.
Section 2. Finance Committee.
-----------------
(a) At each of its annual meetings, the Board of Directors shall elect
four of its members (who shall be nominated by the shareholders of the
Corporation (or, in the event there is a single shareholder, by the respective
shareholders of such shareholder, each of whom shall nominate two such members))
to serve as the Finance Committee for the ensuing year or until their successors
are elected and qualified. Any vacancy in the Finance Committee occurring during
the year may be filled by the Board of Directors for the unexpired term.
(b) The Committee shall meet at the call of any member of the Committee
and at a time and place fixed by the Committee at a previous meeting or in the
notice of call of the meeting by a member of the Committee. Notice of call of
meetings may be written or by telephone and shall be given to each member in
sufficient time to permit convenient travel by usual means to the meeting. Call
and notice of call of meetings may be waived before or after the meeting and
attendance at any meeting shall constitute a waiver of call and notice of call
thereof by the attending member.
L-8 of 12
<PAGE>
(c) The Finance Committee shall be charged with the duty of investing
or lending funds of the Corporation, and also charged with the approval of
banks, banking institutions and other places of deposit of the funds and
securities of the Corporation.
Section 3. Standing Committees.
--------------------
(a) The Board of Directors may establish and discontinue such standing
committees as it may from time to time consider necessary and proper, delegating
to them such responsibilities and authority as it may deem appropriate.
(b) Any such committee shall be composed of an even number of persons,
and the members of any committee of the Board of Directors shall be those
individuals nominated by the shareholders of the Corporation (or, in the event
there is a single shareholder, by the respective shareholders of such
shareholder, each of whom shall nominate half of such members).
(c) Any vacancy occurring in any such committee during the year may be
filled for the unexpired term by the Board of Directors, at the direction of the
shareholder (or the shareholder of the shareholder) which nominated such member.
(d) The affirmative vote of at least a majority of all the members of
any committee shall be the act of such Committee, whether or not all members are
present and/or eligible to vote on such matter and whether or not any vacancy
exists.
Section 4. Informal Action by Committees. Any action required or
-------------------------------
permitted to be taken at a meeting of any committee (including the Executive
Committee and the Finance Committee) may be taken without a meeting if a consent
in writing, setting forth the action so taken, shall be signed by all the
committee members.
Section 5. Committee Records. Each committee other than the Executive
------------------
Committee shall appoint a committee secretary who shall keep minutes of the
official votes and acts of the committee and such other records of the
committee's deliberations and activities as the committee shall direct. The
committee secretary shall keep one copy of such minutes and shall file a copy
with the Secretary of the Company and send a copy to each member or the
Executive Committee.
Section 6. Reports to Board of Directors. All action by each committee
-----------------------------
shall be reported to the Board of Directors at its meeting next succeeding such
action, and shall be subject to revision or alteration by the Board of
Directors; provided, that no acts or rights of third parties shall be affected
by such revision or alteration.
L-9 of 12
<PAGE>
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contract. The Board of Directors may authorize any
--------
officer(s) or agent(s) to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances. Any contract. agreement or
other undertaking of the Corporation with AMAL Corporation, Ameritas Investment
Corp., Ameritas Life Insurance Corp. and/or American Mutual Life Insurance
Company shall be effective only upon approval of the Board of Directors and,
until and unless such approval is obtained, any such contract, agreement or
other undertaking shall be void ab initio.
Section 2. Loans. No loans shall be contracted on behalf of the
-----
Corporation and no evidence of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
Section 3. Checks, Drafts, Etc. All checks, drafts or other orders for
--------------------
the payment of money, notes or other evidence of indebtedness issued in the name
of the Corporation shall be signed by such officer(s) or agent(s) of the
Corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.
Section 4. Deposits. All funds of the Corporation not otherwise
--------
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates representing shares of
-----------------------
the Corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the Chief Executive Officer or a
Vice President and by the Secretary or an Assistant Secretary. All certificates
for shares, including certificates for newly issued shares, shall be
consecutively numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books of the
Corporation. All certificates surrendered to the Corporation for transfer shall
be canceled and no new certificates shall be issued in respect of such transfer
until the former certificates for a like number of shares shall have been
surrendered and canceled, except that in case of a lost, destroyed or mutilated
certificate a new one may be issued therefor upon such terms and indemnity to
the Corporation as the Board of Directors may prescribe.
L-10 of 12
<PAGE>
Section 2. Transfer of Shares. Transfer of shares of the Corporation
------------------
shall be made only on the stock transfer books of the Corporation by the holder
of record thereof or by its legal representative, who shall furnish proper
evidence of authority to transfer, or by its attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the Corporation,
and on surrender for cancellation of the certificate for such shares. The person
in whose name shares stand on the books of the Corporation shall be deemed by
the Corporation to be the owner thereof for all purposes.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall be January 1 to December 31.
ARTICLE IX
DIVIDENDS
The Board of Directors may from time to time declare, and the
Corporation may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law.
ARTICLE X
SEAL
The Board of Directors shall provide a corporate seal and shall have
inscribed thereon the name of the Corporation, its state of incorporation and
the words "Corporate Seal."
ARTICLE XI
WAIVER OF NOTICE
Whenever any notice is required to be given to any shareholder or
Director of the Corporation under the provisions of these Bylaws or under the
provisions of the Articles of Incorporation or under the provisions of the
Nebraska Business Corporation Act, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.
L-11 of 12
<PAGE>
ARTICLE XII
AMENDMENTS
These Bylaws may be altered, amended or repealed and new bylaws may be
adopted by the Board of Directors at any regular or special meeting of the Board
of Directors; provided, however, that these Bylaws shall not be amended without
the unanimous consent of the Directors unless ten (10) days' written notice of
any meeting called for the purpose of amending the Bylaws is delivered to each
Director.
L-12 of 12
<PAGE>
PARTICIPATION AGREEMENT
-----------------------
Among
VARIABLE INSURANCE PRODUCTS FUND II,
------------------------------------
FIDELITY DISTRIBUTORS CORPORATION
---------------------------------
and
AMERITAS VARIABLE LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of this 15th day of July, 1989
by and among AMERITAS VARIABLE LIFE INSURANCE COMPANY, (hereinafter the
"Company") , a Nebraska corporation, on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule C hereto as may be
amended from time to time (each such account hereinafter referred to as the
"Account"), and the VARIABLE INSURANCE PRODUCTS FUND II, an unincorporated
business trust organized under the laws of the Commonwealth of Massachusetts
(hereinafter the "Fund") and FIDELITY DISTRIBUTORS CORPORATION (hereinafter the
"Underwriter"), a Massachusetts corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as 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
substantially identical to this Agreement (hereinafter "Participating Insurance
Companies") ; and WHEREAS, the beneficial interest in the Fund is divided into
several series of shares, each designated a "Portfolio" and representing the
interest in a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission, dated September 17, 1986 (File No. 812-6422), granting
Participating Insurance Companies and variable annuity and variable life
insurance separate
-1-
<PAGE>
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 (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, Fidelity Management & Research Company (the "Adviser") is
duly registered as an investment adviser under the federal Investment Advisers
Act of 1940 and any applicable state securities law; and
WHEREAS, the Company has registered or will register certain variable
life and variable annuity contracts 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 C hereto, to set aside
and invest assets attributable to the aforesaid variable life and annuity
contracts; and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities 2nd Exchange Commission 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. (hereinafter "NASD"); 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 life and variable
annuity contracts and
-2-
<PAGE>
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 Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
-------------------
1.1. The Underwriter agrees to sell to the Company those shares of the
Fund which each Account orders, executing such orders on a daily basis at the
net asset value next computed after receipt by the Fund or its designee of the
order for the shares of the Fund. 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 Fund receives notice of such order by 9:30 a.m. Boston 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 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 Trustees of the Fund (hereinafter the "Trustees") may refuse 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 Trustees
acting in good faith and in light of their
-3-
<PAGE>
fiduciary duties under federal and any applicable state laws, necessary in the
best interests of the shareholders of such Portfolio.
1.3. The Fund and the Underwriter agree that shares of the Fund will be
sold only to Participating Insurance Companies and their separate accounts. No
shares of any Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund shares to any
insurance company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VII and Sections 2.5 and 2.12 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 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 to purchase and redeem the shares of each
Portfolio offered by the then current prospectus of the Fund and in accordance
with the provisions of such prospectus. The Company agrees that all net amounts
available under the variable life and variable annuity contracts with the form
number(s) which are listed on Schedule A attached hereto and incorporated herein
by this reference, as such Schedule A may be amended from time to time hereafter
by mutual written agreement of all the parties hereto, (the "Contracts") shall
be invested in the Fund, in such other Funds advised by the Adviser as may be
mutually agreed to in writing by the parties hereto, or in the Company's general
account, provided that such amounts may also be invested in an investment
company other than the Fund if
-4-
<PAGE>
(a) such other investment company, or series thereof, has investment objectives
or policies that are substantially different from the investment objectives and
policies of all the Portfolios of the Fund; or (b) the Company gives the Fund
and the Underwriter 45 days written notice of its intention to make such other
investment company available as a funding vehicle for the Contracts; or (c) such
other investment company was available as a funding vehicle for the Contracts
prior to the date of this Agreement and the Company so informs the Fund and
Underwriter prior to their signing this Agreement; or (d) the Fund or
Underwriter consents to the use of such 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 purpose 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 Funds' 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.
-5-
<PAGE>
1.10. The Fund shall make the net asset value per share for each
Portfolio available to the Company on a daily basis 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 7 p.m. Boston
time.
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 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 Section 44-402.01 of the Nebraska Insurance Code 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 Nebraska 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 or the
Underwriter.
-6-
<PAGE>
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
endowment, annuity or life insurance 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 and the Underwriter 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 currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise,
although it may make such payments in the future. The Fund has adopted a "no
fee" or "defensive" Rule 12b-1 Plan under which it makes no payments for
distribution expenses. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, the Fund undertakes to have a board of
trustees, a majority of whom are not interested persons of the Fund, formulate
and approve any plan under Rule 12b-1 to finance distribution expenses.
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 Nebraska and the Fund and the Underwriter represent that their
respective operations are and shall at all times remain in material compliance
with the
-7-
<PAGE>
laws of the State of Nebraska to the extent required to perform this Agreement.
2.7. The Underwriter represents and warrants that it is a member in
good standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with the laws of the State of Nebraska and all applicable state
and federal securities laws, including without limitation the 1933 Act, the 1934
Act, and the 1940 Act.
2.8. The Fund 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.
2.9. The Underwriter represents and warrants that the Adviser is and
shall remain duly registered in all material respects under all applicable
federal and state securities laws and that the Adviser shall perform its
obligations for the Fund in compliance in all material respects with the laws of
the State of Nebraska and any applicable state and federal securities laws.
2.10. The Fund and Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other
individual/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 Section 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.
2.11. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Fund are and shall continue to be at all
times
-8-
<PAGE>
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
Section 270.17g-l 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.
2.12. The Company represents and warrants that it will not purchase
Fund shares with Account assets derived from the sale of Contracts to deferred
compensation plans with respect to service for state and local governments which
qualify under Section 457 of the federal Internal Revenue Code, as may be
amended. The Company may purchase Fund shares with Account assets derived from
any sale of a Contract to any other type of tax-advantaged employee benefit
plan; provided however that such plan has no more than 500 employees who are
eligible to participate at the time of the first such purchase hereunder by the
Company of Fund shares derived from the sale of such Contract.
ARTICLE III. Prospectuses and Proxy Statements; Voting
------------------------------------------
3.1. The Underwriter shall provide the Company (at the Company's
expense) with as many copies of the Fund's current prospectus as the Company may
reasonably request. If requested by the Company in lieu thereof, the Fund shall
provide such documentation (including a final copy of the new prospectus as set
in type at the Fund's expense) and other assistance as is reasonably necessary
in order for the Company once each year (or more frequently if the prospectus
for the Fund is amended) to have the prospectus for the Contracts and the Fund's
prospectus printed together in one document (such printing to be at the
Company's expense).
3.2. The Fund's prospectus shall state that the Statement of
Additional Information for the Fund is available from the Underwriter (or in the
Fund's
-9-
<PAGE>
discretion, the Prospectus shall state that such Statement is available from the
Fund), and the Underwriter (or the Fund), at its expense, shall print and
provide such Statement free of charge to the Company and to any owner of a
Contract or prospective owner who requests such Statement.
3.3. The Fund, at its expense, shall provide the Company with copies of
its proxy material, reports to stockholders and other communications to
stockholders in such quantity as the Company shall reasonably require for
distributing to Contract owners.
3.4. 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
(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 Investment Company
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. Participating Insurance
Companies shall be responsible for assuring 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 attached hereto and incorporated herein by this
reference, which standards will also be provided to the
other Participating Insurance Companies.
3.5. 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
-10-
<PAGE>
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 trustees and with
whatever rules the Commission may promulgate with respect thereto.
