AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V (APPLAUSE! II)
Supplement to Prospectus dated May 1, 1998
The prospectus is amended at pages 6, 9, 21, 30 and Appendix A to disclose that
the current mortality and expense risk charge is charged at an annual rate of
.45% for policy years 1 - 20, and .30% for the years thereafter; and the total
daily charge for mortality and expense risks and administrative expenses is at
an annual rate of .80% for policy years 1 - 20, and .45% for the years
thereafter. The maximum charge is 1.25%.
The prospectus is further amended at page 33, under the section "Distribution of
the Policies," to disclose that during the first Policy Year, the commission may
equal an amount up to 100% of the first year target premium paid plus the first
year cost of any riders and 4% for premiums paid in excess of the first year
target premium.
Appendix A, appearing at pages 79 - 83 of the prospectus, is amended by
replacing current Appendix A, in its entirety, with the following revised
Appendix A.
<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 80 through 83 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
80 and 82 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 81 and 83 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 expenses paid by each
portfolio available for investment (the equivalent to an annual rate of .87% of
the aggregate average daily net assets of the Fund), and the daily charge by
AVLIC to each Subaccount for assuming mortality and expense risks and
administrative expenses which is equivalent to a charge at an annual rate of
.80% for policy years 1-20 and .45% thereafter on pages 80 and 82 and at an
annual rate of 1.25% on pages 81 and 83 of the average net assets of the
Subaccounts). A portion of the brokerage commissions that certain Fidelity Funds
pay was used to reduce funds expenses. In addition, certain Fidelity funds have
entered into arrangements with their custodian and transfer agent whereby
interest earned on uninvested cash balances was used to reduce custodian and
transfer agent expenses. Without these reductions, expenses would have been
higher. 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 portfolios may exclude certain items) were in excess of an
annual rate of .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; 1.75% for the Morgan
Stanley Emerging Markets Equity, 1.20% for the Morgan Stanley Asian Equity,
1.15% for the Morgan Stanley Global Equity and Morgan Stanley International
Magnum, 1.10% for the Morgan Stanley U.S. Real Estate Portfolios of daily net
assets. MFS has agreed to bear expenses for each series, subject to
reimbursement by each series, such that each series "Other Expenses" shall not
exceed .25% of the average daily net assets of the series during the current
fiscal year. These agreements are expected to continue in future years but may
be terminated at any time. 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
- -1.67%, 4.33% and 10.33% respectively, for years 1-20 and -1.32%, 4.68% and
10.68% for the years thereafter respectively, on pages 80 and 82 and -2.12%,
3.88% and 9.88% respectively, on pages 81 and 83.
The hypothetical values shown in the tables do not reflect any charges for
Federal Income tax burden attributable to the Separate 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 33).
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 Separate 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.
APPLAUSE! II 79
<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: $2500
INITIAL SPECIFIED AMOUNT: $150000
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
(-1.67% Net) ( 4.33% Net) (10.33% 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 2625 1793 0 150000 1919 0 150000 2046 0 150000
2 5381 3610 1289 150000 3978 1656 150000 4361 2040 150000
3 8275 5390 3165 150000 6119 3894 150000 6910 4685 150000
4 11314 7125 4998 150000 8340 6212 150000 9711 7583 150000
5 14504 8813 6806 150000 10640 8633 150000 12787 10780 150000
6 17855 10450 8637 150000 13019 11205 150000 16162 14349 150000
7 21372 12030 10410 150000 15475 13855 150000 19866 18246 150000
8 25066 13552 12150 150000 18008 16606 150000 23930 22527 150000
9 28944 15011 13802 150000 20620 19411 150000 28391 27182 150000
10 33016 16405 15389 150000 23311 22295 150000 33291 32275 150000
15 56643 22305 22305 150000 38023 38023 150000 66290 66290 150000
20 86798 26231 26231 150000 55207 55207 150000 120944 120944 150000
Ages
60 56643 22305 22305 150000 38023 38023 150000 66290 66290 150000
65 86798 26231 26231 150000 55207 55207 150000 120944 120944 150000
70 125283 27582 27582 150000 76462 76462 150000 214404 214404 248708
75 174401 22852 22852 150000 101728 101728 150000 367654 367654 393390
</TABLE>
1) Assumes an annual $2500 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.
