AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V (APPLAUSE! II)
Supplement to Prospectus dated May 1, 1997
The prospectus is amended at pages 6, 9, 21, 29 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 32, 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 57 - 61 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 58 through 62 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
58 and 60 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 59 and 61 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 (.20%), 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 58 and 60 and at an annual rate of 1.25% on pages 59 and 61
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 portfolios 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;
1.75% 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
- -1.69%, 4.31%, and 10.31% respectively, for years 1-20 and -1.34%, 4.66%, and
10.66% for the years thereafter respectively, on pages 58 and 60 and -2.14%,
3.86%, and 9.86% respectively, on pages 59 and 61.
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 32).
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.
APPLAUSE! II 57
<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
(-1.69% Net) ( 4.31% Net) (10.31% 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 Bemefit
---- -------- ----- ----- ------- ----- ----- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2625 1793 0 150000 1919 0 150000 2045 0 150000
2 5381 3609 1288 150000 3976 1655 150000 4360 2038 150000
3 8275 5387 3163 150000 6116 3892 150000 6907 4683 150000
4 11314 7122 4994 150000 8336 6208 150000 9707 7579 150000
5 14504 8808 6801 150000 10633 8626 150000 12779 10772 150000
6 17855 10442 8629 150000 13009 11196 150000 16151 14337 150000
7 21372 12020 10400 150000 15462 13842 150000 19849 18229 150000
8 25066 13539 12137 150000 17991 16589 150000 23907 22505 150000
9 28944 14995 13786 150000 20598 19389 150000 28360 27151 150000
10 33016 16386 15370 150000 23283 22267 150000 33252 32236 150000
15 56643 22267 22267 150000 37954 37954 150000 66166 66166 150000
20 86798 26169 26169 150000 55066 55066 150000 120624 120624 150000
Ages
60 56643 22267 22267 150000 37954 37954 150000 66166 66166 150000
65 86798 26169 26169 150000 55066 55066 150000 120624 120624 150000
70 125283 27490 27490 150000 76198 76198 150000 213690 213690 247880
75 174401 22727 22727 150000 101252 101252 150000 366157 366157 391788
</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.
58 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
(-2.14% Net) ( 3.86% Net) ( 9.86% 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 2045 0 150000
2 5381 3384 1063 150000 3741 1420 150000 4115 1793 150000
3 8275 4914 2690 150000 5607 3383 150000 6361 4137 150000
4 11314 6375 4247 150000 7509 5381 150000 8795 6667 150000
5 14504 7761 5754 150000 9442 7435 150000 11428 9421 150000
6 17855 9071 7258 150000 11406 9593 150000 14281 12467 150000
7 21372 10300 8680 150000 13395 11775 150000 17368 15748 150000
8 25066 11439 10037 150000 15402 14000 150000 20709 19307 150000
9 28944 12484 11275 150000 17422 16213 150000 24325 23116 150000
10 33016 13425 12409 150000 19446 18430 150000 28239 27223 150000
15 56643 16325 16325 150000 29398 29398 150000 53426 53426 150000
20 86798 15155 15155 150000 38139 38139 150000 92704 92704 150000
Ages
60 56643 16325 16325 150000 29398 29398 150000 53426 53426 150000
65 86798 15155 15155 150000 38139 38139 150000 92704 92704 150000
70 125283 6975 6975 150000 43190 43190 150000 157707 157707 182940
75 174401 0* 0* 0* 39566 39566 150000 261272 261272 279561
</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 59
<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
(-1.69% Net) ( 4.31% Net) (10.31% 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 5106 2688 155106 5435 3017 155106 5763 3345 155763
2 12915 10174 7853 160174 11153 8832 160174 12172 9850 162172
3 19860 15143 12919 165143 17104 14879 165143 19226 17002 169226
4 27153 20007 17880 170007 23290 21162 170007 26987 24859 176987
5 34811 24763 22756 174763 29715 27708 174763 35519 33512 185519
6 42852 29407 27593 179407 36385 34572 179407 44897 43084 194897
7 51294 33934 32314 183934 43303 41683 183934 55202 53582 205202
8 60159 38341 36939 188341 50475 49072 188341 66523 65121 216523
9 69467 42626 41417 192626 57905 56696 192626 78960 77751 228960
10 79240 46785 45769 196785 65601 64586 196785 92623 91607 242623
15 135944 65589 65589 215589 108285 108285 215589 184019 184019 334019
20 208315 80870 80870 230870 158701 158701 230870 330663 330663 480663
Ages
60 135944 65589 65589 215589 108285 108285 215589 184019 184019 334019
65 208315 80870 80870 230870 158701 158701 230870 330663 330663 480663
70 300680 92904 92904 242904 220500 220500 242904 575998 575998 725998
75 418564 96999 96999 246999 289905 289905 246999 984518 984518 1134518
</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.
60 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
(-2.14% Net) ( 3.86% Net) ( 9.86% 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 5082 2664 155082 5410 2992 155410 5739 3321 155739
2 12915 9767 7446 159767 10725 8404 160725 11724 9402 161723
3 19860 14308 12084 164309 16201 13976 166201 18251 16027 168252
4 27153 18707 16580 168708 21841 19713 171840 25376 23248 175375
5 34811 22961 20954 172961 27645 25638 177645 33147 31140 183147
6 42852 27069 25255 177069 33616 31803 183617 41626 39813 191626
7 51294 31024 29404 181024 39752 38132 189752 50872 49252 200872
8 60159 34818 33416 184819 46047 44644 196046 60950 59548 210950
9 69467 38448 37239 188448 52497 51288 202497 71933 70724 221933
10 79240 41903 40887 191903 59096 58081 209096 83895 82879 233894
15 135944 56318 56318 206318 94135 94135 244135 161698 161698 311698
20 208315 64951 64951 214951 131541 131541 281541 280560 280560 430560
Ages
60 135944 56318 56318 206318 94135 94135 244135 161698 161698 311698
65 208315 64951 64951 214951 131541 131541 281541 280560 280560 430560
70 300680 65294 65294 215294 168240 168240 318240 461061 461061 611061
75 418564 53430 53430 203430 198664 198664 348664 734152 734152 884152
</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 61