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 its investment adviser or the Underwriter is
named, at least fifteen Business Days prior to its use. No such material shall
be used if the Fund or its designee object to such use within fifteen 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 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 statement for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee or by the Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.
4.3. The Fund, Underwriter, 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 fifteen Business Days prior to its use.
No such material shall be used if the Company or its designee object to such use
within fifteen Business Days after receipt of such material.
-11-
<PAGE>
4.4. The Fund and the Underwriter 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 Contracts or
each Account, contemporaneously with the filing of such document with the
Securities and Exchange Commission.
4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" incudes, 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
-12-
<PAGE>
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, 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 and Underwriter 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 and such payments will be made out of existing fees otherwise payable to
the Underwriter, past profits of the Underwriter or other resources available to
the Underwriter. No such payments shall be made directly by the Fund. Currently,
no such payments are contemplated.
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 it 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
-13-
<PAGE>
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, all taxes on the issuance or transfer of
the Fund's shares.
5.3. The Company shall bear the expenses of printing and distributing
the Fund's prospectus to owners of Contracts issued by the Company and of
distributing the Fund's proxy materials and reports to such Contract owners.
ARTICLE VII. 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 Section 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.
ARTICLE VII. Potential Conflicts
-------------------
7.1. The Board of Trustees of the Fund (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
-14-
<PAGE>
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 an insurer 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 trustees, that a material irreconcilable conflict exits, 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 trustees), 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
registration management investment company or managed separate account.
-15-
<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 Account's investment in
the Fund and terminate this Agreement; 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. Any such withdrawal and termination must
take place within six(6) months after the Fund gives written notice that this
provision is being implemented, and until the end of that 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.
7.5. If a material irreconcilable conflict arises because a particular
state 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 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
-16-
<PAGE>
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. In the event that the Board determines that any proposed action does
not adequately remedy an irreconcilable material conflict, then the Company will
withdraw the Account's investment in the Fund 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 by any such material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
7.7. If and to the extent the 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
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) Section 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.
ARTICLE VIII. Indemnification
---------------
8.1. Indemnification By The Company
------------------------------
8.1.(a). The Company agrees to indemnify and hold harmless the Fund and
each of its Trustees and officers and each person, if any, who controls the Fund
-17-
<PAGE>
within the meaning of Section 15 of the 1933 Act (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 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 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) or wrongful conduct of the
Company or persons under its control, with respect to the sale or
distribution of the Contracts or Fund Shares; or
-18-
<PAGE>
(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 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 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
to which an Indemnified Party would otherwise be subject by reason of 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 or to
the Fund, whichever is applicable.
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
-19-
<PAGE>
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 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 Underwriter
----------------------------------
8.2(a). The Underwriter 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" 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 Underwriter) 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 the Fund's shares or the
Contracts and:
-20-
<PAGE>
(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, 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 Underwriter or
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 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 for the Contracts not
supplied by the Underwriter or persons under its control) or wrongful
conduct of the Fund, Adviser or Underwriter or persons under their
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 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
-21-
<PAGE>
(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
(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
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material breach of
this Agreement by the Underwriter; as limited by and in accordance with
the provisions of Sections 8.2(b) and 8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of 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 or to
each Company or the Account, whichever is applicable.
8.2(c). The Underwriter 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 Underwriter 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 Underwriter of
any such claim shall not relieve the Underwriter 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
-22-
<PAGE>
brought against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter'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 Underwriter 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 Underwriter 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" 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 Trustees or any member thereof,
are related to the operations of the Fund and:
-23-
<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
(including a failure to comply with the diversification requirements
specified in Article VI 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;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of 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 or to
the Company, the Fund, the Underwriter or each Account, whichever is applicable.
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
-24-
<PAGE>
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 and the underwriter agree 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.
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.
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.
-25-
<PAGE>
ARTICLE X. Termination
-----------
10.1 This Agreement shall terminate:
(a) at the option of any party upon one year advance written notice to
the other parties.; provided, however such notice shall not be given
earlier than one year following the date of this Agreement; or
(b) at the option of the Company to the extent that shares of
Portfolios are not reasonably available to meet the requirements of
the Contracts as determined by the Company, provided however, that such
termination shall apply only to the Portfolio(s) not reasonably
available. Prompt notice of the election to terminate for such cause
shall be furnished by the company; or
(c) at the option of the Fund in the event that formal administrative
proceedings are instituted against the Company by the National
Association of Securities Dealers, Inc. ("NASD"), the Securities and
Exchange Commission, the Insurance Commissioner or any other regulatory
body regarding the Company's duties under this Agreement or related
to the sale of the Contracts, with respect to the operation of any
Account, or the purchase of the Fund shares, provided, however, that
the Fund 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 Company to perform its obligations under
this Agreement; or
(d) at the option of the Company in the event that formal
administrative proceedings are instituted against the Fund or
Underwriter by the NASD, the Securities and Exchange Commission, or
any state securities or insurance department or any other regulatory
body, provided, however, that the Company determines in its sole
judgment exercised in good faith, that any
-26-
<PAGE>
such administrative proceedings will have a material adverse effect
upon the ability of the Fund or Underwriter to perform its obligations
under this Agreement; or
(e) with respect to any Account, upon requisite vote of the Contract
owners having, an interest in such Account (or any subaccourrt) to
substitute the shares of another investment company for the
corresponding Portfolio shares of the Fund in accordance with the terms
of the Contracts for which those Portfolio shares had been selected to
serve as the underlying investment media. The Company will give 30
days' prior written notice to the Fund of the date of any proposed vote
to replace the Fund's shares; or
(f) at the option of the Company, in the event any of the Fund'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
(g) at the option of the Company, if the Fund ceases to qualify as a
Regulated Investment Conpany 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
(h) at the option of the Company, if the Fund fails to meet the
diversification requirements specified in Article VI hereof; or
(i) at the option of either the Fund or the Underwriter, if (1) the
Fund or the Underwriter, respectively, shall determine, in their sole
judgment reasonably exercised in good faith, that the Company has
suffered a material adverse change in its business or financial
condition or is the subject of material adverse publicity and such
material adverse change or material adverse publicity will have a
material adverse impact upon the
-27-
<PAGE>
business and operations of either the Fund or the Underwriter, (2) the
Fund or the Underwriter shall notify the Company in writing of such
determination and its intent to terminate this Agreement, and (3) after
considering the actions taken by the Company and any other changes in
circumstances since the giving of such notice , such determination of
the Fund or the Underwriter shall continue to apply on the sixtieth
(60th) day following the giving of such notice, which sixtieth day
shall be the effective date of termination; or
(j) at the option of the Company, if (1) the Conpany shall determine,
in its sole judgment reasonably exercised in good faith, that either
the Fund or the Underwriter has suffered a material adverse change in
its business or financial condition or is the subject of material
adverse publicity and such material adverse change or material adverse
publicity will have a material adverse impact upon the business and
operations of the Company, (2) the Conpany shall notify the Fund and
the Underwriter in writing of such determination and its intent
to terminate the Agreement, and (3) after considering the actions
taken by the Fund and/or the Underwriter and any other changes in
circumstances since the giving of such notice, such determination
shall continue to apply on the sixtieth (60th) day following the giving
of such notice, which sixtieth day shall be the effective date of
termination; or
(k) at the option of either the Fund or the Underwriter, if the Company
gives the Fund and the underwriter the written notice specified in
Section 1.6(b) 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(k) shall be effective forty five (45) days after the notice
specified in Section 1.6(b) was given.
-28-
<PAGE>
10.2. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 10.1(a) may be exercised for any
reason or for no reason.
10.3. Notice Requirement. No termination of this Agreement shall be
effective unless and until the party terminating this Agreement gives prior
written notice to all other parties to this Agreement of its intent to
terminate which notice shall set forth the basis for such termination.
Furthermore,
(a) In the event that any termination is based upon the provisions of
Article VII, or the provision of Section 10.1(a), 10.1(i), 10.1(j) or
10.1(k) of this Agreement, such prior written notice shall be given in
advance of the effective date of termination as required by such
provisions; and
(b) in the event that any termination is based upon the provisions of
Section 10.1(c) or 10.1(d) of this Agreement, such prior written notice
shall be given at least ninety (90) days before the effective date of
termination.
10.4. Effect of Termination. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall at the option of the Conpany,
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 reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. The parties agree that this
Section 10.4 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.
-29-
<PAGE>
10.5. The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in either Account) except (i) as necessary to implement Contract Owner initiated
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"). Upon request, the Company will promptly
furnish to the Fund and the Underwriter the opinion of counsel for the Company
(which counsel shall be reasonably satisfactory to the Fund and the Underwriter)
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 or the Underwriter 90 days notice of its
intention to do so.
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:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
If to the Company:
5900 "0" Street, P.O. Box 82550
Lincoln, NE 68501
Attn: Rodney Vincent
-30-
<PAGE>
If to the Underwriter:
82 Devonshire Street
Boston, Massachusetts 02109
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 Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund.
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
-31-
<PAGE>
Securities and Exchange Commission, the NASD 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 variable life insurance operations of the Company are
being conducted in a manner consistent with the California Variable Life
Insurance Regulations and any other applicable law or regulations.
12.7 The Fund and Underwriter agree that the extent any advisory or
other fees received by the Fund, the Underwriter or the Adviser are determined
to be unlawful in legal or administrative proceedings under the 1973 NAIC model
variable life insurance regulation in the states of California, Colorado,
Maryland or Michigan, the Underwriter shall indemnify and reimburse the Company
for any out of pocket expenses and actual damages the Company has incurred as a
result of any such proceeding; provided however that the provisions of Section
8.2(b) of this and 8.2(c) shall apply to such indemnification and reimbursement
obligation. Such indemnification and reimbursement obligation shall be in
addition to any other indemnification and reimbursement obligations of the Fund
and/or the Underwriter under this Agreement.
12.8. 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.
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
-32-
<PAGE>
seal to be hereunder affixed hereto as of the date specified below.
Company:
AMERITAS VARIABLE LIFE INSURANCE COMPANY
By its authorized officer
SEAL By: /s/ Lawrence J. Arth
Title: President
Date: August 7, 1989
Fund:
VARIABLE INSURANCE PRODUCTS FUND II
By its authorized officer,
SEAL By: /s/ J. Larry Burkhead
Title: Senior Vice President
Date: August 14, 1989
Underwriter:
FIDELITY DISTRIBUTORS CORPORATION
By its authorized officer,
By: /s/ Roger Servison
Title: President
Date: August 21, 1989
-33-
<PAGE>
Schedule A
----------
Contracts
---------
1. Contract Form 4001, 4002, 4010, 4778, 4780
-34-
<PAGE>
Schedule C
----------
Accounts
--------
Name of Account Date of Resolution of Company's Board which
Established the Account
Separate Account V August 25, 1985
Separate Account VA2
-35-
<PAGE>
SCHEDULE B
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsibilities for the
handling of proxies relating to the Fund by the Underwriter, the Fund and the
Company. 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 Insurance Company to perform the steps
delineated below.
1. The number of proxy proposals is given to the Company by the
Underwriter as early as possible before the date set by the Fund for
the shareholder meeting (the "Record Date") to facilitate the
establishment of tabulation procedures. At this time the Underwriter
will inform the Company of the Record, Mailing and Meeting dates.
This will be done verbally approximately two months before meeting.
2. 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/shares which are attributed to each
contractowner/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 voting instruction cards is determined
by the activities described in Step #2. The Company
will use its best efforts to call in the number of
Customers to Fidelity, as soon as possible, but no
later than two weeks after the Record Date.
3. The Fund's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of a proxy
statement. Underwriter will provide at least one copy of the last
Annual Report to the Company.
-38-
<PAGE>
4. 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
with the name, address, and number of units/shares for each customer.
(This and related steps may occur later in the chronological process
due to possible uncertainties relating to the proposals.)
5. Company will, at its expense, print account information on the Cards.
6. Allow approximately 2-4 business days for printing information on the
Cards. Information commonly found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of shares/units (depends upon
tabulation process used by the computer system, i.e. whether
or not system knows number of shares held just by "reading"
the account number)
e. individual Card number for use in tracking and verification
of votes (already on Cards as printed by the Fund)
Note: When the cards are printed by the Fund, each Card is
numbered individually to guard against potential
Card/vote duplication.
7. During this time, the Legal Department of the Underwriter or its
affiliate ("Fidelity Legal") will develop, produce, and the Fund will
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 Insurance Company). Contents of envelope sent to
Customers by Company will include:
a. Voting Instruction Card
b. proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company) addressed to the
Company or its tabulation agent
-39-
<PAGE>
d. "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.)
e. cover letter - optional, supplied by Company and reviewed and
approved in advance by Fidelity Legal.
8. 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 Fidelity
Legal.
9. 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,
but not necessary, to receive a proper response percentage.)