80 APPLAUSE! II
<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: $2500
INITIAL SPECIFIED AMOUNT: $150000
DEATH BENEFIT OPTION: A
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
(-2.12% Net) ( 3.88% Net) ( 9.88% 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 2625 1793 0 150000 1919 0 150000 2046 0 150000
2 5381 3385 1064 150000 3743 1421 150000 4115 1794 150000
3 8275 4917 2692 150000 5611 3386 150000 6365 4140 150000
4 11314 6377 4250 150000 7513 5385 150000 8799 6671 150000
5 14504 7766 5759 150000 9448 7441 150000 11435 9428 150000
6 17855 9078 7265 150000 11416 9602 150000 14290 12477 150000
7 21372 10309 8689 150000 13407 11787 150000 17383 15763 150000
8 25066 11450 10048 150000 15417 14015 150000 20730 19327 150000
9 28944 12498 11289 150000 17441 16232 150000 24352 23143 150000
10 33016 13441 12425 150000 19470 18454 150000 28274 27258 150000
15 56643 16357 16357 150000 29456 29456 150000 53532 53532 150000
20 86798 15204 15204 150000 38254 38254 150000 92975 92975 150000
Ages
60 56643 16357 16357 150000 29456 29456 150000 53532 53532 150000
65 86798 15204 15204 150000 38254 38254 150000 92975 92975 150000
70 125283 7037 7037 150000 43396 43396 150000 158310 158310 183639
75 174401 0* 0* 0* 39927 39927 150000 262449 262449 280820
</TABLE>
* In the absence of an additional premium the Policy would lapse.
1) Assumes an annual $2500 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.
APPLAUSE! II 81
<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: $150000
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
(-1.67% Net) ( 4.33% Net) (10.33% 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 5108 2690 155108 5436 3018 155108 5764 3346 155764
2 12915 10178 7856 160178 11156 8835 160178 12175 9854 162175
3 19860 15149 12925 165149 17111 14886 165149 19234 17009 169234
4 27153 20018 17890 170018 23301 21174 170018 27000 24872 177000
5 34811 24778 22771 174778 29733 27726 174778 35540 33533 185540
6 42852 29428 27614 179428 36411 34597 179428 44929 43115 194929
7 51294 33961 32341 183961 43338 41718 183961 55246 53626 205246
8 60159 38376 36974 188376 50521 49119 188376 66585 65182 216585
9 69467 42669 41460 192669 57965 56756 192669 79042 77833 229042
10 79240 46837 45821 196837 65676 64661 196837 92730 91715 242730
15 135944 65695 65695 215695 108472 108472 215695 184351 184351 334351
20 208315 81041 81041 231041 159076 159076 231041 331497 331497 481497
Ages
60 135944 65695 65695 215695 108472 108472 215695 184351 184351 334351
65 208315 81041 81041 231041 159076 159076 231041 331497 331497 481497
70 300680 93153 93153 243153 221176 221176 243153 577902 577902 727902
75 418564 97329 97329 247329 291030 291030 247329 988609 988609 1138609
</TABLE>
1) Assumes an annual $6000 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.
82 APPLAUSE! II
<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: $150000
DEATH BENEFIT OPTION: B
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
(-2.12% Net) ( 3.88% Net) ( 9.88% 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 5083 2665 155083 5411 2993 155411 5740 3322 155740
2 12915 9771 7449 159770 10728 8407 160728 11726 9405 161726
3 19860 14314 12090 164315 16208 13983 166207 18259 16034 168259
4 27153 18718 16590 168718 21851 19724 171852 25388 23260 175388
5 34811 22976 20969 172976 27662 25655 177662 33167 31160 183167
6 42852 27089 25275 177089 33641 31827 183641 41656 39842 191656
7 51294 31049 29429 181049 39785 38165 189785 50914 49294 200914
8 60159 34851 33449 184851 46089 44687 196089 61008 59605 211007
9 69467 38488 37279 188488 52552 51343 202552 72009 70800 222009
10 79240 41951 40935 191950 59164 58149 209165 83992 82977 233993
15 135944 56412 56412 206412 94301 94301 244301 161995 161995 311995
20 208315 65097 65097 215097 131864 131864 281864 281287 281287 431287
Ages
60 135944 56412 56412 206412 94301 94301 244301 161995 161995 311995
65 208315 65097 65097 215097 131864 131864 281864 281287 281287 431287
70 300680 65492 65492 215492 168793 168793 318793 462645 462645 612645
75 418564 53669 53669 203669 199530 199530 349530 737365 737365 887365
</TABLE>
1) Assumes an annual $6000 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.
APPLAUSE! II 83