Solicitation time is calculated as days from (but not
including) the meeting, counting backwards. ---
** If the Customers were actually the shareholders, at least 50%
of the outstanding shares must be represented and 66 2/3% of
that 50% must have voted affirmatively on the proposals to
have an effective vote. However, since the Company is the
-------
shareholder, the Customers' votes will (except in certain
limited circumstances) be used to dictate how the Company will
vote.
10. 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 into vote
categories of all yes, no, or mixed replies, and to begin data entry.
* 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 Fidelity in the past.
-40-
<PAGE>
11. Signatures on Card checked against legal name on account registration
which was printed on the Card.
* This verifies whether an individual has signed correctly
for self with the same name as is on the account registration.
For Example:
If the account registration is under "Bertram C. Jones,
Trustee," then that is the exact legal name to be printed on
the Card and is the signature needed on the Card.
12. 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, 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 "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.
13. 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 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.
14. The actual tabulation of votes is done in units and in shares. (It is
very important that the Fund receives the tabulations stated in terms
of a percentage and the number of shares.)
------
15. Final tabulation in shares is verbally given by the Company to the
Legal Department on the morning of the meeting by 10:00 a.m. Boston
time.
-41-
<PAGE>
16. Vote is verified by the Company and is sent to Fidelity Legal.
17. Company then votes its proxy in accordance with the votes received
from the Customers the morning of the meeting (except in limited
circumstances as may be otherwise required by law). A letter
documenting the Company's vote is supplied by Fidelity Legal and is
sent to officer of company for his signature. This letter is normally
sent after the meeting has taken place.
18. 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
Fidelity will be permitted reasonable access to such Cards.
19. All approvals and "signing-off" may be done orally, but must always
be followed up in writing.
20. During tabulation procedures, the Fund and Company determine if a
resolicitation is required and what form that resolicitation should
take, whether it should be by a mailing, or by recorded telephone
line. A resolicitation is considered when the vote response is slow
and it appears that not enough votes would be received by the meeting
date. The meeting could be adjourned to leave enough time for the
resolicitation.
A determination is made by the Company and the Fund to find the most cost
effective candidates for resolicitation. These are Customers who have not yet
voted, but whose balances are large enough to bring in the required vote with
minimal costs.
a. By mail: Fidelity Legal amends the voting instruction cards, if
necessary, and writes a resolicitation letter. The Fund supplies
these to the Company. The Company generates a mailing list etc.,
as per step 2 onward.
b. By phone: Rarely used. This must be done on a recorded line.
Fidelity Legal and the Fund will supply the necessary procedures
and script if a phone resolicitation were to be required.
2/1/88
/proxy1/
PARTICIPATION AGREEMENT
-----------------------
Among
THE ALGER AMERICAN FUND
------------------------
FRED ALGER & COMPANY, INCORPORATED
----------------------------------
and
AMERITAS VARIABLE LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of this 28th day of April,
---- -----
1992 by and among AMERITAS VARIABLE LIFE INSURANCE COMPANY, (hereinafter the
- ----
"Company"), a Nebraska corporation, on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule C hereto as may be
amended from time to time (each such account hereinafter referred to as the
"Account"), and the Alger American Fund, an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (hereinafter the
"Fund") and Fred Alger & Company, Incorporated (hereinafter the "Underwriter").
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as 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
substantially similar to this Agreement (hereinafter "Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a "Portfolio" and representing the interest in
a particular managed portfolio of securities and other assets; and
<PAGE>
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended, ("1940 Act") and
its shares are registered under the Securities Act of 1933, as amended
(hereinafter the "1933 Act") ; and
WHEREAS, Fred Alger Management, Inc. (the "Adviser") is duly registered
as an investment adviser under the Investment Advisers Act and any applicable
state securities law; and
WHEREAS, the Company has registered or will register certain variable
life and variable annuity contracts 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 C hereto, to set aside
and invest assets attributable to the aforesaid variable life and annuity
contracts; and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities & Exchange Commission 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. (hereinafter "NASD"); 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 life and variable
annuity contracts 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 Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
-------------------
1.1. The Underwriter agrees to sell to the Company those shares of
the Fund which each Account orders, executing such orders on a daily basis at
the net asset value next computed
-2-
<PAGE>
after receipt by the Fund or its designee of the order for the shares of the
Fund. 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 in the normal course of
business the Fund receives notice of such order by 10:00 a.m. New York time on
the next following Business Day. The Fund may, at its discretion, accept orders
to purchase until 3:00 p.m. New York time. "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 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 Trustees of the Fund (hereinafter the "Trustees") may refuse 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 Trustees
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 and the Underwriter agree that shares of the Fund will be
sold only to Participating Insurance Companies and their separate accounts or to
the Underwriter. No shares of any Portfolio will be sold to the general public.
1.4. 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
-3-
<PAGE>
Section 1.5, the Company shall be the 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 by 10:00 a.m. on the next following Business Day. The
Fund may, at its discretion, accept orders to redeem until 3:00 p.m. New York
time.
1.5. The Company agrees to purchase and redeem the shares of each
Portfolio offered by the then current prospectus of the Fund and in accordance
with the provisions of such prospectus. The Company agrees that all net amounts
available under the variable life and variable annuity contracts with the form
number(s) which are listed on Schedule A attached hereto and incorporated herein
by this reference, as such Schedule A may be amended from time to time hereafter
by mutual written agreement of all the parties hereto, (the "contracts") shall
be invested in the Fund, in such other Funds advised by the Adviser as may be
mutually agreed to in writing by the parties hereto, or in the Company's general
account, provided that such amounts may also be invested in investment companies
other than the Fund.
1.6. 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. The Fund shall pay for Fund shares redeemed on the next
business day after the order to redeem is made in accordance with the provisions
of Section 1.4 hereof. Payment shall be in Federal Funds transmitted by wire.
For purposes of Section 2.9 and 2.10, upon receipt by the Fund or the Company of
the Federal Funds so wired, such funds shall cease to be the responsibility of,
respectively, the Company or the Fund and shall become the responsibility of
respectively the Fund or the Company. It is agreed that the Company and the Fund
may net the money wire transfers necessary to affect its orders to purchase and
redeem units.
1.7. 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
-4-
<PAGE>
recorded in an appropriate title for each Account or the appropriate subaccount
of each Account.
1.8. 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 Funds' 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.
1.9. The Fund shall make the net asset value per share for each
Portfolio available to the Company on a daily basis 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 7 p.m. New York
time.
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 Section 44-402.01 of the Nebraska Insurance Code 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
-5-
<PAGE>
Act, duly authorized for issuance and sold in compliance with the laws of the
State of Nebraska 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.
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
endowment, annuity or life insurance 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 and the Underwriter 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 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 Nebraska and the Fund and the Underwriter represent that their
respective operations are and shall at all times remain in material compliance
with the laws of the State of Nebraska to the extent required to perform this
Agreement.
2.6. The Underwriter represents and warrants that it is in good
standing of the NASD and is registered as a broker-dealer with the SEC.
The Underwriter further represents that it will
-6-
<PAGE>
sell and distribute the Fund shares in accordance with the laws of the State of
Nebraska and all applicable State and Federal Securities Laws, including without
limitation the 1933 Act, the 1934 Act, and the 1940 Act.
2.7. The Fund 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.
2.8. The Underwriter represents and warrants that the Adviser is and
shall remain duly registered in all material respects under all applicable
Federal and State Securities Laws and that the Adviser shall perform its
obligations for the Fund in compliance in all material respects with the laws of
the State of Nebraska and any applicable state and federal securities laws to
the extent required to perform this Agreement.
2.9. The Fund and Underwriter represent and warrant that all of their
Trustees, directors, officers, employees, investment advisers, 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
minimum coverage as required currently by Section l7g-(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.
2.10. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, 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 Section 270.17g-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.
-7-
<PAGE>
ARTICLE III. Prospectuses and Proxy Statements; Voting
-----------------------------------------
3.1. The Underwriter shall provide the Company (at the Company's
expense, except as set out in Article V) with as many copies of the Fund's
current prospectus as the Company may reasonably request. If requested by the
Company in lieu thereof, the Fund shall Provide such documentation (including a
final copy of the new prospectus as set in type at the Fund's expense) and other
assistance as is reasonably necessary in order for the Company once each year
(or more frequently if the prospectus for the Fund is amended) to have the
prospectus for the Contracts and the Fund's prospectus printed together in one
document (such printing to be at the Company's expense, except as set out in
Article V).
3.2. The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from the Underwriter (or in the Fund's
discretion, the Prospectus shall state that such Statement is available from the
Fund), and the Underwriter (or the Fund), at its expense, shall print and
provide such Statement free of charge to the Company and to any owner of a
Contract or prospective owner who requests such Statement.
3.3. The Fund, at its expense, shall provide the Company with copies of
its proxy material, reports to stockholders and other communications to
stockholders in such quantity as the Company shall reasonably require for
distributing to Contract owner's.
3.4. 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
(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
-8-
<PAGE>
reserves the right to vote Fund shares held in any
segregated asset account in its own right, to the extent
permitted by law. The Company shall be responsible for
assuring 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
attached hereto and incorporated herein by this reference.
3.5. 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 trustees
and with whatever rules the Commission and/or the state of organization may
promulgate with respect thereto.
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 its investment adviser or the Underwriter is
named, concurrent with its submission to the NASD. No such material shall be
used if the Fund or its designee makes a material objection to such use within
three 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 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
-9-
<PAGE>
Fund or its designee or by the Underwriter, except with the permission of the
Fund or the Underwriter or the designee of either.
4.3. The Fund, Underwriter, 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 concurrent with its submission to the NASD. No
such material shall be used if the Company or its designee makes a material
objection to such use within three Business Days after receipt of such material.
4.4. The Fund and the Underwriter 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
originated by the Fund or Underwriter, 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
-10-
<PAGE>
the Contracts or each Account, contemporaneously with the filing of such
document with the Securities and Exchange Commission.
4.7. For purposes of this Article IV, 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 billboard, 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, 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 and Underwriter 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 and such payments will be made out of existing fees otherwise payable to
the Underwriter, past profits of the Underwriter or other resources available to
the Underwriter. No such payments shall be made directly by the Fund. Currently,
no such payments are contemplated.
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 and State laws prior to their sale. The Fund shall bear the expenses for
the cost of
-11-
<PAGE>
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, all taxes on the issuance or transfer of
the Fund's shares.
5.3. The Company shall bear the expenses of printing and distributing
the Fund's prospectus to owners of Contracts issued by the Company and of
distributing the Fund's proxy materials and reports to such Contract owners
except as follows:
(a) The Fund will pay the cost of printing, distribution,
calculation and tabulation of proxies for the second
and all subsequent proxy solicitations, each calendar
year;
(b) In the event that the Fund terminates this Contract
under 10.1(a) or the Company terminates the Contract
under 10.1(b), (d), (f), (g), (h), (j) the Fund will:
(i) reimburse the Company for the Company's cost in
connection with distributing prospectuses, periodic
reports, and any other information or documents to
policyholders of Contracts in effect on the effective
date of the termination as set out in Article 10.4;
(ii) pay the cost of printing, distribution and
tabulation of proxy solicitation to policyowners of
Contracts in effect on the effective date of the
termination as set out in Article 10.4.
ARTICLE VI. 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)
-12-
<PAGE>
of the Code and Treasury Regulation Section 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.
ARTICLE VII. Potential Conflicts
-------------------
7.1. The Board of Trustees of the Fund (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 an insurer 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 trustees, that a material
-13-
<PAGE>
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 trustees), 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.
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 Account's investment in
the Fund and terminate this Agreement; 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. Any such withdrawal and termination must
take place within six (6) months after the Fund gives written notice that this
provision is being implemented, and until the end of that 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.
7.5. 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
-14-
<PAGE>
in the Fund and terminate this Agreement 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. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
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 by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
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
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
-15-
<PAGE>
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.
ARTICLE VIII. Indemnification
---------------
8.1. Indemnification By The Company
------------------------------
8.1(a). The Company agrees to indemnify and hold harmless the
Fund and each of its Trustees and officers, the Underwriter, and each
person if any, who controls the Fund within the meaning of Section 15
of the 1933 Act (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 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
-16-
<PAGE>
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 contained in the Registration Statement,
prospectus or sales literature of the Fund not supplied by the
Company, or persons under its control) or wrongful 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 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 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 to which an Indemnified Party would otherwise
be subject by reason of such
-17-
<PAGE>
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 or to the Fund, whichever is applicable.
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 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.
-18-
<PAGE>
8.2. Indemnification by the Underwriter
----------------------------------
8.2 (a). The Underwriter 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" 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
Underwriter) 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 the Fund's shares 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 Underwriter or 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 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,
-19-
<PAGE>
prospectus or sales literature for the Contracts not supplied
by the Underwriter or persons under its control) or wrongful
conduct of the Fund, Adviser or Underwriter or persons under
their 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 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 (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
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Underwriter; as limited by
and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise
be subject by reason of 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 or to each
Company or the Account, whichever is applicable.
-20-
<PAGE>
8.2(c). The Underwriter 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
Underwriter 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 Underwriter of any such
claim shall not relieve the Underwriter 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
Underwriter will be entitled to participate, at its own expense, in the
defense thereof. The Underwriter also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Underwriter to such party of the
Underwriter'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 Underwriter 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 Underwriter
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
-21-
<PAGE>
of Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
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 of Trustees or any member thereof, are related
to the operations of the Fund and:
(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 (including a failure to comply with the
diversification requirements specified in Article VI 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; as limited by and in
accordance with the provisions of Sections 8.3(b) and 8.3(c)
hereof.
8.3(b). The Fund shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would
otherwise be subject by reason of 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 or
to the Company, the Fund, the Underwriter or each Account, whichever is
applicable.
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
-22-
<PAGE>
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 and the Underwriter agree 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.
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 Nebraska.
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
-23-
<PAGE>
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 terminate:
(a) at the option of any party upon 180 days advance written
notice to the other parties; provided, however such notice
shall not be given earlier than one year following the date of
this Agreement; or
(b) at the option of the Company to the extent that shares
of Portfolios are not reasonably available to meet the
requirements of the Contracts as determined by the Company,
provided however, that such termination shall apply only to
the Portfolio(s) not reasonably available. Prompt notice
of the election to terminate for such cause shall be
furnished by the Company; or
(c) at the option of the Fund in the event that formal
administrative proceedings are instituted against the Company
by the National Association of Securities Dealers, Inc.
("NASD"), the Securities and Exchange Commission, the
Insurance Commissioner or any other regulatory body regarding
the Company's duties under this Agreement or related to the
sale of the Contracts, with respect to the operation of any
Account, or the purchase of the Fund shares, provided,
however, that the Fund 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 Company to perform its obligations under this
Agreement; or
-24-
<PAGE>
(d) at the option of the company in the event that formal
administrative proceedings are instituted against the Fund or
Underwriter by the NASD, the Securities and Exchange Commission, or any
state securities or insurance department or any other regulatory body,
provided, however, that the 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 Fund or
Underwriter to perform its obligations under this Agreement; or
(e) with respect to any Account, upon requisite vote of the
Contract owners having an interest in such Account (or any
subaccount) to substitute the shares of another investment
company for the corresponding Portfolio shares of the Fund in
accordance with the terms of the Contracts for which those
Portfolio shares had been selected to serve as the underlying
investment media. The Company will give 30 days' prior written
notice to the Fund of the date of any proposed vote to replace
the Fund's shares; or
(f) at the option of the Company, in the event any of the
Fund'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
(g) at the option of the Company, if the Fund 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
(h) at the option of the Company, if the Fund fails to meet
the diversification requirements specified in Article VI
hereof; or
(i) at the option of either the Fund or the Underwriter, if
(1) the Fund or the Underwriter, respectively, shall
determine, in their sole judgment reasonably exercised
-25-
<PAGE>
in good faith, that the Company has suffered a material
adverse change in its business or financial condition or is
the subject of 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 the Fund or the Underwriter, (2) the Fund or the
Underwriter shall notify the Company in writing of such
determination and its intent to terminate this Agreement, and
(3) after considering the actions taken by the Company and any
other changes in circumstances since the giving of such
notice, such determination of the Fund or the Underwriter
shall continue to apply on the sixtieth (60th) day following
the giving of such notice, which sixtieth day shall be the
effective date of termination; or
(j) at the option of the Company, if (1) the Company shall
determine, in its sole judgment reasonably exercised in good
faith, that either the Fund or the Underwriter has suffered a
material adverse change in its business or financial
condition or is the subject of material adverse publicity and
such material adverse change or material adverse publicity
will have a material adverse impact upon the business and
operations of the Company, (2) the Company shall notify the
Fund and the Underwriter in writing of such determination
and its intent to terminate the Agreement, and (3) after
considering the actions taken by the Fund and/or the
Underwriter and any other changes in circumstances since the
giving of such notice, such determination shall continue to
apply on the sixtieth (60th) day following the giving of such
notice, which sixtieth day shall be the effective date of
termination; or
10.2. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 10.1(a) may be exercised for any
reason or for no reason.
10.3. Notice Requirement. No termination of this Agreement shall be
------------------
effective unless and until the party terminating this
-26-
<PAGE>
Agreement gives prior written notice to all other parties to this Agreement
of its intent to terminate which notice shall set forth the basis for such
termination. Furthermore,
(a) In the event that any termination is based upon the
provisions of Article VII, or the provision of Section
10.1(a), 10.1(i), or 10.1(j) of this Agreement, such prior
written notice shall be given in advance of the effective date
of termination as required by such provisions; and
(b) in the event that any termination is based upon the
provisions of Section 10.1(c) or 10.1(d) of this Agreement,
such prior written notice shall be given at least ninety (90)
days before the effective date of termination.
10.4. Effect of Termination. Notwithstanding any termination of this
---------------------
Agreement, the Fund and the Underwriter 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 reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. The parties agree that this
Section 10.4 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.
10.5. The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in either Account) except (i) as necessary to implement Contract Owner initiated
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"). Upon request, they will promptly
furnish to the Fund and the Underwriter the
-27-
<PAGE>
opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund and the Underwriter) 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 or the
Underwriter 90 days notice of its intention to do so.
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:
75 Maiden Lane
New York, New York 10038
Attention: Treasurer
If to the Company:
5900 "0" Street, P.O. Box 82550
Lincoln, NE 68501
Attn: Rodney Vincent
If to the Underwriter:
30 Montgomery Street
Jersey City, NJ 07302
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
Trustees, shareholders, officers, or agents assume any personal liability for
obligations entered into on behalf of the Fund.
-28-
<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 NASD 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 variable life insurance operations of the Company are
being conducted in a manner consistent with the California Variable Life
Insurance Regulations and any other applicable law or regulations.
12.7 The Fund and Underwriter agree that to the extent any advisory or
other fees received by the Fund, the Underwriter or the Adviser are determined
to be unlawful in legal or
-29-
<PAGE>
administrative proceedings under the 1973 NAIC Model variable life insurance
regulation in the States of California, Colorado, Maryland or Michigan, the
Underwriter shall indemnify and reimburse the Company for any out of pocket
expenses and actual damages the Company has incurred as a result of any such
proceeding; provided however that the provisions of Section 8.2 (b) of this and
8.2(c) shall apply to such indemnification and reimbursement obligation. Such
indemnification and reimbursement obligation shall be in addition to any other
indemnification and reimbursement obligations of the Fund and/or the Underwriter
under this Agreement.
12.8. 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.
12.9 The parties specifically agree that this Contract is not an
exclusive Contract between the parties.
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 below.
Company:
AMERITAS VARIABLE LIFE INSURANCE COMPANY
By its authorized officer,
SEAL By: /s/ Lawrence J. Arth
-------------------------
Title: President
-------------------------
Date: May 1, 1992
-------------------------
-30-
<PAGE>
Fund:
ALGER AMERICAN FUND
By its authorized officer,
SEAL By: /s/ Gregory Duch
---------------------
Title: Treasurer
---------------------
Date: 4/28/92
---------------------
Underwriter:
FRED ALGER & COMPANY, INCORPORATED
By its authorized officer,
By: /s/ Gregory Duch
-----------------------
Title: Treasurer
-----------------------
Date: 4/28/92
-----------------------
-31-
<PAGE>
Schedule A
----------
Contracts
---------
1. Contract Form 4001, 4010, 4778, 4782
-32-
<PAGE>
SCHEDULE B
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsibilities for the
handling of proxies relating to the Fund by the Underwriter, the Fund and the
Company. 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 Insurance Company to perform the steps
delineated below.
1. The number of proxy proposals is given to the Company by the
Underwriter as early as possible before the date set by the Fund for
the shareholder meeting (the "Record Date") to facilitate the
establishment of tabulation procedures. At this time the Underwriter
will inform the Company of the Record, Mailing and Meeting dates. This
will be done verbally approximately two months before meeting.
2. 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/shares which are attributed to each
contractowner/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 voting instruction cards is determined by the
activities described in 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.
3. The Fund's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt
-33-
<PAGE>
of a proxy statement. Underwriter will provide at least one copy of
the last Annual Report to the Company.
4. The Voting Instruction Cards ("Cards" or "Card") are produced and paid
for by the Fund and sent to Company. (This and related steps may occur
later in the chronological process due to possible uncertainties
relating to the proposals.)
5. Company will, at its expense, print account information on the Cards.
6. Allow approximately 2-4 business days for printing information on the
Cards. Information commonly found on the Cards includes:
a. Name (legal name as found on account registration)
b. Address
c. Fund or account number
d. Coding to state number of shared/unites (depends upon tabulation
process used by the computer system, i.e. whether or not system
knows number of shares held just by "reading" the account number)
e. Individual Card number for use in tracking and verification of
votes (already on Cards as printed by the Fund)
Note: When the Cards are printed by the Fund, each Card is
numbered individually to guard against potential Card/vote
duplication.
7. During this time, the Legal Department of the Underwriter or its
affiliate will develop, product, and the Fund will 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 Insurance Company). Contents of envelope sent to Customers by
Company will include:
-34-
<PAGE>
a. Voting Instruction Card
b. Proxy notice and statement (one document)
c. Return envelope (postage pre-paid by Company) addressed to the
Company or its tabulation agent
d. "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.)
e. Cover letter - optional, supplied by Company and reviewed and
approved in advance by the Fund's legal department.
8. 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's legal
department.
9. 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,
but not necessary, to receive a proper response percentage.)
Solicitation time is calculated as days from (but not
including) the meeting, counting backwards.
** If the Customers were actually the shareholders, at least 50%
of the outstanding shares must be represented and 66 2/3% of
that 50% must have voted affirmatively on the proposals to
have an effective vote. However, since the Company is the
-------
shareholder, the Customers' votes will (except in certain
limited circumstances) be used to dictate how the Company will
vote.
10. Collection and tabulation of Cards begins. Tabulation usually takes
place in another department or another vendor depending
-35-
<PAGE>
on process used. An often used procedure is to sort Cards on arrival
into vote categories of all yes, no, or mixed replies, and to begin
data entry.
* 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 Fidelity in the past.
11. Signatures on Card check against legal name on account registration
which was printed on the Card.
* This verifies whether an individual has signed correctly for
self with the same name as is on the account registration.
For example:
If the account registration is under "Bertram C. Jones,
Trustee." then that is the exact legal name to be printed
on the Card and is the signature needed on the Card.
12. 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, 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 "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.
13. There are various control procedures used to ensure proper tabulation
of votes an 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
-36-
<PAGE>
vote is progressing may 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.
14. The actual tabulation of votes is done in unites and in shares. (It is
very important that the Fund receives the tabulations states in terms
of a percentage and the number of shares.)
------
15. Final tabulation in shares is verbally given by the Company to the
Legal Department on the morning of the meeting by 10:00 a.m. Boston
time.
16. Vote is verified by the Company and is sent to the Fund's legal
department.
17. Company then votes its proxy in accordance with the votes received from
the Customers the morning of the meeting (except in limited
circumstances as may be otherwise required by law). A letter
documenting the Company's vote is supplied by the Fund's legal
department and is sent to officer of company for his signature. This
letter is normally sent after the meeting has taken place.
18. 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.
19. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
20. During tabulation procedures, the Fund and Company determine if a
resolicitation is required and what form that resolicitation should
take, whether it should be by a
-37-
<PAGE>
mailing, or by recorded telephone line. A resolicitation is
considered when the vote response is slow and it appears that
not enough votes would be received by the meeting date. The
meeting could be adjourned to leave enough time for the
resolicitation.
A determination is made by the Company and the Fund to find the most cost
effective candidates for resolicitation. These are Customers who have not yet
voted, but whose balances are large enough to bring in the required vote with
minimal costs.
a. By mail: The Fund's legal department amends the voting instruction
cards, if necessary, and writes a resolicitation letter. The Fund
supplies these to the Company. The Company generates a mailing list
etc., as per step 2 onward.
b. By phone: Rarely used. This must be done on a recorded line. The Fund
will supply the necessary procedures and script if a phone
resolicitation were to be required.
-38-
<PAGE>
AMERITAS VARIABLE 1010-V
LIFE INSURANCE APPLICATION FOR VARIABLE UNIVERSAL LIFE
COMPANY (AVLIC) ONE AMERITAS WAY
P.O. BOX 82550
LINCOLN, NE 68501-2550 Please print clearly in
black ink.
This form will be photocopied.
- --------------------------------------------------------------------------------
Product Name: _____________________________
- --------------------------------------------------------------------------------
1 INSURED
If no policy owner _________________________ ___________________________
is specified in Name: Last/First/MI Social Security #
section 2, the
Insured will be _________________________ ___________________________
the policy owner. Address Date of Birth MO./DAY/YR.
_________________________ ___________________________
City/State/Zip Birthplace (State)
_________________________
Occupation [ ] Male [ ] Female
________________________________
Employer's Name Time Employed
- --------------------------------------------------------------------------------
2 POLICY OWNER
Complete only if _________________________ ____________________________
different from Full Name Social Security #/Tax ID #
the Insured.
/ / / /
(If a Trust, give _________________________ ____________________________
Trustee(s), Trust Relationship to Insured Date of Birth: If Trust,
Name & Trust date) (or all Trustee's Names) Trust date:
- --------------------------------------------------------------------------------
3 MAILING ADDRESS _________________________
OF OWNER Address
All notices will be _________________________
sent to this address. City/State/Zip
- --------------------------------------------------------------------------------
4 BENEFICIARY
Unless otherwise _________________________ ____________________________
indicated, multiple Primary Contingent
beneficiaries will be
paid equally or to _________________________ ____________________________
the survivor(s). Relationship to Insured Relationship to Insured
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
5 PLAN OF Plan of Insurance _________ Death Benefit Option (select only one):
INSURANCE [ ] Option A (death benefit is the amount
of insurance)
Amount of Insurance $ _____ [ ] Option B (death benefit is the amount
of insurance plus the accumulation value)
OPTIONAL RIDERS:
[ ] Accidental Death Benefit $ _________ [ ] Guaranteed Insurability $ _________________
(only if insured is under age 37)
[ ] Disability Benefit $ ____________ [ ] Covered Insured Rider
or [ ] Waiver of Monthly Deduction [ ] Self Amount $ __________
[ ] Other Person
[ ] Payor Disability $ _____________ (Complete L-6 in Supplemental Book)
or [ ] Payor of Monthly Deduction
(Applicant under age 37, Insured [ ] ___________________________________________
up through age 14 -
Complete L-5 in Supplemental Book)
[ ] Children's Protection ($10,000 coverage per child)
Complete L-5 in Supplemental Book)
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
6 PREMIUM MODE [ ] Annual [ ] Semi-Annual [ ] Quarterly [ ] Monthly Bank Withdrawal
Please select (Complete Optional Program form)
one. [ ] Monthly [ ] Non-Billing [ ] Invoice [ ] Payroll Deduction
Billing Billed (Additional form required)
[ ] Single $ ______________
</TABLE>
- --------------------------------------------------------------------------------
7 PREMIUM Planned Annual Premium $ ____ Planned Modal Premium $ ______
AMOUNT
*Initial Premium (paid with application) $ ___ (leave receipt
with payor).
- --------------------------------------------------------------------------------
* All premium checks must be made payable to the Company. Do not make check
payable to the agent or leave the payee blank.
FORM FP VUL Ed. 10-96 Page 1 of 4 Pages 111996P
<PAGE>
5 ALLOCATION Allocation will always be to the ___ except as you indicate
Whole below.
percentages
only, must _________________% ___________________% ___________________%
total 100%. _________________% ___________________% ___________________%
_________________% ___________________% ___________________%
_________________% ___________________% ___________________%
_________________% ___________________%
_________________% ___________________%
_________________% ___________________%
_________________% ___________________%
_________________% ___________________%
_________________% ___________________%
_________________% ___________________%
_________________% ___________________%
_________________% ___________________%
_________________% ___________________% Total 100%
- --------------------------------------------------------------------------------
9 EXISTING LIFE
INSURANCE WILL THIS
List all life YEAR REPLACE?
insurance AMOUNT ISSUED TYPE COMPANY YES NO 1035
existing on __________ _________ _____ ___________ [] [] []
life of
Insured.(If __________ _________ _____ ___________ [] [] []
none, so
state) __________ _________ _____ ___________ [] [] []
- --------------------------------------------------------------------------------
10 OTHER MO residents, DO NOT respond to Q.13.a.
COVERAGE a. Has any company declined, postponed, []Yes [] No
Complete for modified, cancelled or refused to renew,
the Proposed reinstate or issue insurance? (IF YES,
Insured. PLEASE EXPLAIN)
_______________________________________
(Name of Company) (Reason)
_______________________________________
b. Is any other life insurance []Yes [] No
application now pending or contemplated
with any other company? (IF YES, PLEASE
EXPLAIN)
_______________________________________
(Name of Company)
- --------------------------------------------------------------------------------
11 OTHER a. Have you been charged with a driving []Yes [] No
INFORMATION violation, had your license suspended or
Complete for the restriction placed on your license
Proposed Insured. within the past 5 years? (IF YES,
GIVE DETAILS) __________________________
________________________________________
Drivers License Number ______ State of Issue _________
b. Have you participated in any vehicle []Yes [] No
racing, parachuting, hang gliding,
scuba diving or rodeos within the past
2 years, or is any such activity
contemplated? (IF YES, COMPLETE FORM HS
in Supplemental Book)
c. Have you flown within the past 3 years []Yes [] No
as a pilot, student pilot, crew member
or had any flying duties or is any
such activity contemplated? (IF YES,
COMPLETE FORM AV IN SUPPLEMENTAL BOOK)
d. Do you contemplate travel or residence []Yes [] No
in a foreign country in the near future?
(IF YES, PROVIDE COMPLETE DETAILS
INCLUDING DESINTATION)___________________
_________________________________________
_________________________________________
_________________________________________
_________________________________________
- --------------------------------------------------------------------------------
12 TOBACCO USE a. Has the proposed insured smoked one or more
cigarettes in the past twelve months? []Yes [] No
b. Has the proposed insured used any form of
tobacco in the past twelve months? []Yes [] No
(IF YES, PLEASE EXPLAIN THE TYPE OF USE
AND FREQUENCY) ______________________________
- --------------------------------------------------------------------------------
Page 2 of 4 Pages
<PAGE>
13 HEALTH HISTORY
Answer the Name of personal physician _______ Address ________________
following (If none, so state)
questions Reason last consulted ___________ Date ____________________
regarding the
Proposed Insured. What treatment was given or medication prescribed? ________
Has the Proposed Insured: (IF YES, PLEASE EXPLAIN)
If paramed not a. Ever been treated by a physician or other health care
required, professional for any of the following: Heart trouble,
complete Form L-1 stroke, heart murmur, elevated blood pressure, lung or
(found after this respiratory disorder, kidney disorder, tumor, cancer,
application). digestive disorder, diabetes, nervous or mental
disorder? []Yes [] No
North Carolina b. Consulted a physician or been examined or treated at a
residents DO NOT hospital or other medical facility in the last five
respond to years? ME residents, you may answer this question "No"
Question e. if you have tested positive for HIV and have not
developed symptoms of the disease AIDS. []Yes [] No
c. Ever used narcotics, barbiturates, amphetamines,
cocaine, LSD, marijuana or hallucinogenic drugs?
[]Yes [] No
d. Ever received counseling or treatment for the use of
alcohol or drugs? []Yes [] No
e. Have you ever been a member of any support group for the
use of alcohol or drugs? []Yes [] No
Exact Height ____ ft.____in. Exact Weight________lbs.
[] Gained [] Lost_________ pounds in past year.
f. Please explain any "Yes" answers.
- --------------------------------------------------------------------------------
14 SPECIAL ___________________________________________________________
INSTRUCTIONS ___________________________________________________________
___________________________________________________________
- --------------------------------------------------------------------------------
15 ENDORSEMENTS/ No change in the amount, plan, classification or benefits
CORRECTIONS will be effective unless agreed to in writing by the policy
owner. This space will not be used in MD, PA, WV or any
HOME OFFICE other state if not allowed by Statute or Insurance
USE ONLY Department Regulations.
- --------------------------------------------------------------------------------
16 TELEPHONE I hereby authorize and direct AVLIC to make allowable
AUTHORIZATION transfers of funds or reallocation of net premiums
among available subaccounts or to complete other financial
UNLESS WAIVED, transactions as may be allowed by the AVLIC at the time
THE POLICY OWNER of request, based upon instructions received by
AND REPRESENT- telephone from (a) myself, as Policy Owner, (b) my
ATIVE WILL HAVE Registered Representative in Section 22 below, and (c) the
AUTOMATIC person(s) named below. AVLIC will not be liable for
TELEPHONE following instructions communicated by telephone that it
TRANSFER reasonably believes to be genuine. AVLIC will employ
reasonable procedures, including requiring the policy
[] I elect NOT number to be stated, tape recording all instructions, and
to have mailing written confirmations. If AVLIC does not employ
telephone reasonable procedures to confirm that instructions
transfer communicated by telephone are genuine, AVLIC may be liable
authorization. for any losses due to unauthorized or fraudulent
instructions.
[] I elect NOT Name per (c) above: ______________________ SS# ___________
to have my
Registered Address: __________________________________________________
Rep have (This is not to be used for Fee Advisor authorization)
transfer
authorization.
I understand: a) all telephone transactions will be
recorded; and b) this authorization will continue in force
until the earlier of (1) revocation by the Policy Owner
is received in written form or by telephone by AVLIC or
(2) AVLIC discontinues this privilege.
- --------------------------------------------------------------------------------
Page 3 of 4 Pages
<PAGE>
17 AGREEMENTS I AGREE AS FOLLOWS:
NOTE FOR KENTUCKY 1. Any policy including any endorsements issued as a result
RESIDENTS: Any of this application will, with this application and any
person who, with supplemental applications, be the entire insurance
intent of defraud contract.
or knowing that he
is facilitating a 2. No agent, broker or medical examiner can: a) waive the
fraud against an answers to any questions in this application; b) make or
insurer, submits change any insurance contract; or c) waive any rights or
an application or rules of AVLIC.
files a claim
containing a false 3. Except as specified otherwise in a receipt provided upon
or deceptive a payment of premium at the time of application,
statement is guilty insurance will not be effective until ALL of the
of insurance fraud. following are met: a) the policy issued by AVLIC is
delivered to and accepted by the applicant; b) the first
full premium is paid.
4. AVLIC may change this application by an appropriate
notation in the space marked "Amendments and
Corrections": a) to correct apparent errors or
omissions; and b) to conform it with any policy rider
that may be issued. No change will be made in the
following without the applicant's written consent: a)
amount of insurance; b) plan of insurance;
c) classification of risks; or d) benefits. Acceptance
of any policy issued under this application ratifies any
amendments.
5. I understand that: a) the amount and duration of the
death benefit may vary with investment experience, loans
and other specified conditions; b) policy values not in
the Fixed Account will increase or decrease in
accordance with the experience of the selected
investment options of the Separate Account; c) the
amount of the benefit payable on surrender is not
guaranteed, but is dependent on the then surrender
value; d) illustrations of benefits, including the
death benefit, are available upon request; and e) this
policy meets my investment objectives and anticipated
financial needs.
- --------------------------------------------------------------------------------
18 DISCLOSURES I hereby acknowledge recipt of the current prospectus,
and any supplements, for this policy including any required
disclosure if the policy applied for will be in a qualified
plan.
- --------------------------------------------------------------------------------
19 AUTHORIZATION I authorize any licensed physician, medical practitioner,
This authoriza- hospital, clinic or other medically related facility
tion or a photo- insurance company, Equifax or any information service or
copy of it, shall financial institution, family member, or associate to
remain valid for release to AVLIC or any person or entity acting on
use by AVLIC its behalf, any personal information which is on file and
for 2 (two) relates to my/our health or mental condition, general
years from the character, driving records, use of alcohol and drugs, and
date below. hobbies of a hazardous nature.
In addition, I authorize the Medical Information Bureau
(MIB) to release to AVLIC or its reinsurers, any personal
information which is on file and relates to me/us.
I also agree that I have received and read the "Notice of
AVLIC's Insurance Information Practices," MIB and
Investigative Consumer Reports. I also understand that I
can receive a copy of this authorization if I so desire.
- --------------------------------------------------------------------------------
20 SUBSTITUTE W-9 I certify under penalty of perjury that: 1) the number
CERTIFICATION shown on this form is my correct taxpayer identification
number (or I am waiting for a number to be issued to me);
and 2) I am not subject to backup withholding because:
a) I am exempt from backup withholding, or b) I have not
been notified by the Internal Revenue Service that I am
subject to backup withholding as a result of a failure to
report all interest and dividends, or c) the IRS has
notified me that I am no longer subject to backup
withholding.
You must cross out item 2 if your have been notified by the
IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax
return.
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT
TO ANY PROVISIONS OF THIS DOCUMENT OTHER THAN THE
CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
- --------------------------------------------------------------------------------
21 SIGNATURES I represent to the best of my knowledge and belief that all
statements and answers to this application are complete and
true.
Dated at (City, State) ____________On this Date____________
X ________________________ X ____________________________
Signature of Proposed Signature of Policy Owner
Insured (Parent or (if not Proposed Insured,
Guardian if Juvenile) Parent or Guardian) or if a
Corporation or Trust, show
full name.
X _________________________________________________________
Signature(s) and Title of Officer or Trustee(s)
- --------------------------------------------------------------------------------
22 AGENT'S/ Do you have any knowledge or reason to believe that
REPRESENTATIVE'S replacement of existing insurance or annuity coverage may
STATEMENT be involved?
[]Yes [] No (IF YES, GIVE DETAILS IN SECTION 9 AND COMPLETE
ANY STATE REQUIRED REPLACEMENT FORMS.)
I certify that: (1) the information provided by the owner
has been accurately recorded; (2) a current prospectus and
all supplements were delivered; and (3) I have reasonable
grounds to recommend the purchase of the policy as suitable
for the owner.
X _________________________________________________________
Signature of Agent/Registered Representative
X _________________________________________________________
Print Name Here Agent Code Agency or Broker/Dealer
- --------------------------------------------------------------------------------
Page 4 of 4 Pages
<PAGE>
DESCRIPTION OF AMERITAS VARIABLE LIFE INSURANCE COMPANY'S
ISSUANCE, TRANSFER AND REDEMPTION PROCEDURES FOR POLICIES PURSUANT TO RULE
6e-3 (T)(b)(12)(ii) UNDER THE INVESTMENT
COMPANY ACT OF 1940
Set forth below is the information called for under Rule 6e-3 (T) (b) (12) (ii)
under the Investment Company Act of 1940 ("1940 Act"). That rule provides an
exemption for separate accounts, their investment advisors, principal
underwriters and sponsoring insurance company from Sections 22(d), 22(e), and
27(c)(1) of the 1940 Act, and Rule 22(c)-2 promulgated thereunder, for issuance,
transfer and redemption procedures under flexible premium variable life
insurance policies in the extent necessary to comply with Rule 6e-3(T), state
administrative law or established administrative procedures of the life
insurance company. In order to qualify for the exemption, procedures must be
reasonable, fair and non-discriminatory and they must be disclosed in the
registration statement filed by the separate account.
AVLIC's Separate Account (the "Account") is registered under the 1940 Act.
Within the Account are investment Subaccounts, which as of January 1, 1997 are
expected to be the Variable Insurance Products Fund ("VIPF") Money Market,
Equity-Income, Growth, High Income and Overseas Subaccounts; the Variable
Insurance Products Fund II ("VIPF II") Asset Manager, Investment Grade Bond,
Asset Manager: Growth, Index 500, and Contrafund Subaccounts; the Alger American
Fund ("Alger Funds") Growth, Income and Growth, Small Capitalization, Balanced,
MidCap Growth, and Leveraged AllCap Subaccounts; the MFS Variable Insurance
Trust ("MFS Funds") Emerging Growth, Utilities, World Governments, Research and
Growth With Income Subaccounts; Morgan Stanley Universal Funds, Inc. ("Morgan
Stanley") Emerging Markets Equity, Global Equity, International Magnum, Asian
Equity, and U.S. Real Estate. Procedures apply equally to each Subaccount and
for purposes of this description are defined in terms of the Account, except
where a discussion of both the Account and its Subaccounts is necessary. Each
Subaccount invests in shares of a corresponding portfolio of VIPF, VIPF II,
Alger Funds, MFS Funds, and Morgan Stanley. The investment experience of the
Subaccounts of the Account depends on the market performance of the
corresponding Fund portfolios. Although flexible premium variable life insurance
policies funded through the Account may also provide for fixed benefits
supported by AVLIC's general account, except as otherwise explicitly stated
herein, this description assumes that net premiums are allocated exclusively to
the Account and that all transactions involve only the Subaccounts of the
Account.
I. PROCEDURES RELATING TO ISSUANCE AND PURCHASE OF THE POLICIES
------------------------------------------------------------
Set out below is a summary of the principal policy provisions and
administrative procedures which might be deemed to constitute, either
directly or indirectly, an "issuance or purchase" transaction. The
summary shows that, because of the insurance nature of the policies,
the procedures involved necessarily differ in certain significant
respects from the purchase procedures for mutual funds and contractual
plans.
The chief differences revolve around the structure of the cost of
insurance and the insurance underwriting (evaluation of risk) process.
There are also certain policy provisions such as Guaranteed Death
Benefit, reinstatement and loan repayment which do not result in the
issuance of a policy but which require certain payments by the
policyowner and may involve a transfer of assets supporting the policy
values into the Account.
A. Cost of Insurance Rates. Guaranteed Death Benefit Premium and
------------------------------------------------------------------
Underwriting Standards
----------------------
Cost of insurance rates and Guaranteed Death Benefit Premiums for
AVLIC's policies will not be the same for all policyowners. The
chief reason is that the principle of pooling and distribution of
mortality risks is based upon the assumption that each policyowner
pays a cost of insurance charge commensurate with the Insured's
mortality risk which is actuarially determined based upon factors
such as age, sex, health, tobacco use, and occupation. In the
context of life insurance, a uniform mortality charge (the "cost
of insurance charge") for all insureds would discriminate unfairly
in favor of those Insureds representing greater mortality risks to
the disadvantage of those representing lesser risks. Accordingly,
although there will be a uniform "public offering price" for all
policyowners, because premiums are flexible and amounts allocated
to the Account will be subject to the same deductions, there will
be a different "price" for each actuarial category of
policyholders because different cost of insurance rates will
apply. The "price" will also vary based on net
1
<PAGE>
amount at risk. While not all Insureds will be subject to the same
cost of insurance rate, there will be a single cost of insurance
rate for all persons of the same age, sex, risk, size of policy
and tobacco use class and whose policies have been in effect for
the same length of time.
The Guaranteed Death Benefit premium as described below reflects
the different cost of insurance rates for males and females and
varies by age.
Current cost of insurance rates will be determined by AVLIC based
upon expectations as to future mortality experience. The cost of
insurance rates are guaranteed to not exceed rates based upon the
Commissioner's 1980 Standard Ordinary Smoker and Nonsmoker, Male
and Female Mortality Tables. A table showing the maximum cost of
insurance rates reflecting the actuarial risk class of the Insured
will be part of the policy. The current cost of insurance charge
will be included in the annual report.
AVLIC will require 1/12 of the annual Guaranteed Death Benefit
premium times the number of months between the policy date
(receipt of application with money), and the issue date plus one
to be received into AVLIC's Home Office in good Federal Funds to
put the policy in force. This annual Guaranteed Death Benefit
Premium will vary by sex and reflects the initial specified amount
for the policy and any riders. For policies issued on a Unisex
basis, the costs of insurance rates are based upon a 80% male/20%
female assumption. Guaranteed cost of insurance rates are based
upon the 1980 CSO-B Unisex Table. The annual Guaranteed Death
Benefit premiums for the policy was calculated to never exceed the
SEC guideline premium defined using 5% interest, the standard
guaranteed cost of insurance rates, the percent of premium loads
for that issue age, the per policy administrative charges, the
asset based administrative expenses, an annual mode, and the level
death benefit option with any applicable tax corridor death
benefits. Charges that vary by policy size, non-annual modes or
non-standard risk classes are not reflected in the minimum first
year premium tables. Since these premiums were determined assuming
an annual mode and standard underwriting class, they may not be
sufficient to cover the premium expenses, administration charges,
and cost of insurance charges if the mode is other than annual or
if the Insured is not in a standard underwriting class. The
payment of such initial premium will not guarantee that the policy
remains in force.
Policyowners, with the help of the registered representative, may
determine a planned periodic premium payment schedule that
provides for a level premium payable at a fixed interval. This
payment schedule may include the premiums required for the
Guaranteed Death Benefit. Factors considered in setting the
planned periodic payment schedule and selecting the death benefit
option include, but are not limited to, the Insured's age and risk
classification; the policyowner's economic circumstances including
future obligations, retirement and tax sheltering needs; the
policyowner's judgment regarding market needs; the death benefit
needs of the beneficiary; and the desire to qualify for the
Guaranteed Death Benefit Provision. Payment of premiums in
accordance with this schedule is not, however, mandatory and
failure to do so will not of itself cause the policy to lapse.
Instead, policyowners may make premium payments in any amount at
any frequency, subject only to the initial premium requirements
described above and any minimum acceptable premium amount and
maximum premium limitations, including those set forth in the
Internal Revenue Code. If at any time a premium is paid which
would result in total premiums exceeding the current IRS maximum
premium limitation, AVLIC will accept only that portion of the
premium which will make total premiums equal such maximum. Any
portion of the premium in excess of such maximum will be returned
to the policyowner and no further premiums will be accepted until
allowed by the then current maximum premium limitations set forth
in the Internal Revenue Code.
The policy will remain in force so long as the surrender value is
sufficient to pay the monthly deductions imposed in connection
with the policy or so long as the net funding meets cumulative
monthly prorata Guaranteed Death Benefit premiums paid on the
policy during the Guaranteed Death Benefit Period (between 3 and
25 years). Thus, without exercising the guaranteed death benefit
option, a premium, if any, that must be paid to keep the policy in
force depends upon the net accumulation value of the policy which
in turn depends on such factors as the investment experience of
the Account and the cost of insurance charge reflecting the cost
of insurance rate and the net amount at risk.
The policies will be offered and sold pursuant to AVLIC's
established underwriting standards and in accordance with state
insurance laws. State insurance laws prohibit unfair
discrimination among Insureds but
2
<PAGE>
recognize that premiums and cost of insurance rates may be based
upon factors such as age, sex, tobacco use, health and occupation.
B. Application and Initial Premium Processing
------------------------------------------
Upon receipt of a completed application form from a prospective
policyowner, AVLIC will follow certain insurance underwriting
(i.e., evaluation of risk) procedures designed to determine
whether the proposed Insured is insurable. In some cases, the
process may involve such verification procedures as medical
examinations and may require that further information be provided
by the proposed Insured before a determination can be made. A
policy cannot be issued, i.e., physically issued through AVLIC's
computerized issue system, until this underwriting procedure has
been completed.
The date on which the insurance coverage applied for on the
proposed Insured begins is called the policy date. Interim
insurance may be provided under the terms of the conditional
receipt, described later in this section. The policy date
represents the first day of the policy year and therefore
determines the policy anniversary and monthly activity processing
date. Suicide and contestable periods are measured from the policy
date.
The issue date is the date that all financial and contractual
arrangements have been completed and processed for the policy.
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 policyholder or sent to the agent
for delivery to the policyholder. This will normally also be the
policy date. When application amendments or additional premiums
need to be obtained upon delivery of the policy, the issue date
will be when the policy receipt, the application amendments and/or
funds are received in AVLIC's Home Office and the application
amendment reviewed. The issue date marks the date on which
benefits begin to vary in accordance with the investment
performance of the Subaccounts. It is shown on the confirmation
notice. Any premiums submitted with the application will be held
in AVLIC's general account prior to the issue date. Amounts held
in the general account are credited with interest at a rate
determined by AVLIC for the period from the date funds are
received by AVLIC (except in the case of insufficient funds) until
the issue date, but in no event will interest be credited prior to
the policy date. On the issue date, AVLIC will allocate the
initial net premiums to the Money Market subaccount. After a
13-day period the monies will be reallocated to the designated
Subaccounts.
If interim conditional receipt insurance on the proposed Insured
is desired pending the issue of the policy, AVLIC will require a
payment at the time of application equal to the greater of $15.00
or one modal premium for the amount of life insurance applied for.
Such interim insurance is conditional with time and amount
limitations. These conditions are shown in the Conditional Receipt
section of the application as follows:
1. This interim insurance will be effective upon the death of a
proposed Insured before the policy delivery when ALL of these
conditions are met:
a. The greater of $15.00 or one modal premium for the amount
and plan of life insurance applied for is paid; and
b. All medical examinations, tests, and related data required
by AVLIC's rules are completed for each proposed Insured
within 60 days of the date of Part I of the Application; and
c. Each proposed Insured qualifies as an acceptable risk
according to AVLIC's rules for this plan on the Effective
Date, as defined below. This means the plan, amount, or risk
classification do not have to be changed; and
d. Each proposed Insured is in good health on the Effective
Date, as defined below.
2. The insurance for each proposed Insured which will be effective
before policy delivery is limited to the smaller of:
a. The combined amount in force and applied for with AVLIC and
its affiliated companies; or
3
<PAGE>
b. $100,000; or
c. $25,000 if the proposed Insured is over age 60 at his or her
nearest birthday.
((a), (b) and (c) above include life insurance and accidental
death benefits.)
3. If one or more conditions in Paragraph No. 1 on any proposed
Insured are not completely met, then AVLIC is liable only to
return any premium paid for coverage on that proposed Insured.
Any insurance in effect because of the Conditional Receipt will
end at the earliest of:
a. The date the policy applied for is mailed to the
policyowner; or
b. At the end of 60 days from the date of that Receipt.
4. "Effective Date" means the latest of these dates;
a. The date of the Application in Part 1; or
b. The date all medical data or tests required by AVLIC's
rules, if any, are completed; or
c. The policy date asked for in the Application, or
d. The date on which the proposed Insured is at least 15 days
of age.
The minimum initial specified amount at issue is $500,000 for
Insureds ages 20-49 and $250,000 for Insureds Issue Age 50-80
under AVLIC's current rules. AVLIC reserves the right to revise
its rules from time to time to specify a different minimum initial
specified amount for subsequently issued policies.
C. Premium Processing
------------------
The net premiums are credited to the policy Account as of the
valuation date next following the day that the premium payments
accompanied by proper notice are received by AVLIC with the
possible exception of the first net premium which is credited on
the issue date as described in the preceding section. The
valuation date is as of the close of trading of the New York Stock
Exchange on each day on which the Exchange is open for trading.
The net premium currently equals the premium paid less 3.5% for
taxes with a maximum deduction of 5%. "Proper" notice, for
purposes of this paragraph, means that the policy number and the
manner in which the payment is to be allocated (premium payment
vs. loan repayment) must be indicated.
The minimum Guaranteed Death Benefit premium will be from a per
$1,000 table varying by sex and issue age multiplied by the
specified amount at issue. These premiums were calculated to never
exceed the SEC defined guideline premium.
The prospective owner at the time the application is taken will
indicate the percentage allocation of the net premiums to the
Subaccounts of the Account or to the Fixed Account. All net
premiums will be allocated in accordance with the policyowner's
proper written instructions. AVLIC will permit the policyowner to
change the allocation of later net premiums without charge.
"Proper", for purposes of this paragraph, means that the
notice/instructions must include the policy number(s) to which the
instructions apply. Any such change will apply to future net
premiums received after AVLIC receives the change. If the request
for change in allocation is made incorrectly, net premiums will be
allocated in accordance with the most recent instructions on
AVLIC's records until an allocation or correction is received from
the policyowner.
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.
Any unscheduled premiums received will be allocated in accordance
with the policyowner's prior instructions for net premiums. The
policyowner at the time that an unscheduled premium is paid may
specify the
4
<PAGE>
percentages of the unscheduled premium payment to be allocated
among the Subaccounts or the Fixed Account. Any special
instructions for allocating unscheduled net premiums will be
followed with no charge.
The minimum percentage of each net premium (scheduled or
unscheduled) that may be allocated to any Subaccount of the
Account or the Fixed Account is 1%. All percentages must be
expressed in whole numbers and must total 100%.
D. Reinstatement
-------------
During the Insured's life, the policy can be considered for
reinstatement if it terminated because a grace period ended
without sufficient payment being paid. Any reinstatement must be
done within three years from the end of the grace period. (This
period will be longer if required by state law.) The policy cannot
be reinstated if it has been surrendered for its surrender value,
nor can it be reinstated after the maturity date. A written
application for reinstatement must be made to AVLIC. Reinstatement
will be effected based upon the insured's underwriting
classifications at the time of 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 policy debt will be reinstated with interest due and
accrued;
c. The policy cannot be reinstated if it has been surrendered for
its full surrender value;
d. The minimum premium required is the greater of:
(1) the amount necessary to raise the net surrender value
as of the date of reinstatement to equal to or
greater than zero; or
(2) the amount necessary to pay percent of premium
charges on any premium paid and monthly policy
deductions for the next three policy months.
The effective date of the reinstatement will be the first monthly
activity date on or next following the date the application for
reinstatement is approved and the required payment received.
AVLIC will treat the amount paid upon reinstatement as a premium.
It will deduct the appropriate percent of premium charge. The
accumulation value of the reinstated policy will immediately upon
reinstatement, be equal to this net premium payment plus the net
cash surrender value on the date of lapse, less the amounts stated
above plus that part of the deferred sales charge and deferred
administrative charge (i.e. surrender charge) which would be
charged if the policy were surrendered immediately after
reinstatement. This last addition to the accumulation value is
designed to avoid duplicate surrender charges. If any policy debt
was reinstated, that debt will be held in AVLIC's general account.
Accumulation value calculations will then proceed as described in
the policy.
E. Repayment of Loan
-----------------
A loan made under the policy may be repaid at any time with an
amount equal to the original loan plus loan interest. AVLIC
charges interest to policyholders at regular and reduced rates.
After the tenth policy anniversary, the policyholder can borrow
each year a limited amount of the accumulation value of the policy
at a reduced interest rate. Interest on this limited amount will
accrue on a daily basis at a rate of up to 4% per year (reduced
loan rate). The amount available each year at the reduced rate is
10% of the net cash surrender value as of the most recent policy
anniversary plus any previous loans at a reduced loan rate and
their accrued interest charges. Regular loans will accrue interest
on a daily basis at a rate of up to 6% per year. If unpaid when
due, interest will be added to the amount of the loan and bear
interest at the same rate.
5
<PAGE>
When a policy loan is made or when loan interest is not paid when
due, an amount of accumulation value sufficient to secure the
policy debt is transferred out of the Account or the Fixed Account
into AVLIC's general account. The amount of the accumulation value
attributable to outstanding policy debt will be credited with
interest at an annual rate of 3.5%. AVLIC will retain the
difference between that rate and the loan interest rate, if any,
to cover loan investment expenses, income taxes, if any, and
processing costs.
When a loan repayment is made, the accumulation value in the
general account related to that payment will be transferred to the
Subaccounts or the Fixed Account in the same proportion that net
premiums are being allocated unless otherwise instructed. The 3.5%
annual interest credited on outstanding policy debt will also be
annually allocated to the Subaccounts or the Fixed Account in the
same proportion that net premiums are being allocated.
F. Correction of Misstatement of Age and Sex
-----------------------------------------
If AVLIC discovers that the age or sex of the Insured or of any
person insured by rider has been misstated, it will adjust the
death benefits and accumulation values under the policy.
The death benefit will be adjusted in proportion to the correct
and incorrect cost of insurance rates in the month of death.
II. TRANSFER AMONG SUBACCOUNTS
--------------------------
The Account currently has 26 Subaccounts, each of which is invested in
shares of a corresponding portfolio of the Variable Insurance Products
Fund, Variable Insurance Products Fund II, the Alger American Fund, MFS
Variable Insurance Trust, and Morgan Stanley Universal Funds, Inc. which
are registered under the 1940 Act as open-end diversified management
investment companies. All 26 are available to the policyowner of the
policy. The policyowner may transfer accumulation value amounts from one
Subaccount to another, AVLIC will make no charge for the first fifteen
transfers each policy year. Each transfer after the first fifteen in a
policy year will be subject to a transfer charge of $10.00. AVLIC will
effectuate transfers and determine all values in connection with
transfers on the later of the date designated in the request or on the
valuation date next following receipt of the written request at AVLIC's
Home Office. All transfers included in the request are treated as one
transfer transaction. Transfer may also be made from the Subaccounts to
the Fixed Account. Up to the greater of: (i) 25% of the amount deposited
in the Fixed Account plus interest thereon; or (ii) the largest amount
transferred in the previous 13 months; or (iii) $1000 may be transferred
out of the Fixed Account during the 30-day period following the yearly
anniversary of the policy.
Each transfer must be for a minimum of $250 or the balance in the
Subaccount or Fixed Account, if less. The minimum amount which can
remain in a Subaccount or Fixed Account as a result of a transfer is
$100. Any amount below this minimum must be included in the amount
transferred.
Transfers resulting from policy loans and the exercise of exchange
privileges will not be subject to a transfer charge. In addition, such
transfers will not be counted for purposes of the limitation of free
transfers.
The request for amounts to be transferred may be in terms of dollars
such as a request to transfer $5,000 from one Subaccount to another or
to the Fixed Account, or may be in terms of a percentage reallocation
among Subaccounts or the Fixed Account. In the later case, the
percentages must be in whole numbers and meet the requirements for net
premium allocations.
AVLIC may offer systematic programs, 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 also apply. The systematic programs available are:
portfolio rebalancing; dollar cost averaging; and earnings sweep. The
policyowner can request participation in available programs when
purchasing the policy or at a later date. Policyowners can change the
allocation percentage or discontinue any program by sending written
notice or calling the Home Office. AVLIC reserves the right to modify,
suspend or terminate such programs at any time.
6
<PAGE>
III. "REDEMPTION PROCEDURES": SURRENDER AND RELATED TRANSACTIONS
-----------------------------------------------------------
Set out below is a summary of the principal policy provisions and
administrative procedures which might be deemed to constitute, either
directly or indirectly, a "redemption" transaction. The summary shows
that, because of the insurance nature of the policies, the procedures
involved necessarily differ in certain significant respects from the
redemption procedures for mutual funds and contractual plans.
A. Full Surrender and Partial Withdrawals
--------------------------------------
At any time before the earlier of the death of the Insured or the
maturity date, the policyowner, with the consent of any assignee,
may totally surrender the policy or partially withdraw part of the
values by sending a written request to AVLIC. To totally surrender
the policy under current procedures, the policy itself must also
be returned to AVLIC.
The amount payable upon full surrender of the policy is the
accumulation value on the valuation date next following the date
AVLIC receives written request less any surrender charges, less
any outstanding policy debt, and any monthly deductions that are
due and unpaid.
This amount is the net cash surrender value. Surrenders will
generally be paid by mailing a check to the policyowner within 7
days of receipt of the written request and the policy.
In lieu of payment of the net cash surrender value in a lump sum
upon total surrender of a policy, an election may be made to apply
all or a portion of the proceeds under one of the fixed benefit
payment options described in the policy. The fixed benefit payment
options are subject to the restrictions and limitations set forth
in the policy, and will be paid by AVLIC or one of its affiliates.
A partial withdrawal of accumulation values may be made for an
amount of at least $500 subject to the following rules:
1. The total net cash surrender value in all Subaccounts or the
Fixed Account after partial withdrawal must be the greater of
$1,000 or an amount sufficient to maintain the policy in force
for the remainder of the policy year.
2. Only one partial withdrawal per policy year can be made.
A partial withdrawal charge guaranteed to be no more than the
lesser of $50 or 2% of the amount withdrawn will be deducted from
the amount of each partial withdrawal. The current partial
withdrawal charge is the lesser of $25 or 2% of the amount
withdrawn.
The amount of the partial withdrawal, including the charge, will
be deducted from the policy's net cash surrender value on the date
that the request is received. The owner may designate how to
allocate the partial withdrawal among the Subaccounts or Fixed
Account provided that the minimum amount remaining in a Subaccount
as a result of such allocation is $100. If no allocation
designation is received, the partial withdrawal will be allocated
in the same proportion that the accumulation value in each bears
to the total accumulation value in all of the Subaccounts and the
Fixed Account on the date AVLIC receives the request in its Home
Office.
Partial withdrawals affect policy values. The accumulation value
will be reduced by the amount of the partial withdrawal. If Death
Benefit Option A is in effect on the date of the partial
withdrawal, the specified amount may also be reduced by the amount
of the partial withdrawal. These reductions reduce the death
benefits. If the request for a partial withdrawal would cause the
specified amount to be reduced below AVLIC's minimum specified
amount, the request for the partial withdrawal will not be
implemented and the owner so notified in writing. AVLIC's minimums
for the specified amount after decreases are currently $500,000
for Issue Ages 20-49 and $250,000 for Issue Ages 50-80 for the
first 3 policy years. After the first 3 policy years, the minimum
is $400,000 for Insureds Issue Ages 20-49 and $200,000 for Issue
Ages 50-80. These minimums may be revised from time to time by
AVLIC.
7
<PAGE>
NOTE: Payment may be postponed whenever: 1) 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 Commission; 2) the Commission by order
permits postponement for the protection of policyowners; 3) 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 4) surrenders or partial withdrawals from
the Fixed Account may be deferred for up to six months from the
date of written request. Payments under the policy of any amount
paid by check may be postponed until such time as the check has
cleared the owner's bank.
B. Death Benefit Proceeds Claims and Maturity Benefit
--------------------------------------------------
As long as the policy remains in force, AVLIC will generally pay
death benefit proceeds to the named beneficiary in accordance with
the designated death benefit option within 7 days after receipt of
due proof of the death of the Insured. (Payment may be postponed
under certain circumstances as described in the preceding
section.)
The death benefit proceeds will equal:
1. The death benefit; plus
2. Any additional death benefit proceeds provided by riders; minus
3. Any outstanding policy debt; minus
4. Any monthly deduction that may apply to that period including
the deduction for the month of death.
A claim during the suicide or contestable period may be limited as
provided in the policy.
The death benefit will vary by the Death Benefit Option A or B in
effect at the time of death. It will never be less than the
current specified amount of the policy, unless the Extended
Maturity Option is in effect, in which case the death benefit will
be the Accumulation Value.
Option A: Basic Coverage
The death benefit will be the greater of:
1. The current specified amount; or
2. A percentage of the accumulation value, where the applicable
percentage is determined from the then effective tax corridor
table as shown in the policy.
Option B: Basic Coverage Plus Cash Value
The death benefit will be the greater of:
1. The current specified amount plus the accumulation value on the
date of death; or
2. A percentage of the accumulation value, where the applicable
percentage is determined from the then effective tax corridor
table as shown in the policy.
The accumulation value used for determining the amount of death
benefit will be as of the valuation date when the Insured died.
AVLIC's requirements for satisfactory proof of death include:
1. A certified copy of the death certificate;
8
<PAGE>
2. A Claimant Statement;
3. The policy; and
4. Any other information which AVLIC may reasonably require to
establish the validity of the contract.
In lieu of payment of the death benefit proceeds in a lump sum,
the beneficiary may elect to apply all or any part of the proceeds
under one of the fixed benefit payment options described in the
policy. The fixed benefit payment options are subject to the
restrictions and limitations set forth in the policy. These
options will be paid by AVLIC or one of its affiliates.
The amount of the benefit payable at maturity is the accumulation
value less any outstanding debt of the Policy on the maturity
date. This benefit will only be paid if the Insured is living on
the Policy maturity date. The Policy will mature on the Policy
anniversary nearest the Insured's 100th birthday, unless the
Extended Maturity Option is in effect.
C. Policy Loans
------------
After the first policy anniversary, the owner may obtain a policy
loan from AVLIC. The policy is the only security required. The
maximum loan amount generally is current Net Cash Surrender Value
less 12 times the most recent Monthly Deduction. The available
loan amount at any time is the maximum loan amount less any
outstanding policy debt.
AVLIC charges interest to policyholders at regular and reduced
rates. After the tenth policy anniversary, the policyholder can
borrow each year a limited amount of the accumulation value of the
policy at a reduced interest rate. Interest payments are due on
each anniversary date. If interest is not paid when due, it will
be added to the policy debt and bear interest at the same rate as
the loan. Regular loans may accrue interest on a daily basis at a
rate of up to 6% per year. The amount available each year at the
reduced rate is 10% of the net cash surrender value as of the most
recent policy anniversary increased by the amount of any previous
loans at the reduced loan rate plus accrued interest charges on
the reduced loan amount. Interest on the reduced loan amount will
accrue on a daily basis at a rate of up to 4% per year.
When a policy loan is made, or when interest is not paid when due,
an amount of accumulation value sufficient to secure the policy
debt is transferred out of the Account or the Fixed Account and
into AVLIC's general account. The owner may specify how to
allocate that accumulation value amount to the Subaccounts or the
Fixed Account provided that the minimum amount remaining in a
Subaccount or Fixed Account as a result of the allocation is $100.
If no allocation is made, the accumulation value will be allocated
among the Subaccounts or the Fixed Account in the same proportion
that the policy's accumulation value in each Subaccount or the
Fixed Account bears to the total accumulation value in all
Subaccounts or the Fixed Account on the date of loan.
The loan will generally be paid 7 days after receipt of a written
request; payment may be postponed under the circumstances
described earlier under III Paragraph A "Full Surrenders and
Partial Withdrawals".
Accumulation value in the general account will be credited 3.5%
interest annually. The interest earned will be allocated annually
to the Subaccounts or the Fixed Account in the same manner as net
premiums.
If the policy debt exceeds the accumulation value, less any
surrender charges and less any accrued expenses, the owner must
pay the excess. AVLIC will send notice of the amount due. If this
amount is not paid within 61 days after the notice is sent, the
policy will terminate without value. AVLIC will send the notice to
the owner and to any assignee of record at the Home Office.
Any loan transaction may permanently affect the values of this
policy.
D. Policy Lapsation
----------------
Lapse will occur when policy debt exceeds the accumulation value,
less any surrender charges and less any accrued expenses or the
surrender value is insufficient to cover the monthly deduction and
a grace period expires without a sufficient payment.
9
<PAGE>
If the policy debt exceeds the accumulation value less any
surrender charges and less any accrued expenses, the owner must
pay an amount equal to all excess indebtedness within 61 days
after AVLIC mails notice in order to avoid lapse.
If the net cash surrender value on a monthly activity date is not
sufficient to cover the monthly deduction, and the Guaranteed
Death Benefit provision is not in effect, a grace period of 61
days will be allowed for the payment of a premium sufficient to
cover the monthly deductions. The grace period will begin on the
day AVLIC mails notices of the necessary premium to the owner and
any assignee of record in its Home Office.
If a sufficient payment is made during a grace period, it will be
treated as a premium payment and the net premium so paid will be
allocated among the Subaccounts and the Fixed Account in
accordance with the policyowner's current instructions and any
monthly deductions due will be charged. If a sufficient payment is
not made during a grace period, the policy will lapse.
If the insured dies after notice of payment due, but before the
expiration of a grace period, the due and unpaid payment including
any due and unpaid monthly deductions will be deducted from the
death benefit proceeds.
Reinstatement may be permitted under the conditions described
earlier after policy lapse.
10
<PAGE>
Ameritas Variable Life Insurance Company
5900 "O" Street, Lincoln, Nebraska
January 10, 1997
Ameritas Variable Life Insurance Company
5900 "O" Street
P.O. Box 81889
Lincoln, Nebraska 68501
Gentlemen:
With reference to Pre-Effective Amendment No. 1 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 the
Pre-Effective Amendment No. 1 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>
Ameritas Variable Life Insurance Company
5900 "O" Street, Lincoln, Nebraska 68510
January 10, 1997
Ameritas Variable Life Insurance Company
5900 "O" Street
P.O. Box 81889
Lincoln, Nebraska 68501
Gentlemen:
This opinion is furnished in connection with the registration by Ameritas
Variable Life Insurance Company of Nebraska of a flexible premium variable life
insurance policy ("Contract") under the Securities Act of 1933. The prospectus
included in Pre-Effective Amendment No. to Registration Statement No. 333-15585
on Form S-6 describes the Contract. The form of Contract was prepared under my
direction and I am familiar with the Registration Statement and Exhibits
thereto. This contract was developed and filed under Securities and Exchange
Commission Rule 6E-3(T), as interpreted at this time by the SEC staff. In my
opinion:
The illustrations of death benefits and cash values included in the section
entitled "Illustrations of Death Benefits and Cash Values" in the Appendices of
the prospectus, based on the assumptions stated in the illustrations, are
consistent with the provisions of the Contract. The rate structure of the
Contract has not been designed so as to make the relationship between premiums
and benefits, as shown in the illustrations, appear more favorable to
prospective purchasers of the Contract for male age 35, than to prospective
purchasers of the Contract for other ages or for females.
I hereby consent to the use of this opinion as an exhibit to the Pre-Effective
Amendment No. 1 to the Registration Statement and to the reference to my name
under the heading "Experts" in the prospectus.
Very truly yours,
/s/ Thomas P. McArdle
Thomas P. McArdle
Assistant Vice President and
Associate Actuary
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Pre-Effective Amendment No. 1 to Registration
Statement No. 333-15585 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 (which expresses an unqualified opinion
and includes an explanatory paragraph relating to a change in a reserving
practice) and Ameritas Variable Life Insurance Company Separate Account V
appearing in the Prospectus, which is a part of such Registration Statement, and
to the related reference to us under the heading "Experts."
DELOITTE & TOUCHE LLP
/s/ DELOITTE & TOUCHE LLP
Lincoln, Nebraska
January 16, 1997
CALL(CANLCALL) AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO
- --------------------------------------------------------------------------------
One Ameritas Way / P. O. Box 82550 / Lincoln, NE 68501-2550
FIELD(22) Policy Number: FIELD(3)
Social Security Number: FIELD(202)
Insured: FIELD(1)
RE: Notice of Cancellation Right
FIELD(23)
Thank you for selecting this Overture Encore! life insurance policy which
combines the guarantees of insurance with the opportunities of investment. We
believe it will serve you well.
This letter is sent to you in accordance with the laws administered by the
United States Securities and Exchange Commission (SEC). Please read it carefully
and retain with your important records.
Overture Encore! is a variable universal life insurance policy in which you may
direct your net premiums into one or more of the investment accounts ranging
from the Fixed Account (managed by AVLIC) to the various portfolios in AVLIC's
Separate Account V managed or administered by Fidelity Management and Research
Company, Fred Alger Management, Inc., Massachusetts Financial Services Company
or Morgan Stanley Asset Management. If you choose one or more of these
portfolios, your benefits depend on their investment experience.
Under the requirements of the SEC and your policy, you have the right to return
this policy for cancellation within (1) VARIABLE(DAYS) days from the date of
receipt of this policy, or (2) VARIABLE(DAYS) days from the date of receipt of
this notice, or (3) 45 days from the date you signed the application, whichever
is later. If allowed by state law, the amount of the refund will equal the sum
of all charges deducted from premiums paid, plus the net premiums allocated to
the Fixed Account and to the Separate Account adjusted by investment gains or
losses. Otherwise, the amount of the refund will equal the gross premiums paid.
Please review the prospectus for details of Overture Encore! life expenses and
your cancellation right, and also the attachments to this letter which provide
further details on your right of cancellation.
While we hope you are pleased with your ownership of this policy, if you should
decide to exercise this right of cancellation, complete the enclosed form and
return your policy within the time period outlined above.
Please do not hesitate to contact our Customer Service Department
(1-800-745-1112) with any questions you may have about the insurance coverage,
investment options, expenses, or your rights as a policyholder. Again, thank you
for your confidence in Ameritas Variable Life Insurance Company, Fidelity
Management and Research Company, Fred Alger Management, Inc., Massachusetts
Financial Services Company, Morgan Stanley Asset Management and Overture
Encore!.
Sincerely,
/s/ Lawrence J. Arth
Lawrence J. Arth
President
Form 4018 (1-1)
<PAGE>
AMERITAS VARIABLE LIFE INSRUANCE COMPANY LOGO
- --------------------------------------------------------------------------------
One Ameritas Way / P. O. Box 82550 / Lincoln, NE 68501-2550
FIELD(22) Policy Number: FIELD(3)
Social Security Number: FIELD(202)
Insured: FIELD(1)
OVERTURE ENCORE! -- FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
In determining whether or not to exercise your right to cancel, you should
consider, among other things: the insurance and investment needs served by this
policy, the projected cost of your policy and the deductions from the premiums
before the payment is allocated to the various investments available in the
policy.
You have been given a prospectus which describes the deduction from each premium
payment which is a 3 1/2% premium tax. This could be increased to a guaranteed
maximum of 5% in the future.
Deductions from the accumulation value in your accounts include:
A daily asset based administrative charge based on the accumulation
value. Currently, in the first four years there is no charge. In years
5 through 20, the current charge is .25%, and beginning in year 21, the
current charge is .15%. (This charge could be increased in all years to
a guaranteed maximum of .25% in the future.)
A monthly maintenance charge of $5.00 (could be increased to a maximum
of $9.00 in the future).
A monthly cost of insurance based on the current cost of insurance
rates now in effect (could be increased in the future to the Schedule
of Guaranteed Annual Cost of Insurance Rates shown in your policy).
A current mortality and expense charge of 0.90% of the accumulation
value for the first four years, reducing to 0.65% in years 5 through
20, and to 0.50% beginning in year 21 (could be increased in all years
to a guaranteed maximum of 0.90% in the future).
A contingent deferred sales charge (surrender charge) as shown in the
Schedule of Charges in your policy if the policy is surrendered in its
first 14 years.
Form 4018 (1-2)
<PAGE>
AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO
- --------------------------------------------------------------------------------
One Ameritas Way / P. O. Box 82550 / Lincoln, NE 68501-2550
FIELD(22) Policy Number: FIELD(3)
Social Security Number: FIELD(202)
Insured: FIELD(1)
***INSTRUCTIONS***
PLEASE READ CAREFULLY
RE: Request for Cancellation
If, after reading the enclosed notice, you elect to return your policy for
cancellation, please:
1. Sign and date the bottom portion of this form.
2. Mail this notice together with your policy to:
Ameritas Variable Life Insurance Company
One Ameritas Way, P.O. Box 82550
Lincoln, Nebraska 68501-2550
3. Make certain that the postmark of the return envelope is on or
before the last date permitted for cancellation as described in
the attached letter.
***TO BE COMPLETED BY OWNER***
TO: Ameritas Variable Life Insurance Company (AVLIC)
Pursuant to the terms of the notice previously furnished me by AVLIC, I hereby
return the policy numbered above (The "Policy") for cancellation and request a
refund. If allowed by state law, the amount of the refund will equal the sum of
all charges deducted from premiums paid, plus the net premiums allocated to the
Fixed Account and to the Separate Account adjusted by investment gains or
losses. Otherwise, the amount of the refund will equal the gross premiums paid.
I hereby release AVLIC from any and all claims arising out of or in connection
with the sale or issuance of the policy under state insurance law and I hereby
acknowledge that AVLIC's sole liability with respect to the policy is the refund
to me.
- -------------------------------- ----------------------------------
Date Signature of Policyowner
Form 4018 (1-3)
<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>
